Cap. 273 - Third Parties (Rights against Insurers) Ordinance

To confer on third parties rights against insurers of third party risks in the event of the insured becoming insolvent, and in certain other events. [9 November 1951](Format changes—E.R. 5 of 2018) 1. Short title This Ordinance may be cited as the Third Parties (Rights against Insurers) Ordinance. 2. Rights of third parties against insurers on bankruptcy, etc. of the insured (1) Where under any contract of insurance a person (hereinafter referred to as the insured) is insured against liabilities to third parties which he may incur, then—(a) in the event of the insured becoming bankrupt or making a composition or arrangement with his creditors; or(b) in the case of the insured being a company, in the event of a winding-up order being made, or a resolution for a voluntary winding-up being passed, with respect to the company, or of a receiver or manager of the company’s business or undertaking being duly appointed, or of possession being taken, by or on behalf of the holders of any debentures secured by a floating charge, of any property comprised in or subject to the charge; or(c) in the case of the insured being a co-operative society in the event of an order for cancellation of registration of such co-operative society being made under the Co-operative Societies Ordinance (Cap. 33),if, either before or after that event, any such liability as aforesaid is incurred by the insured, his rights against the insurer under the contract in respect of the liability shall, notwithstanding anything in any enactment or rule of law to the contrary, be transferred to and vest in the third party to whom the liability was so incurred.(2) Where an order is made under section 112 of the Bankruptcy Ordinance (Cap. 6) for the administration of the estate of a deceased debtor according to the law of bankruptcy, then, if any debt provable in bankruptcy is owing by the deceased in respect of a liability against which he was insured under a contract of insurance as being a liability to a third party, the deceased debtor’s rights against the insurer under the contract in respect of that liability shall, notwithstanding anything in the said Ordinance, be transferred to and vest in the person to whom the debt is owing.(3) In so far as any contract of insurance made after the commencement* of this Ordinance in respect of any liability of the insured to third parties purports, whether directly or indirectly, to avoid the contract or to alter the rights of the parties thereunder upon the happening to the insured of any of the events specified in paragraph (a), (b) or (c) of subsection (1) or upon the making of an order under section 112 of the Bankruptcy Ordinance (Cap. 6) in respect of his estate, the contract shall be of no effect.(4) Upon a transfer under subsection (1) or (2), the insurer shall, subject to the provisions of section 4, be under the same liability to the third party as he would have been under to the insured, but—(a) if the liability of the insurer to the insured exceeds the liability of the insured to the third party, nothing in this Ordinance shall affect the rights of the insured against the insurer in respect of the excess; and(b) if the liability of the insurer to the insured is less than the liability of the insured to the third party, nothing in this Ordinance shall affect the rights of the third party against the insured in respect of the balance.(5) For the purposes of this Ordinance, the expression liabilities to third parties (對第三者所負的法律責任), in relation to a person insured under any contract of insurance, shall not include any liability of that person in the capacity of insurer under some other contract of insurance.(6) This Ordinance shall not apply where a company is wound up voluntarily merely for the purposes of reconstruction or amalgamation with another company.[cf. 1930 c. 25 s. 1 U.K.] Editorial Note: *Commencement date: 9 November 1951. 3. Duty to give necessary information to third parties (1) In the event of any person becoming bankrupt or making a composition or arrangement with his creditors, or in the event of an order being made under section 112 of the Bankruptcy Ordinance (Cap. 6) in respect of the estate of any person, or in the event of a winding-up order being made with respect to any company or of a receiver or manager of the company’s business or undertaking being duly appointed or of possession being taken by or on behalf of the holders of any debentures secured by a floating charge of any property comprised in or subject to the charge or of a resolution for a voluntary winding-up being passed with respect to any company, or in the event of an order for cancellation of registration of a co-operative society being made, it shall be the duty of the bankrupt, debtor, personal representative of the deceased debtor, or the company or co-operative society, and, as the case may be, of the trustee in bankruptcy, trustee, liquidator, receiver or manager, or person in possession of the property, to give, at the request of any person claiming that the bankrupt, debtor, deceased debtor, company, or co-operative society, is under a liability to him, such information as may reasonably be required by him for the purpose of ascertaining whether any rights have been transferred to and vested in him by this Ordinance and for the purpose of enforcing such rights, if any, and any contract of insurance, in so far as it purports, whether directly or indirectly to avoid the contract or to alter the rights of the parties thereunder upon the giving of any such information in the events aforesaid or otherwise to prohibit or prevent the giving thereof in the said events, shall be of no effect.(2) If the information given to any person in pursuance of subsection (1) discloses reasonable ground for supposing that there have or may have been transferred to him under this Ordinance rights against any particular insurer, that insurer shall be subject to the same duty as is imposed by the said subsection on the persons therein mentioned.(3) The duty to give information imposed by this section shall include a duty to allow all contracts of insurance, receipts for premiums, and other relevant documents in the possession or power of the person on whom the duty is so imposed to be inspected and copies thereof to be taken.[cf. 1930 c. 25 s. 1 U.K.] 4. Settlement between insurers and insured persons Where the insured has become bankrupt or where, in the case of the insured being a company, a winding-up order has been made with respect to the company, or a resolution for a voluntary winding-up has been passed with respect to the company or where, in the case of the insured being a co-operative society, an order for cancellation of registration has been made, no agreement made between the insurer and the insured after liability has been incurred to a third party and after the commencement of the bankruptcy, winding-up or as from the date of such order for cancellation of registration, as the case may be, nor any waiver, assignment or other disposition made by, or payment made to, the insured after the commencement aforesaid shall be effective to defeat or affect the rights transferred to the third party under this Ordinance, but those rights shall be the same as if no such agreement, waiver, assignment, disposition or payment had been made.[cf. 1930 c. 25 s. 3 U.K.]