Malaysia legislation
Section 97
Section 97
(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 appointed or of possession being taken by or on behalf of the holders of any debentures secured by a floating charge on any property comprised in or subject to the charge, if either before or after that event any such liability as aforesaid is incurred by the insured, his rights against the insurer under the policy in respect of the liability shall, notwithstanding anything in any
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written 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 any written law relating to bankruptcy for the administration in bankruptcy of the estate of a deceased debtor then if any debt provable in bankruptcy is owing by the deceased in respect of a liability against which he was insured under a policy issued for the purposes of this Part as being a liability to a third party, the deceased debtor’s rights against the insurer under the policy in respect of that liability shall, notwithstanding anything in any such law expressed, be transferred to and vest in the person to whom the debt is owing.
(3)
Any condition in a policy issued for the purposes of this Part purporting directly or indirectly to avoid the policy or to alter the rights of the party thereunder upon the happening to the insured of any of the events specified in paragraph (1)(a) or (b) or upon the making of an order under any written law relating to bankruptcy in respect of his estate, shall be of no effect.
(4)
Upon a transfer of rights under subsection (1) or (2), the insurer shall, subject to the provisions of section 99, 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
Act 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
Act shall affect the rights of the third party against the insured in respect of the balance.
(5)
For the purposes of this section and sections 98 and 99, the expression “liabilities to third parties” in relation to a person insured under any policy of insurance shall not include any liability of that person in the capacity of insurer under some other policy of insurance.
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(6)
This section and sections 98 and 99 shall not apply—
(a)
where a company is wound up voluntarily merely for the purposes of reconstruction or of amalgamation with another company; or
(b)
to any case to which subsections 21(1) and (2) of the
Workmen’s Compensation Act 1952 [Act 273], apply.
Duty to give necessary information to third parties