Clause 5: Assignment
No assignment of or interest in this insurance or in any moneys which may be or become payable thereunder is to be binding on or recognised by the Underwriters unless a dated notice of such assignment or interest signed by the Assured, and by the assignor in the case of subsequent assignment, is endorsed on the Policy and the Policy with such endorsement is produced before payment of any claim or return of premium thereunder.
Comments to ITCH
This clause sets out certain form requirements in order that an assignment of the benefit of the policy or of money due under the policy is binding on underwriters. Although form requirements may vary most legal systems accept as a starting point that the benefit of an insurance policy or money due may be assigned so that the assignee can step into the shoes of the assured and exercise rights against the insurers. Assignment is of greatest practical relevance in relation to mortgagees and there well established routines documenting and protecting the rights of mortgagees by means of formal assignment and Loss Payee clauses.
If notice of the mortgage is given to the insurer before payment is effected, the mortgagee also receives the benefit of priority in the payment of compensation cf. Cl. 7-4.
This rules will have effect without the necessity of any formal documentation and function as a form of safety net if there should be some of slip up in the usual documentation routines.
The main difference between ITCH and the Plan is that mortgagees are automatically covered under the Plan, while a signed notice by the assured to underwriters is a perquisite under the ITC.