What is required for the assignment of an insurance policy to be valid?

For the assignment of an insurance policy to be valid, it is essential that the assignment is in writing and approved by the insurer. This requirement ensures that there is a clear and documented agreement regarding the transfer of rights and obligations of the policy from one party to another. Written assignments help eliminate misunderstandings and provide a clear record for both the insurer and the assignee.

Moreover, the insurer's approval is significant because it verifies that the insurer acknowledges the change in ownership and continues to accept the new policyholder under the same terms and conditions. This practice helps maintain the integrity of the contractual relationship between the insurer and the policyholder and allows the insurer to evaluate any risks associated with the new party taking over the policy.

In contrast, verbal assignments lack the necessary documentation and formal acknowledgment, which can lead to disputes and confusion. Additionally, requiring a fee for assignment is not a standard practice and does not apply universally. Lastly, proceeding with an assignment without the insurer's permission can result in complications and the potential invalidation of the assignment, which underlines the necessity of following proper procedures.