Commentary on Sections Section 1: Rights against insurer of insolvent person etc
15.Section 1 sets out when a statutory transfer of rights occurs and specifies when the third party may enforce those rights.
16.Subsections (1) and (2) effect a transfer of rights of an insured under an insurance contract to a third party. Subsection (1)(a) effects a transfer where the insured, who is already subject to one of the procedures listed in section 4, 6 or 7, incurs a liability towards the third party. Subsection (1)(b) effects a transfer where an insured, who is already subject to a liability to the third party, subsequently becomes subject to one of the procedures listed in sections 4 to 7.
17.Subsection (3) provides that the third party may initiate proceedings against the insurer without having first established the liability of the insured. This is a change from the 1930 Acts. However, subsection (3) also states that before the third party can enforce rights transferred under section 1 against the insurer, he or she must establish the liability of the insured. The liability of the insured and the insurer may be established in one set of proceedings.
18.Subsection (4) sets out how a liability can be established.