The validity of an assignment of policy rights was at issue in Isles Wellness, Inc. v. Progressive Ins. Co., A09-0119, 2009 Minn. App. Unpub. LEXIS 1051 (Minn. Ct. App. Sept. 15, 2009).
The plaintiff clinics provided treatment to the insured patients who had automobile coverage with Progressive and Allstate. In 2003, the clinics sued the insurers on behalf of the insureds for alleged breach of contract due to failure to pay for the treatment. The trial court ruled that the clinics had standing even though they were not the policyholders.
On appeal, the insurers argued the clinics could not assert the insureds' claims because the policies provided they could not be transferred to another person without the insurer's consent. The appellate court noted that under Minnesota law, anti-assignment provisions that barred assignment of the policy did not prohibit the insured from assigning to another the rights to the proceeds of a claim. Because the contracts here only prohibited the assignment of the policies themselves, the insureds were not prohibited from assigning their rights to receive benefits to the clinics.
In Del Monte Fresh Produce (Hawaii), Inc. v. Fireman's Fund Insurance Company, 117 Hawaii 357, 183 P.3d 734 (2007) [reviewed here], the Hawai`i Supreme Court determined the insured could not assign liability policies through a bill of sale or assumption agreement without the insurer's consent.
