Section 11: Rights of third parties against insurers.

(1) Where under a policy issued for the purposes of this Act a person, hereinafter referred to as the insured, is insured against liabilities to third parties which he may incur, then-
(a) in the event of the insured becoming bankrupt or making a composition or arrangement with his creditors; or
(b) in the event of the insured being a company and a winding-up order being made or a resolution for the voluntary winding up of the company being passed in respect of the company or a receiver or manager of the company's business or undertaking being duly appointed or in the event of possession being taken by or on behalf of the holders of any debentures secured by a floating charge, of any property comprised in or subject to the charge,
if either before or after either event any such liability is incurred by the insured his rights against the insurer under the policy in respect of that liability shall, notwithstanding anything in any written law to the contrary contained, be transferred to and vest in the third party to whom the liability was so incurred.
(2) Where under the provisions of any law an order is made for the administration in bankruptcy of the estate of a deceased debtor then if any debt, which may be proved 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 Act as being a liability to a third party then the rights of the deceased debtor against the insurer under that policy shall, notwithstanding anything in any law to the contrary contained, 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 Act purporting directly or indirectly to avoid the policy or to alter the rights of the parties thereunder upon the happening of any of the events specified in subsections (1) and (2) of this section shall be of no effect.
(4) Upon a transfer of rights under subsection (1) or subsection (2) of this section the insurer shall, subject to the provisions of section 13 of this Act be under the same liability to the third party as he would have been under to the insured save that-
(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 right of the insured against the insurer in respect of such 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) Sections 11, 12 and 13 of this Act 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 the provisions of section 26 of the Workmen's Compensation Act applies.
[Cap. W6.]
(6) For the purposes of sections, 11, 12 and 13 of this Act the expression "liabilities to third parties" in relation to a person insured under a policy of insurance shall not include any liability of that person in the capacity of insurer under some other policy of insurance.