LIFE INSURANCE MONEYS

Wanganui Chronicle, Volume 83, Issue 289, 7 December 1939, Page 12

LIFE INSURANCE MONEYS

CLAIM BY OFFICIAL ASSIGNEE [ Per Press Association.J CHRISTCHURCH, Dec. 6. The disposal of moneys recoverable from insurance policies of Eric Pryce Newburgh, who a year after he was declared bankrupt was killed in a motor accident, was argued in a claim before the Supreme Court. On the life of Newburgh, it was stated, there had been 11 insurance policies. On all of them loans had been obtained and some of them had lapsed because the premiums had not been paid, but deducting the value of the loans, the policies, with bonuses, which could be cashed after Newburgh’s death, meant a total of £2695 7s 7d. The question for the Court to decide was whether the protection afforded life insurance policies in debt claims applied in this case. The administrator of Eric Newburgh’s estate, his brother, R. L. Newburgh, claimed the mcney on behalf of himself, his two brothers, his sister, and his mother, while the Official Assignee claimed the money on the grounds that under legislation it was not protected by the Life Insurance Act and should .go to the creditors. It was argued, too, that if jit was protected it was only protected iin favour of Newburgh’s mother, as |the legislation affected only the man insured or his wife, or a husband and his lineal descendants, which the brothers and sisters were not. R. L. Newburgh relied on Section 65 of the Life Insurance Act, which set out that if the holder of an insurance policy became bankrupt, the policy should not become available for payment of his debts, and also if the policy-holder died leaving a will, ■ insurance moneys should not be used |to settle debt claims unless expressly !set out in the will. It was claimed that the protection of his policies in | Eric Pryce Newburgh’s case, arose on his bankruptcy and were he still alive would be enjoyed still by him. Upon his death his estate acquired the protected asset. It passed as an asset that had survived bankruptcy and benefited the beneficiaries of the will. If he died intestate, as happened in this case, his next of kin received the asset. It was claimed in rebuttal for the Official Assignee, that if protection did extend to Newburgh’s mother f and not to his brothers and sister) then she was only entitled to onefifth of it —her share of the estate. Much legal argument was also heard on whether legislation governing protected policies dealt with their face lvalues of their cash surrender values. I Decision was reserved.