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📋 '''Anti-assignment clause''' is a provision commonly found in [[Definition:Insurance policy | insurance policies]] that restricts or prohibits the [[Definition:Policyholder | policyholder]] from transferring rights, interests, or obligations under the policy to a third party without the prior written consent of the [[Definition:Insurance carrier | insurer]]. This clause reflects the deeply personal nature of the insurance contract: because [[Definition:Underwriting | underwriting]] decisions are based on the specific risk profile of the named insured — their loss history, operations, financial condition, and [[Definition:Moral hazard | moral hazard]] characteristics — allowing unrestricted transfer could fundamentally alter the risk the insurer agreed to assume. Anti-assignment clauses appear across virtually every line of business, from [[Definition:Property insurance | property]] and [[Definition:Casualty insurance | casualty]] to [[Definition:Life insurance | life]] and [[Definition:Health insurance | health]] coverage, though their enforceability and interpretation vary by jurisdiction.

⚙️ In practice, the clause typically operates as a contractual restriction embedded in the policy's general conditions. Before any assignment takes effect, the insured must notify the insurer and obtain explicit consent, giving the insurer the opportunity to re-evaluate the risk under the proposed new insured. A critical distinction that courts in the United States and other [[Definition:Common law | common law]] jurisdictions have drawn is between pre-loss and post-loss assignments. Many courts hold that anti-assignment clauses validly prevent pre-loss transfers — where the policy itself and future coverage obligations would shift to a new party — but do not bar post-loss assignments, where the insured merely transfers the right to collect [[Definition:Claims | claim]] proceeds for a loss that has already occurred. This distinction is less uniformly applied in [[Definition:Civil law | civil law]] jurisdictions, where statutory rules on the transferability of contractual rights may override or modify the clause's effect. In the context of corporate [[Definition:Mergers and acquisitions (M&A) | mergers and acquisitions]], anti-assignment clauses demand careful review during [[Definition:Due diligence | due diligence]], as an asset purchase (as opposed to a stock purchase) may trigger the clause and leave the buyer without coverage for legacy exposures.

💡 For insurers, the anti-assignment clause is a fundamental [[Definition:Risk management | risk management]] tool that preserves the integrity of the underwriting process. Without it, policies could be transferred to parties with materially different risk characteristics, undermining the actuarial assumptions on which [[Definition:Premium | pricing]] and [[Definition:Reserving | reserving]] were based. For policyholders and their advisors, understanding the scope and enforceability of the clause is essential when structuring transactions, assigning [[Definition:Insurance proceeds | insurance proceeds]] as [[Definition:Collateral | collateral]], or navigating bankruptcy proceedings where insurance assets may be part of the estate. Regulatory frameworks in some markets — such as certain U.S. states and EU member states — impose statutory limits on how broadly insurers can restrict assignment, particularly for post-loss claims, reflecting a policy judgment that injured parties and legitimate assignees should not be denied recovery on technicalities.

'''Related concepts:'''
{{Div col|colwidth=20em}}
* [[Definition:Insurance policy]]
* [[Definition:Policyholder]]
* [[Definition:Moral hazard]]
* [[Definition:Mergers and acquisitions (M&A)]]
* [[Definition:Subrogation]]
* [[Definition:Insurable interest]]
{{Div col end}}

Definition:Anti-assignment clause - Revision history

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