An assignment is an agreement between the assignor and the assignee. The insurance company is not a party to the agreement. Therefore, the policy’s assign¬ment provision states that the insurer is not responsible for the validity of any assignment. When an insurance company receives written notice of an assign¬ment, the company presumes that the assignment is valid. The insurance company, however, has no control over the validity of the assignment and usually cannot be held liable for having acted in accordance with an assignment that ไร later deter¬mined to be invalid.
The insurance company is not obligated to act in accordance with the terms of an assignment unless it has received written notice of the assignment. The follow¬ing example illustrates what can happen if an insurer is not notified of a collateral assignment.