Disability Insurance - Insurance Proceeds and Insolvency

(Cork v Rawlins [2001], Court of Appeal, Lloyd’s Rep IR (forthcoming))

In Cork v Rawlins [2001] Lloyd’s Rep IR (forthcoming) the Court of Appeal considered the circumstances in which the proceeds of a disability policy taken out by the assured may be retained by him following his bankruptcy. The Court of Appeal’s general conclusion was that the proceeds are to go to the assured’s trustee in bankruptcy for distribution to his general creditors rather than to the assured himself in that the policy was against fiinancial loss rather than to compensate the assured for pain and suffering.