Assignment Of Life Policy – Certificate Of Title (2009 Edition)
It has been brought to the attention of the Conveyancing Committee that some lending institutions have a requirement that solicitors attend to an assignment of life policy in connection with a residential mortgage loan. Solicitors will be aware from the form of undertaking in residential mortgage loan cases that paragraph 2(d) provides that the solicitor undertakes to have the lender’s standard form of life policy assignment executed by the borrower, if this is specified in the letter of offer, and provided that the standard form is furnished to the solicitor in the form in which it is to be signed prior to the drawdown of the loan.
The committee confirms that this means that solicitors are not required to insert the details of the policy in the assignment form and are merely required to attend to the execution of the life policy assignment itself. The attention of solicitors is directed to paragraph 15(a) and (b) of the Guidelines and Agreement (2009 Edition) agreed between the Law Society and the IBF in relation to residential mortgage loans, which confirms the position:
15(a) Some Lenders may furnish Borrower’s solicitors with deeds of assignment of life policy for execution at completion. Where this is done, the solicitor should ensure each relevant document is executed, witnessed and dated in order to comply with clause 2(d) of the Undertaking.
(b) It is the responsibility of the Lender to furnish the Borrower’s solicitor prior to completion with the assignment of life policy in the form in which they wish to have it executed and with the relevant policy details inserted. Borrowers’ solicitors are not obliged to insert the details of the life policy in the schedule to the life policy assignment.
The committee further confirms that it has not been agreed with any lending institution that solicitors who attend to the execution of the life policy assignment will thereafter notify any life assurance company of the assignment itself. The committee believes that this is purely an administrative matter for a lending institution to attend to itself.