Golub's comments pertained to Fluor Corp. v. Superior Court of Orange County. The California Supreme Court agreed to take up the case this year, reconsidering its 2003 ruling in Henkel Corp. v. Hartford.
The Henkel ruling limits the circumstances under which policyholders can transfer insurance rights without an insurer's permission, allowing transfers “only if a loss has already been reduced to a sum of money due under the policy as a result of a settlement or judgment.”
The Fluor case argues that when it ruled in Henkel, the court ignored an 1872 statute which allows companies to freely assign their rights under insurance policies following a loss.
Golub told Law360 that the court's ruling in Fluor could be key given that there have been an increasing number of mergers and acquisitions and that it would provide certainty for both insurers and policyholders.
“The supreme court will reconsider the issue in light of this 1872 statute and hopefully draw a bright line, so parties know which way to go,” he said.