Yesterday, draft Insolvency (Amendment) (EU Exit) Regulations 2018 were published by the Government. In the event of a 'no deal' Brexit, the statutory instrument would amend UK legislation and EU legislation retained on exit day relating to insolvency.
The Government has announced that it will legislate to prohibit the enforcement of certain contractual termination clauses ('ipso facto clauses').
As with other aspects of the response to recent insolvency and corporate governance consultations, this has given us pause for thought.
In Berryman v Zurich Australia Ltd [2016] WASC 196 it was decided that a bankrupt's entitlement to claim a TPD benefit under a life insurance policy is not an entitlement that is divisible amongst the bankrupt's creditors, and therefore such an entitlement does not vest in the Official Trustee in bankruptcy. Tottle J of the Supreme Court of Western Australia ruled that the bankrupt insured could continue an action in his own name to recover the TPD benefit. Life insurers may need to adjust their claims' payment practices in light of the Berryman decision.