The limitation on transferability is used for securing a loan by means of the entitlements from the insurance contract. The insurance policyholder applies to the insurance undertaking for limitation on transferability. Then the insurance undertaking deposits a declaration of limitation on transferability to the creditor to whom transferability is limited (e.g. a bank). Consequently entitlements can only be paid out to the policyholder by the insurance undertaking with the approval of the creditor to whom transferability is limited.
German: Vinkulierung (859)
Source: FMA AT m. e. E., 30.10.2018
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