Common Law, Not Article 9, Governs Perfection Of Security Interests In Insurance Policies And Proceeds

LexisNexis (March 14, 2019, 10:29 AM EDT) -- Several years ago, the First Circuit decided a matter of first impression at the federal appellate level: whether Article 9 of the UCC governs the taking and perfection of a security interest in a right to payment arising under an insurance policy. Affirming two lower courts, the First Circuit concluded that Article 9 did not govern perfection in such collateral. Instead, Maine common law governed. And since the secured lender did nothing more than file a UCC financing statement, the debtor’s trustee in bankruptcy got the insurance proceeds under the strongarm clause....