Section 87 - Insolvency of employer

Employee compensation rights transfer to insurers on employer insolvency; insurers assume employer liabilities subject to policy limits.

Where an employer has insured liabilities under this Chapter, the employer's rights against the insurer transfer to and vest in the employee upon the employer's insolvency or winding up, and the insurer assumes the same rights and liabilities as the employer subject to policy limits; shortfalls must be proved by the employee in insolvency, voidable employer contracts (except non payment of premium) are treated as effective for transfer with insurer subrogation rights in insolvency, compensation accrued before adjudication or winding up ranks in priority, and half monthly payments are converted to a lump sum measure for these purposes.