Imposters, Insurance and the UCC

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Authors
Whaley, Douglas J.
Yegerlehner, Mark A.
Issue Date
1972
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Journal Article
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INTRODUCTION|The Uniform Commercial Code section 3-405 states: Impostors; Signature in Name of Payee. An indorsement by any person in the name of a named payee is effective if an impostor by use of the mails or otherwise has induced the maker or drawer to issue the instrument to him or his confederate in the name of the payee; or a person signing as or on behalf of a maker or drawer intends the payee to have no interest in the instrument; or an agent or employee of the maker or drawer has sup plied him with the name of the payee intending the latter to have no such interest. Nothing in this section shall affect the criminal or civil liability of the person so indorsing. The purpose of this article is to explain section 3-405 and its effect on the checks that insurance companies mail to their insureds in response to requests for loans or policy surrenders. Inevitably some of these checks are cashed on forged indorsements, either because they were stolen from the insured or because the insurance company itself has been duped by a phony request. The authors analyze herein the existing insurance practices designed to avoid victimization by impostors and, to the extent these practices are inadequate, suggest several possible steps that the insurance companies can take to improve their practices or eliminate their problem and decrease losses....
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5 Creighton L. Rev. 60 (1971-1972)
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Creighton University School of Law
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