sec.115Application of insurance money

sec.115 Application of insurance money

This section applies if— an insurance policy has been kept up against— the loss of, or damage to, trust property, whether by fire or otherwise; or any other risk or liability relating to trust property; and the trustee receives an amount under the policy. For subsection (1) , it does not matter whether the insurance policy was kept up— under the trust or under any power, whether statutory or otherwise; or in performance of any obligation, whether statutory or otherwise. For the purposes of the trust, the amount received by the trustee— is to be treated as income to the extent it is consistent with the purpose for which the insurance policy was taken out; or is to be treated as capital if, or to the extent, paragraph (a) does not apply. The amount is to be held on trusts corresponding as nearly as possible with the trusts affecting the property in relation to which the amount was payable. Also, the trustee may apply the amount, or part of the amount, in rebuilding, reinstating, replacing or repairing the property that was lost or damaged. However, if the amount has been paid into court, subsection (5) applies subject to any direction of the court. This section does not prejudice or affect— the rights of a person to require the amount or part of the amount to be applied in rebuilding, reinstating, replacing or repairing the property that was lost or damaged; or the rights of a mortgagee, lessor or lessee of the property, whether under an Act or otherwise. (sec.115-ssec.1) This section applies if— an insurance policy has been kept up against— the loss of, or damage to, trust property, whether by fire or otherwise; or any other risk or liability relating to trust property; and the trustee receives an amount under the policy. (sec.115-ssec.2) For subsection (1) , it does not matter whether the insurance policy was kept up— under the trust or under any power, whether statutory or otherwise; or in performance of any obligation, whether statutory or otherwise. (sec.115-ssec.3) For the purposes of the trust, the amount received by the trustee— is to be treated as income to the extent it is consistent with the purpose for which the insurance policy was taken out; or is to be treated as capital if, or to the extent, paragraph (a) does not apply. (sec.115-ssec.4) The amount is to be held on trusts corresponding as nearly as possible with the trusts affecting the property in relation to which the amount was payable. (sec.115-ssec.5) Also, the trustee may apply the amount, or part of the amount, in rebuilding, reinstating, replacing or repairing the property that was lost or damaged. (sec.115-ssec.6) However, if the amount has been paid into court, subsection (5) applies subject to any direction of the court. (sec.115-ssec.7) This section does not prejudice or affect— the rights of a person to require the amount or part of the amount to be applied in rebuilding, reinstating, replacing or repairing the property that was lost or damaged; or the rights of a mortgagee, lessor or lessee of the property, whether under an Act or otherwise.