The deed of assignment is basically giving/assigning your bank power over your life assurance, in other words if you die the life cover will be paid to the bank to clear your mortgage and not directly to dependents. Some banks assign policies, others just insist you have one.
If you dont sign it then in theory if you died the life assurance would be paid to your estate who would then I presume clear off the mortgage. It's not really that big a deal either way as I assume the purpose of it is to clear the mortgage so its not like you and the bank want different things.