REINSURANCE A clause that holds that a reinsurer is liable for his share of a loss assumed under a treaty even through the primary insurer has become insolvent.
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REINSURANCE A provision appearing in most reinsurance contracts (because most if not all states require it) stating that in the event the reinsured is insolvent the reinsurance is payable directly to the company or its liquidator without reduction because of its insolvency or because the company or its liquidator has failed to pay all or a portion of any claim.
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A provision in reinsurance agreements that provides for the continuance of payments of the obligations of the reinsurer as though no insolvency had occurred, with appropriate recognition of additional expenses of the reinsurer caused by the insolvency. Required in New York and in certain other states.
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UK Clause, common in the US, whereby the reinsurer agrees, in the event of the cedant’s insolvency, to pay its obligations to the liquidator or other specified party.
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MEDICAL,USA Provision in many reinsurance contracts that specifies if the ceding company becomes insolvent, the reinsurer must pay the ceding company or its liquidator all reinsurance that comes payable even if the ceding company has failed to pay all or a portion of any claim. This provision is required by most state regulations.