The termination provision of a reinsurance contract stating that the reinsurer shall not be liable for loss as a result of occurrences taking place after the date of termination.

The termination provision of a reinsurance contract stipulating that the reinsurer shall not be liable for loss as a result of occurrences taking place after the date of termination. The remaining unearned premiums are returned to the ceding company.

The clause provides that in the event of the reinsured’s insolvency any part of a loss covered by reinsurance be paid directly to the original insured by the reinsurer. This is an exception to the legality of privity of contract.
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UK: A reinsurance clause providing that, in the event of insolvency of the cedant, the reinsurer will be liable to the insured for his share of the loss and not to the cedant’s liquidator.

REINSURANCE: An endorsement to an insurance policy or reinsurance contract which provides that, in the event of the insolvency of the insurance company, the amount of any loss which would have been recovered from the reinsurer by the insurance company (or its statutory receiver) will be paid instead directly to the policyholder, claimant, or other payee, as specified in the endorsement, by the reinsurer. The term is distinguished from an assumption. See Assumption of Liability Endorsement.
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REINSURANCE: Guarantee of coverage by a Reinsurer to a third party who is not a party to the Reinsurance contract
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This is also known as an “assumption endorsement.” Basically, it is an endorsement to a reinsurance contract that states that if the ceding company becomes insolvent, the reinsurer will pay any covered loss directly to the insured. The endorsement provides an extra layer of security if the company that issues the policy to the insured is not admitted in the state (and, thus, does not come under the state’s guaranty fund) or is financially weak and the reinsurer is financially more secure. (See Guaranty Fund; Reinsurance).