Cut Through Clause Sample Clauses
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Cut Through Clause. This clause is more common in Aviation facultative placement. The clause provides that in the event of loss the original insured have right to recover the claim from participating reinsurers although they are not party to the contract of reinsurance. That part of premium that relates to the expired part of the policies.
Cut Through Clause. A form of direct contractual relafionship with a policyholder with a cut-through clause in the reinsurance contract. A cut-through clause or assumpfion cerfificate is an agreement between the reinsurer and the primary or ceding insurer. • Spells out circumstances the insurer shall go into the hands of a receiver, assignee, trustee or successor or the purpose of liquidafion, or on account of insolvency. This will detail what the reinsurer will pay to a third party, other than the reinsured insurer, any amounts that the reinsurer may become liability to pay under the contract of reinsurance. • A specific cut-through clause permifting direct recourse by a policyholders is rarely found in reinsurance contractors, unless there is a group under the same controlling ownership. • Contracts of indemnity not in favor of the Insured • Not easily obtained- normally needed due to lack of financial stability • Some courts have invalidated due to they create a privileged class of creditors terms and usually separate claims bordereaux. Would suggest becoming familiar with some of the basic terms including quota share, excess of loss, treaty, facultafive, gross and net lines, retrocession.
Cut Through Clause. All insurance policies covering Vessels shall provide a “cut through” clause in the following form (or a form otherwise reasonably satisfactory to the Collateral Agent):