Common use of Cut-Through Clause in Contracts

Cut-Through. (a) In the event the Ceding Company does not pay amounts otherwise payable under a Covered Insurance Policy as a result of a court of competent jurisdiction or the state insurance regulatory authority in the Ceding Company’s domiciliary state issuing an order finding the Ceding Company to be insolvent or entering an order to the Ceding Company which legally prohibits the Ceding Company from paying amounts otherwise payable under a Covered Insurance Policy because of the Ceding Company’s financial condition, then the Reinsurer may elect to pay on behalf of the Ceding Company 100% of any Reinsured Liabilities payable by the Ceding Company under the Covered Insurance Policy that has not been previously paid by the Ceding Company, subject always to the other terms, conditions, exclusions and limitations of the Covered Insurance Policy. If the Reinsurer elects to make such payment in accordance with the preceding sentence, the Reinsurer shall make such payment directly to the insured under the Covered Insurance Policy (such party entitled to payment, the “Payee”). The Reinsurer shall be deemed to have all the rights of the Ceding Company and be subrogated to all the rights of the Ceding Company to the extent of such payment. Any such payment by the Reinsurer shall be used to discharge the Ceding Company from its related payment obligation under the subject Covered Insurance Policy and shall be treated as a payment by the Ceding Company for all purposes. (b) The Reinsurer shall have no obligation to indemnify the Ceding Company for amounts paid or payable by the Ceding Company in respect of a Covered Insurance Policy to the extent of any payments made by the Reinsurer to the applicable Payee of such Covered Insurance Policy in accordance with Section 7.2(a), and the Reinsurer shall be discharged of its payment obligations to the Ceding Company, or to its conservator, rehabilitator, receiver, liquidator or statutory successor, under this Agreement to the extent of such payments.

Cut-Through. (a) In Subject to Applicable Law and the event applicable terms of the Ceding Reinsured Policies, if the Company does not pay amounts otherwise payable under a Covered Insurance Policy as a result of a court of competent jurisdiction or the state insurance regulatory authority in the Ceding Company’s domiciliary state issuing an order finding the Ceding Company to be becomes insolvent or entering an order is subject to the Ceding Company which legally prohibits the Ceding Company from paying amounts otherwise payable under a Covered Insurance Policy because of the Ceding Company’s financial conditionany liquidation, then rehabilitation, conservatorship, receivership, administrative supervision or any other similar proceeding, the Reinsurer may elect to pay on behalf of the Ceding Company 100% of any Reinsured Liabilities otherwise due and payable by the Ceding Reinsurer to the Company hereunder directly to the named insureds or their designees under the Covered Insurance Policy that has not been previously paid by applicable Reinsured Policies (the Ceding Company“Payee”), in accordance with and subject always to the other terms, conditions, exclusions and limitations of the Covered Insurance Policy. If the Reinsurer elects to make such payment in accordance with the preceding sentence, the Reinsurer shall make such payment directly to the insured under the Covered Insurance Policy (such party entitled to payment, the “Payee”). The Reinsurer shall be deemed to have all the rights of the Ceding Company and be subrogated to all the rights of the Ceding Company to the extent of such paymentReinsured Policies. Any such payment by the Reinsurer shall be used to discharge the Ceding Company from its related payment obligation under the subject Covered Insurance Reinsured Policy and shall be treated as a payment by the Ceding Company for all purposespurposes of such Reinsured Policy and related documentation and otherwise. (b) The Reinsurer shall have no obligation to indemnify the Ceding Company for amounts paid or payable by the Ceding Company in respect of a Covered Insurance Reinsured Policy to the extent of any payments made by the Reinsurer to the applicable Payee of under such Covered Insurance Reinsured Policy in accordance with Section 7.2(a8.2(a), and the Reinsurer shall be discharged of its payment obligations to the Ceding Company, or to its conservatorliquidator, receiver, rehabilitator, receiver, liquidator conservator or statutory successorother similar Person, under this Agreement to the extent of such payments. The cut-through afforded by Section 8.2(a) shall not be available pursuant to this Agreement if, under Applicable Law, regulation, court rule or order or similar requirement either: (i) the Reinsurer’s direct payment to such Payee will not, to the extent thereof, discharge the Reinsurer’s obligations to the Company or its legal representative or (ii) the Reinsurer is required by Applicable Law to make any payment to the Company or its liquidator, receiver, rehabilitator, conservator or other similar Person notwithstanding the provisions of this Agreement. Nothing herein or in any Reinsured Policy shall be construed to require the Reinsurer to make duplicative payments or payments duplicative of payments that have been made by the Company.

Cut-Through. (a) In During the event term of this Agreement, the Ceding Company does not pay amounts otherwise payable under a Covered Insurance Policy as a result of a court of competent jurisdiction or the state insurance regulatory authority in the Ceding Company’s domiciliary state issuing an order finding the Ceding Company to be insolvent or entering an order to the Ceding Company which legally prohibits the Ceding Company from paying amounts otherwise payable under a Covered Insurance Policy because of the Ceding Company’s financial conditionReinsurer, then the Reinsurer may elect to pay on behalf of the Company, will pay directly to the applicable holder of the insured securities or obligations thereunder (“Bondholder”), to the trustee, paying agent or other third party fiduciary acting on behalf of such Bondholder, to the Company’s fiscal agent under an Issued Covered Policy, to any other Person that is entitled to receive payment from the Company under the terms of an Issued Covered Policy or to a Ceding Company Insurer, as the case may be, (any such Bondholder, other Person or Ceding Insurer, a “Payee”), in accordance with the terms of the Issued Covered Policy or Assumed Reinsurance Agreement, 100% of any Reinsured Liabilities claim due and payable by the Ceding Company under the such Issued Covered Insurance Policy that has not been previously paid by the Ceding Companyor Assumed Reinsurance Agreement in respect of an Assumed Covered Policy, subject always to the other terms, conditions, exclusions and limitations of such Issued Covered Policy or the Covered Insurance Policy. If applicable Assumed Reinsurance Agreement; provided, however, that, notwithstanding anything in this Agreement to the contrary, any payment by the Reinsurer elects to make such payment in accordance with the preceding sentence, the Reinsurer shall make such payment directly to the insured under the Second-to-Pay Policy in respect of a Covered Insurance Policy (such party entitled to paymentshall, the “Payee”). The Reinsurer shall be deemed to have all the rights of the Ceding Company and be subrogated to all the rights of the Ceding Company to the extent of such payment, discharge the Reinsurer from its obligation under this Section 9.01(a) to make the related payment directly to the applicable Payee. As a condition of the Reinsurer’s payment obligation under this Section 9.01, the Payee shall provide written notice to the Reinsurer at the address specified in Section 16.02 of this Agreement (or any other address identified in writing by the Reinsurer to such Payee) for any Loss for which the Reinsurer may be liable pursuant to this Section. Any such payment by the Reinsurer shall be used to discharge the Ceding Company from its related payment obligation under or in respect of the subject Covered Insurance Policy and shall be treated as a payment by the Ceding Company for all purposespurposes of such Covered Policy and related documentation and otherwise, including for purposes of the Company’s claims under Third-Party Reinsurance Agreements. All notice, claims and suits or actions on or in respect of such Covered Policy may be made directly to the Reinsurer as though it had originally issued or reinsured such Covered Policy, as applicable. Without limiting any rights of the Reinsurer set forth in the Administrative Services Agreement, in the event of any payment by the Reinsurer under this Section 9.01, the Reinsurer shall have the right to mitigate loss or otherwise to exercise any right of the Company with respect to the loss or claim under the Covered Policies. Upon termination of this Agreement by the Company and the Reinsurer for any reason, the rights of the Payees to receive payments from the Reinsurer under this Section 9.01(a) shall cease immediately and automatically, without any further action on the part of the Company or the Reinsurer. The Company and the Reinsurer agree that this Agreement may not be terminated by them without obtaining the prior approval of the insurance department of each of their domiciliary states; provided, however, that in no event shall the Reinsurer and the Company agree to terminate this Agreement unless, after giving effect to such termination (including any simultaneous transaction by the Company), the ratings assigned by the Rating Agencies to the underlying securities or obligations under the Covered Policies will not be downgraded or withdrawn. (b) The Reinsurer shall have no obligation to indemnify the Ceding Company for amounts paid or payable by the Ceding Company in respect of a Covered Insurance Policy to the extent of any payments made by the Reinsurer to the applicable Payee of such Covered Insurance Policy in accordance with Section 7.2(a9.01(a), and the Reinsurer shall be discharged of its payment obligations to the Ceding Company, or to its conservator, rehabilitatorliquidator, receiver, liquidator conservator, rehabilitator or statutory successor, under this Agreement reinsurance to the extent of such payments. (c) The parties hereto acknowledge and agree that a Payee (including the Ceding Insurers) shall be entitled, as an express third-party beneficiary, to enforce against the Reinsurer its obligations to make payment directly to such Payee in the circumstances described in this Section 9.01 to the same extent as if such Payee were a party hereto, it being understood that the third-party beneficiary right of any such Payee hereunder pertains solely to the payment obligations under or in respect of the related Covered Policy and does not pertain to any other provisions of this Agreement.

Cut-Through. (a) In the event the Ceding Company does not pay amounts otherwise payable under a Covered Insurance Policy as a result of a court of competent jurisdiction or the state insurance regulatory authority in the Ceding Company’s 's domiciliary state issuing an order finding the Ceding Company to be insolvent or entering an order to the Ceding Company which legally prohibits the Ceding Company from paying amounts otherwise payable under a Covered Insurance Policy because of the Ceding Company’s 's financial condition, then the Reinsurer may elect to pay on behalf of the Ceding Company 100% of any Reinsured Liabilities payable by the Ceding Company under the Covered Insurance Policy that has not been previously paid by the Ceding Company, subject always to the other terms, conditions, exclusions and limitations of the Covered Insurance Policy. If the Reinsurer elects to make such payment in accordance with the preceding sentence, the Reinsurer shall make such payment directly to the insured under the Covered Insurance Policy (such party entitled to payment, the “Payee”"PAYEE"). The Reinsurer shall be deemed to have all the rights of the Ceding Company and be subrogated to all the rights of the Ceding Company to the extent of such payment. Any such payment by the Reinsurer shall be used to discharge the Ceding Company from its related payment obligation under the subject Covered Insurance Policy and shall be treated as a payment by the Ceding Company for all purposes. (b) The Reinsurer shall have no obligation to indemnify the Ceding Company for amounts paid or payable by the Ceding Company in respect of a Covered Insurance Policy to the extent of any payments made by the Reinsurer to the applicable Payee of such Covered Insurance Policy in accordance with Section SECTION 7.2(a), and the Reinsurer shall be discharged of its payment obligations to the Ceding Company, or to its conservator, rehabilitator, receiver, liquidator or statutory successor, under this Agreement to the extent of such payments.

Cut-Through. (a) In The Reinsurer will pay, in accordance with the event Covered Policy, directly to the Ceding Company does not pay amounts otherwise payable under a Covered Insurance Policy as a result applicable holder of a court the insured securities or obligations thereunder (“Bondholder”), to the trustee, paying agent or other third party fiduciary acting on behalf of competent jurisdiction or such Bondholder, to the state insurance regulatory authority in the Ceding Company’s domiciliary state issuing an order finding the Ceding Company to be insolvent or entering an order to the Ceding Company which legally prohibits the Ceding Company from paying amounts otherwise payable fiscal agent under a such Covered Insurance Policy because of the Ceding Company’s financial conditionPolicy, then the Reinsurer may elect to pay on behalf of the Ceding Company Company, or to such other Person that is entitled to receive payment under the terms of the applicable Covered Policy (any such Bondholder or other Person, a “Payee”), 100% of any Reinsured Liabilities claim due and payable by the Ceding Company under the such Covered Insurance Policy that has not been previously paid by the Ceding CompanyPolicy, subject always to the other terms, conditions, exclusions and limitations of the such Covered Insurance Policy. If As a condition of the Reinsurer’s payment obligation, the Payee shall provide written notice (including facsimile) to the Reinsurer elects to make such payment at the address specified in accordance with the preceding sentence, Section 20 of this Agreement (or any other address identified in writing by the Reinsurer shall make to such payment directly Payee) for any Loss for which the Reinsurer may be liable pursuant to the insured under the Covered Insurance Policy (such party entitled to payment, the “Payee”). The Reinsurer shall be deemed to have all the rights of the Ceding Company and be subrogated to all the rights of the Ceding Company to the extent of such paymentthis section. Any such payment by the Reinsurer shall be used to discharge the Ceding Company from its related payment obligation under the subject Covered Insurance Policy and shall be treated as a payment by the Ceding Company for all purposespurposes of such Covered Policy and related documentation and otherwise, including for purposes of the Company’s claims under Third Party Reinsurance. All notices, claims and suits or actions on such Covered Policy may be made directly to the Reinsurer as though it had originally issued such Covered Policy; provided, that the Reinsurer will provide a copy of any such notice, claim or suit or action to the Company within two (2) Business Days after Reinsurer’s receipt thereof and will notify the Company within two (2) Business Days after any payment by the Reinsurer under this Section 13. In the event of any payment by the Reinsurer under this Section 13, the Reinsurer shall have the right to mitigate loss or otherwise to exercise any right of the Company with respect to the loss or claim under the Covered Policies. (b) The Reinsurer shall have no obligation to indemnify the Ceding Company for amounts paid or payable by the Ceding Company in respect of a Covered Insurance Policy to the extent of any payments made by the Reinsurer to the applicable Payee of such Covered Insurance Policy in accordance with Section 7.2(aclause (a), and the Reinsurer shall be discharged of its payment obligations to the Ceding Company, or to its conservator, rehabilitator, receiver, liquidator or statutory successorsuccessor (“Conservator”), under this Agreement reinsurance to the extent of such payments. (c) The parties hereto acknowledge and agree that a Payee shall be entitled, as an express third-party beneficiary, to enforce against the Reinsurer its obligations to make payment directly to such Payee in the circumstances described in this Section 13 to the same extent as if such Payee were a party hereto, it being understood that the third-party beneficiary right of any Payee hereunder pertains solely to the payment obligations under the related Covered Policy and does not pertain to any other provisions of this Agreement. (d) The Company shall, promptly after any payment by the Reinsurer to any Payee under this Section 13 for a claim payable by the Company under a Covered Policy, reimburse the Reinsurer for any amount due and payable to the Company in connection with such claim under any Third Party Reinsurance that is not Covered Third Party Reinsurance, whether or not collectible under such Third Party Reinsurance. The Company hereby assigns and transfers to the Reinsurer all of the Company’s rights to the proceeds, if any, of the Covered Third Party Reinsurance to the extent that Reinsurer has paid a claim on a Covered Policy reinsured under such Covered Third Party Reinsurance, and promises to pay to the Reinsurer, any such proceeds promptly after receipt thereof by the Company. The Reinsurer will be subrogated to all rights of the Company under, arising out of, or relating to, the Covered Policies or any related Third Party Reinsurance to the extent of such payments under this Section 13 and the Company shall use its commercially reasonable efforts to assist the Reinsurer in pursuing any such subrogation rights.

Cut-Through. (a) In The Reinsurer will pay, in accordance with the event Covered Policy, directly to the Ceding Company does not pay amounts otherwise payable under a Covered Insurance Policy as a result applicable holder of a court the insured securities or obligations thereunder (“Bondholder”), to the trustee, paying agent or other third party fiduciary acting on behalf of competent jurisdiction or such Bondholder, to the state insurance regulatory authority in the Ceding Company’s domiciliary state issuing an order finding the Ceding Company to be insolvent or entering an order to the Ceding Company which legally prohibits the Ceding Company from paying amounts otherwise payable fiscal agent under a such Covered Insurance Policy because of the Ceding Company’s financial conditionPolicy, then the Reinsurer may elect to pay on behalf of the Ceding Company Company, or to such other Person that is entitled to receive payment under the terms of the applicable Covered Policy (any such Bondholder or other Person, a "Payee"), 100% of any Reinsured Liabilities claim due and payable by the Ceding Company under the such Covered Insurance Policy that has not been previously paid by the Ceding CompanyPolicy, subject always to the other terms, conditions, exclusions and limitations of the such Covered Insurance Policy. If As a condition of the Reinsurer’s payment obligation, the Payee shall provide written notice (including facsimile) to the Reinsurer elects to make such payment at the address specified in accordance with the preceding sentence, Section 20 of this Agreement (or any other address identified in writing by the Reinsurer shall make to such payment directly Payee) for any Loss for which the Reinsurer may be liable pursuant to the insured under the Covered Insurance Policy (such party entitled to payment, the “Payee”). The Reinsurer shall be deemed to have all the rights of the Ceding Company and be subrogated to all the rights of the Ceding Company to the extent of such paymentthis section. Any such payment by the Reinsurer shall be used to discharge the Ceding Company from its related payment obligation under the subject Covered Insurance Policy and shall be treated as a payment by the Ceding Company for all purposespurposes of such Covered Policy and related documentation and otherwise, including for purposes of the Company’s claims under Third Party Reinsurance. All notices, claims and suits or actions on such Covered Policy may be made directly to the Reinsurer as though it had originally issued such Covered Policy; provided, that the Reinsurer will provide a copy of any such notice, claim or suit or action to the Company within two (2) Business Days after Reinsurer’s receipt thereof and will notify the Company within two (2) Business Days after any payment by the Reinsurer under this Section 13. In the event of any payment by the Reinsurer under this Section 13, the Reinsurer shall have the right to mitigate loss or otherwise to exercise any right of the Company with respect to the loss or claim under the Covered Policies. (b) The Reinsurer shall have no obligation to indemnify the Ceding Company for amounts paid or payable by the Ceding Company in respect of a Covered Insurance Policy to the extent of any payments made by the Reinsurer to the applicable Payee of such Covered Insurance Policy in accordance with Section 7.2(aclause (a), and the Reinsurer shall be discharged of its payment obligations to the Ceding Company, or to its conservator, rehabilitator, receiver, liquidator or statutory successorsuccessor (“Conservator”), under this Agreement reinsurance to the extent of such payments. (c) The parties hereto acknowledge and agree that a Payee shall be entitled, as an express third-party beneficiary, to enforce against the Reinsurer its obligations to make payment directly to such Payee in the circumstances described in this Section 13 to the same extent as if such Payee were a party hereto, it being understood that the third-party beneficiary right of any Payee hereunder pertains solely to the payment obligations under the related Covered Policy and does not pertain to any other provisions of this Agreement. (d) The Company shall, promptly after any payment by the Reinsurer to any Payee under this Section 13 for a claim payable by the Company under a Covered Policy, reimburse the Reinsurer for any amount due and payable to the Company in connection with such claim under any Third Party Reinsurance that is not Covered Third Party Reinsurance, whether or not collectible under such Third Party Reinsurance. The Company hereby assigns and transfers to the Reinsurer all of the Company’s rights to the proceeds, if any, of the Covered Third Party Reinsurance to the extent that Reinsurer has paid a claim on a Covered Policy reinsured under such Covered Third Party Reinsurance, and promises to pay to the Reinsurer, any such proceeds promptly after receipt thereof by the Company. The Reinsurer will be subrogated to all rights of the Company under, arising out of, or relating to, the Covered Policies or any related Third Party Reinsurance to the extent of such payments under this Section 13 and the Company shall use its commercially reasonable efforts to assist the Reinsurer in pursuing any such subrogation rights.

Cut-Through. (a) In Subject to Applicable Law and the event applicable terms of the Ceding Reinsured Policies, if the Company does not pay amounts otherwise payable under a Covered Insurance Policy as a result of a court of competent jurisdiction or the state insurance regulatory authority in the Ceding Company’s domiciliary state issuing an order finding the Ceding Company to be becomes insolvent or entering an order is subject to the Ceding Company which legally prohibits the Ceding Company from paying amounts otherwise payable under a Covered Insurance Policy because of the Ceding Company’s financial conditionany liquidation, then rehabilitation, conservatorship, receivership, administrative supervision or any other similar proceeding, the Reinsurer may elect to pay on behalf of the Ceding Company 100% of any Reinsured Liabilities otherwise due and payable by the Ceding Reinsurer to the Company hereunder directly to the named insureds or their designees under the Covered Insurance Policy that has not been previously paid by applicable Reinsured Policies (the Ceding Company“Payee”), in accordance with and subject always to the other terms, conditions, exclusions and limitations of the Covered Insurance Policy. If the Reinsurer elects to make such payment in accordance with the preceding sentence, the Reinsurer shall make such payment directly to the insured under the Covered Insurance Policy (such party entitled to payment, the “Payee”). The Reinsurer shall be deemed to have all the rights of the Ceding Company and be subrogated to all the rights of the Ceding Company to the extent of such paymentReinsured Policies. Any such payment by the Reinsurer shall be used to discharge the Ceding Company from its related payment obligation under the subject Covered Insurance Reinsured Policy and shall be treated as a payment by the Ceding Company for all purposespurposes of such Reinsured Policy and related documentation and otherwise. (b) The Reinsurer shall have no obligation to indemnify the Ceding Company for amounts paid or payable by the Ceding Company in respect of a Covered Insurance Reinsured Policy to the extent of any payments made by the Reinsurer to the applicable Payee of under such Covered Insurance Reinsured Policy in accordance with Section 7.2(a9.2(a), and the Reinsurer shall be discharged of its payment obligations to the Ceding Company, or to its conservatorliquidator, receiver, rehabilitator, receiver, liquidator conservator or statutory successorother similar Person, under this Agreement to the extent of such payments. The cut-through afforded by Section 9.2(a) shall not be available pursuant to this Agreement if, under Applicable Law, regulation, court rule or order or similar requirement either: (i) the Reinsurer’s direct payment to such Payee will not, to the extent thereof, discharge the Reinsurer’s obligations to the Company or its legal representative or (ii) the Reinsurer is required by Applicable Law to make any payment to the Company or its liquidator, receiver, rehabilitator, conservator or other similar Person notwithstanding the provisions of this Agreement. Nothing herein or in any Reinsured Policy shall be construed to require the Reinsurer to make duplicative payments or payments duplicative of payments that have been made by the Company.

Cut-Through. (a) In the event of a Recapture Triggering Event, other than a Recapture Triggering Event under clauses (c)(2) and (c)(3) (provided, in each case, that the Reinsurer has not failed to make payments required under the Retrocession Agreement) and (f) of the definition thereof, during the Recapture Exercise Period and, if the Ceding Company does not pay amounts otherwise payable under a Covered Insurance Policy as a result of a court of competent jurisdiction or elects to recapture, until such time (if after the state insurance regulatory authority in the Ceding Company’s domiciliary state issuing an order finding the Ceding Company to be insolvent or entering an order to the Ceding Company which legally prohibits the Ceding Company from paying amounts otherwise payable under a Covered Insurance Policy because expiration of the Ceding Company’s financial condition, then Recapture Exercise Period) as the Reinsurer may elect to pay on behalf of the Ceding Company 100% of any Reinsured Liabilities payable by the Ceding Company under the Covered Insurance Policy that has not been previously Terminal Settlement in connection with such recapture is paid by the Ceding Company, subject always to the other terms, conditions, exclusions and limitations of the Covered Insurance Policy. If the Reinsurer elects to make such payment in accordance with the preceding sentence, the Reinsurer shall make such payment directly to the insured under the Covered Insurance Policy (such party entitled to payment, the “PayeeCut-Through Election Period”). The Reinsurer shall be deemed to have all the rights , each of the Ceding Company and the Retrocessionaire shall have the right to deliver a written notice to each other party of a cut-through election (the “Cut-Through Election”), it being understood and agreed that following the Recapture Date, the Reinsurer shall have no other obligations hereunder except as described in Section 7.3(b). Following a Cut-Through Election during the Cut-Through Election Period: (i) The Ceding Company shall be subrogated permitted to all enforce the Reinsurer’s rights in respect of the Reinsured Liabilities under the Retrocession Agreement. The Retrocessionaire shall be obligated to, pursuant to this Agreement, make the portion of the applicable payments due to the Reinsurer under the Retrocession Agreement in respect of the Reinsured Liabilities and payable by the Reinsurer to the Ceding Company under this Agreement directly to the Ceding Company, in which case such portions of payments shall not be payable to the Reinsurer (or any successor by operation of law of the Reinsurer, including any liquidator, rehabilitator, receiver or conservator of the Reinsurer). Without limiting the Ceding Company’s rights hereunder, including the right to receipt of all payments to which it is entitled under the terms of this Agreement, before making direct payments to the Ceding Company, the Retrocessionaire shall have the right to deduct from such payment any amounts due by the Reinsurer to the Retrocessionaire under the Retrocession Agreement. Any such payment by the Retrocessionaire directly to the Ceding Company pursuant to this Section 10.3(a)(i) shall constitute value provided by the Retrocessionaire to the Reinsurer to the extent that the Reinsurer’s obligation in respect of Reinsured Liabilities to the Ceding Company is satisfied and therefore shall discharge the corresponding payment obligation from the Retrocessionaire to the Reinsurer (including any liquidator, rehabilitator, receiver or conservator of the Reinsurer) under the Retrocession Agreement to the extent of such payment. Any In addition, any such payment by the Reinsurer shall be used Retrocessionaire directly to discharge the Ceding Company pursuant to this Section 10.3(a)(i) shall discharge the corresponding obligation from its related payment obligation under the subject Covered Insurance Policy and shall be treated as a payment by the Ceding Company for all purposes. (b) The Reinsurer shall have no obligation to indemnify the Ceding Company for amounts paid or payable by the Ceding Company in respect of a Covered Insurance Policy to the extent of any payments made by the Reinsurer to the applicable Payee of such Covered Insurance Policy in accordance with Section 7.2(a), and the Reinsurer shall be discharged of its payment obligations to the Ceding Company, or to its conservator, rehabilitator, receiver, liquidator or statutory successor, Company under this Agreement to the extent of such paymentspayment. For the avoidance of doubt, but without limiting the Ceding Company’s rights under this Agreement, including the right to receipt of all payments to which it is entitled under the terms of this Agreement, under no circumstances shall the Retrocessionaire be obligated to make any payment to the Ceding Company to the extent the Retrocessionaire has already paid such amount to the Reinsurer. (ii) In addition, the Ceding Company shall be obligated to, pursuant to the Cut-Through Election, make or direct payment of, as applicable, the portion of the applicable payments in respect of the Reinsured Liabilities that are otherwise due to the Reinsurer under this Agreement and payable by the Reinsurer to the Retrocessionaire under the Retrocession Agreement directly to the Retrocessionaire, in which case such payments shall not be payable by the Reinsurer (or any successor by operation of law of the Reinsurer, including any liquidator, rehabilitator, receiver or conservator of the Reinsurer). Without limiting the Retrocessionaire’s rights under the Retrocession Agreement, including the right to receipt of all payments due under the terms of the Retrocession Agreement, before making or directing direct payment to the Retrocessionaire, the Ceding Company shall have the right to deduct from such payment any amounts due by the Reinsurer to the Ceding Company under this Agreement. Any such payment by or on behalf of the Ceding Company directly to the Retrocessionaire pursuant to this Section 10.3(a)(ii) shall constitute value provided by the Ceding Company to the Reinsurer to the extent that the Reinsurer’s obligation in respect of the fee payment to the Retrocessionaire is satisfied and therefore shall discharge the corresponding payment obligation from the Ceding Company to the Reinsurer (or any successor by operation of law of the Reinsurer, including any liquidator, rehabilitator, receiver or conservator of the Reinsurer) under this Agreement to the extent of any such payment. In addition, any such payment by or on behalf of the Ceding Company to the Retrocessionaire pursuant to this Section 10.3(a)(ii) shall discharge the corresponding payment obligation from the Reinsurer to the Retrocessionaire under the Retrocession Agreement to the extent of such payment. For the avoidance of doubt, but without limiting the Retrocessionaire’s rights under the Retrocession Agreement, including the right to receipt of all payments due under the terms of the Retrocession Agreement, under no circumstances shall the Ceding Company be obligated to make or direct any payment to the Retrocessionaire to the extent the Ceding Company has already paid such amount to the Reinsurer. (iii) In the event of the Insolvency of the Reinsurer, (x) the Retrocessionaire’s payment obligations in respect of the Cut-Through Election shall not apply to the extent the Retrocessionaire reasonably believes that such payments will not relieve the Retrocessionaire of its liability towards the Reinsurer, including any liquidator, rehabilitator, receiver or conservator of the Reinsurer with respect to the payment amount, and (y) the Ceding Company’s payment obligations in respect of a Cut-Through Election shall not apply to the extent the Ceding Company reasonably believes that such payments will not relive the Ceding Company of its liability towards the Reinsurer, including any liquidator, rehabilitator, receiver or conservator of the Reinsurer, with respect to the payment amount.