Assumption Certificate

(redirected from Cut-Through Endorsement)

Assumption Certificate

A guarantee from a reinsurance company that it will pay for losses from an insured event if the original insurance company fails to do so. It provides the assumption certificate even though it does not bear a contractual relationship directly with policyholders. An assumption certificate is also called a cut-through endorsement.
References in periodicals archive ?
One way that reinsurers frequently help out when a primary insurer's rating slips below the standards that lenders apply is to issue something called a cut-through endorsement.
On its face a cut-through endorsement appears to give the policyholder the right to collect the reinsured portion of any loss directly from the reinsurer if the primary insurer becomes insolvent or is placed trader the supervision of a state regulator.
subsidiary, National Indemnity Company (which has a 'AAA' IFS rating by Fitch), whereby National Indemnity will provide a cut-through endorsement on policies issued under the agreement beginning Jan.