Assumption Certificate

(redirected from Cut-Through Endorsements)

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 ?
For one thing, cut-through endorsements are so full of weasel words that a lot of reinsurance specialists just can't foresee a situation that will actually meet all the criteria for giving the policyholder direct access to the reinsurer.
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.