Apa itu re wording clause maksudnya

A cut-through clause is a reinsurance contract provision that allows a party, other than the ceding company and reinsurance company, to have rights under the agreement. Cut-through clauses are often triggered by specific events, such as when a ceding company becomes insolvent.

• A cut-through clause is a reinsurance contract provision that allows a party, other than the cedent and reinsurer, to have rights under the contract.
• Cut-through clauses are often triggered by specific events, such as when a ceding company becomes insolvent.
• A cut-through clause might allow a third party, such as another reinsurer, insurance company, or policyholder, to gain access to funds.

The relationship between the ceding company and reinsurer changes when a cut-through clause is present. A reinsurance contract is made between a ceding company, such as an insurance company, and a reinsurance company. An insurance company is always at risk of an event occurring that would result in a payout of insurance claims made by their policyholders. An insurance company can reduce the risk of their policies being paid out by ceding or transferring some of their policies to another insurer–called a reinsurer. The reinsurance company receives a portion of the ceding company's policies and in exchange, gets paid a portion of the premiums earned by the ceding company–called the cedent–from its policyholder customers.

As a result, the reinsurance company agrees to indemnify the ceding company from claims made. The reinsurance contract is typically between the ceding company and the reinsurer and not any other parties, such as policyholders. In other words, even the insured can't force the reinsurance company to act since the insured is not part of the contractual relationship between the cedent and reinsurer. However, a cut-through clause changes this contractual relationship allowing a third party to have rights against the reinsurance company.

However, those rights only kick in if the cut-through provision has been triggered. The cut-through provision is a clause within the reinsurance agreement that allows a third party to have rights in certain circumstances. A cut-through clause essentially cuts through the contract. However, a cut-through endorsement could be neeeded as well, which is a separate add-on allowing a third party to file a claim for damages from the reinsurer if the cedent is unable to pay.

Cut-through clauses are most commonly attached to reinsurance agreements when the ceding company is struggling or becomes financially insolvent, meaning it can't pay its debts. A cut-through endorsement might also be included, which allows for financial payouts by the reinsurer for claims. Typically, the insured parties obtaining rights under the clause are most in need of protection when the insurance company is insolvent and cannot make payments on claims, or is liquidated by insurance regulators.

Insurance policies and the relationships between the reinsurance companies, cedents, and the insureds can become quite complex. Even reinsurers, for example, cede some of their policies to other reinsurers in a process called retrocession. The receiving reinsurance company of policies from another reinsurer is called the retrocessionaire.

All of these actions of ceding policies from one insurance company to another helps the insurance industry spread out the risk of claims being paid by one insurer. In other words, ceding policies help prevent one insurer from enduring the brunt of payouts following a major event, such as a natural disaster.

A cut-through clause allows third parties, such as reinsurers, insurance companies, and policyholders, to modify the original reinsurance agreement and gain access to funds or rights within that agreement.

However, circumstances can become challenging when a reinsurer has an obligation to the cedent, while the policyholders are also filing a claim for money from the cedent. As a result, a reinsurer may be caught between conflicting demands between the insured, the cedent, and other reinsurers. A clearly defined cut-through clause can help in these challenging situations, particularly if the cedent is insolvent.

There are numerous benefits to cut-through clauses for all of the parties involved, including the insured, the reinsurer, and the ceding insurance company.

Policyholders benefit from the added protection provided by cut-through provisions. Rather than having to work with insurance regulators to make claims against an insolvent insurer, policyholders can work directly with the reinsurer.

Ceding insurers find the clause helpful since it makes the reinsurance company guarantee claims payments, which allows a company that may not typically be able to attract larger commercial clients to seem more stable and thus more attractive.

Reinsurers find the clause useful because it can allow them to provide services in areas where it may not be licensed. A cut-through clause functions as a competitive tool, which enables the reinsurer to capture a certain type of reinsurance business. However, a cut-through endorsement might also be attached, which can help reinsurers that are not licensed in a particular area to provide reinsurance.

SEVERAL LIABILITY – LMA 3333

(RE)INSURERS LIABILITY CLAUSE (Re)insurer`s liability several not joint The liability of a (re)insurer under this contract is several and not joint with other (re)insurers party to this contract. A (re)insurer is liable only for the proportion of liability it has underwritten. A (re)insurer is not jointly liable for the proportion of liability underwritten by any other (re)insurer. Nor is a (re)insurer otherwise responsible for any liability of any other (re)insurer that may underwrite this contract.

The proportion of liability under this contract underwritten by a (re)insurer (or, in the case of a Lloyd`s syndicate, the total of the proportions underwritten by all the members of the syndicate taken together) is shown next to its stamp. This is subject always to the provision concerning “signing” below.

 In the case of a Lloyd`s syndicate, each member of the syndicate (rather than the syndicate itself) is a (re)insurer. Each member has underwritten a proportion of the total shown for the syndicate (that total itself being the total of the proportions underwritten by all the members of the syndicate taken together). The liability of each member of the syndicate is several and not joint with other members. A member is liable only for that member`s proportion. A member is not jointly liable for any other member`s proportion. Nor is any member otherwise responsible for any liability of any other (re)insurer that may underwrite this contract. The business address of each member is Lloyd`s, One Lime Street, London EC3M 7HA. The identity of each member of a Lloyd`s syndicate and their respective proportion may be obtained by writing to Market Services, Lloyd`s, at the above address.

Proportion of liability

Unless there is “signing” (see below), the proportion of liability under this contract underwritten by each (re)insurer (or, in the case of a Lloyd`s syndicate, the total of the proportions underwritten by all the members of the syndicate taken together) is shown next to its stamp and is referred to as its “written line”.

Where this contract permits, written lines, or certain written lines, may be adjusted (“signed”). In that case a schedule is to be appended to this contract to show the definitive proportion of liability under this contract underwritten by each (re)insurer (or, in the case of a Lloyd`s syndicate, the total of the proportions underwritten by all the members of the syndicate taken together). A definitive proportion (or, in the case of a Lloyd`s syndicate, the total of the proportions underwritten by all the members of a Lloyd`s syndicate taken together) is referred to as a “signed line”. The signed lines shown in the schedule will prevail over the written lines unless a proven error in calculation has occurred.

Although reference is made at various points in this clause to “this contract” in the singular, where the circumstances so require this should be read as a reference to contracts in the plural.