Assumption Endorsement

AAA

DEFINITION of 'Assumption Endorsement'

A supplemental insurance policy stipulating that, should the original insurer become insolvent, any claim covered by the reinsurance will be paid directly to the policyholder by the reinsurer, rather than through the traditional channels. This is not intended to increase the risk to the reinsurer but, rather, to expedite the claims process. Also called a "cut-through endorsement."

INVESTOPEDIA EXPLAINS 'Assumption Endorsement'

The assumption, or cut-through, endorsement derives its name from the fact that it "cuts through" the proverbial "red tape" so often associated with insurance claims, providing prompt, hassle-free payments of claims.

RELATED TERMS
  1. Reinsurance

    The practice of insurers transferring portions of risk portfolios ...
  2. Insurance

    A contract (policy) in which an individual or entity receives ...
  3. Insurance Claim

    A formal request to an insurance company asking for a payment ...
  4. Reinsurance Sidecar

    A limited purpose company created to work in tandem with insurance ...
  5. Net Premiums Written

    The sum of premiums written by an insurance company over the ...
  6. Business Net Retention

    The amount of policies that remain after accounting for policies ...
Related Articles
  1. How much life insurance is enough?
    Insurance

    How much life insurance is enough?

  2. Rental Property: Getting Rich Means ...
    Investing Basics

    Rental Property: Getting Rich Means ...

  3. How the Affordable Care Act Changed ...
    Insurance

    How the Affordable Care Act Changed ...

  4. Insurance Tips For Homeowners
    Insurance

    Insurance Tips For Homeowners

comments powered by Disqus
Hot Definitions
  1. Certificate Of Deposit - CD

    A savings certificate entitling the bearer to receive interest. A CD bears a maturity date, a specified fixed interest rate ...
  2. Days Sales Of Inventory - DSI

    A financial measure of a company's performance that gives investors an idea of how long it takes a company to turn its inventory ...
  3. Accounts Payable - AP

    An accounting entry that represents an entity's obligation to pay off a short-term debt to its creditors. The accounts payable ...
  4. Ratio Analysis

    Quantitative analysis of information contained in a company’s financial statements. Ratio analysis is based on line items ...
  5. Days Payable Outstanding - DPO

    A company's average payable period. Calculated as: ending accounts payable / (cost of sales/number of days).
  6. Net Sales

    The amount of sales generated by a company after the deduction of returns, allowances for damaged or missing goods and any ...
Trading Center