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. Elder Law

    Elder law is a legal specialty focusing on the rights and needs ...
  6. Net Premiums Written

    The sum of premiums written by an insurance company over the ...
Related Articles
  1. How much life insurance is enough?
    Insurance

    How much life insurance is enough?

  2. Insurance Myths Involve Houses, Cars ...
    Insurance

    Insurance Myths Involve Houses, Cars ...

  3. What's the difference between renter's ...
    Insurance

    What's the difference between renter's ...

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

    Rental Property: Getting Rich Means ...

comments powered by Disqus
Hot Definitions
  1. Correlation

    In the world of finance, a statistical measure of how two securities move in relation to each other. Correlations are used ...
  2. Letter Of Credit

    A letter from a bank guaranteeing that a buyer's payment to a seller will be received on time and for the correct amount. ...
  3. Due Diligence - DD

    1. An investigation or audit of a potential investment. Due diligence serves to confirm all material facts in regards to ...
  4. Certificate Of Deposit - CD

    A savings certificate entitling the bearer to receive interest. A CD bears a maturity date, a specified fixed interest rate ...
  5. 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 ...
  6. 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 ...
Trading Center