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Assumption Of Liability Endorsement

Assumption of Liability Endorsement (ALE)

Definition

An endorsement added to an insurance policy to provide that, in the event of insolvency of the insurance company, the amount of any loss that would have been recovered from the reinsurer by the insurance company will be paid instead directly to the policyholder by the reinsurer. Also referred to as a cut through or assumption of risk endorsement.

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