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assumption of liability endorsement (ALE)

An assumption of liability endorsement is added to an insurance policy to provide that, in the event of the insurance company's insolvency, 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.

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Additional Information

It is also referred to as a cut through or assumption of risk endorsement.


cut through endorsement