{
  "id": "clause-insolvency-clause",
  "type": "clause",
  "languages": {
    "en": {
      "id": "clause-insolvency-clause",
      "lang": "en",
      "type": "clause",
      "title": "Insolvency Clause",
      "shortDefinition": "The insolvency clause requires the reinsurer to continue paying its share of a loss to the cedent's insolvency estate even if the cedent becomes insolvent and can no longer settle policyholder claims in full.",
      "synonyms": [
        "Insolvency of the reinsured clause"
      ],
      "linesOfBusiness": [
        "Reinsurance"
      ],
      "jurisdictions": [
        "Global"
      ],
      "tags": [
        "Reinsurance",
        "Insolvency"
      ],
      "relations": {
        "relatedTerms": [
          "term-cedent",
          "term-reinsurer",
          "term-treaty-reinsurance"
        ],
        "partOf": [],
        "appliesTo": [
          "term-treaty-reinsurance"
        ],
        "regulatedBy": [],
        "relevantFor": [],
        "insurableVia": [],
        "mitigatedBy": [],
        "comprises": [],
        "alternativeTo": [],
        "complementedBy": []
      },
      "attribute": null,
      "profile": null,
      "coverageProfile": null,
      "clause": {
        "kind": "condition",
        "origin": "reinsurance-market",
        "favours": "insured",
        "negotiability": "standard",
        "standardWordings": []
      },
      "legalBasis": [
        "US: NAIC Credit for Reinsurance Model Law"
      ],
      "standards": [],
      "reviewStatus": "expert-reviewed",
      "reviewedBy": "Guido Hesse, Hesse Group Holding AG",
      "lastReviewed": "2026-09-04",
      "version": "0.1.0",
      "updated": "2026-09-03",
      "generated": {
        "by": "cursor-agent/claude-sonnet-5",
        "at": "2026-09-03T00:00:00.000Z"
      },
      "verified": [
        {
          "by": "human:ghesse",
          "at": "2026-09-04T00:00:00.000Z",
          "method": null
        }
      ],
      "staleAfter": null,
      "url": "https://hgh.ch/lexikon/en/knowledge/clause/insolvency-clause/",
      "alternateUrl": "https://hgh.ch/lexikon/de/wissen/klausel/insolvency-klausel/",
      "body": "## Purpose\n\nReinsurance is fundamentally a contract between cedent and reinsurer from which policyholders derive no direct rights (no cut-through absent a specific clause). If the cedent becomes insolvent, the reinsurer could otherwise argue that payment is only due once the cedent has actually paid the policyholder – something that practically never happens in full once an estate is in liquidation. The insolvency clause removes this defence.\n\n## Effect and limits\n\nThe reinsurer pays its share to the receiver or liquidator regardless of the actual payment status to policyholders; the funds flow into the general estate and do not necessarily benefit only the affected policyholders. In the United States the clause is required by regulation for a cession to qualify for \"credit for reinsurance\" in solvency supervision.\n\n## Negotiation and practice\n\nBecause the clause is regulatorily mandatory or market standard in many jurisdictions, there is little room to negotiate whether it applies; details such as the receiver's notification duties and time limits for filing claims are nonetheless specified contractually."
    },
    "de": {
      "id": "clause-insolvency-clause",
      "lang": "de",
      "type": "clause",
      "title": "Insolvency-Klausel",
      "shortDefinition": "Die Insolvency-Klausel verpflichtet den Rückversicherer, seinen Anteil an einem Schaden weiterhin an die Konkursmasse des Zedenten zu zahlen, auch wenn dieser insolvent wird und Forderungen der Versicherten nicht mehr vollständig begleicht.",
      "synonyms": [
        "Insolvenzklausel"
      ],
      "linesOfBusiness": [
        "Rückversicherung"
      ],
      "jurisdictions": [
        "Global"
      ],
      "tags": [
        "Rückversicherung",
        "Insolvenz"
      ],
      "relations": {
        "relatedTerms": [
          "term-cedent",
          "term-reinsurer",
          "term-treaty-reinsurance"
        ],
        "partOf": [],
        "appliesTo": [
          "term-treaty-reinsurance"
        ],
        "regulatedBy": [],
        "relevantFor": [],
        "insurableVia": [],
        "mitigatedBy": [],
        "comprises": [],
        "alternativeTo": [],
        "complementedBy": []
      },
      "attribute": null,
      "profile": null,
      "coverageProfile": null,
      "clause": {
        "kind": "condition",
        "origin": "reinsurance-market",
        "favours": "insured",
        "negotiability": "standard",
        "standardWordings": []
      },
      "legalBasis": [
        "US: NAIC Credit for Reinsurance Model Law"
      ],
      "standards": [],
      "reviewStatus": "expert-reviewed",
      "reviewedBy": "Guido Hesse, Hesse Group Holding AG",
      "lastReviewed": "2026-09-04",
      "version": "0.1.0",
      "updated": "2026-09-03",
      "generated": {
        "by": "cursor-agent/claude-sonnet-5",
        "at": "2026-09-03T00:00:00.000Z"
      },
      "verified": [
        {
          "by": "human:ghesse",
          "at": "2026-09-04T00:00:00.000Z",
          "method": null
        }
      ],
      "staleAfter": null,
      "url": "https://hgh.ch/lexikon/de/wissen/klausel/insolvency-klausel/",
      "alternateUrl": "https://hgh.ch/lexikon/en/knowledge/clause/insolvency-clause/",
      "body": "## Zweck\n\nRückversicherung ist grundsätzlich ein Vertrag zwischen Zedent und Rückversicherer, aus dem Versicherungsnehmer keine direkten Rechte ableiten (kein Cut-Through ohne besondere Klausel). Wird der Zedent insolvent, könnte der Rückversicherer sonst einwenden, er müsse erst zahlen, wenn der Zedent den Versicherten tatsächlich ausbezahlt hat – was bei einer Konkursmasse praktisch nie vollständig geschieht. Die Insolvency-Klausel schliesst diese Einrede aus.\n\n## Wirkung und Grenzen\n\nDer Rückversicherer zahlt seinen Anteil an den Insolvenzverwalter oder Liquidator, unabhängig vom tatsächlichen Zahlungsstand gegenüber den Versicherten; die Mittel fliessen in die allgemeine Konkursmasse und kommen nicht zwingend nur den betroffenen Versicherten zugute. In den USA ist die Klausel regulatorisch vorgeschrieben, damit eine Zession als «Credit for Reinsurance» in der Bilanzaufsicht anerkannt wird.\n\n## Verhandlung und Praxis\n\nDa die Klausel in vielen Rechtsordnungen aufsichtsrechtlich zwingend oder marktüblich ist, besteht wenig Verhandlungsspielraum über das Ob; Details wie Mitteilungspflichten des Insolvenzverwalters und Fristen für die Anmeldung von Forderungen werden dennoch vertraglich präzisiert."
    }
  }
}