Whether an underlying insured has a direct right of action against reinsurers often depends on whether there is a cut-through clause in the reinsurance contract. A cut-through clause allows the underlying insured to cut through directly to the reinsurers if the policy issuing company becomes insolvent. Check out my colleague Robert M. Hall’s article, Are Cut-Through Clauses Enforceable?, in the ARIAS U.S. Quarterly, Second Quarter, 2021 and my IRMI.com Expert Commentary on cut-through clauses.

In a recent appellate decision in New York, the court affirmed the dismissal of a complaint by a policyholder against its reinsurers because there was no cut-through clause.

Continue reading “Insured’s Claims Against Reinsurers Dismissed Where Reinsurance Contract Had No Cut-Through Clause” →