Insolvency Clause

A provision in a reinsurance contract which stipulates that irrespective of the fact that an insurer may have become insolvent and/or ceased paying losses to its claimants, that the reinsurer must continue to make payments to the reinsured or to its receiver as if the insolvency had not occurred. (Similar to the Cut Through Clause which provides for payments directly to the original insured, particularly where a captive is merely using the original insurer as a fronting vehicle to access the reinsurer.)