Strike-Through Clause (Cut-Through Clause)

Provision that holds a reinsurer liable for its share of losses even if the Ceding Company becomes insolvent before paying these losses. For example, XYZ Insurance Co. Writes a fire policy for Acme Manufacturing and then reinsures 80% of the risk with ABC Reinsurance. XYZ is declared insolvent. Then Acme Manufacturing burns to the ground. ABC Reinsurance would be responsible for the 80% of the risk it reinsured and would pay the claim directly to Acme.