Common use of Insolvency of the Ceding Company Clause in Contracts

Insolvency of the Ceding Company. In the event of the insolvency of the Ceding Company, all reinsurance made, ceded, renewed or otherwise becoming effective under this Agreement shall be payable by the Reinsurer directly to the Ceding Company or to its statutory liquidator, receiver or statutory successor on the basis of the Liability of the Ceding Company under the Covered Insurance Policies without diminution because of the insolvency of the Ceding Company except: (1) where this Agreement specifically provides for the Reinsurer to make payment to the payees under the Covered Insurance Policies in the event of the insolvency of the Ceding Company; or (2) where the Reinsurer, with the consent of the direct insured, has assumed the policy obligations of the Ceding Company as direct obligations of the Reinsurer to the payees under a Covered Insurance Policy and in substitution for the obligations of the Ceding Company to the payees.