Common use of Liability and Payment Clause in Contracts

Liability and Payment. The Reinsured’s good faith determinations regarding its liabilities under the policies of the Subject Business, including the Reinsured’s decisions to adjust, settle, and compromise all Claims will bind the Reinsurer. Notwithstanding anything contained in this Agreement to the contrary, the liability of the Reinsurer with respect to Claims will follow the liability of the Reinsured in all respects and will be subject to all good faith interpretations of contract provisions in the policies of the Subject Business by the Reinsured including interpretations resulting in the payment of Claims. Notwithstanding anything contained in this Agreement to the contrary, all such adjustments, settlements and compromises will be unconditionally binding upon the Reinsurer in proportion to the Reinsurer’s quota share participation, the true intent of this Agreement being that the Reinsurer will, in every case to which this Agreement applies, follow the fortunes, and follow the settlements of the Reinsured.