The assumed risk is in the context of the business written by the insurer, see Assumed Reinsurance. In the context of self-insurance, the risk remains with the policyholder.
The Assumption of Liability Agreement is a separate agreement between the company appointed by the reinsurer and the company issuing the policy, entered into on behalf of the insured. It imposes on the reinsurer direct liability to the insured in the event of the insolvency of the issuing company. The reinsurer is usually a licensed company in the states where the insured requires coverage, giving policyholders access to an insurer that is subject to government regulation. Another important provision indicates that the agreement takes precedence over any other reinsurance contracts or arrangements between the reinsurer and the primary insurer. These agreements are almost always between affiliated insurers.
An Assumption of Liability Evidence (ALE) is an acknowledgment added to an insurance policy to ensure that in the event of the insurer’s insolvency, the amount of any loss that would have been recovered by the reinsurer from the insurance company will be paid instead. reinsurer directly to the insured. Also called risk reduction or risk acceptance.
Risk acceptance is based on the principle of “volenti non fit injuria”. If a person is aware of the consequences of a particular action and willingly accepts that risk, he or she is solely responsible for any harm caused.
The doctrine of risk acceptance is a common law defense that has been used to transfer liability for loss or damage to an injured party by arguing that the person knew and understood the hazards involved in the enterprise and is therefore not entitled to redress for the damage caused. the loss. Judicial decisions have undermined and narrowed the applicability of this protection.
Assurance is a British term meaning “insurance”. This terminology may be used, among other things, in policies and approvals written in the London and Bermuda markets.