Cut-through clause gains appeal in Latin America.(Spotlight: RIMS 2006 Conference Report)

Byline: ROBERTO CENICEROS

HONOLULU-With support growing for left-leaning populist governments in Latin America, cut-through clauses are attracting new interest in the region, speakers told the Risk & Insurance Management Society Inc.

But cut-through arrangements can be tricky and perhaps unenforceable, requiring insurance purchasers to consider factors such as the local insurance laws, the broad variations in contract wording and the attitudes of reinsurers, speakers said.

Essentially, a cut-through endorsement provides that, should a primary or fronting insurer not be able to pay a claim, the policyholder is entitled to collect directly from the …