Follow-The-Settlements Doctrine Law and Legal Definition

Follow the settlements doctrine is a principle of Insurance law whereby an indemnitor must accede to the actions of the indemnitee in adjusting and settling claims. According to this principle, a reinsurer must follow the actions of the reinsured. This doctrine obligates reinsurers to indemnify cedents for any payments the cedent makes for claims covered by the underlying insurance. The purpose behind the follow-the-settlements doctrine is to promote the cedent's good-faith settlements.