500 Error during CA Federation & Office 365 Transaction.
Error: "Bad installation or configuration, Assertion handler can't be initialized. Leaving Assertion Generator Framework." is seen in the Policy Server SMPS log.
[FWS TRACE SHOWS THE TUNNEL CALL FAILED]
[processAssertionGeneration][Result of authorizeEx call is: 1.]
[...omitted for brevity...]
[processAssertionGeneration][Received the following response from WSFED assertion generator: WSFEDResponse=NO.]
[SMPS TRACES SHOW ASSERTION HANDLER COULD NOT BE LOADED]
[02/22/2016][11:57:57.374][11:57:57][12917][30][AssertionGenerator.java][invoke][Assertion Handler for "WSFED12.SAML11" will be loaded.][][][][][][][][][][][18ae4ad5-8691dbd9-bcb48be4-b495a84a-e43319ee-c51][][][][][][][][][][][][][][][][][][][][][][][][][][][][][][][][][][][][][][]
[02/22/2016][11:57:57.375][11:57:57][12917][30][AssertionGenerator.java][getAssertionHandler][Loading AssertionHandler: null][][][][][][][][][][][18ae4ad5-8691dbd9-bcb48be4-b495a84a-e43319ee-c51][][][][][][][][][][][][][][][][][][][][][][][][][][][][][][][][][][][][][][]
[02/22/2016][11:57:57.375][11:57:57][12917][30][AssertionGenerator.java][invoke][Bad installation or configuration, Assertion handler can't be initialized. Leaving Assertion Generator Framework.][][][][][][][][][][][18ae4ad5-8691dbd9-bcb48be4-b495a84a-e43319ee-c51][][][][][][][][][][][][][][][][][][][][][][][][][][][][][][][][][][][][][][]
Policy Server SMPS & SPS 12.52 & above
For Office 365 Integration.
This happens due to missing entries in the AssertionGeneratorFramework.properties file.
The Policy Server has AssertionGeneratorFramework.properties file with entries missing and those are:
# WS Federation 1.1/SAML11 Assertion Handler mapping
AssertionHandler.WSFED12.SAML11=com.netegrity.assertiongenerator.wsfed.AssertionHandlerWSFED12
# WS Federation 1.1/SAML20 Assertion Handler mapping
AssertionHandler.WSFED12.SAML20=com.netegrity.assertiongenerator.wsfed.AssertionHandlerWSFED12
AssertionGeneratorFramework.properties.new file was had all the missing entries. Adding these missing entries and restarting the Policy Server resolves the error. The SMPS doesn't show the error anymore.