There is no deductible under the Bank Letter of Credit Policy. The policy covers insured transactions in which the irrevocable letter of credit is denominated in U.S. dollars, European currency units, yen, Deutsche marks, Swiss francs, French francs or British pounds. No coverage exists for transfer or exchange to U.S. dollars or another approved currency. The policy covers interest on claims under this policy up to the date of claim payment or 180 days after the date of the issuing bank's default, whichever is earlier. If the interest rate set forth in the agreement between the issuing bank and the insured is lower than the special prime-based rate discussed above, the lower nominal rate will be the coverage limit.
Premiums are due only on the principal amount of the letter of credit or refinancing thereunder.
The interest rates endorsement sets forth insured interest rates for each of the other approved currencies. The Bank Letter of Credit Policy may be issued to banks doing business in the United States in accordance with applicable federal or state banking laws and regulations. The insured bank must act under the terms of UCP as either the paying, accepting, or negotiating bank for the insured transaction. The application requires disclosure of all relevant financial information on the issuing bank, and the Country Limitation Schedule applies. If the pre-presentation agreement of the insurer is elected, the Country Limitation Schedule in effect at the time of bank commitment governs.