Alaska Administrative Code › Title 3 - Commerce, Community, and Economic Development › Part 2 - Division of Insurance › Chapter 21 - Insurer - Financial › Article 6 - Reinsurance › 3 AAC 21.664 - Letters of credit

Current through May 31, 2024
(a) The letter of credit must be clean,
				  irrevocable, unconditional, and issued or confirmed by a qualified United
				  States financial institution as defined in AS 21.12.020(h). The letter of
				  credit must contain an issue date and expiration date and must stipulate that
				  the beneficiary need only draw a sight draft under the letter of credit and
				  present it to obtain funds and that no other document need be presented. The
				  letter of credit also must indicate that it is not subject to any condition or
				  qualifications outside of the letter of credit. In addition, the letter of
				  credit may not contain reference to any other agreements, documents, or
				  entities, except as provided in (h)(1) of this section.
(b) The heading of the letter of credit may
				  include a boxed section containing the name of the applicant and other
				  appropriate notations to provide a reference for the letter of credit. The
				  boxed section must be clearly marked to indicate that such information is for
				  internal identification purposes only.
(c) The letter of credit must contain a
				  statement to the effect that the obligation of the qualified United States
				  financial institution under the letter of credit is in no way contingent upon
				  reimbursement with respect thereto.
(d) The term of the letter of credit must be
				  for at least one year and contain an "evergreen clause" that prevents the
				  expiration of the letter of credit without due notice from the issuer. The
				  "evergreen clause" must provide for a period of no less than 30-day's notice
				  prior to the expiration date for nonrenewal.
(e) The letter of credit must state whether
				  it is subject to and governed by the laws of this state or the Uniform Customs
				  and Practice for Documentary Credits of the International Chamber of Commerce
				  Publication 600 (UCP 600) or International Standby Practices of the
				  International Chamber of Commerce Publication 590 (ISP98), or any successor
				  publication, and all drafts drawn thereunder shall be presentable at an office
				  in the United States of a qualified United States financial
				  institution.
(f) If the letter of
				  credit is made subject to the Uniform Customs and Practice for Documentary
				  Credits of the International Chamber of Commerce Publication 600 (UCP 600) or
				  International Standby Practices of the International Chamber of Commerce
				  Publication 590 (ISP98), or any successor publication, then the letter of
				  credit must specifically address and provide for an extension of time to draw
				  against the letter of credit in the event that one or more of the occurrences
				  specified in Article 36 of Publication 600 or any other successor publication,
				  occur.
(g) If the letter of credit
				  is issued by a financial institution authorized to issue letters of credit,
				  other than a qualified United States financial institution as described in
				  subsection (a) of this section, then the following additional requirements must
				  be met
(1) the issuing financial institution
				  shall formally designate the confirming qualified United States financial
				  institution as its agent for the receipt and payment of the drafts;
				  and
(2) the "evergreen clause"
				  shall provide for 30-day notice prior to expiration date for
				  nonrenewal.