Missouri Code of State Regulations › Title 8 - DEPARTMENT OF LABOR AND INDUSTRIAL RELATIONS › Division 10 - Division of Employment Security › Chapter 4 - Unemployment Insurance › Section 8 CSR 10-4.170 - Irrevocable Letter of Credit

Current through Register Vol. 49, No. 14, July 15, 2024
PURPOSE: This rule establishes procedures for
				  complying with the irrevocable letter of credit aspect of section
				  288.032(2),
				   RSMo.
(1) A letter of credit, issued by a
				commercial bank chartered under the laws of Missouri or chartered pursuant to
				the National Banking Act, may be submitted to the Missouri Department of Labor
				and Industrial Relations, Division of Employment Security, (hereinafter the
				division) in lieu of a surety bond or securities as required by section
				288.032,
				RSMo. The letter of credit must be in an amount equal to the otherwise required
				bond or securities.
(2) The letter
				of credit shall be irrevocable and the beneficiary shall be the division.
				Payment shall be made immediately upon presentment of a demand for payment
				signed by the director of the division or his/her designated
				representative.
(3) All letters of
				credit shall conform to a required format. A standard letter of credit form
				embodying this format shall be provided by the division. All letters of credit
				shall be accompanied by an authorization for release of confidential
				information allowing the director of the division or his/her designee to
				release confidential information to the issuing bank.
(4) A demand for payment upon a letter of
				credit may be presented for payment only upon reasons that bond proceeds would
				be demanded.
(5) All letters of
				credit must be negotiable at a financial institution located within
				Missouri.
(6) Letters of credit
				shall have a term of one (1) year and shall be automatically renewable on an
				annual basis for an additional five (5) years. A letter of credit may be
				canceled by the issuer sixty (60) days after written notice is delivered to the
				division. Upon this notice the lessor employing unit shall be required to
				substitute a surety bond within sixty (60) days. If the required bond is not
				received within that time period, the client lessees will be jointly and
				severally liable and required to separately report as provided in section
				288.032,
				RSMo.
(7) The division shall not
				release the letter of credit until it is satisfied, either by audit or
				otherwise, that no claims exist against the letter.
(8) A lessor employing unit shall be required
				to augment letters of credit in any situation where the lessor employing unit
				would be required to increase its coverage under a surety bond. This additional
				bonding requirement may be satisfied by increasing the letter of credit,
				submitting an additional letter of credit, submitting an additional surety
				bond, depositing additional securities, or submitting an additional certificate
				of deposit. Failure to increase the letter of credit amount when required will
				result in the client lessees being jointly and severally liable and required to
				separately report as provided in section
				288.032,
				RSMo.
*Original authority: 288.220. RSMo 1951, amended 1955,
					 1961, 1963, 1967, 1971, 1995.