Louisiana Administrative Code › Title 37 - INSURANCE › Part XIII - Regulations › Chapter 35 - Regulation 56-Credit for Reinsurance › Section XIII-3519 - Letters of Credit Qualified under Section 3515 [Formerly Section 3517]

Current through Register Vol. 50, No. 6, June 20, 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
				R.S.
				22:653(A). The letter of
				credit shall contain an issue date and expiration date and shall 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 shall indicate that it is not subject to any condition or
				qualifications outside of the letter of credit. In addition, the letter of
				credit itself shall not contain reference to any other agreements, documents or
				entities, except as provided in §3519.H.1 As used in §3519:
Beneficiary
-the domestic insurer for whose
				  benefit the letter of credit has been established and any successor of the
				  beneficiary by operation of law. If a court of law appoints a successor in
				  interest to the named beneficiary, then the named beneficiary includes, and is
				  limited to, the court appointed domiciliary receiver (including conservator,
				  rehabilitator, or liquidator).
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 shall be clearly marked to indicate that such information is for
				internal identification purposes only.
C. The letter of credit shall 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 shall be
				for at least one year and shall contain an "evergreen clause" that prevents the
				expiration of the letter of credit without due notice from the issuer. The
				"evergreen clause" shall provide for a period of no less than 30 days notice
				prior to expiration date or nonrenewal.
E. The letter of credit shall 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) International Standby Practices of the International Chamber of
				Commerce Publication 590
(ISP98) or any successor publication, then
				the letter of credit shall 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 §3519 A, then the
				following additional requirements shall 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 days notice prior to expiration date for nonrenewal.