New York Codes, Rules and Regulations › Title 11 - INSURANCE › Chapter IV - Financial Condition Of Insurer and Reports to Superintendent › Subchapter A - Rules of General Application › Part 79 - Letters Of Credit › Section 79.4 - Letter of credit issued by an unqualified bank-confirmation of

Current through Register Vol. 46, No. 28, July 10, 2024
For a letter of credit issued by a bank or trust company
					 which is not a qualified bank to be acceptable it must, in addition to meeting
					 the required conditions specified in section
					 79.2(a),
					 (b), (d)-(h) and (j)  of this Part, meet all
					 of the following conditions:
(a)
				  notwithstanding section
				  79.2(b) 
				  of this Part, name and formally designate the confirming bank (i.e., qualified
				  bank) as agent for the receipt and payment of drafts;
(b) contain an evergreen clause which
				  provides at least 60 days' written notice to the beneficiary prior to expiry
				  date for nonrenewal;
(c) be
				  presentable and payable at an office of the confirming bank in the United
				  States;
(d) state that it is
				  subject to and governed by the Laws of the State of New York and the 1993
				  revision of the Uniform Customs and Practice for Documentary Credits of the
				  International Chamber of Commerce (Publication 500)[FN*] and that, in the event
				  of any conflict, the Laws of the State of New York will control. If the
				  beneficiary is a foreign insurer, then such insurer's state of domicile may be
				  substituted for New York. The letter of credit must contain a provision that in
				  the event that one or more of the occurrences described in article 17 of
				  Publication 500 occurs to the issuing or confirming bank, the issuing bank
				  agrees to effect payment if the letter of credit is drawn against within 30
				  days after the resumption of business from such interruption;
(e) be confirmed by a qualified bank and such
				  confirmation must:
(1) be
				  irrevocable;
(2) be clean and
				  unconditional, except by way of reference to the letter of credit it is
				  confirming;
(3) be issued,
				  presentable and payable at an office of the qualified bank in the United
				  States. The aggregate of all letters of credit issued or confirmed to one
				  beneficiary by any one qualified bank on behalf of any one applicant must not
				  exceed five percent of such bank's consolidated capital and surplus as shown in
				  its annual report as of the end of its preceding fiscal year, as filed with the
				  Federal or state regulatory authority having jurisdiction over such
				  bank;
(4) contain a statement that
				  identifies the beneficiary and includes the definition set forth in section
				  79.1(b) 
				  of this Part;
(5) contain a
				  statement that it is not subject to any agreement, condition or qualification
				  outside of the confirmation or the letter of credit it is confirming;
(6) contain a statement to the effect that
				  the obligation of the confirming bank is an individual obligation of such bank
				  and is in no way contingent upon reimbursement with respect thereto;
(7) contain an issue date;
(8) contain a stated expiration date and time
				  which shall be prior to or coincide with the expiration date and time of the
				  letter of credit it is confirming;
(9) contain an evergreen clause which
				  provides at least 60 days written notice to the beneficiary prior to expiry
				  date for nonrenewal;
(10) state
				  that it is subject to and governed by the Laws of the State of New York and the
				  1993 revision of the Uniform Customs and Practice for Documentary Credits of
				  the International Chamber of Commerce (Publication 500)* and that, in the event
				  of any conflict, the Laws of the State of New York will control. If the
				  beneficiary is a foreign insurer, then such insurer's state of domicile may be
				  substituted for New York;
(11)
				  conform in substance to section
				  79.9(b) 
				  of this Part; and