Oklahoma Administrative Code › Title 365 - Insurance Department › Chapter 25 - Other Licensees › Subchapter 7 - Companies › Part 11 - CREDIT FOR REINSURANCE › Section 365:25-7-72 - Letters of credit qualified under 365:25-7-67

Current through
				  Vol. 41, No. 20, July 1, 2024
(a) The letter of credit must be clean,
				  irrevocable, unconditional and issued or confirmed by a qualified United States
				  institution as defined in Section 5123.1(A) of the Act. 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 (h)(1) of this section. As used in this
				  section, "beneficiary" means 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 thirty (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) or
				  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 (a)
				  of this section, 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
				  thirty (30) days' notice prior to expiration date for nonrenewal.