New Mexico Administrative Code › Title 13 - INSURANCE › Chapter 2 - INSURANCE COMPANY LICENSING AND OPERATION › Part 8 - CREDIT FOR REINSURANCE › Section 13.2.8.24 - LETTERS OF CREDIT APPLICABLE TO REINSURANCE AGREEMENTS FOR TRUST AGREEMENTS QUALIFIED UNDER SECTION 18 OF 13.2.8 NMAC

Current through Register Vol. 35, No. 13, July 16, 2024
A. The letter of credit shall be clean,
				irrevocable, unconditional and issued or confirmed by a qualified U.S.
				financial institution as defined in Paragraph (1) of Subsection E of Section
				59A-12E-2 NMSA 1978. 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 Subsection A
				of
				13.2.8.27
				NMAC.
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 U.S. 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 U.S. of a qualified U.S. 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 U.S. financial institution as described in Subsection A of this
				section, then the following additional requirements shall be met:
(1) the issuing financial institution shall
				formally designate the confirming qualified U.S. 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.