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 79.9 - Exhibits

Current through Register Vol. 46, No. 28, July 10, 2024
Exhibit A, "Letter of Credit", Exhibit B, "Confirmation",
					 Exhibit C, "Letter of Credit - Nonqualifying Bank", and Exhibit D, "Letter of
					 Credit Trust Agreement" are as follows:
(a) Exhibit A--Letter of credit.
............
FOR INTERNAL IDENTIFICATION
PURPOSES ONLY
Our No. ________ Other ____________
Applicant ____________
(Issue Date)
____________
IRREVOCABLE LETTER OF CREDIT NO. ________
TO: (Beneficiary)
We hereby establish this irrevocable Letter of Credit in
					 favor of the aforesaid addressee ("Beneficiary") for drawings up to United
					 States $ ________ effective immediately. This Letter of Credit is issued,
					 presentable and payable at our office at (issuing bank's address) and expires
					 with our close of business on ________, 19 ________.
The term "Beneficiary" includes any successor by operation
					 of law of the named Beneficiary including, without limitation, any liquidator,
					 rehabilitator, receiver or conservator.
We hereby undertake to promptly honor your sight draft(s)
					 drawn on us, indicating our Credit No. ________, for all or any part of this
					 Credit if presented at our office specified in paragraph one on or before the
					 expiry date or any automatically extended expiry date.
Except as expressly stated herein, this undertaking is not
					 subject to any agreement, condition or qualification. The obligation of
					 (issuing bank) under this Letter of Credit is the individual obligation of
					 (issuing bank), and is in no way contingent upon reimbursement with respect
					 thereto.
It is a condition of this Letter of Credit that it is
					 deemed to be automatically extended without amendment for one year from the
					 expiry date hereof, or any future expiration date, unless 30 days prior to any
					 expiration date we notify you by registered mail that we elect not to consider
					 this Letter of Credit renewed for any such additional period.
This Letter of Credit 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, in the event of any conflict, the Laws of
					 the State of New York will control. If this Credit expires during an
					 interruption of business as described in article 17 of said Publication 500,
					 the bank hereby specifically agrees to effect payment if this Credit is drawn
					 against within 30 days after the resumption of business.
Very truly yours,
____________
(Issuing Bank)
(b)
				  Exhibit B--Confirmation.
(Issue Date)
____________
TO: (Beneficiary)
We hereby confirm the enclosed irrevocable Letter of Credit
					 No. ________and amendments thereto, if any, issued in favor of the aforesaid
					 addressee ("Beneficary") by (issuing bank) for drawings up to United States $
					 ________effective immediately. This confirmation is issued, presentable and
					 payable at our office at (confirming bank's address) and expires with our close
					 of business on ________, 19 ________.
The term "Beneficiary" includes any successor by operation
					 of law of the named Beneficiary including, without limitation, any liquidator,
					 rehabilitator, receiver or conservator.
We hereby undertake to promptly honor your sight draft(s)
					 drawn as specified in the Letter of Credit and presented at our office
					 specified in paragraph one on or before the expiry date of this confirmation or
					 any automatically extended expiry date.
Except as expressly stated herein, this undertaking is not
					 subject to any agreement, condition or qualification. The obligation of
					 (confirming bank) under this Confirmation is the individual obligation of
					 (confirming bank), and is in no way contingent upon reimbursement with respect
					 thereto.
It is a condition of this Confirmation that it is deemed to
					 be automatically extended without amendment for one year from the expiry date
					 hereof, or any future expiration date, unless 60 days prior to any expiration
					 date we shall notify you by registered mail that we elect not to consider this
					 Confirmation renewed for any such additional period.
This Confirmation ts 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, in the event of any conflict, the Laws of the State of New York
					 will control.
Very truly yours,
____________
(Confirming Bank)
(c) Exhibit C - Letter of
				  credit--nonqualifying bank.
............
FOR INTERNAL IDENTIFICATION
PURPOSES ONLY
Our No.________ Other____________
Applicant ____________
(Issue Date)
____________
IRREVOCABLE LETTER OF CREDIT NO.________
TO: (Beneficiary)
We hereby establish this irrevocable Letter of Credit in
					 favor of the aforesaid addressee ("Beneficiary") for drawings up to United
					 States $________effective immediately and expiring at our office at (issuing
					 bank's address) with our close of business on ________, 19________.
This Letter of Credit is hereby confirmed by (confirming
					 bank's name) and such bank is formally designated as our agent for the receipt
					 and payment of drafts under the Credit.
The term "Beneficiary" includes any successor by operation
					 of law of the named Beneficiary including, without limitation, any liquidator,
					 rehabilitator, receiver or conservator.
We hereby undertake to promptly honor your sight draft(s)
					 drawn on us, indicating our Credit No. ________, for all or any part of this
					 Credit if presented at our office at (issuing bank's address), or at such
					 office of (confirming bank) as is designated in the confirmation of this Credit
					 on or before the expiry date or any automatically extended expiry date.
Except as expressly stated herein, this undertaking is not
					 subject to any agreement, condition or qualification. The obligation of
					 (issuing bank) under this Letter of Credit is the individual obligation of the
					 (issuing bank), and is in no way contingent upon reimbursement with respect
					 thereto.
It is a condition of this Letter of Credit that it is
					 deemed to be automatically extended without amendment for one year from the
					 expiry date hereof, or any future expiration date, unless 60 days prior to any
					 expiration date we notify you by registered mail that we elect not to consider
					 this Letter of Credit renewed for any such additional period.
This Letter of Credit 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, in the event of any conflict, the Laws of
					 the State of New York will control. If this Credit or the Confirmation thereof
					 expires during an interruption of business of this bank or the confirming bank
					 as described in article 17 of said Publication 500, the bank hereby
					 specifically agrees to effect payment if this Credit is drawn against within 30
					 days after the resumption of business from such interruption.
Very truly yours,
____________
(Issuing Bank)
(d)
				  Exhibit D - Letter of credit trust agreement.
This Agreement between________, (hereinafter called the
					 "reinsurer"), and________, (hereinafter called the "the ceding insurer"),
					 including any successor by operation of law of the ceding insurer including,
					 without limitation, any liquidator, rehabilitator, receiver or conservator of
					 such insurer.
WITNESSETH:
The reinsurer has secured delivery to the ceding insurer of
					 a clean, unconditional and irrevocable Letter of Credit of (issuing bank),
					 No.________issued on________, 19 ________in the sum of United States
					 $________expiring on ________, 19 ________("the Credit") securing refund and
					 payment to the ceding insurer of reinsurer's share of any obligations due or
					 which may become due to the ceding insurer pursuant to the terms of the
					 specific Reinsurance Agreement No. ________between the parties which became
					 effective on________, 19________.
Now, THEREFORE, in consideration of reinsurer having so
					 applied for and secured delivery of said Letter of Credit, which is hereby
					 acknowledged, the ceding insurer undertakes to use and apply any amounts which
					 it may draw upon such Credit, without diminution because of the insolvency of
					 the ceding insurer or the reinsurer, for the following purposes:
(1) To pay or reimburse the ceding insurer
				  for the reinsurer's share under the specific reinsurance agreement for any
				  losses and allocated loss expenses paid by the ceding insurer but not recovered
				  from the reinsurer or for unearned premiums due to the ceding insurer, if not
				  otherwise paid by the reinsurer in accordance with the terms of such agreement
				  or;
(2) Where the ceding insurer
				  has received notification of the nonrenewal of the Letter of Credit and where
				  the reinsurer's entire obligations under the specific reinsurance agreement
				  remain unliquidated and undischarged 10 days prior to such expiration date, to
				  obtain a cash deposit equal to such obligations and deposit such amounts in a
				  separate account in the name of the ceding insurer in any United States bank or
				  trust company, apart from its general assets, in trust for such uses and
				  purposes specified in paragraph (1) of this Agreement as may remain executory
				  after obtaining the cash deposit and for any period after such expiration date.
				  Where the amounts held in such separate account exceed the actual amount
				  required to fund the reinsurer's entire obligations under the specific
				  reinsurance agreement, the ceding insurer shall make payment to the reinsurer
				  of the excess amount.
"Obligations", whenever used in this Agreement, shall mean
					 the following:
(a) losses and
				  allocated loss expenses paid by the ceding insurer, but not recovered from the
				  reinsurer;
(b) reserves for losses
				  reported and outstanding;
(c)
				  reserves for losses incurred but not reported;
(d) reserves for allocated loss expenses;
				  and
(e) reserves for unearned
				  premiums.
IT IS FURTHER AGREED between the parties hereto that, at
					 annual intervals or more frequently as required but never more frequently than
					 quarterly, the balance of Credit made available will be adjusted in the
					 following manner:
(a) The ceding
				  insurer will prepare a statement showing the reinsurer's share of the
				  obligations on the accounting date under the specific reinsurance
				  agreement.
(b) If the reinsurer's
				  share of the obligations under the specific reinsurance agreement exceeds the
				  then existing balance of the Credit made available, the reinsurer will, within
				  30 days after receiving notice of such excess, secure delivery to the ceding
				  insurer of an amendment of the Credit increasing the amount of Credit available
				  by the amount of such difference.
(c) If the reinsurer's share of the
				  obligations under the specific reinsurance agreement is less than the balance
				  of Credit available on the accounting date, the ceding insurer will, within 30
				  days after receipt of a written request from the reinsurer, release the excess
				  credit by agreeing to secure an amendment to the Credit reducing the amount of
				  Credit available by the amount of such excess credit.
(d) The ceding insurer undertakes to use and
				  apply any amount which it may draw upon the amended Credit solely for the
				  purposes set forth in this Agreement.
IT IS FURTHER AGREED between the parties hereto that
					 (issuing bank and confirming bank, if any) with or without notice of the
					 existence of this Agreement, shall have no responsibility whatsoever in
					 connection with its execution.
This Agreement is subject to and governed by the Laws of
					 the State of New York.
The parties have caused this Agreement to be signed as of
					 ________, 19________.
By____________
(Reinsurer)
By____________
(Ceding Insurer)
[FN*] ICC No. 500, UNIFORM CUSTOMS AND PRACTICE FOR
					 DOCUMENTARY CREDITS/1993 Revision. Copyright 1993 by the International Chamber
					 of Commerce. All rights reserved. Reprinted with the permission of the
					 International Chamber of Commerce through ICC Publishing, Inc., in New
					 York.
[FN*] ICC No. 500, UNIFORM CUSTOMS AND PRACTICE FOR
					 DOCUMENTARY CREDITS/1993 Revision. Copyright 1993 by the International Chamber
					 of Commerce. All rights reserved. Reprinted with the permission of the
					 International Chamber of Commerce through ICC Publishing, Inc., in New
					 York.
[FN*] ICC No. 500, UNIFORM CUSTOMS AND PRACTICE FOR
					 DOCUMENTARY CREDITS/1993 Revision. Copyright 1993 by the International Chamber
					 of Commerce. All rights reserved. Reprinted with the permission of the
					 International Chamber of Commerce through ICC Publishing, Inc., in New
					 York.