Washington Administrative Code › Title 284 - Insurance Commissioner, Office of the › Chapter 284-13 - Assets-Liabilities-Investments and reinsurance › CREDIT FOR REINSURANCE › Section 284-13-560 - Letters of credit qualified under WAC 284-13-540

Current through Register Vol. 24-14, July 15, 2024
(1) The letter of credit must be clean,
				irrevocable, and unconditional and issued or confirmed by a qualified United
				States financial institution as defined in
				RCW
				 48.12.465(1). The letter of
				credit must contain an issue date and date of expiration and must 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 must also indicate that it is not subject to any condition
				or qualifications outside of the letter of credit. In addition, the letter of
				credit itself must not contain reference to any other agreements, documents, or
				entities, except as provided in subsection (8)(a) 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).
(2) 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 must be clearly marked to indicate that the
				information is for internal identification purposes only.
(3) The letter of credit must 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.
(4) The term of the letter of credit must be
				for at least one year and must contain an "evergreen clause" that prevents the
				expiration of the letter of credit without due notice from the issuer. The
				"evergreen clause" must provide for a period of no less than thirty days'
				notice prior to the expiration date or nonrenewal.
(5) The letter of credit must 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 must be presentable at an office
				in the United States of a qualified United States financial
				institution.
(6) 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 must 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.
(7) 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
				subsection (1) of this section, then the following additional requirements must
				be met:
(a) The issuing financial institution
				must formally designate the confirming qualified United States financial
				institution as its agent for the receipt and payment of the drafts;
				and
(b) The "evergreen clause" must
				provide for thirty days' notice prior to the expiration date for
				nonrenewal.