West Virginia Code of State Rules › Agency 114 - Insurance Commission › Title 114 - LEGISLATIVE RULE INSURANCE COMMISSIONER › Series 114-40 - Credit For Reinsurance › Section 114-40-11 - Letters of Credit Qualified Under Section 9

Current through Register Vol. XLI, No. 28, July 12, 2024
11.1. The letter of credit must be clean,
				irrevocable, unconditional and issued or confirmed by a qualified United States
				financial institution as defined in W. Va. Code §
									33-4-15a(d)(1).
				The letter of credit shall contain an issue date and date of expiration 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 shall 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 shall not contain reference to any other agreements, documents or entities,
				except as provided in subdivision a, subsection 11.8 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 a conservator, rehabilitator or liquidator).
11.2. 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 shall be clearly marked to indicate that such information is for internal
				identification purposes only.
11.3. 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.
11.4. 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 the expiration date or nonrenewal.
11.5. 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 under the letter of credit shall be presentable at an office in the
				United States of a qualified United States financial institution.
11.6. 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 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.
11.7. 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 11.1 of this section, then the following additional requirements shall be
				met:
11.7.a. 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
11.7.b. The "evergreen clause" shall provide for
				thirty (30) days' notice prior to the expiration date for
				nonrenewal.