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CONSIGNEE ON INSURANCE CERTIFICATE

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(Quoted from DCPro Discussion Forum 7 – 8 Mar, 2015)

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QUESTION

L/C requires [i] insurance policy or certificate endorsed in blank ….. and [ii] bill of lading made out to order and endorsed in blank or made out to the order of the issuing bank [ABC Bank].

B/L presented under the L/C shows to the order of the ABC Bank. Insurance certificate is endorsed by the beneficiary in blank, but in the face of the insurance certificate it shows consignee as [name and address of the applicant].

There is an anomalies of the consignee in the B/L and the Insurance certificate. B/L shows the issuing bank’s name under consignee whereas insurance shows the applicant’s name.

Do you think this is a discrepancy ?

In the event of any damage of the goods, can an issuing bank lodge any claim given the consignee is the applicant, not the issuing bank.

Your thoughts, please.

Regards,

Shahed

———-

ANSWER

Hi,

Paragraph L5 of ISBP 745 refers to consignee information on C/O. According to this paragraph, when an L/C requires a transport document to be issued “to order”, “to the order of shipper”, “to order of issuing bank”, “to order of nominated bank (or negotiating bank)” or “consigned to issuing bank”, the C/O may show the consignee as any entity named in the L/C except the beneficiary.

According to ICC Opinion R699 / TA607, the above principle equalizes to other documents (I would like to add, including insurance document) on which there is consignee information completed.

So, the fact that the insurance certificate in question shows the consignee as the applicant’s name whereas the B/L shows the consignee as “to the order of the ABC Bank” does not constitute a discrepancy.

According to ICC Opinion R322, by requesting an insurance document to be endorsed in blank, the issuing bank is seeking to receive a document which is capable of transfer by means of completion of the endorsement, i.e. the assured party (holder) would become the issuing bank or the applicant. So, in my opinion, in some cases and if necessary, the issuing bank as a holder in due course can file claim to the insurer regardless whether the insurance policy shows the consignee as the applicant’s name.

Kind regards,
N.H. Duc

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3 Comments

  1. Crazy Cricketer

    April 26, 2016 at 10:32 pm

    Dear Mr. Old Man,

    If LC requires insurance policy or certificate issued and blank endorsed and Which of the below presentation is correct if “NAME OF ASSURED” in policy shows as below (not mentioning consignee).

    1. Beneficiary name— Blank endorsed by beneficiary
    2. To order —Blank endorsed beneficiary
    3. To bearer –Blank endorsed beneficiary
    4.Issuing bank name —Blank endorsed beneficiary
    5.Confirming bank name (if any)—Blank endorsed beneficiary
    6.Applicant name —Blank endorsed beneficiary

    Reply

    • mroldman

      April 27, 2016 at 10:21 am

      Hi,

      Endorsement should be done by the assured.
      Where an insurance document indicates the assured as “to bearer” or “to order”, no endorsement is needed.

      In view of the above,
      1. OK
      2. Acceptable
      3. Acceptable
      4. Not ok
      5. Not ok
      6. Not ok

      Kind regards,
      Mr. Old Man

      Reply

  2. Naima

    December 21, 2016 at 12:56 pm

    Hi,,

    Please when a Bill of Lading in L/C is to Order of a bank for ex:
    TO ORDER OF THE SAUDI INVESTMENT BANK,
    in the L/C the Issuing Bank is :
    SAUDI INVESTMENT BANK,
    RIYADH SA
    Please in filed 46A:
    Documents Required:
    B/L to be issued TO ORDER OF THE SAUDI INVESTMENT BANK
    Here the question is it the same bank ( Sender or Issuing )
    and in the Documents ( Commercial Invoice , Packing List , Certificate of Origin) the Consignee will be the same as mentioned in the B/L , means word by word as B/L or it will be the one shown on the Swift message.( Sender / Issuing Bank )
    Sometimes in the L/C Swift they are mentioning only the name of the Bank without any other informations in TO THE ORDER OF IN THE BILL OF LADING , and i have some difficulties to identify the Bank ( Head Office or Branch ), so i am mentioning the same Name in the B/L as consignee in all the other documents.

    Reply

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