Uncategorized INSURANCE COVER IS SUBJECT TO EXCESS By Mr Old Man Posted on June 3, 2014 1 min read 2 0 2,942 Share on Facebook Share on Twitter Share on Google+ Share on Reddit Share on Pinterest Share on Linkedin Share on Tumblr QUESTION Dear Mr. Old Man, LC requires: Insurance Certificate in assignable form and endorsed in blank for 110 % of invoice value covering all risks showing CLAIM PAYABLE IN VIETNAM. Insurance Certificate presented shows CLAIM PAYABLE IN VIETNAM EXCESS 0.5% OUT OF SUM INSURED. Is the insurance certificate acceptable? Thank you. Best regards, PTTM ————– ANSWER Hi, Paragraph K14 ISBP 745 provides: “An insurance document may indicate that cover is subject to A FRANCHISE or EXCESS (DEDUCTIBLE) [emphasis added]. However, when a credit requires the insurance cover to be irrespective of percentage, the insurance document is not to contain a clause stating that the insurance cover is subject to a franchise or an excess (deductible)”. The insurance certificate in question is acceptable. By the way, please click the following link to find out examples regarding the terms “franchise” and “excess” (deductible): http://nhducdng.wordpress.com/2013/11/27/claims-payable-settling-agent-franchise-excess-deductible/ Kind regards, Mr. Old Man
IS THE NOMINATED BANK REQUIRED TO VERIFY WHETHER THE BENEFICIARY HAS AUTHORIZED THE PRESENTING BANK TO PRESENT THE DOCUMENTS?
CAN THE ISUING BANK CITE “LATE PRESENTATION” AS A DISCREPANCY SOLELY BASED ON THE DATE OF THE COVER LETTER?
IS THE NOMINATED BANK REQUIRED TO VERIFY WHETHER THE BENEFICIARY HAS AUTHORIZED THE PRESENTING BANK TO PRESENT THE DOCUMENTS?
CAN THE ISUING BANK CITE “LATE PRESENTATION” AS A DISCREPANCY SOLELY BASED ON THE DATE OF THE COVER LETTER?