INSURANCE DOCUMENT INDICATING AN EXPIRY DATE FOR PRESENTING CLAIMS; MATURITY DATE OF DRAFT AT 90 DAYS SIGHT DRAWN ON REIMBURSING BANK

QUESTION

Dear Mr. Old Man,

1. Insurance policy indicating expiry date for the presentation of claims

We have received documents including an insurance policy showing: “Claims must be advised within 3 months from the date of discovery of loss/damage”.

Is this statement considered as a stipulation of  “expiry date for the presentation of any claims” as per ISBP 745, paragraph K9?

If yes, this document is discrepant, isn’t it?

2. Calculation of maturity date

A UPAS LC requires:

– Drafts for 90 days after sight to be drawn on the reimbursing bank.

– Drafts to be sent to the reimbursing bank

– Documents required under F.46A to be sent to the issuing bank

The question is whether the maturity date is 90 days after the date the reimbursing bank receives the drafts or after the date the issuing bank receives the documents.

I’m very appreciated if you could reply as soon as possible.

Best regards,

K.

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ANSWER

Hi,

1) According to ISBP para K9, an insurance document is not to indicate an expiry date for the presentation of any claims.

The fact that the insurance policy states “claims must be advised within 3 months from the date of discovery of loss/damage” is deemed as to have set an expiry date for presenting claims, therefore, it is discrepant.

2) It is understood from ISBP para B5 (a) that for a draft at 90 days sight, the maturity date will be 90 days after the day of the presentation to the bank on which the draft is drawn.

In your case the draft is drawn on the reimbursing bank. So, the maturity date will be 90 days after the day the draft is seen by the drawee (i.e. the reimbursing bank).

Answer no. 2  is based on my assumption that LC does not include any clause contrary to ISBP para B5 (a).

Kind regards,

Mr. Old Man