Uncategorized INSURANCE DOCUMENT ISSUED TO ORDER OF THE ISSUING BANK By Mr Old Man Posted on November 22, 2013 2 min read 5 1 8,902 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 issued by XYZ BANK requires presentation of an insurance document as follows: MARINE INSURANCE CERTIFICATE IN DUPLICATE FOR 110 PCT OF INVOICE VALUE, ENDORSED TO THE ORDER OF XYZ BANK WITH CLAIMS PAYABLE IN SAUDI ARABIA IN THE CURRENCY OF THE CREDIT. The insurance certificate presented shows: Insurance applicant: ABC VIETNAM CO LTDInsured name: TO ORDER OF XYZ BANK. Does ABC VIETNAM CO LTD need to endorse the insurance certificate?Thanks and regards,BD—-ANSWER Hi, An insurance document issued to the order of an insured party is as valid as that endorsed to the order of that insured party I understand XYZ BANK is the LC issuing bank. As the insurance certificate in question is issued to order of XYZ BANK, endorsement (if any) shall be made by XYZ BANK and not by the insurance applicant – ABC VIETNAM CO LTD. XYZ BANK shall endorse the insurance certificate to the LC applicant when the LC applicant takes up the documents and fulfils his obligations towards XYZ BANK under the contract for opening LC, i.e., to deposit funds (in case the import transaction is self-financed) or to provide signed promissory note to the issuing bank (in case the import transaction is financed by the issuing) to cover the payment. The insurance certificate in question is acceptable without endorsement. ABC VIETNAM CO LTD should not endorse it. 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?