INSURANCE DOCUMENT ISSUED TO ORDER WITHOUT ENDORSEMENT

QUESTION

Dear Mr. Old Man,

I will appreciate your comment on the following:

LC requires: Insurance certificate to order and blank endorsed.

Presented insurance certificate shows the assured party as “To Order” without endorsement.

Let me know whether such an insurance certificate is acceptable.

Thank you in advance.

TPG

——-

ANSWER

Hi,

According to ICC Opinion TA688rev, insurance documents should not indicate or be required to indicate the assured as “To Order” or “To Bearer”.

ISBP 745 paragraph K20 (a) also states: “A credit should not require an insurance document to be issued “to bearer”, or “to order”. A credit should indicate the name of an insured party”.

However, practice has shown some banks, as in your case, still require presentation of insurance policy/certificate to be issued to order and blank endorsed. The situation in your case is much the same as that ICC Opinion TA688rev and R788/TA688rev the conclusion of which is that the insurance document issued in such a manner is acceptable.

For your reference, I would like quote an excerpt of the query and ICC conclusion from the above mentioned ICC opinion:

QUOTE

QUERY

…

Case 3 where the L/C required insurance document blank endorsed

The presented insurance policy without endorsement showed:

Assured: To order

Our opinion: This is acceptable because “to order” is, in effect, the same as “to bearer”.

ANALYSIS AND CONCLUSION

….

Case 3: In the context of an insurance document, we agree with your opinion.

UNQUOTE

Kind regards,

Mr. Old Man