Uncategorized INSURANCE POLICY VS INSURANCE CERTIFICATE By Mr Old Man Posted on March 9, 2010 2 min read 12 0 7,590 Share on Facebook Share on Twitter Share on Google+ Share on Reddit Share on Pinterest Share on Linkedin Share on Tumblr QUERY FROM YOYO KENSHIN I'm still a little confused. Is that Insurance policy an agreement between 2 sides with proper terms and conditions while Insurance Certificate is just a letter or a document that informs the insurance is now available? ———————— COMMENT FROM MR. OLD MAN Dear Yoyo Kenshin, Thanks for asking Mr. Old Man. The insurance policy may be either a specific policy (voyage policy) or an open policy (blanket policy/floating policy). A specific policy covers a particular shipment or one shipment only, whereas an open policy is issued once by the insurer under the contract to cover many shipments made by the exporter to different importers over a period of time (usually one year). Therefore, the exporter holding an open policy can not send that sole policy to all the importers. Instead, he will issue an insurance certificate to each shipment and that insurance certificate will bear the open policy number. Please note that if the LC requires an insurance certificate, an insurance policy presented is acceptable, but if the LC requires an insurance policy, an insurance certificate presented is not acceptable unless the LC provides that an insurance certificate issued under an open policy is acceptable. LC issued by banks in Vietnam would require insurance documents worded as follows: “Insurance Policy/Certificate in assignable form covering all risks …”. This means that either insurance policy or insurance certificate presented is acceptable. Best regards, Mr. Old Man (Nguyen Huu Duc) …
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?