Uncategorized QUESTIONS REGARDING INSURANCE DOCUMENT By Mr Old Man Posted on September 30, 2014 7 min read 6 0 4,007 Share on Facebook Share on Twitter Share on Google+ Share on Reddit Share on Pinterest Share on Linkedin Share on Tumblr Early morning at Ha Long Bay QUESTION Dear Mr. Nguyen, Gone through your site and was surprised to see the the L/C clarifications you are providing in the field of Letter of credit to the New Learner till L/C Experts asking queries from all over the world. Very few people we have in the Globe who wants to share their knowledge with others considering every body should win the Race. Your Help and Assistants are so valuable that it is almost impossible to assess. No doubt you are the GOD FATHER of Letter of Credit. Thx that I got your web site to clarify my L/C doubt. I have a L/C where I have to arrange Insurance Policy. My Insurance agent has sent me the draft in which it is written as follows: 1) Name of Insured as ABC…….. (Is it correct or it should be Name of Assured.) 2) Name of Applicant as XYZ……… (Can we mention L/C Applicant Name in the Insurance certificate or we should Not use Applicant Name in the Policy) 3) Instead of Applicant Name can we use “In the order of “in the Insurance policy or Applicant name to avoid totally. 4) L/C Condition says Opening bank name (Applicant bank) should be mentioned in the all Documents. Can we mention Opening Bank Name in the Insurance policy as per L/C clause 5) What is the difference between Insurance policy and Insurance Certificate? Are both same. Which is the appropriate caption to be used? One last question. Do you have any restrictions for asking question or I can ask as many as I can? Regards, Anand SV ————- ANSWER Dear Anand, Thank you for your encouraging words, but I am not the GOD FATHER of Letter of Credit. 1) Insured or Assured? You can look up in the dictionary the definition of the terms “insured” and “assured”, when to use “insured” and when to use “assured”. There are some very clear definitions with examples to illustrate the differences of the two terms. Notwithstanding different interpretations of the differences between the terms “insured” and “assured”, I see that the terms “the insured” and “the assured” are generally used interchangeably and do believe that insurance policies showing the name of the insured party or that of the assured party are acceptable. I have in my hand some insurance documents of which some contain the box “the name of insured” and some others “the assured”. What’s more? ISBP 745 (International Standard Banking Practice for the Examination of Documents under UCP 600) uses both terms “the assured” and “the insured”. See the following paragraphs quoted from ISBP 745: “K5) When an insurance document requires a countersignature by the issuer, THE ASSURED or a named entity, it must be countersigned.” “K21) a. When a credit is silent as to THE INSURED PARTY, an insurance document is not to evidence that claims…” 2) Insurance Applicant or LC Applicant? If the insurance document contains a box “Applicant”, it should be understood that it is the insurance applicant, i.e., person applying for the insurance policy, and not the LC applicant. 3) See Answer No. 2 4) You should do so to comply with the LC terms and conditions. 5) Insurance Policy vs Insurance Certificate? Please find my answer to a question similar to yours: QUOTE 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. UNQUOTE Please also visit here: http://nhducdng.wordpress.com/tag/insurance-policy-vs-insurance-certificate/ Last but not least, in order to receive my answer earlier, you should ask one or two questions at once. 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?