N.Y. Comp. Codes R. & Regs. tit. 11 § 79.1

Current through Register Vol. 46, No. 36, September 4, 2024

Section 79.1 - Definitions

As used in this Part, the following terms shall have the following meanings:

(a) Applicant means the party who applies for and causes the bank or trust company to issue the letter of credit.

(b) Beneficiary means the insurer in favor of which the letter of credit or its confirmation is established and shall include any successor by operation of law of any named beneficiary including, without limitation, any liquidator, rehabilitator, receiver or conservator.

(c) Clean and unconditional letter of credit or clean and unconditional confirmation means a letter of credit or confirmation which:

(1) makes no reference to any other agreement, document or entity; and

(2) provides that a beneficiary need only draw a sight draft under the letter of credit or confirmation and present it to promptly obtain funds and that no other document need be presented.

(d) Evergreen clause means a provision in a letter of credit or its confirmation which prevents the expiration of the letter of credit or its confirmation without due written notice to the beneficiary from the issuing or confirming bank or trust company.

(e) Qualified bank means a bank or trust company that:

(1) is organized and existing, or in the case of a branch or agency office of a foreign banking organization is licensed, under the laws of the United States or any state thereof;

(2) is regulated, supervised and examined by United States Federal or state authorities having regulatory authority over banks and trust companies;

(3) is determined by the Securities Valuation Office of the National Association of Insurance Commissioners to meet such standards of financial condition and standing as are considered necessary and appropriate to regulate the quality of banks and trust companies whose letters of credit will be acceptable to insurance regulatory authorities;

(4) is not a foreign branch office of a bank or trust company organized and existing in the United States; and

(5) is not a parent, subsidiary or affiliate of the applicant or the beneficiary.

N.Y. Comp. Codes R. & Regs. Tit. 11 § 79.1