N.Y. Comp. Codes R. & Regs. tit. 11 § 79.9

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

Section 79.9 - Exhibits

Exhibit A, "Letter of Credit", Exhibit B, "Confirmation", Exhibit C, "Letter of Credit - Nonqualifying Bank", and Exhibit D, "Letter of Credit Trust Agreement" are as follows:

(a) Exhibit A--Letter of credit.

............

FOR INTERNAL IDENTIFICATION

PURPOSES ONLY

Our No. ________ Other ____________

Applicant ____________

(Issue Date)

____________

IRREVOCABLE LETTER OF CREDIT NO. ________

TO: (Beneficiary)

We hereby establish this irrevocable Letter of Credit in favor of the aforesaid addressee ("Beneficiary") for drawings up to United States $ ________ effective immediately. This Letter of Credit is issued, presentable and payable at our office at (issuing bank's address) and expires with our close of business on ________, 19 ________.

The term "Beneficiary" includes any successor by operation of law of the named Beneficiary including, without limitation, any liquidator, rehabilitator, receiver or conservator.

We hereby undertake to promptly honor your sight draft(s) drawn on us, indicating our Credit No. ________, for all or any part of this Credit if presented at our office specified in paragraph one on or before the expiry date or any automatically extended expiry date.

Except as expressly stated herein, this undertaking is not subject to any agreement, condition or qualification. The obligation of (issuing bank) under this Letter of Credit is the individual obligation of (issuing bank), and is in no way contingent upon reimbursement with respect thereto.

It is a condition of this Letter of Credit that it is deemed to be automatically extended without amendment for one year from the expiry date hereof, or any future expiration date, unless 30 days prior to any expiration date we notify you by registered mail that we elect not to consider this Letter of Credit renewed for any such additional period.

This Letter of Credit is subject to and governed by the Laws of the State of New York and the 1993 revision of the Uniform Customs and Practice for Documentary Credits of the International Chamber of Commerce(Publication 500) [FN*] and, in the event of any conflict, the Laws of the State of New York will control. If this Credit expires during an interruption of business as described in article 17 of said Publication 500, the bank hereby specifically agrees to effect payment if this Credit is drawn against within 30 days after the resumption of business.

Very truly yours,

____________

(Issuing Bank)

(b) Exhibit B--Confirmation.

(Issue Date)

____________

TO: (Beneficiary)

We hereby confirm the enclosed irrevocable Letter of Credit No. ________and amendments thereto, if any, issued in favor of the aforesaid addressee ("Beneficary") by (issuing bank) for drawings up to United States $ ________effective immediately. This confirmation is issued, presentable and payable at our office at (confirming bank's address) and expires with our close of business on ________, 19 ________.

The term "Beneficiary" includes any successor by operation of law of the named Beneficiary including, without limitation, any liquidator, rehabilitator, receiver or conservator.

We hereby undertake to promptly honor your sight draft(s) drawn as specified in the Letter of Credit and presented at our office specified in paragraph one on or before the expiry date of this confirmation or any automatically extended expiry date.

Except as expressly stated herein, this undertaking is not subject to any agreement, condition or qualification. The obligation of (confirming bank) under this Confirmation is the individual obligation of (confirming bank), and is in no way contingent upon reimbursement with respect thereto.

It is a condition of this Confirmation that it is deemed to be automatically extended without amendment for one year from the expiry date hereof, or any future expiration date, unless 60 days prior to any expiration date we shall notify you by registered mail that we elect not to consider this Confirmation renewed for any such additional period.

This Confirmation ts subject to and governed by the Laws of the State of New York and the 1993 revision of the Uniform Customs and Practice for Documentary Credits of the International Chamber of Commerce (Publication 500)[FN*] and, in the event of any conflict, the Laws of the State of New York will control.

Very truly yours,

____________

(Confirming Bank)

(c) Exhibit C - Letter of credit--nonqualifying bank.

............

FOR INTERNAL IDENTIFICATION

PURPOSES ONLY

Our No.________ Other____________

Applicant ____________

(Issue Date)

____________

IRREVOCABLE LETTER OF CREDIT NO.________

TO: (Beneficiary)

We hereby establish this irrevocable Letter of Credit in favor of the aforesaid addressee ("Beneficiary") for drawings up to United States $________effective immediately and expiring at our office at (issuing bank's address) with our close of business on ________, 19________.

This Letter of Credit is hereby confirmed by (confirming bank's name) and such bank is formally designated as our agent for the receipt and payment of drafts under the Credit.

The term "Beneficiary" includes any successor by operation of law of the named Beneficiary including, without limitation, any liquidator, rehabilitator, receiver or conservator.

We hereby undertake to promptly honor your sight draft(s) drawn on us, indicating our Credit No. ________, for all or any part of this Credit if presented at our office at (issuing bank's address), or at such office of (confirming bank) as is designated in the confirmation of this Credit on or before the expiry date or any automatically extended expiry date.

Except as expressly stated herein, this undertaking is not subject to any agreement, condition or qualification. The obligation of (issuing bank) under this Letter of Credit is the individual obligation of the (issuing bank), and is in no way contingent upon reimbursement with respect thereto.

It is a condition of this Letter of Credit that it is deemed to be automatically extended without amendment for one year from the expiry date hereof, or any future expiration date, unless 60 days prior to any expiration date we notify you by registered mail that we elect not to consider this Letter of Credit renewed for any such additional period.

This Letter of Credit is subject to and governed by the Laws of the State of New York and the 1993 revision of the Uniform Customs and Practice for Documentary Credits of the International Chamber of Commerce(Publication 500) [FN*] and, in the event of any conflict, the Laws of the State of New York will control. If this Credit or the Confirmation thereof expires during an interruption of business of this bank or the confirming bank as described in article 17 of said Publication 500, the bank hereby specifically agrees to effect payment if this Credit is drawn against within 30 days after the resumption of business from such interruption.

Very truly yours,

____________

(Issuing Bank)

(d) Exhibit D - Letter of credit trust agreement.

This Agreement between________, (hereinafter called the "reinsurer"), and________, (hereinafter called the "the ceding insurer"), including any successor by operation of law of the ceding insurer including, without limitation, any liquidator, rehabilitator, receiver or conservator of such insurer.

WITNESSETH:

The reinsurer has secured delivery to the ceding insurer of a clean, unconditional and irrevocable Letter of Credit of (issuing bank), No.________issued on________, 19 ________in the sum of United States $________expiring on ________, 19 ________("the Credit") securing refund and payment to the ceding insurer of reinsurer's share of any obligations due or which may become due to the ceding insurer pursuant to the terms of the specific Reinsurance Agreement No. ________between the parties which became effective on________, 19________.

Now, THEREFORE, in consideration of reinsurer having so applied for and secured delivery of said Letter of Credit, which is hereby acknowledged, the ceding insurer undertakes to use and apply any amounts which it may draw upon such Credit, without diminution because of the insolvency of the ceding insurer or the reinsurer, for the following purposes:

(1) To pay or reimburse the ceding insurer for the reinsurer's share under the specific reinsurance agreement for any losses and allocated loss expenses paid by the ceding insurer but not recovered from the reinsurer or for unearned premiums due to the ceding insurer, if not otherwise paid by the reinsurer in accordance with the terms of such agreement or;

(2) Where the ceding insurer has received notification of the nonrenewal of the Letter of Credit and where the reinsurer's entire obligations under the specific reinsurance agreement remain unliquidated and undischarged 10 days prior to such expiration date, to obtain a cash deposit equal to such obligations and deposit such amounts in a separate account in the name of the ceding insurer in any United States bank or trust company, apart from its general assets, in trust for such uses and purposes specified in paragraph (1) of this Agreement as may remain executory after obtaining the cash deposit and for any period after such expiration date. Where the amounts held in such separate account exceed the actual amount required to fund the reinsurer's entire obligations under the specific reinsurance agreement, the ceding insurer shall make payment to the reinsurer of the excess amount.

"Obligations", whenever used in this Agreement, shall mean the following:

(a) losses and allocated loss expenses paid by the ceding insurer, but not recovered from the reinsurer;

(b) reserves for losses reported and outstanding;

(c) reserves for losses incurred but not reported;

(d) reserves for allocated loss expenses; and

(e) reserves for unearned premiums.

IT IS FURTHER AGREED between the parties hereto that, at annual intervals or more frequently as required but never more frequently than quarterly, the balance of Credit made available will be adjusted in the following manner:

(a) The ceding insurer will prepare a statement showing the reinsurer's share of the obligations on the accounting date under the specific reinsurance agreement.

(b) If the reinsurer's share of the obligations under the specific reinsurance agreement exceeds the then existing balance of the Credit made available, the reinsurer will, within 30 days after receiving notice of such excess, secure delivery to the ceding insurer of an amendment of the Credit increasing the amount of Credit available by the amount of such difference.

(c) If the reinsurer's share of the obligations under the specific reinsurance agreement is less than the balance of Credit available on the accounting date, the ceding insurer will, within 30 days after receipt of a written request from the reinsurer, release the excess credit by agreeing to secure an amendment to the Credit reducing the amount of Credit available by the amount of such excess credit.

(d) The ceding insurer undertakes to use and apply any amount which it may draw upon the amended Credit solely for the purposes set forth in this Agreement.

IT IS FURTHER AGREED between the parties hereto that (issuing bank and confirming bank, if any) with or without notice of the existence of this Agreement, shall have no responsibility whatsoever in connection with its execution.

This Agreement is subject to and governed by the Laws of the State of New York.

The parties have caused this Agreement to be signed as of ________, 19________.

By____________

(Reinsurer)

By____________

(Ceding Insurer)

[FN*] ICC No. 500, UNIFORM CUSTOMS AND PRACTICE FOR DOCUMENTARY CREDITS/1993 Revision. Copyright 1993 by the International Chamber of Commerce. All rights reserved. Reprinted with the permission of the International Chamber of Commerce through ICC Publishing, Inc., in New York.

N.Y. Comp. Codes R. & Regs. Tit. 11 § 79.9