3 AAC 21.675. Letter of credit provisions for an unauthorized assuming insurer

(a) The letter of credit securing credit for reinsurance with an unauthorized assuming insurer must

(1) contain an issue date and date of expiration and stipulate that the ceding insurer need only draw a sight draft under the letter of credit and present it without other documentation to obtain funds;

(2) state that it is not subject to any condition or qualification outside of the letter of credit, except as provided in 3 AAC 21.600 - 3 AAC 21.695;

(3) contain no reference to any other agreement, document, or entity, except as provided in 3 AAC 21.600 - 3 AAC 21.695;

(4) state that the obligation of the qualified United States financial institution under the letter of credit is not contingent upon reimbursement;

(5) be for a term of no less than one year;

(6) contain an evergreen clause that provides for no less than 30 days notice of nonrenewal before the renewal date; and

(7) state that the letter of credit is governed by the laws of this state and that all drafts drawn will be presentable at an office in the United States of a qualified United States financial institution.

(b) The heading of a letter of credit may include a boxed section that contains the name of the applicant and other notations to provide a reference for the letter of credit. If used, the boxed section must be clearly marked that the information is for internal identification purposes only.

History: Eff. 11/25/94, Register 132

Authority: AS 21.06.090

AS 21.12.020

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