It is our standard requirement to call for the marine insurance policy to be blank endorsed.
I noted credits from some other banks overseas merely calls for the insurance policy without
stipulating for the policy to be blank endorsed.
I would appreciate if you could advise which is the correct requirement.
Thank you.
Blank endorsed
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michaeltan
- Posts: 10
- Joined: Fri Apr 05, 2019 5:22 pm
Blank endorsed
All negotiable instruments, like drafts, bills of lading and insurance policies, can be endorsed to pass the rights and/or benefits from the original holder to another new holder. There are three kinds of endorsements.
(1) "Restricted endorsement" is "to a named legal person" and he cannot make any further endorsement to another legal person. Endorsement is "To Mr. T. O. Lee" (a natural person) or "To ABC Bank" (a legal entity or a corporation).
(2) "To Order" endorsement is "to the order of a named legal person" who may make further endorsement to another legal person if he so wishes.
(3) "Blank endorsement" is "to whoever then takes possession of the document" (works like a "bearer" cheque). Hence blank endorsement has its own risk - the finder, the keeper.
To know more on endorsements, please refer to the Article "What 'To Order' and 'Blank Endorsed' Actually Means" in our website only after you have finished browsing the DC PRO.
In LC operations, a bill of lading or an insurance policy is either blank endorsed or endorsed to the order of the issuing bank.
In "1/3 bill of lading" practice, where an original BL is to be sent directly to the applicant, we still recommend it to be endorsed to the order of the issuing bank so that the applicant cannot claim for the goods unless after full payment has been effected whereby the issuing bank endorses the BL to the applicant or his nominee. However, we do not encourage the "1/3 bill of lading" practice for reasons already explained in our response to another query in the DC PRO.
The endorsement of an insurance policy should go hand in hand and be consistent with that in the bill of lading, in order to pass the title of the goods and the insurance rights to one and the same legal person. Otherwise the goods are passed to the issuing bank whilst the insurance rights are passed to the applicant. If the goods sustain damage or loss, the issuing bank has no right to claim insurance unless the applicant agrees to pass the insurance rights back to the issuing bank. If they have disputes, such as over the discrepancies, then this may create problems and risk for the parties.
We are from www.tolee.com
[edited 7/2/02 10:11:00 PM]
(1) "Restricted endorsement" is "to a named legal person" and he cannot make any further endorsement to another legal person. Endorsement is "To Mr. T. O. Lee" (a natural person) or "To ABC Bank" (a legal entity or a corporation).
(2) "To Order" endorsement is "to the order of a named legal person" who may make further endorsement to another legal person if he so wishes.
(3) "Blank endorsement" is "to whoever then takes possession of the document" (works like a "bearer" cheque). Hence blank endorsement has its own risk - the finder, the keeper.
To know more on endorsements, please refer to the Article "What 'To Order' and 'Blank Endorsed' Actually Means" in our website only after you have finished browsing the DC PRO.
In LC operations, a bill of lading or an insurance policy is either blank endorsed or endorsed to the order of the issuing bank.
In "1/3 bill of lading" practice, where an original BL is to be sent directly to the applicant, we still recommend it to be endorsed to the order of the issuing bank so that the applicant cannot claim for the goods unless after full payment has been effected whereby the issuing bank endorses the BL to the applicant or his nominee. However, we do not encourage the "1/3 bill of lading" practice for reasons already explained in our response to another query in the DC PRO.
The endorsement of an insurance policy should go hand in hand and be consistent with that in the bill of lading, in order to pass the title of the goods and the insurance rights to one and the same legal person. Otherwise the goods are passed to the issuing bank whilst the insurance rights are passed to the applicant. If the goods sustain damage or loss, the issuing bank has no right to claim insurance unless the applicant agrees to pass the insurance rights back to the issuing bank. If they have disputes, such as over the discrepancies, then this may create problems and risk for the parties.
We are from www.tolee.com
[edited 7/2/02 10:11:00 PM]