ICC Digital Library Forum

If a documents maked as "insurance policy" and with a letterhead of "ABC COMPANY", signed by "ABC COMPANY". But on the face of the document without mentioning "ABC COMPANY" as insurance company or underwriter or their agent, (1) whether the L/C issuing bank can
accept this document as insurance
policy under ucp500 sub-article 34a?

Hello Mr. C.Y. Li, we are sorry to have neglected this query from you. However, without seeing the document itself, merely relying on your brief description, from our experience, we should not make any comments here.

Having said that, we may offer you some ideas in exmination of documents that we hope may be of help to you.

(1) A document checker in a bank is not responsible for the validity, genuineness or legal effect of a document. But he has to do this with simple common sense as regarded by the late Master Bernard S. Wheble.

(2) A document checker needs to determine compliance solely "on the face" of the documents and he needs not have to check for the facts, as far as the UCP is concerned. Risk management is a separate issue that may requires him to do so. The balance between UCP and risk management is according to your in-house risk management procedures. If there is no such procedures, he may ask for guidance from his supervisors.

(3) There are restrictions and control over an insurer, by the industry itself and also by the government. Anybody may trade provide he has a valid business registration and in the case of a limited company, a valid certificate of incorporation with the government, such as in Hong Kong where you and we are from but not everybody may do insurance business unless and until he is authorised to do so by the insurance association/institute and/or licensed by the proper government authorities. This may have something to do with the issue of "public interest". Our above comments may also apply to a bank.

(4) It is the insurance trade practice that an insurer would normally show its identity as an insurer in the title and/or data content of the document it issues or in the stationery used by it. Life insurers use "assurance company" and other non-life insurers such as for motor, hosuehold or cargo insurers use "insurance company". However, these two terms are often used interchangeably in the market place, although there is some difference in these two terms as we have already explained previously in our response to another query about insurance.

Frm http://wwww.tolee.com

[edited 9/1/01 5:34:28 PM]

Article 34 UCP 500 stipulates that:

a. Insurance documents must appear on their face to be issued and signed by insurance companies or underwriters or their agents.

d. Unless otherwise stipulated in the Credit, banks will accept an insurance certificate or a declaration under an open cover pre-signed by insurance companies or underwriters or their agents. If a Credit specifically calls for an insurance certificate or a declaration under an open cover, banks will accept, in lieu thereof, an insurance policy.

Therefore, “ABC" should indicate itself as an insurance company, however this can be realized by so many formats that one cannot restrict it one or two here unless the document is seen by an expert.

Since the checking of documents is a technical process that requires sound skill , experience and accurate knowledge of the practices governing such transactions, it is worthy that you consider the guidelines given by Mr. Lee in this regards.

I have encountered this issue and asked myself the question as well. The document I have seen is probably not the same as yours - I have accepted it as complying.

Pavel Andrle