Letter of credit

A document issued by the buyer’s bank, through its foreign correspondent bank, establishing a credit against which the seller may draw after complying with specific instructions. In reinsurance, typically used to permit reserve credit to be taken with respect to non-admitted reinsurance an alternative to funds withheld and modified coinsurance.

Letter of credit (L/C)

A document issued by a bank, at the buyer’s request, guaranteeing payment to the seller upon receipt by the bank of shipping and documents validating the delivery of goods. L/Cs are also used on a ‘standby’ basis to secure recoverables from non-admitted reinsurers to enable the cedant to reduce its provision for unauthorised reinsurance in its statutory statement.

Letter of Credit (LOC)

(a) A financial guarantee issued by a bank that permits the party to which it is issued to draw funds from the bank in the event of a valid unpaid claim against the other party; (b) in Reinsurance, typically used to permit reserve credit to be taken with respect to non-admitted reinsurance; and alternative to funds withheld and modified coinsurance.
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REINSURANCE: A financial guarantee issued by a bank that permits the party to which it is issued to draw funds from the bank in the event of a valid unpaid claim against the other party; in Reinsurance, typically used to permit reserve credit to be taken with respect to non-admitted reinsurance; and alternative to funds withheld and modified coinsurance.
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REINSURANCE: A financial instrument obtained from a bank that guarantees the availability of funds to be collected in the future under a reinsurance contract. In the noncommercial setting, these are known as standby credits in the event of non-performance by the obligor. Uniform Custom and Practices for Document Bearing Credits (2007 rev.) ICC, Pub. No. 600. See also Evergreen Clause.

Letter of Indemnity

A letter giving indemnity to a party in return for a document which might otherwise prejudice the rights of the party. Sometimes called a ‘hold harmless’ agreement. Such letter may be given to an Insurer as a protection for the issue off a duplicate Policy where the original has been mislaid or lost.

Letter of request

On organizational letterhead, a formal document detailing needs and purposes by a requestor for a federally funded project. In addition, a letter of support is required from the federal project officer on his or her organizational letterhead.

Lettered rules

York-Antwerp Rules that are prefixed by a letter rather than a number. The lettered rules apply only when it is impossible to apply the numbered rules.
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Those of the York-Antwerp Rules that are prefixed by a letter as distinct from a number. The lettered rules are applicable only in circumstances to which it is impossible to apply the numbered rules.