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Dear All,

I need your advice on below situation:

LC asks for insurance document to be issued in the name of issuing bank. However documents presented shows insurance doc issued in the name of beneficiary and further endorsed in the name of issuing bank by beneficiary. Practically the issued document is correct, however LC term is not fulfilled that insurance document to be issued in the name of issuing bank. Hence does it calls for a discrepancy or document presented is perfectly fine?

Regards
Shikha

Hy,

Actually it's a little bit arguable situation, but i think that it can be considered as an discrepancy, because As per Original LC instructions was clear and different.
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It is the same situation as Bill of Lading. If LC calls for B/L to the order of I/Bank, and I/Bank receives B/L to the order of BENE and than it is endorsed to issuing bank. The result will be same but anyway in IMHO it can be considered as disc.
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Any comments appretiated.

Hi,
Mostly insurance documents evidence insured/assured another party and further bear endorsement by the insured/assured on the back of document.
For instance:
Lc request: Insurance document issued to order of Bank A
Document presented: Insured: Company A (blank endorsed by insured or order to Bank A)
.
In my opinion, While document bears insured another party, if there is any wording on the document such as "to the order of Bank A" and further endorsement by the insured, it is not discrepant as the rights under document passed to Bank A.

Other comments appreciated.

Yes Navi,

Actually i agree with you, the result is same if:
1) It is issued in the name of issuing bank.
2) and if bene endoresed to the issuing bank later.

But i thought, that as Original LC called for insurance doc to be direclty issued in the name of issuing bank it was disc.

any commnets.

Dear All,

Hope the below comments from Gary will help on this case.

Question:
Insurance policy or certificate issued in negotiable form in two originals endorsed to the ''order of applicant''',covering all risk....

Insurance policy:
Assured:ABC company Ltd
Endorsed by ABC company Ltd to the order of the applicant.

Answer:
Technically, there is no such thing as a negotiable insurance document. An insurance document is a document that is issued in favour of an assured party who may then endorse the rights to claim thereunder to another party. Banks try and align the insurance document and bill of lading in referring to negotiability,but they are two totally different documents and ''negotiable'' only has relevance under a document of title. An insurance document that is issued in the manner that you have described is acceptable under a credit requiring it to be endorsed to the order of applicant.