| (A) the office in the United States, inclusive of complete
name and address, where presentations for draws are to be made; and
(B) the specific month, day, time, and year that the
confirmation letter will expire.
(3) The confirmation letter must:
(A) contain an evergreen clause that prevents expiration
of the confirmation letter without some affirmative action by the
issuer;
(B) coincide with the term of the letter of credit
being confirmed; and
(C) provide that the confirmation letter automatically
will be extended for a like term unless, prior to the end of the stated
term, the confirming bank has given the ceding insurer (beneficiary),
the assuming insurer, and the issuing bank not less than 60 days'
written notice of nonrenewal by either certified or registered mail,
or other mutually agreed means.
(4) The confirming bank must comply with subsection
(k) of this section.
(r) Qualifying foreign branches of Federal Deposit
Insurance Corporation banks may issue letters of credit, and such
letters of credit will be acceptable if the face of the letter of
credit clearly shows that the letter of credit may be drawn down at
a United States office of the bank and specifically lists the street
address of that office. Similarly, qualifying foreign branches of
Federal Deposit Insurance Corporation banks may confirm letters of
credit. A confirmation letter will be acceptable if the face of the
confirmation letter clearly shows that the letter of credit may be
drawn down at a United States office of the confirming bank and specifically
lists the street address of that office.
(s) In the event a letter of credit is not renewed
or replaced under a reinsurance arrangement between the ceding insurer
and assuming insurer, the ceding insurer must not be precluded from
withdrawing the balance of the letter of credit and placing such sums
in trust to secure continuing obligations under the reinsurance agreement
until a renewal letter of credit or a substitution in lieu thereof
has been received.
(t) All letters of credit must be readily available
for viewing by TDI on request; letters of credit must be available
at any time to TDI examiners in connection with the preparation of
reports of examination. All confirming letters must be attached to
the letters of credit that they confirm.
(u) In the event that either a letter of credit or
a confirming letter of credit is not renewed or replaced or is suspended
to become inactive, the ceding insurer and the issuing bank must give
immediate notice of such nonrenewal or inactive status and the ceding
insurer must advise TDI of any amount still outstanding and unsettled
under the reinsurance agreement(s). This required notice must be sent
to TDI by certified mail, return receipt requested (or by registered
mail).
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| Source Note: The provisions of this §7.610 adopted to be effective August 16, 1990, 15 TexReg 4435; amended to be effective September 30, 1993, 18 TexReg 6329; amended to be effective June 19, 2018, 43 TexReg 3888 |
