§ 36.454. Form of letter of credit.
A letter of credit held by a registrant to satisfy the requirements of AMCRA and this subchapter must include all of the following:
(1) A provision that the letter of credit is irrevocable for a term of not less than 1 year and that the letter of credit automatically renews annually unless the letter of credit is specifically nonrenewed by the issuing bank 90 days or more prior to the anniversary date of its issuance and the issuing bank gives at least 90 days prior written notice to the Bureau and the registrant of its intent to terminate the letter of credit at the end of the current term.
(2) A provision that the Department has the right to draw upon the credit before the end of its term and to convert it into a cash collateral bond if the registrant fails to replace the letter of credit with other acceptable bond within 30 days of the bank’s notice to terminate the letter of credit.
(3) The letter of credit must name the Department as the beneficiary and be payable to the Department under § 36.456 (relating to claims against surety or obligor).
(4) A letter of credit is subject to the most recent edition of the Uniform Customs and Practices for Documentary Credits, published by the International Chamber of Commerce, and the laws of the Commonwealth, including 13 Pa.C.S. (relating to Uniform Commercial Code).
(5) The Board will not accept letters of credit from a bank that has failed to make or delayed in making payment on a defaulted letter of credit.
Cross References This section cited in 49 Pa. Code § 36.404 (relating to content of application); 49 Pa. Code § 36.422 (relating to early termination of registration); and 49 Pa. Code § 36.451 (relating to requirements for surety bond or letter of credit).
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