Letters of credit: the not-so-perfect security instrument
Article Abstract:
Letters of credit are not the protective financial device they were designed to be. Approximately half of the letters issued prove worthless when a dispute arises. Letters of credit are issued most often by buyers of foreign goods, in an effort to ensure that the products received are the products ordered. Letters of credit take two basic forms: (1) commercial letters, covering tangible goods shipments, and (2) standby letters, used when the transaction involves financial instruments. Usually the worthlessness of letters of credit is attributable to either impossible documentation requirements placed on importers, or the high financial risk of the exporting country. Letters of credit can legally be ignored for misspellings therein, improperly prepared or absent commercial certificates, and presentation of documents after legally stipulated deadlines.
Publication Name: Cashflow Magazine
Subject: Business
ISSN: 0196-6227
Year: 1987
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The new insurance rules: hard-ball tactics lead states to tighten regulation of insurers
Article Abstract:
State regulators have imposed new restrictions on insurance firms' ability to cancel or not renew policies, as well as their ability to increase premiums. The increased regulation, which varies from state to state, is partly in reaction to a recent crisis in which insurance companies responded to a 'hard' market with a rush of cancellations, non-renewal notices, and drastic price increases. Forty-two states now limit the grounds which for policy cancellation and demand a set period of advance notice for situations in which cancellation is allowed. Thirty-nine of these 42 states have enacted such controls within the last 18 months. The consumer remains the ultimate beneficiary and guardian of these newly enacted regulations.
Publication Name: Cashflow Magazine
Subject: Business
ISSN: 0196-6227
Year: 1987
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