Problems with regard to Insurance Document

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Queries from N.H.D.:
Dear Kim,
I have received some questions regarding insurance documents from one of my colleagues. Could you kindly forward them to TSU editors for their comments?
Question 1:
LC required Insurance Certificate in full set.
Insurance Certificate presented in two folds including 01 ORIGINAL and 01 COPY (both manually signed) contains on its face the statement “Covering all risks ... in full set insurance issued in DUPLICATE”.
Some say DUPLICATE in this case means two original copies. So, it is a discrepancy based on ISBP para. 29, which says “The number of originals to be presented must be at least the number required by the credit, the UCP 600 or, where the document itself states how many originals have been issued, the number stated on the document.”
Some others say “No”. They argue that DUPLICATE means two copies, so the the document presented in one original and one copy is acceptable.
Please elaborate on the issue.
Question 2:
LC required Insurance Certificate showing claim payable at Haiphong, Vietnam.
The document presented contains on its face the statement “Claim payable at Haiphong, Vietnam” as required by the LC. However, the document also has a pre-printed box “Claim, if any, payable at/in: _____________” ; the blank is filled with “ABC Co, Ltd 123 Le Loi St., Ho Chi Minh City, Vietnam”.
With regard to “claim payable statement”, can I raise the discrepancy “data conflict” ?
Best regards,
N.H.D.

1st Response from T.O. Lee:

Dear Kim,
My short responses to the two queries are:
Q1
The word “duplicate” has many meanings
The word “duplicate” has different meanings in different languages. In French it may mean a second original, but in English it may mean a copy. So for an LC from a French bank, such as BNP and an LC from an English bank, such as Barclays, the answer may be different.
The best thing is to definite unclear words such as “duplicate” in the LC to avoid disputes.
Q2
In insurance practice, in a policy, the handwritten words override the words in stamp, which override words printed in margin that override pre-printed words in the body of the policy.
So there is no conflict or inconsistency for a statement written by a typewriter or a stamp or by hand (unfortunately the enquirer has not specified clearly in his query) that is different from the pre-printed wordings in the body of the policy.
There should be no discrepancy.
T. O.

Input from G.R.:

In response to question 1 - I note that
From ICC Opinion R225 - 1995/96:
"Insurance certificate in 2 originals. If the credit calls for 2 originals of the certificate, then both must be presented. One may be labelled "original" and the other "duplicate" (not copy). When more than one original is issued, one must be classified as the "original" of the original and the other as the "duplicate" of the original. That is, both originals constitute the full set issued, and should be accepted as such". From ISBP 29 - "29. The number of originals to be presented must be at least the number required by the credit, the UCP 600 or, where the document itself states how many originals have been issued, the number stated on the document."
Question 2:
In addition to TO Lee's comment - I would say there is no conflict because claims can be payable at more that one location. ABC Co. may have multiple locations to receive and pay the claims and the required statement from the LC is included.
Best Regards,
G.

2nd Response from T.O. Lee (based on G.R.'s input):

Dear G.,
Thanks to your valuable input.
Documents checkers in banks have to step out their work stations and play golf or mahjong with the traders to get themselves familiarized with the current trade practices. Otherwise they cannot perform their job well.
Insurers like carriers, usually have their terms and conditions of services, pre-printed. If the insured needs a special coverage, a rider or endorsement will be attached to the policy. Most often the insurer will not check each and every term in the policy to see if there is any inconsistency or conflict with the addition of the rider. This is life. We have to face it. So the court would consider this and adjudicate that in case of conflicts or inconsistency, the handwritten words in a policy will override the endorsement, that will override typewritten words that will override words written in margin, that will override words pre-printed in body of the policy.
To save time in checking for inconsistency, that can be very tedious, and to avoid future disputes, in some contracts, we often see terms like: "This term shall override any other conflicting terms, if any in this contract or other contracts."
The is is also common sense. Document checking cannot be robotic as regarded by Bernard Wheble and Reinhardt Langerich.
That is also why we cannot enforce the so called "best practices", promoted by the scholars living in an ivory tower, who need not consider the costs. Consultants are like rope walkers, need to play balance between theory and practices.
T. O.

3rd Response from T.O. Lee (based on excerpt shown in teal below):

Dear R.,
I would be pleased to respond to your comments below that represent the thinking of a lot of LC practitioners:
"Very well said, indeed. We do read occasional comments about the document examiner being advised to learn about best practices, go out into the real world, to get out of the ivory tower etc. Your thoughts, in that context, (especially, "but to what extent and where is the border?") is very relevant."
FYI upon public demand and request, I have prepared workshops on "What bankers should know about non-bank trade practices? (such as cargo insurance, transport by air, sea, road and multimodal, including charter party carriage). After completion of these workshops, bankers should have no difficulty to determine compliance on documents about cargo insurance, all modes of transport and charter party bill of lading. The workshops provide the border. What bankers need not know will not be included in the workshops.
Periodical refresher courses would update the trade practices of non bank trades, such as as insurance and transport.
So bankers now cannot rely on the excuse: "Where is the border?"
The real issue before us is therefore:
Whether your bank has the budget for it? or
Whether you are willing to learn new things (not tricks of course :-) just for laughs to ease the worries, anxiety, and tightened nerves built up by watching the exciting World Cup matches when your favorite team is one goal behind.) As a Brazil fan, I always hope this team losing one goal first so that we can see them working harder for our better enjoyment.
T. O.

4th Response from T.O. Lee (based on excerpt shown in teal below):

Dear D.,
I would like to share with you my views on your statements quoted here below:
"Will the examiner in the near future be allowed to handle a documentary credit according to what he knows of the real world and not only according to the material provided by the banking commission? Will the difference between a good examiner and a top examiner be the extent of their knowledge of the "real world" and their use of common sense? (I do not believe in common sense, if people used common sense the world would be different and would be a good world)
Will all these considerations be soon obsolete due to the arrival and presentation of documents? "

It is unreasonable, if not also ridiculous that compliance of a cargo insurance policy be determined by a person who does not know cargo insurance basics. It is like putting a gun into the hands of a baby, well said by a Chinese proverb. "If you cannot stand the heat, you better stay away from the kitchen" is the equivalent from the English world.
FYI to fill the market needs I have prepared workshops to share with document checkers what they need to know about cargo insurance and transport. So they do not have to worry about "where is the border?" Those "out of bounds" knowledge will not be included in the workshops.
Common sense is promoted by Bernard Wheble, the father of LC and Reinhardt Langerich. Whether all people have common sense or not is not an issue. We are all different. Some are winners and some are losers, same as in World Cup. Can a banker tell his clients that he has no common sense?
Best regards,
T. O.

Conclusions from T.O. Lee:

Dear All,
If the LC asks for claims payable in A and the policy states claims payable in A but also includes a second place B for payment of claims. There is nothing wrong with this. It is in fact more favorable to the holder of the policy. He can have more free choices.
Let us consider a real life case.
A husband is busy with World Cup and asks his wife to buy him a Colgate tooth paste. When the housewife goes to the supermarket, she notices that there is a bundle offer in Wal-Mart "Buy one Colgate tooth paste and get one free Dove soap". Can her husband blame her for "non-compliance" of his order? If he did, I bet that he would not watch his World Cup at home any more because he should be in a hospital. However, I can think of one possible benefit for him. His tooth paste may last longer because he has lost some teeth due to his "refusal notice".
So what is wrong when the LC requirement is filled up and an additional benefit is offered? I would say this is "double compliance".
T. O.

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