With Letter of credit confirmation insurance, a bank can confirm a foreign financial institution’s letter of credit in cases where it would have been unwilling to assume this risk without SERV’s insurance.
It thus covers payment default due to political, transfer, force majeure or del credere risks. In this context, SERV defines a del credere risk as the insolvency of the bank issuing the letter of credit or the improper non-payment of the debt from the letter of credit.
SERV waives its right vis-à-vis the confirming bank to modify the cover due to increased risk during the term of the letter of credit.
- Maximum cover ratio: 95%