8 CSR 10-4.170 - Irrevocable Letter of Credit
PURPOSE: This rule establishes procedures for complying with the irrevocable letter of credit aspect of section 288.032(2), RSMo.
(1) A letter of credit, issued by a
commercial bank chartered under the laws of Missouri or chartered pursuant to
the National Banking Act, may be submitted to the Missouri Department of Labor
and Industrial Relations, Division of Employment Security, (hereinafter the
division) in lieu of a surety bond or securities as required by section
288.032,
RSMo. The letter of credit must be in an amount equal to the otherwise required
bond or securities.
(2) The letter
of credit shall be irrevocable and the beneficiary shall be the division.
Payment shall be made immediately upon presentment of a demand for payment
signed by the director of the division or his/her designated
representative.
(3) All letters of
credit shall conform to a required format. A standard letter of credit form
embodying this format shall be provided by the division. All letters of credit
shall be accompanied by an authorization for release of confidential
information allowing the director of the division or his/her designee to
release confidential information to the issuing bank.
(4) A demand for payment upon a letter of
credit may be presented for payment only upon reasons that bond proceeds would
be demanded.
(5) All letters of
credit must be negotiable at a financial institution located within
Missouri.
(6) Letters of credit
shall have a term of one (1) year and shall be automatically renewable on an
annual basis for an additional five (5) years. A letter of credit may be
canceled by the issuer sixty (60) days after written notice is delivered to the
division. Upon this notice the lessor employing unit shall be required to
substitute a surety bond within sixty (60) days. If the required bond is not
received within that time period, the client lessees will be jointly and
severally liable and required to separately report as provided in section
288.032,
RSMo.
(7) The division shall not
release the letter of credit until it is satisfied, either by audit or
otherwise, that no claims exist against the letter.
(8) A lessor employing unit shall be required
to augment letters of credit in any situation where the lessor employing unit
would be required to increase its coverage under a surety bond. This additional
bonding requirement may be satisfied by increasing the letter of credit,
submitting an additional letter of credit, submitting an additional surety
bond, depositing additional securities, or submitting an additional certificate
of deposit. Failure to increase the letter of credit amount when required will
result in the client lessees being jointly and severally liable and required to
separately report as provided in section
288.032,
RSMo.
Notes
*Original authority: 288.220. RSMo 1951, amended 1955, 1961, 1963, 1967, 1971, 1995.
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