to the order vs bearer

[jim]

Dear sir,

we have recently faced this question in relation to insurance document. is to the order and bearer has the same meaning for a insurance document? if no, whats the deference.

is it correct to say that if LC request insurance to the order of issuing bank while to the order of bearer is presented, the document is acceptable?

[iLC]

you are right. they are indeed different. to bearer insurance means that the bearer has the right to claim. there is no requirement to transfer the right by endorsement. however so far i understand that to order insurance is not a correct concept. in terms of bill of lading to order means to order of shipper. but in insurance there is no such concept.

[loankim]

Dear all,

As far as i know, i agree with you that an insurance document is not like a bill of lading, totally different documents.
However i think that, the document is issued "to order" and is therefore a bearer document.The effect is the same.There is no requirement for an endorsement.
.
Your comments appriciated .

rgds,

[cnaw]

if to the order..the insurance can be endorsed to another party(correct me if im wrong)

[21vita]

Commission on Banking Technique and Practice
Revised Opinions of the ICC Banking Commission
Attached are the consolidated Final Opinions that were discussed at the November
2009 Banking Commission meetings held in Brussels.

Subject: Document 470/TA.688rev (UCP 600)
is disscussing this topic:
.....
Case 3 where the LC required insurance document blank endorsed
The presented insurance policy without endorsement showed:
Assured: To order
......
Our(negotiation bank) opinion: This is acceptable because “to order” is in effect same as “to bearer”.

ICC opinion:Case 3. In the context of an insurance document, we agree with your opinion.
ICC OPINION in addition:To avoid some of the issues identified in this query, insurance documents
should not evidence or be required to evidence the assured as “To Order” or “To
Bearer”.
HOPE THIS IS HELPFUL

[21vita]

sorry for not mention "to bearer".following is complete content,a little bit lengthy... hope it would not dizzy you




Subject: Document 470/TA.688rev (UCP 600)
Dear Ms. Lau,
We refer to our letter dated 12 May 2009 in respect of your query regarding
UCP 600. Please find below the opinion of the Banking Commission.
QUOTE
We have recently come up with cases related to insurance documents where
some banks required endorsements but the others did not. We would therefore
appreciate the ICC official opinion.
Case 1 where the LC required insurance document blank endorsed
The presented insurance policy without endorsement showed:
Assured: To bearer
Our opinion: This is acceptable according ISBP Paragraph 179.
Case 2 where the LC required insurance document blank endorsed
The presented insurance policy without endorsement showed:
Assured: ABC Exporting Co Ltd
To bearer
Our opinion: This is acceptable according ISBP Paragraph 179.

Case 3 where the LC required insurance document blank endorsed
The presented insurance policy without endorsement showed:
Assured: To order
Our opinion: This is acceptable because “to order” is in effect same as “to bearer”.
Case 4 where the LC required insurance document blank endorsed
The presented insurance policy without endorsement showed:
Assured: ABC Exporting Co Ltd
To order
Our opinion: This is acceptable because “to order” is in effect same as “to bearer”.
Case 5 where the LC required insurance document to be issued to order of
XYZ Bank Ltd
The presented insurance policy without endorsement showed:
Assured: To order of XYZ Bank Ltd
Our opinion: This is acceptable because the issuance policy was issued as required
by the LC.
Case 6 where the LC required insurance document to be issued to order of
XYZ Bank Ltd
The presented insurance policy without endorsement showed:
Assured: ABC Exporting Co Ltd
To order of XYZ Bank Ltd
Our opinion: This is also acceptable because the issuance policy was issued as
required by the LC.
Please confirm whether our opinions are correct or incorrect.
ANALYSIS & CONCLUSION
Case 1. We agree with your opinion.
Case 2. We disagree with your opinion. The insurance document requires
endorsement by ABC Exporting Co. Ltd which would remove the contradiction
between ABC Exporting Co. Ltd and “To Bearer”. The addition of “[T]o bearer” does
not change the fact that the assured is stated to be ABC Exporting Co. Ltd.
Case 3. In the context of an insurance document, we agree with your opinion.
Case 4. We disagree with your opinion. The insurance document requires
endorsement by ABC Exporting Co. Ltd. The addition of “[T]o order” does not
change the fact that the assured is stated to be ABC Exporting Co. Ltd.
Case 5. We agree with your opinion.
Case 6. We disagree with your opinion. The insurance document requires
endorsement by ABC Exporting Co. Ltd. The addition of “[T]o order of XYZ Bank
Ltd” does not change the fact that the assured is stated to be ABC Exporting Co. Ltd.
To avoid some of the issues identified in this query, insurance documents
should not evidence or be required to evidence the assured as “To Order” or “To
Bearer”.
The opinion(s) rendered on this query reflect the opinion of the ICC
Banking Commission based on the facts under “QUOTE” above.
The reply given is not to be construed as being other than solely for the
benefit of guidance and there should be no legal imputation associated with
the reply offered.
If this query relates to a matter currently under consideration by the
courts, the ICC Banking Commission will refrain from considering it for
adoption as an opinion.

[sagar1984]

In my opinion,
In case to order (ie. to the order of bearer) there is no need for endorsement, while in case where insurance is in favour of certain entity specific endorsement is required.
Hence, to order and bearer are one and the same thing and documents mentioned under above case will be acceptable.