62-5-11. Requirements for acceptance of irrevocable letter of credit--Definitions.
As used in §§62-5-10 to 62-5-16, inclusive, an irrevocable letter of credit shall be accepted only if it is clean, irrevocable, and contains an evergreen clause.
Terms used in §§62-5-10 to 62-5-16, inclusive, mean:
(1)"Clean," a letter of credit that is not conditioned on the delivery of any other documents or materials;
(2)"Irrevocable," a letter of credit that cannot be modified or revoked without the consent of the beneficiary, once the beneficiary is established;
(3)"Evergreen clause," a clause specifically stating that the expiration of a letter of credit will not take place without a sixty-day notice by the issuer. If prior notice of expiration is not given by the issuer, the letter of credit is automatically extended for one year.
A clean irrevocable letter of credit shall be accepted only if it is in the form prescribed by §§62-5-10 to 62-5-16, inclusive, and is issued by a financial institution that is authorized to engage in banking in any of the fifty states or under the laws of the United States and whose business is substantially confined to banking, and that has a long-term debt rating by a recognized national rating agency of investment grade or better. If no long-term debt rating is available, the financial institution shall have the equivalent investment grade financial characteristics.
Source: SL 1989, ch 453, §3; SL 2017, ch 219, §1.
Structure South Dakota Codified Laws
Title 62 - Workers' Compensation
Chapter 05 - Insurance And Security For Payments
Section 62-5-1 - Methods of securing payment of compensation.
Section 62-5-2 - Obtaining workers' compensation insurance.
Section 62-5-6 - Exemption of political subdivisions from security provisions.
Section 62-5-7 - Failure to secure payment as election not to operate under title.
Section 62-5-8 - Commission for placing insurance limited.
Section 62-5-9 - Issuance of policy to employer--Certification to department.
Section 62-5-10 - Surety for performance required for self-insurers--Irrevocable trust.
Section 62-5-11 - Requirements for acceptance of irrevocable letter of credit--Definitions.
Section 62-5-12 - Deposit of surety bonds, letters of credit, etc.
Section 62-5-13 - Deposit of certificate of deposit or government securities.
Section 62-5-14 - Deposit and withdrawal of cash.
Section 62-5-15 - Perfected security interest in deposit--Release of security interest.
Section 62-5-16 - Claims administration contracts.
Section 62-5-18 - Reduction of premium where employer selects a policy with a deductible.
Section 62-5-19 - Deductible does not affect reporting requirements.
Section 62-5-20 - Insurer to pay entire loss--Employer to reimburse deductible amount.
Section 62-5-21 - Provision of medical services and health care.