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The 440 3640A Oregon form, also known as the Irrevocable Standby Letter of Credit, is an essential document utilized in the realm of workers’ compensation for self-insured employers in Oregon. This form serves as a financial guarantee from an issuing bank to the Oregon Department of Consumer and Business Services, ensuring that the self-insured employer meets its workers’ compensation liabilities. Key components of the form include the issuing bank's details, the amount of credit, and the conditions under which the credit can be drawn upon. The form outlines specific scenarios, such as default on payments or bankruptcy, that allow the Oregon Department to claim the funds. It also stipulates the process for drawing funds, including the requirement for a signed statement from authorized representatives of the Department. Furthermore, the letter of credit is designed to automatically renew unless the issuing bank provides prior notice of non-renewal. This ensures ongoing financial security for the state in relation to the self-insured employer’s obligations. The 440 3640A form is governed by Oregon state laws and is subject to international standby practices, providing a structured framework for managing workers’ compensation responsibilities.
Common mistakes
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Inaccurate Bank Information: Failing to provide the correct name and address of the issuing or confirming bank can lead to significant delays in processing.
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Incorrect Credit Amount: Not spelling out the amount in U.S. dollars correctly can result in misunderstandings regarding the financial obligations.
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Missing Effective Date: Omitting the effective date of the letter of credit can create confusion about when the obligations begin.
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Expiry Date Errors: Providing an incorrect expiry date may lead to complications if the letter of credit is not extended in time.
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Failure to Include Presentation Place: Not specifying where the documents should be presented can result in delays and potential rejections.
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Improper Signature: Neglecting to have the appropriate parties sign the document can invalidate the letter of credit.
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Not Including Required Statements: Failing to attach one of the four necessary statements can prevent the drawing of funds when needed.
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Ignoring Amendment Procedures: Not following the correct process for amendments can lead to disputes regarding the terms of the letter of credit.
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Not Considering Legal Jurisdiction: Overlooking the importance of the governing laws can complicate any legal proceedings related to the letter of credit.
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Overlooking Notification Requirements: Failing to notify the beneficiary of non-renewal at least 60 days before expiry can result in automatic extensions that may not be desired.
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Listed Questions and Answers
What is the purpose of the 440 3640A Oregon form?
The 440 3640A form is an Irrevocable Standby Letter of Credit used by self-insured employers in Oregon. It serves as a financial guarantee to the Oregon Department of Consumer and Business Services for workers' compensation liabilities. This ensures that funds are available to cover any obligations that the self-insured employer may have.
Who is considered the applicant on this form?
The applicant is the self-insured employer who is seeking to provide a financial guarantee through the letter of credit. This entity is responsible for ensuring that the terms of the letter of credit are met and that the necessary amounts are available to cover any potential claims.
What information is required to complete the form?
To complete the 440 3640A form, you will need to provide the following information:
- Issuing bank name and address
- Irrevocable Standby Letter of Credit number
- Effective date and expiry date
- Applicant's name and address
- Beneficiary's information (Oregon Department of Consumer and Business Services)
- Amount of the letter of credit, spelled out in U.S. dollars
How does the payment process work under this letter of credit?
Payments under the letter of credit are made by the issuing or confirming bank upon presentation of a draft by the beneficiary. The draft must be accompanied by one of the specified statements regarding the self-insured employer's obligations. Payments are made by wire transfer to the Oregon Department of Consumer and Business Services’ bank account as instructed in the demand notice.
What happens if the self-insured employer defaults?
If the self-insured employer defaults on its workers' compensation liabilities, the Oregon Department of Consumer and Business Services can draw on the letter of credit. This process ensures that funds are available to cover any outstanding obligations without delay.
Can the letter of credit be amended?
Yes, amendments to the letter of credit can be made. However, any changes must be approved by the beneficiary, which is the Oregon Department of Consumer and Business Services. It is important to ensure that any amendments comply with the requirements set forth in the original letter of credit.
What is the duration of the letter of credit?
The letter of credit is automatically extended for one year from the expiry date unless the issuing bank notifies the beneficiary at least 60 days prior to expiry that it will not extend the letter. This automatic renewal helps ensure continuous coverage for the self-insured employer's obligations.
What are the consequences of not renewing the letter of credit?
If the self-insured employer fails to renew the letter of credit or substitute acceptable security by 15 days before the expiry date, the Oregon Department of Consumer and Business Services may draw on the letter of credit. This is to ensure that funds are available to cover any liabilities that may arise.
Are there any fees associated with the letter of credit?
Yes, all bank charges related to the letter of credit are the responsibility of the applicant. It is essential for the self-insured employer to be aware of these costs and factor them into their financial planning.
What legal jurisdiction applies to this letter of credit?
The letter of credit is subject to the laws of the state of Oregon. In the event of any legal disputes regarding the letter, the proceedings will take place in Oregon courts, ensuring that state laws govern the agreement.
Form Specifications
| Fact Name | Details |
|---|---|
| Form Purpose | This form serves as an Irrevocable Standby Letter of Credit for self-insured employers in Oregon, ensuring compliance with workers' compensation obligations. |
| Governing Law | The form is governed by Chapter 656 of the Oregon Revised Statutes and the International Standby Practices 1998 (ISP 98). |
| Automatic Renewal | The letter of credit will automatically renew for one year unless the issuing bank notifies the Oregon Department of Consumer and Business Services at least 60 days before the expiry date. |
| Payment Method | Payments under this letter of credit are made via wire transfer to the Oregon Department of Consumer and Business Services' designated bank account. |