AIG Taiwan Insurance Comprehensive Export Credit Insurance For Financial Institutions

Transcription

1 查 詢 本 公 司 資 訊 公 開 說 明 文 件, 請 上 本 公 司 網 站, 網 址 : 或 至 本 公 司 索 取 免 費 申 訴 電 話 : AIG Taiwan Insurance Comprehensive Export Credit Insurance For Financial Institutions 核 准 日 期 及 文 號 (104) 美 亞 保 字 第 0046 號 函 備 查 承 保 範 圍 及 不 保 事 項 Insured: Policy Number: In consideration of the payment of the premium and in reliance upon written statements made to the Company by the Insured and subject to the Declarations and Endorsements made a part hereof and the terms, conditions and limitations set forth herein, the AIG TAIWAN INSURANCE CO., LTD. (the "Company") agrees as follows: I. INSURING AGREEMENT The Company shall indemnify the Insured for Loss(es) incurred in connection with Eligible Transactions and caused by the Non Payment by the Customer(s) in Eligible Transaction Currency within the Waiting Period. This policy covers all Eligible Transactions committed to by the Insured during the Policy Period. The indemnification amount payable by the Company under the Insuring Agreement will be calculated in accordance with Article VI.C, Calculation of Claim Payment. II. DEFINITIONS A. APPLICATION means an application for a Credit Limit for a particular Customer. B. APPROVED RECOURSE AMOUNTS means: (a) moneys recovered or recoverable from the Seller or its related bodies corporate on account of the Uninsured Percentage; and (b) any amounts recovered or recoverable from any related body corporate of the Insured under any risk allocation arrangement between it and the Insured; and (c) any other amounts which the parties agree in writing to be Approved Recourse Amounts. C. COSTS OF RECOVERY means the necessary and reasonable costs and expenses paid by the Insured to third parties in connection with the recovery or collection of a Customer s obligations under an Eligible Transaction. Costs of Recovery in excess of require the prior written approval of the Company. D. COUNTRY LIMIT OF LIABILITY means the amount of claimable losses specified in Item 7. 1

2 of the Declarations, which is the Company s maximum liability for all Loss(es) in each particular country. E. CREDIT LIMIT means the approved maximum amount outstanding in respect of a Customer and shall be either: 1. The limit specified in writing by the Company for that Customer in a Notice of Customer Credit Limit or, where no such limit exists, or 2. the written limit for the Customer established by the Insured in accordance with the Credit Procedures provided that such limit does not exceed the Discretionary Credit Limit specified in Item 6 of the Declarations. With respect to Clause E.2., where a Customer includes other entities controlling, controlled by or under common control with the Customer, an aggregate Credit Limit shall be established for all such entities under common control, which shall be the applicable Credit Limit for the purposes of the policy. F. CREDIT PROCEDURES means the written representations (if any) made by the Insured to the Company that describe its internal processes for analyzing, evaluating, and determining the amount of credit risk the Insured is prepared to bear in entering into Eligible Transactions with its Customers. G. CUSTOMER means: 1. the applicant where a Letter of Credit is issued by the Insured ; or 2. the Issuing Bank where the Insured confirms a Letter of Credit (including confirmations on a silent basis) or accepts, discounts or commits to negotiate drafts or documents under a Letter of Credit ;or 3. the obligor under a Trade-Related Loan; or 4. the obligor(s) under a promissory note, bill of exchange, negotiable instrument, draft or banker s acceptance. 5. the obligor/buyer in an Open Account Transaction with the following exceptions which are excluded from coverage: (a) all corporations and other entities controlling, controlled by or under common control with the Insured; (b) any Customer that, as of the first day of the Policy Period, is to the knowledge of the Insured, Insolvent or more than days past due in any payment obligations to the Seller (payment obligations that are disputed by the Customer in writing will not be considered past due for the purposes of this paragraph) unless otherwise agreed by the Company in writing; (c) any Customer about which the Insured provided inaccurate information to the Company. If the inaccurate information was based on the representations or statements of third parties and was true to the knowledge of the Insured after reasonable investigation, this exception shall not apply Any Customer and any successor to such Customer shall be considered the same entity. The term Customer shall include the Customer and all companies and other entities controlling, controlled by, or under common control with the Customer. Control means ownership directly or indirectly of more than fifty per cent (50%) of the voting share capital, or effective management control, of the Customer. H. CUSTOMER S COUNTRY means the country from which the Customer is obligated to pay under the Eligible Transaction. 2

3 I. DATE OF LOSS means the date on which the Waiting Period expires following Non Payment. J.DEDUCTIBLE means the amount specified in Item 13. of the Declarations, which is the annual aggregate sum of Losses greater than the Non Qualifying Loss Amount that the Insured shall bear for its own account. K. DELIVERY means: (a) for exported goods delivery means the date of arrival of the relevant goods to the applicable port of entry under the relevant Sale Contract or related documents; (b) for domestic goods delivery means the date of arrival of the relevant goods to the premises of the buyer under the relevant sale contract or related documents. L. DISCRETIONARY CREDIT LIMIT means the amount specified in Item 6. of the Declarations, which is the maximum Credit Limit the Insured may establish for a Customer without obtaining approval from the Company. M. DUE DATE means the date payment is required to be made by the Customer under the terms of the Eligible Transaction. If the original Due Date has been extended pursuant to the terms of Article II.U, then the extended Due Date shall be the Due Date for the purposes of this policy. N. ELIGIBLE TRANSACTION means any transaction in which the Insured during the Policy Period: 1. issues a Letter of Credit; or 2. confirms a Letter of Credit (including confirmation on a silent basis) or accepts, avalises, indorses, discounts or commits to negotiate drafts or documents under a Letter of Credit ; or 3. makes Trade-Related Loans directly to a Customer; 4. discounts, guarantees, avalises, endorses, accepts or re-discounts a promissory note, bill of exchange, draft, negotiable instrument or banker s acceptance; or 5. discounts, purchases or otherwise finances an Open Account Transaction or provides a guarantee of payment to the Seller in respect of an Open Account Transaction. provided always, that (i) the payment obligation of the Customer, pursuant to the applicable Payment Instrument, conforms with the Maximum Terms of Payment as specified in Item 9 of the Declarations; (ii) the Customer is required to pay in Eligible Transaction Currency; (iii) the Customer is not a subsidiary or associated company of the Insured. O. ELIGIBLE TRANSACTION CURRENCY means the currency in which the Customer is obligated to pay pursuant to the Payment Instrument. P. INSOLVENT/INSOLVENCY means that any of the following steps, or an equivalent step, has been taken by or against a Customer under the law of a jurisdiction relevant to the Customer's affairs: (i) Bankruptcy or insolvency is declared against the Customer; (ii) The court approves a compromise, composition, scheme of arrangement or similar arrangement of the Customer's debts; (iii) The Customer makes a valid assignment, compromise, composition or similar arrangement of its debts for the benefit of its creditors generally or with substantially 3

4 all of them; (iv) The court orders the winding-up or liquidation of the Customer'; (v) An effective resolution is passed for the voluntary winding-up or liquidation of the Customer; (vi) A compromise, composition, scheme of arrangement or similar arrangement of the Customer's debts is made binding on the Customer and all or substantially all of its creditors; (vii) A receiver, receiver/manager, trustee, liquidator, provisional liquidator, administrator or similar person is appointed to the Customer; (viii) the Customer is or is deemed (under the Corporations Law of Taiwan R.O.C. or any equivalent provision under laws applicable to the Customer) to be insolvent or is unable to pay its debts as and when they fall due; or (ix) the Customer declares itself to be insolvent or bankrupt. The date of Insolvency shall be the date on which the first of the above events occurs. Q. INSURED PERCENTAGE means the percentage of an Eligible Transaction that will be indemnified by the Company in the event of a Loss and is specified in Item 12. of the Declarations. R. ISSUING BANK has the same meaning provided in the Uniform Customs and Practice for Documentary Credits (UCP). S. LETTER OF CREDIT means an irrevocable letter of credit that is issued in accordance with UCP guidelines. T. LOSS means the gross value of an Eligible Transaction in Eligible Transaction Currency, including the principal or face amount thereof and any accrued interest as set forth in the Payment Instrument, plus any Costs of Recovery pursuant to Article II.C., which is not paid on the Due Date by or on behalf of the Customer, less any amounts received by the Insured from any source as or towards payment of the Eligible Transaction, (but excluding Approved Recourse Amounts). Post maturity or default interest shall not be considered part of a Loss for the purposes of this policy and nothing contained in this policy restricts the Insured from recovering and retaining such amounts solely for its own account. U. MAXIMUM TERMS OF PAYMENT means the terms specified in Item 9. of the Declarations. However, if there has been an amendment to the Sale Contract underlying or other documents relating to the Eligible Transaction that requires a change to the payment terms, then the Insured or the Seller (as applicable) may grant a single extension of the original Due Date for a total period up to the Maximum Extension Period, as specified in Item 10 of the Declarations. V. NON QUALIFYING LOSS AMOUNT means the amount specified in Item 14 of the Declarations. If the total adjusted Loss in respect of a Customer is less than the Non Qualifying Loss Amount, then such Loss shall be borne by the Insured for its own account and shall not be applied to the Deductible. W. NON PAYMENT means non payment by the Customer on the Due Date for all or part of amounts due under an Eligible Transaction. X. OPEN ACCOUNT TRANSACTION means a sale and purchase transaction on open account credit terms as evidenced by a Sale Contract. 4

5 Y. PAYMENT INSTRUMENT means: (a) where the Insured has issued a Letter of Credit, the indemnity from the applicant in favour of the Insured; (b) where the Insured has confirmed (including confirmation on a silent basis) or refinanced a Letter of Credit or accepted, discounted, or committed to negotiate drafts or documents under a Letter of Credit, the Letter of Credit issued by the original Issuing Bank; (c) where the Insured has made a Trade Related Loan, the loan agreement or other document containing the obligation on the Customer to repay the loan; (d) where the Insured discounts, guarantees, avalises, indorses, accepts or re-discounts a promissory note, bill of exchange, draft, negotiable instrument or banker s acceptance, the promissory note, bill of exchange, draft, negotiable instrument or banker s acceptance; or (e) where the Insured discounts, purchases or otherwise finances an Open Account Transaction or provides a guarantee of payment to the Seller in respect of an Open Account Transaction, the Sale Contract which relates to that Open Account Transaction Z. POLICY CURRENCY means the currency stated in Item 8. of the Declarations and shall be the currency in which: 1. the premium is payable; and 2. the Limits of Liability are stated, as per Article III. of the policy. Where the Eligible Transaction Currency is other than Policy Currency, the rate of exchange shall be the rate as listed in the Bank of Taiwan on the Due Date (or if such rate is not shown, then the rate as listed in the Wall Street Journal on the Due Date). AA. RELEASE AND ASSIGNMENT FORM means a form the Insured will sign when accepting the Indemnification by the Company as full and final settlement and discharge of the claims and release the Company from all debts, claims, demands, damages, actions and causes of action of whatever description, which have arisen or may hereinafter arise in connection with or in consequence of the claims. BB. SALE CONTRACT means an agreement for the sale and purchase of goods between a buyer and a Seller as evidenced by a written agreement, order form, commercial invoice or other written document customarily utilised in trade transactions of this nature. CC. SELLER means the seller under a Sale Contract or under any trade transaction underlying any Eligible Transaction. DD. TRADE-RELATED LOANS means a direct advance from the Insured to a Customer with a Due Date of less than days and where either: a) the advances are 1) used to fund the purchase of inventory for resale on selling terms of less than days from Delivery, and 2) secured in the interest of the Insured by the Customer s short term trade receivables; or b) the purpose of the advances is to finance the purchase of inventory by the Customer. EE. UNIFORM CUSTOMS AND PRACTICE FOR DOCUMENTARY CREDITS OR UCP means the most recent publication by the International Chamber of Commerce, Commission on Banking Technique and Practice, entitled Uniform Customs and Practice for Documentary Credits which is in effect at the time of the Eligible Transaction. FF. UNINSURED PERCENTAGE means the percentage of an Eligible Transaction that will not 5

6 be indemnified by the Company. GG. WAITING PERIOD means the period stated in Item 11. of the Declarations, which is the number of consecutive calendar days that must elapse from each Due Date before any Loss is payable under this policy. III. LIMITS OF LIABILITY A. The Policy Limit of Liability, as stated in Item 5 of the Declarations, is the Company's maximum liability for the total of all claims payments made in accordance with Article VI.C of this policy. Losses insured under this policy are subject always to the lesser of the applicable Country Limit of Liability or Credit Limit. B. Each payment made by the Company of a Loss hereunder shall reduce the Policy Limit of Liability, and the applicable Country Limit of Liability and the Credit Limit by the amount of such payment. C. Each Credit Limit and Country Limit of Liability under this policy and any preceding or future policies issued by the Company for the Insured is non-cumulative. When more than one Credit Limit is issued for a Customer under a policy, the Credit Limit in effect for the Customer on the date the Eligible Transaction is committed to by the Insured will be the applicable Credit Limit for loss adjustment purposes. Within each Policy Period, the highest Credit Limit in effect for the Customer is the maximum limit of liability for the Customer. No more than one maximum limit of liability shall be in effect for any one Customer or for any one Customer s Country, regardless of the number of years this policy or any prior, replacement or renewal policy is in force. IV. EXCLUSIONS A. Losses caused by or resulting from the following shall not constitute a Loss and are not covered under this policy: 1. Wrongful or dishonest acts or omissions of the Insured; 2. In the case of: (a) transactions described in paragraphs 4 and 5 of the definition of Eligible Transactions, contractual disputes between the relevant Seller and the Customer, including any unresolved documentary credit disputes, unless and until each such dispute has been settled to the Company s satisfaction or the Loss is determined to be a valid and legally enforceable indebtedness of the Customer, its legal representative or successor in interest but excluding any situation where the goods have been delivered to and accepted by the Customer and payment has not been received within 6 months from the Due Date; and (b) transactions described in paragraphs 1, 2 and 3 of the definition of Eligible Transaction a dispute between the Customer and the Insured where the dispute relates to the failure of the Insured to perform its obligations in respect of that Eligible Transaction and other Eligible Transactions covered under this Policy, unless and until either the Customer has withdrawn from such dispute or the Insured has obtained judgement in its favour in legal proceedings against the Customer. 3. Any material breach of or inaccuracy regarding any warranty or representations made herein or failure to perform or to fulfil in all material respects any warranty, covenant or agreement made herein by the Insured; 6

7 4. The failure of the Insured or its agents to comply with the applicable laws and regulations for the acquisition and transfer of Eligible Transaction Currency; 5. Nuclear reaction or nuclear radiation or radioactive contamination; 6. War between the People's Republic of China, France, the United Kingdom, the Russian Federation and/or the United States of America 7. Insolvency or financial default of any party except the Seller, the Customer or, if applicable, any guarantor of the Customer s obligations. B. Losses relating to any of the following Customer and/or Eligible Transactions are not covered under this policy: 1. Any Customer that, as of the first day of the Policy Period, is to the knowledge of the Insured, Insolvent or more than days past due in any payment obligations to the Insured or the Seller unless; (a) the total aggregate amount of such past due payment obligations does not exceed the Non Qualifying Loss Amount (payment obligations that are disputed by the Customer in writing will not be considered past due for the purposes of this paragraph); or (b) this is a renewal policy, in which case the Insured must disclose to the Company on the renewal application if any particular Customer is to its knowledge, Insolvent or more than days past due in any payment obligation to the Insured or the Seller at the time the renewal application is being completed. If the Insured fails to make such a disclosure, then any and all Eligible Transactions between the Insured and that particular Customer will be automatically excluded from coverage under the renewal policy. If the Insured makes the disclosures required herein, then policy coverage will be extended to that Customer unless that Customer is specifically excluded by the Company. 2. Any Customer with which the Insured has or the Seller (to the knowledge of the Insured) has, during the months immediately prior to the first day of the Policy Period, rescheduled or extended the Due Date of any Eligible Transactions for longer than the Maximum Extension Period, unless coverage for such Customer is specifically approved by the Company. 3. Any Customer about which the Insured provided inaccurate information to the Company. If the inaccurate information was based on the representation of statements of third parties and was true to the knowledge of the Insured after a reasonable investigation, this exclusion shall not apply. 4. Any receivables that are purchased or otherwise acquired by the Insured from any other person or entity (except for Open Account Transactions which have been purchased, discounted or otherwise financed by the Insured or where the purchase or acquisition otherwise arises out of an Eligible Transaction) or sold or otherwise transferred by the Insured to any other person or entity, unless otherwise agreed in writing by the Company. C. The Company shall not be deemed to provide cover and the Company shall not be liable to pay any claim or provide any benefit hereunder to the extent that the provision of such cover, payment of such claim or provision of such benefit would expose the Company, its parent company or its ultimate controlling entity to any sanction, prohibition or restriction under United Nations resolutions or the trade or economic sanctions, laws or regulations of the European Union or the United States of America. V. WARRANTIES AND COVENANTS 7

8 The Insured warrants and agrees: A. To cease committing to additional Eligible Transactions in respect of any Customer that is: i) to the knowledge of the Insured, Insolvent; or ii) to the knowledge of the Insured, when and for so long as any Customer is more than days past due in any payment obligations under any other Eligible Transaction insured under this Policy, which in aggregate exceed the Non Qualifying Loss Amount. Payment obligations that are disputed by the Customer in writing will not be considered past due for the purposes of this paragraph; B. To notify the Company monthly of all amounts in respect of Eligible Transactions due from any Customer under any other Eligible Transaction insured under this Policy which at the end of the previous month were unpaid for more than days after the Due Date and will report each month thereafter all such amounts which continue to be unpaid. In addition, the Insured shall, once it is aware of the same, give immediate written notice to the Company of the Insolvency of any Customer or any circumstance that may reasonably be expected to result in a Loss; C. To incur no further exposure after it has become aware of the occurrence of any event that may reasonably be expected to result in a Loss hereunder and to use all reasonable measures to prevent and to minimize Loss, including the filing of any reclamation claims and enforcing any liens or security interests against a Customer or its property, and to cooperate with the Company and to take all reasonable steps, before and after the settlement by the Company of any Loss, to effect recoveries of any amounts due including, at the written request of the Company, the enforcement of any security and the institution of legal proceedings against the Customer or, if applicable, any guarantor; D. Where the relevant Payment Instrument creates: 1. obligations and liabilities between the Customer and the Insured, to establish and maintain a valid and legally enforceable payment obligation of the Customer to the Insured; and 2. obligations and liabilities between the Customer and the Seller, to obtain a warranty and agreement from the Seller that: (a) it will establish and maintain a valid and legally enforceable payment obligation of the Customer to the Seller; (b) it will cease shipment to any Customer which is more than days overdue in any of its obligations to the Seller in respect of Eligible Transactions except where the relevant transaction is the subject of a contractual dispute between the Seller and the Customer; and (c) the Customer is not insolvent to the best of the Seller s knowledge and belief. (d) with respect to the underlying trade transaction, the Seller has shipped the goods in conformity with the applicable import/export laws and regulations of both the relevant buyers and the Seller s countries; E. That it will adhere to the Credit Procedures (if any) with respect to Eligible Transactions, and will consistently follow these procedures with respect to Eligible Transactions to determine reasonably at the time that such transaction becomes an Eligible Transaction that the Customer has both the financial capacity to meet its payment obligations and a record of meeting payment obligations within the Maximum Extension Period (see Item 10 of the Declarations). F. To retain for its own account without recourse to any party the amount of the Deductible and 8

9 the Uninsured Percentage, except for Approved Recourse Amounts; G. That the statements contained in the application and any attachments thereto, which are hereby part of this policy, are true to their knowledge, that no material information has been withheld, and that it has no knowledge at the policy inception of any circumstances that may reasonably be expected to result in a Loss hereunder, except for that which is specifically disclosed about particular Customers in the Application. Furthermore, the Insured warrants that all information given by the Insured to the Company after the inception of the Policy Period will be true to the Insured s knowledge. VI. RESCHEDULING, CLAIMS & RECOVERIES A. Rescheduling Notwithstanding any other provision of this Policy, if any moratorium, rescheduling, refinancing, readjustment, suspension of payments, rollover or other arrangement however described (a Rescheduling ) (excluding those circumstances that are referred to under the Maximum Terms of Payment in Article II.V and those circumstances which would constitute an Insolvency Event under this Policy) that affects the obligations of the Customer to pay under an Eligible Transaction insured under this Policy (or any class of the Customer s obligations of which the Eligible Transaction forms part), are to the knowledge of Insured announced, declared or put into effect, the Insured shall assess them into one of the following two categories, advise the Company accordingly and (provided that this is within the Insured s control) take the action noted. In all circumstances where a Rescheduling is to the knowledge of the Insured under negotiation, the Insured shall not enter into any further Eligible Transactions involving that Customer and which are to be insured under this policy without the written approval of the Company, until such time as the Customer has fulfilled all obligations under Eligible Transactions outstanding at the time the Rescheduling was announced and which are insured under this Policy: 1. If the Rescheduling comprises a short term extension of the Customer s obligations (for reasons other than those described under Article II.V of the Policy under the Eligible Transaction(s) that will result in an extension of the Due Date(s) for a period up to days, the Rescheduling may be approved by the Insured without the consent of the Company providing that the Insured advises the Company of the action that has been taken and the reasons for the Rescheduling. If the Rescheduling proceeds without the need for approval or otherwise by the Insured then the Insured will advise the Company of the relevant situation to the extent that it is aware. 2. If the Rescheduling comprises an extension of the Customer s obligations under the Eligible Transaction(s) that will result in an extension of the Due Date(s) by more than days, the Insured will consult with the Company concerning the proposed Rescheduling and seek their approval to participate if the consent or otherwise of the Insured is necessary for the Rescheduling to proceed. If agreement is reached by the Insured and the Company to proceed with a Rescheduling or if the Rescheduling proceeds without the requirement for the approval or otherwise of the Insured, the liabilities of the Insured to the Company and vice versa shall remain unchanged under this Policy unless specifically agreed in writing by both parties. In all cases the Insured insofar as it is aware, shall continue to keep the Company fully appraised on progress under the Rescheduling and will seek the Company s consent for any changes that may be required thereunder (to the extent that the consent or otherwise of the Insured is required for such change), with such consent of the Company not to be unreasonably withheld or delayed. If the Insured and the Company cannot reach agreement on the proposed Rescheduling 9

10 within a reasonable period of time, the Insured shall submit a proof of Loss to the Company. Notwithstanding any provision of this clause VI.A, if the Rescheduling does not require the approval or otherwise of the Company or proceeds regardless of the approval or otherwise of the Company then, for the purposes of this policy the relevant Due Date will be taken not to have been extended and the Insured may claim under this policy in the event of Non Payment during the applicable Waiting Period. B. Indemnification Procedures The Insured must submit a written proof of Loss to the Company within twelve (12) months after the Date of Loss or in the event of an earlier demand by the Company for submission of such proof of Loss, then thirty (30) days thereafter. It is understood that the written proof of Loss may be amended from time to time by the Insured without prejudice to its claim. The payment of a Loss shall be made promptly after the Date of Loss and after submission by the Insured of a satisfactory written proof of Loss form together with the best evidence reasonably available that the Loss is insured under this policy. The responsibility for proving a Loss under this policy shall rest with the Insured and the responsibility of evidencing that all conditions and warranties have been complied with (except as may otherwise be provided) shall also rest with the Insured. The Loss shall be paid in Policy Currency or Eligible Transaction Currency, at the option of the Company. For the purpose of any currency conversion required in the settlement of a Loss, the rate of exchange shall be the rate as listed in the Bank of Taiwan on the Due Date (or if such rate is not shown, in the Wall Street Journal on or about the relevant date). C. Calculation of Claim Payment Indemnification by the Company shall be calculated as follows for each Eligible Transaction, subject always to the Policy Limit of Liability, Country Limit of Liability, Credit Limit and any other applicable terms and conditions of the policy: 1. calculate the amount of Loss in accordance with Article II.U.; 2. provided the Loss is greater than the Non Qualifying Loss Amount, subtract the remaining Deductible from the lesser of either a) the amount of the Loss or b) the applicable Credit Limit; 3. multiply the Insured Percentage by the amount determined pursuant to 2. above. Where the Loss comprises more than one Eligible Transaction, indemnification by the Company shall apply to the sum of Eligible Transactions outstanding with the Customer. D. Application of Funds For the purpose of determining the Company's liability under this policy in respect of an Eligible Transaction(s), all funds received from the relevant Customer and from any source whatsoever in respect of the Eligible Transaction(s) (other than Approved Recourse Amounts) after the Customer is in default of any payment obligation under the relevant Eligible Transaction(s) for more than days, or is Insolvent, whichever happens first, shall be applied in chronological order of Due Dates, unless the Customer or other paying party has designated the obligation to which the funds shall be applied. Where funds are received after the Company has indemnified the Insured for Loss then the terms of Article VI.E below shall apply to the allocation of such funds between the Company and the Insured. E. Recoveries Where funds are received from the Customer or from any source whatsoever (other than Approved Recourse Amounts) as or towards payment of the Customer s obligations to the 10

11 Insured in respect of an Eligible Transaction after the Company has indemnified the Insured for a Loss in respect of that Eligible Transaction, then such funds shall be shared between the Company and the Insured. Any sums received in respect of default interest payable under the Payment Instrument shall inure solely to the benefit of the Insured and rank pari passu on distribution with the Costs of Recovery as set out below The method under which applicable funds shall be shared between the Insured and the Company is as follows: 1. Costs of Recovery (see Article II.C) shall be reimbursed to the party, either the Company or the Insured, that incurred such costs with the Costs of Recovery on a pari passu basis; 2. after Costs of Recovery have been reimbursed, then on a pari passu basis, the Company shall receive the Insured Percentage of all further funds recovered and the Insured shall receive the Uninsured Percentage of such funds and any amounts attributable to the Deductible; and 3. any surplus or further funds recovered shall inure to the benefit of the Insured. For the purpose of any currency conversion required after the settlement of a Loss(es), the rate of exchange shall be the rate as listed in the Bank of Taiwan on the date of receipt of cleared funds into the account of the Insured (or if such rate is not shown then as shown in the Wall Street Journal on or about the relevant date). Sums recovered with respect to any loss retained by the Insured under the Deductible shall reinstate the Deductible by the same amount. F. Subrogation In the event of any payment of a Loss under this policy, the Company shall be subrogated to the extent of such payment to the Insured's rights of recovery therefor against any person or organization (except in respect of Approved Recourse Amounts), and the Insured shall execute and deliver all instruments and papers and do whatever else is reasonably within its power to secure such rights, including rights with respect to amounts that have been applied to the Deductible and to any deposits made by the Customer (or, if applicable, the guarantor) to obtain and transfer Eligible Transaction Currency. The Company shall have the right to direct the manner in which such assets shall be liquidated. The Insured shall do nothing to prejudice such rights. The Company will not pay a Loss under this policy, and the Insured will reimburse any such Loss paid, if any sources of recovery to which it shall be subrogated are subject to any lien, security, interest or other third party claim superior to that of the Company and of which the Insured was aware after making reasonable enquiry. VII. GENERAL CONDITIONS A. Accounting Principles All financial statements and accounts as well as the calculation of any Loss hereunder shall be in accordance with the principles of accounting generally accepted in the country of the Insured, consistently applied. B. Action Against Company No legal action arising out of this policy may be brought against the Company unless the Insured has complied in all material respects with all the terms of this policy in respect of the specific claim which is the cause of the action and such action is commenced within twenty four (24) months following the last day of the Policy Period, or within 180 (180) days after the Company s first disposition of a specific claim which is the cause for the action or proceeding, whichever event occurs later. 11

12 C. Arbitration Any dispute which cannot be settled amicably between the Insured and the Company arising out of or in connection with this policy, including any question regarding its existence, validity or termination shall be referred to and finally resolved by arbitration in Taiwan, R.O.C. The arbitration shall be conducted in accordance with the R.O.C. Arbitration Law (ROCAL). The rules of the ROCAL shall apply except with respect to the selection of the arbitration panel which shall consist of one arbitrator appointed by the Insured, one arbitrator appointed by the Company and a third independent arbitrator appointed by the first two arbitrators. If either the Insured or the Company fail to appoint their respective arbitrator within thirty days after the notice of arbitration such arbitrator shall be appointed by the Chairperson of the Chinese Arbitration Association, Taipei (CAA). If the first two arbitrators fail to agree on a third arbitrator, the third arbitrator shall be appointed by the Chairperson of the CAA. D. Assignment This policy cannot be assigned to any third party. Any Loss under the policy may be paid, after adjustment with the Insured, to a named Loss payee if such action is agreed by the Company in writing and evidenced by endorsement hereto. E. Cancellation 1. The Company is not permitted to cancel this policy, except for non-payment of premium as outlined in Article VII.L, or pursuant to Article VII.F below. The Company shall have no obligation under this policy in respect of an Eligible Transaction until the premium has been paid in respect of that Eligible Transaction. 2. In the event of cancellation by the Company, the Company shall notify the Insured in writing sent by fax or registered mail stating when, not less than ten (10) business days thereafter, the cancellation shall be effective. Upon the effective date of cancellation, the policy shall be voided insofar as it relates to Eligible Transactions in respect of which the premium has not been paid and no Loss shall be eligible for payment in respect of those Eligible Transactions. The mailing of such notice by registered mail or in the case of facsimile, receipt of a successful transmission report by the sender shall be sufficient proof of notice. F. Change in the Composition of the Insured The Insured shall notify the Company promptly in writing (but in no event later than business days after receipt of knowledge thereof) if, during the Policy Period, it consolidates with, merges into or sells all or substantially all of its assets to any other person or entity or if another person or entity should acquire more than fifty percent (50%) of its voting share capital. No later than days after receipt of such notice, the Company may cancel this policy effective on the date of such change in the composition of the Insured. If the policy is cancelled, a pro-rata return of premium shall be made by the Company. Cancellation under this clause is without prejudice to the rights and obligations of the parties accrued up to the date of cancellation. G. Choice Of Law The construction, validity and performance of this policy shall be governed by the laws of Taiwan, R.O.C. Insofar as any terms of this policy do not comply with any applicable and relevant legislation in Taiwan, R.O.C, then such terms are hereby amended to conform to such legislation. 12

13 H. Compliance By Insured Failure by the Insured to comply with any term or condition of this policy shall not be deemed to have been excused or accepted by the Company unless the same is specifically so excused or accepted by the Company in writing. I. False Or Fraudulent Statements, Reports Or Claims, Concealment If the Insured has made any willful concealment, nondisclosure through its own fault, or misrepresentation, and such concealment, nondisclosure, or misrepresentation is sufficient to alter or diminish the Company's estimation of the risk to be undertaken, the Company has the right to rescind the policy and needs not refund premium already collected. If the Insured shall give notice of any loss knowing the same to be false or fraudulent, as regards amount or otherwise, such loss shall be excluded from the policy and the Company reserves the right to cancel this policy, and all payments made by the Company shall be returned with interest thereon by the Insured upon demand. J. Insured s Records The Company may at any time upon giving reasonable notice, in connection with a Loss or proof of Loss, examine or require to be produced copies of any corporate records or books, internal documents and correspondence, letters, or other documentation or records in whatever form and wherever situated in the possession or control of the Insured relating to or connected with this policy or to any Eligible Transaction insured under this policy. The Insured shall, at the request of the Company, take any and all reasonable steps to obtain for the Company any and all of the aforesaid information in the possession of any other person relating to or connected with this policy or any Loss hereunder. K. Notices All notices provided for in this policy shall be in writing (including by facsimile transmission or electronic mail) and given to: 1. the Insured at the address stated in Item 1. of the Declarations or to facsimile number or to electronic mail ; or 2. to the Company at: ; or to facsimile number or to electronic mail or to such other address or facsimile or electronic mail as advised in writing from time to time. Except as otherwise provided herein, all notices, requests, demands and other communications which are required or permitted hereunder shall be in writing and shall be deemed to have been duly given: (i) at the time of delivery, when delivered personally; (ii) on the following business day, when sent by overnight courier; (iii) at the date and time of receipt by the sender of the correct answer back or notification (iv) of successful transmission (as appropriate) when sent by facsimile or electronic mail; at the time of delivery, when mailed by registered or certified mail, postage prepaid, return receipt requested; and A notice sent by facsimile can be relied upon by the recipient if the recipient reasonably believes the notice to be genuine and if it bears what appears to be the signature (original or facsimile) of an authorised signatory of the sender (without the need for further enquiry or confirmation). Each party must take reasonable care to ensure that no forged, false or unauthorised notices are sent to the other party. L. Payment of Premium The Premium set forth in Item 4. of the Declarations shall be payable to the Company 13

14 within thirty (30) days of the effective date of this policy. The Premium is fully earned at the inception date of the policy. Any premium that is not payable in full at inception of this policy shall be fully due and payable immediately in the event a proof of Loss is submitted. M. Release of Liability The Company shall be released from all liability hereunder one (1) year after the expiration of the applicable Waiting Period for the last Eligible Transaction insured hereunder except for those Customers reported to the Company in the manner described in Article V.B. N. Other Insurance The insurance provided under this policy shall be excess over any other valid bond, insurance or other indemnity of which the Insured has the benefit (other than Approved Recourse Amounts). The Insured shall inform the Company of any bond, insurance or other indemnity in place at the inception of the policy or as they may arise during the Policy Period. In witness whereof, the Company has caused this policy to be signed by its duly authorized representative, but this policy shall not be valid unless Policy Declarations bearing this Policy Number and also signed by a duly authorized representative of the Company are attached hereto. 個 人 保 險 商 品 預 定 費 用 率 不 適 用 短 期 費 率 表 依 主 保 險 契 約 之 約 定 保 費 退 費 係 數 表 依 主 保 險 契 約 之 約 定 理 賠 申 請 文 件 及 程 序 : 請 參 照 主 保 險 契 約 之 理 賠 服 務 網 頁 14