The 440 3640A Oregon form is known as the Irrevocable Standby Letter of Credit. It is issued by banks as a guarantee for self-insured employers, ensuring they meet their workers' compensation liabilities as required by the Oregon Department of Consumer and Business Services. This form plays a crucial role in providing financial security, ensuring that obligations related to workers' compensation are adequately covered.
In the realm of workers' compensation in Oregon, a critical tool for ensuring the financial responsibility of self-insured employers is encapsulated in the 440 3640A Oregon form, officially known as the Irrevocable Standby Letter of Credit. This document serves as an indispensable assurance from banks to the State of Oregon's Department of Consumer and Business Services, effectively guaranteeing that self-insured employers will uphold their workers' compensation liabilities. Constructed to offer the Oregon Department of Consumer and Business Services, as the beneficiary, financial security, the form delineates the conditions under which the funds can be drawn. These include situations where the employer either defaults on their compensation liabilities, declares bankruptcy, fails to renew the letter of credit or provide acceptable security, or if the existing security is deemed inadequate. Such a financial instrument not only embodies the trust placed by the state in these enterprises but also underpins the protective measures set forth to safeguard workers' rights to compensation. Furthermore, the form prescribes specific legal frames, including the International Standby Practices and Oregon state laws, to govern its execution, thereby ensuring the interplay between local regulations and international norms. The intricacies of this document, from its efficacy in securing owed obligations to its procedural requisites and legal underpinnings, highlight its significance in the landscape of Oregon's workers' compensation framework.
State of Oregon
Department of Consumer and Business Services
Workers’ Compensation Division
IRREVOCABLE STANDBY LETTER OF CREDIT
(Form A)
Issuing bank name/address:
Irrevocable Standby Letter of Credit number:
Effective date:
Date and place of issue:
Expiry date and place for presentation of documents:
Date:
Expiry date:
Place:
Place for presentation:
Applicant (self-insured employer) name/address:
Beneficiary:
State of Oregon acting by and through, the
Oregon Department of Consumer and Business Services
350 Winter Street NE
P.O. Box 14480
Salem, OR 97309-0405
Confirming bank name/address:
Reference number:
Amount: U.S. $ (spell out amount in U.S. dollars)
(hereinafter referred to as “Issuer”) hereby issues our irrevocable standby letter of
[Insert bank name]
credit (hereinafter referred to as “letter of credit”) in favor of the Oregon Department of Consumer and Business Services, on behalf of (hereinafter referred to as the “self-insured employer”)
(applicant)
in the amount of U.S. dollars:
.
The credit is available with
(issuing or confirming bank located in the state of Oregon)
by presentation of the beneficiary’s draft drawn at sight on the issuing bank or confirming bank, payable within three business days, when accompanied by one of the four following statements, signed by the director of the Oregon Department of Consumer and Business Services or the administrator of the Oregon Department of Consumer and Business Services, Workers’ Compensation Division, or their designated authorized representative:
That the self-insured employer has defaulted in payment of its workers’ compensation liabilities or obligations, or in payments due the director of the Oregon Department of Consumer and Business Services; OR
That the self-insured employer has filed for bankruptcy; OR
That the self-insured employer has failed to renew the letter of credit or substitute acceptable security for workers’ compensation liabilities and obligations by fifteen (15) days before the expiry date of the letter of credit; OR
That the beneficiary has determined that the existing security is deemed to be inadequate; that additional or replacement security must be provided by the self-insured employer and that neither has been provided, notwithstanding written notice to the self-insured employer.
This letter of credit is payable at:
(branch of bank, name and address)
. Drafts presented must be marked
“Drawn under
’s
(issuing bank)
letter of credit number
dated
.”
Drawings honored by the issuing bank or confirming bank under this letter of credit shall not, in the aggregate, exceed the total amount of credit set forth above, or as modified by accepted amendments, and each drawing honored by the issuing bank or confirming bank shall reduce the amount set forth pro tanto. Partial drawings are permitted.
440-3640a (8/06/DCBS/WCD/WEB)
Letter of Credit Number
Page 2
The purpose of this letter of credit is to create a primary obligation on the part of
and any confirming bank to the Oregon Department of Consumer and Business Services relating to the self-insured workers’ compensation liabilities and obligations of the self-insured employer
in accordance with Chapter 656 of the Oregon Revised Statutes. Except as stated herein, this letter of credit is not subject to any condition or qualification and is the issuing and any confirming bank’s individual obligation which is in no way contingent upon reimbursement, and shall cover all of the certified self-insured employer’s past, present, existing, and potential liability up to the total amount of credit set forth above for assessments, contributions, or other obligations due from the certified self-insured employer to the Oregon Department of Consumer and Business Services, Workers’ Compensation Division.
This letter of credit will be automatically extended without amendment for one year from the expiry date shown above, or any future expiry date, unless at least 60 days prior to expiry, we notify the beneficiary by registered mail or overnight delivery that we elect not to extend this letter of credit for such additional period. The notification will be addressed to the Administrator, Workers’ Compensation Division, Department of Consumer and Business Services, State of Oregon, 350 Winter Street NE, P.O. Box 14480, Salem, OR 97309-0405.
Payment of any amount under this letter of credit by the issuing or a confirming bank shall be made by wire transfer to the Oregon Department of Consumer and Business Services’ bank account, as instructed in the demand notice signed by the director or the administrator or their designated authorized representative, for deposit to the account of the Oregon Department of Consumer and Business Services for the self-insured employer’s workers’ compensation liabilities and obligations under ORS 656.
If the issuing bank or any confirming bank is closed at the time of the expiry of this letter of credit for any reason that would prevent the delivery of a demand notice during its normal hours of operation, this letter of credit will be automatically extended for a period of 30 days commencing on the next day of operation.
All bank charges for this letter of credit are for the account of the applicant.
Any amendments to this letter of credit must be approved by the beneficiary.
Except so far as otherwise expressly stated, this letter of credit is subject to the International Standby Practices 1998 (ISP 98) International Chamber of Commerce Publication # 590 and to the laws of the state of Oregon. In the event of a conflict between these authorities, the laws of the state of Oregon will control.
We hereby engage with drawers, endorsers, and/or bona fide holder that drafts drawn under and presented in strict conformity with the terms of this credit will be duly honored on presentation to us.
The funds provided by this letter of credit are not construed to be an asset of the self-insured employer. If any legal proceedings are initiated with respect to this letter of credit, it is agreed that such proceedings shall be subject to the courts and law of the state of Oregon.
is requested to add its confirmation to this letter of credit.
(name of confirming bank or N/A)
Issuing bank
Name:
Title:
Signature:
hereby undertakes to honor any drafts presented to it when
drawn under and in strict conformity with the terms of this credit.
Confirming bank
Accepted by the Oregon Department of Consumer and Business Services
When a self-insured employer in Oregon needs to secure their workers' compensation liabilities, they may be required to fill out a form known as the 440 3640A Oregon form, which is an Irrevocable Standby Letter of Credit. This form establishes a financial guarantee from a bank to the State of Oregon, ensuring that funds are available to cover the employer’s workers' compensation liabilities. Below are the steps needed to correctly fill out this form.
After the form is filled out correctly and thoroughly reviewed for accuracy, it should be submitted in accordance with the instructions provided by the Oregon Department of Consumer and Business Services, Workers’ Compensation Division. This form is a critical part of ensuring that a self-insured employer can meet its workers' compensation liabilities, and careful attention to detail during the completion process is essential.
The Form 440 3640A, known as the Irrevocable Standby Letter of Credit, serves a vital purpose within the Oregon Workers' Compensation system. Issued by banks on behalf of self-insured employers, its primary role is to ensure that there are readily available funds to cover the employer's potential workers' compensation liabilities. By providing a financial guarantee to the Oregon Department of Consumer and Business Services, it ensures that the self-insured employers can fulfill their obligations towards assessments, contributions, or other dues under the workers' compensation laws outlined in Chapter 656 of the Oregon Revised Statutes. This form of security benefits both the employees, by securing their compensation rights, and the state, by ensuring compliance and protection of workers' compensation funds.
Funds can be drawn under the letter of credit through a process designed to ensure the self-insured employer's compliance with their workers' compensation liabilities. The Oregon Department of Consumer and Business Services is entitled to draw funds by presenting a draft, at sight, either on the issuing bank or the confirming bank. This draft must be accompanied by one of four specific statements signed by an authorized representative, asserting either a default in payment by the employer, bankruptcy filing, failure to renew or replace the letter of credit, or a determination that the existing security is insufficient. The issuing or confirming bank is then obligated to honor the draft and make payment by wire transfer to the department's account, thus ensuring that liabilities are covered without delay.
The Irrevocable Standby Letter of Credit contains a feature that automatically extends its validity for an additional year beyond its indicated expiry date, ensuring uninterrupted coverage of the self-insured employer's obligations. However, this automatic extension is subject to the issuing bank's right to notify the beneficiary, which is the Oregon Department of Consumer and Business Services, at least 60 days before the current expiry date, should they decide not to extend the credit for an additional period. This notice must be conveyed through registered mail or overnight delivery, directed to the administrator's office. If the bank fails to provide such notice, the letter of credit is automatically extended, safeguarding the continuity of coverage.
Yes, the letter of credit includes provisions for its amendment, but with a crucial condition: any changes to the letter of credit must receive the explicit approval of the Oregon Department of Consumer and Business Services, acting as the beneficiary. This stipulation ensures that the integrity and purpose of the letter of credit—to provide secure funding for workers' compensation liabilities—are maintained without compromise. Moreover, it upholds the department's authority to oversee and ensure that the revised terms continue to meet the statutory requirements and the protection objectives of the Oregon Workers' Compensation system.
When filling out the 440 3640A Oregon form, also known as the Irrevocable Standby Letter of Credit, there are several common mistakes individuals tend to make. It is important to pay close attention to detail to ensure the application is completed correctly and efficiently. Below are seven mistakes often encountered:
Attention to detail is paramount when completing the 440 3640A Oregon form. Avoiding these common mistakes can help ensure the process moves forward without unnecessary complications. Additionally, double-checking the entered information against the document's requirements can save time and prevent potential legal issues.
When dealing with forms like the 440-3640A Oregon form, an Irrevocable Standby Letter of Credit, it’s not uncommon to need additional documentation. These additional forms and documents often streamline the process, ensuring that all legal and regulatory bases are covered for self-insured employers in Oregon. Below is a list of documents that are frequently used alongside the 440-3640A form to provide a comprehensive overview of the requirements and responsibilities of self-insured employers.
Understanding and utilizing these forms properly can play a significant role in maintaining compliance with workers' compensation regulations in Oregon. Each document plays a unique role in establishing and maintaining the credibility and reliability of a self-insured employer, from initial application to annual reporting and beyond. Ensuring accurate and timely completion of these documents can help avoid legal complications and reinforce a commitment to employee welfare.
The Performance Bond is quite similar to the 440 3640A Oregon form, primarily because it serves as a guarantee for the completion of contractual obligations, much like the letter of credit ensures a self-insured employer’s workers’ compensation obligations are met. Both documents provide financial security, assuring the beneficiary will be compensated in case of the applicant's failure to fulfill their duties. However, the performance bond specifically relates to project completion, while the letter of credit covers workers' compensation liabilities.
A Bank Guarantee shares a close resemblance with the 440 3640A form as it serves as a type of financial insurance from a banking institution. It guarantees that the bank will cover a debtor’s obligations if the debtor fails to do so. Like the irrevocable standby letter of credit, a bank guarantee provides a beneficiary reassurance that it will receive payment, covering various types of obligations, including but not limited to, loans, contracts, and trading activities.
The Surety Bond is another document that parallels the 440 3640A Oregon form. It involves three parties: the obligee, the principal, and the surety, where the surety ensures the obligee is compensated if the principal fails to meet their obligations. This is akin to the letter of credit where the issuing bank (the surety) guarantees payment to the Oregon Department of Consumer and Business Services (the obligee) for the self-insured employer’s (the principal’s) obligations.
Advance Payment Guarantee is similar to the 440 3640A form as it secures an advance payment under a contract. Should the party that received the advance fail to fulfill their commitments, the guarantee ensures the advance is returned. The irrevocable standby letter of credit operates on a similar principle by ensuring the beneficiary is paid if the applicant defaults, protecting financial interests ahead of service or contract fulfillment.
The Demand Guarantee closely aligns with the 440 3640A Oregon form. It provides a beneficiary the right to demand payment from a guarantor under specified conditions, without the guarantor needing to prove default by the principal. The irrevocable standby letter of credit mirrors this functionality by requiring the bank to pay upon presentation of a demand meeting the letter of credit's terms, similar to how a demand guarantee works.
The Commercial Letter of Credit is particularly akin to the 440 3640A form but is more commonly used in international trade to facilitate transactions between buyers and sellers. While the commercial letter of credit guarantees payment for goods and services exchanged, the standby letter of credit guarantees the self-insured employer’s obligations regarding workers’ compensation. Both provide a secure method of ensuring payments are made and received as agreed upon.
A Parent Company Guarantee is a document where a parent company agrees to fulfil the contractual obligations of its subsidiary in case of default. This is analogous to the 440 3640A form where the bank guarantees to cover the self-insured employer’s workers’ compensation liabilities. Both guarantees offer a form of financial assurance that obligations will be met, with the key difference being the guarantor entity.
The Bid Bond resembles the 440 3640A Oregon form as it serves to protect the beneficiary if the bidder on a contract fails to honor the terms of their bid. This ensures the entity requesting bids will not suffer a loss, which aligns with the purpose of the 440 3640A form's goal to protect the Oregon Department of Consumer and Business Services from defaults on workers' compensation liabilities by self-insured employers.
An Indemnity Letter, while not exactly a guarantee, holds similarities to the 440 3640A form in that it promises reimbursement for loss or damage. The indemnity letter may offer broader coverage without the specificity of financial transactions but aligns with the letter of credit's intent to ensure the beneficiary is made whole should the applicant fail to meet obligations.
The Maintenance Bond shares similarities with the 440 3640A form as it guarantees against defective workmanship or materials for a certain period after a project's completion. Though its application is more specific in scope, focusing on construction project quality assurance, it aligns with the letter of credit’s purpose of guaranteeing obligations are met - in this case, the long-term fulfilment of contract terms regarding quality.
When dealing with the 440 3640A Oregon form, which is crucial for self-insured employers as it involves the Irrevocal Standby Letter of Credit with the Oregon Department of Consumer and Business Services, it's essential to adhere to guidelines that ensure accuracy and compliance. Below are some do's and don'ts that one should consider:
Do's:
Don'ts:
Many misconceptions surround the 440 3640A Oregon form, also known as the Irrevocable Standby Letter of Credit. Here, we aim to clarify some of these misunderstandings to ensure accurate information is available.
It's only for large businesses: The form is applicable to any self-insured employer in Oregon, regardless of the size of the business. It ensures that workers' compensation liabilities are covered.
It's a one-time arrangement: This letter of credit is subject to automatic extension unless the issuing bank notifies the beneficiary at least 60 days prior to the expiry date, indicating a continuous commitment rather than a one-off arrangement.
It can be altered by the applicant: Any amendments to the letter of credit require the approval of the beneficiary, ensuring the terms remain favorable to the State of Oregon and its standards for workers' compensation coverage.
It serves as an asset to the self-insured employer: The funds secured by this letter of credit are not considered assets of the self-insured employer but are designed to cover the employer's workers' compensation liabilities and obligations.
Bankruptcy of the self-insured employer automatically terminates the letter: Even in the event of the employer's bankruptcy, the letter of credit stands, ensuring that workers' compensation obligations are still met.
Usage is unrestricted: The funds are strictly for workers' compensation liabilities and obligations as determined by the Oregon Department of Consumer and Business Services.
It's governed by international law: The letter of credit is subject to the laws of the state of Oregon, although it acknowledges the International Standby Practices (ISP 98) unless those practices conflict with state law.
A confirming bank is always required: The need for a confirming bank depends on the specific agreement and the comfort level of the beneficiary with the issuing bank's creditworthiness.
It covers all financial obligations of the employer: The letter of credit covers workers’ compensation liabilities and obligations as specified by the Oregon Department of Consumer and Business Services, not necessarily all financial obligations of the employer.
It guarantees the employer's financial stability: While it secures funds for potential workers' compensation claims, it does not serve as a blanket guarantee of the employer's overall financial health.
Understanding these aspects of the 440 3640A Oregon form can help employers, employees, and financial institutions navigate its requirements more effectively, ensuring that workers' compensation obligations are met securely and in compliance with Oregon state laws.
Filling out and using the 440 3640A Oregon form, an Irrevocable Standby Letter of Credit, requires attention to specific details and procedures. Here are six key takeaways to ensure accuracy and completeness in this process:
Understanding these critical elements of the 440 3640A Oregon form will guide you in successfully fulfilling your obligations as a self-insured employer in Oregon. Ensuring that each section is filled out accurately and completely is paramount to the validity and effectiveness of the letter of credit as a guarantee for workers' compensation liabilities.
How Long Does a Father Have to Establish Paternity in Oregon - Through voluntary acknowledgment, this affidavit streamlines the process of establishing paternity without court intervention.
Oregon Tax Forms - Utilize Form 10 to assess if your estimated tax payments met the state's requirements to avoid interest charges.