Article 28 — Insurance Documents: Insurance in the Credit Currency

Introduction

UCP 600 Article 28 governs insurance documents presented under documentary credits. When the credit requires insurance, the insurance document must be in the currency of the credit unless the credit permits otherwise. This guide examines the regulatory framework, failure scenarios, and resolution process for insurance currency requirements.

Failure Mode Analysis

Failure 1: Insurance Document Is in a Different Currency Than the Credit

The credit is in USD but the insurance document is in EUR. Article 28(f) requires the insurance to be in the credit currency unless the credit permits otherwise.

Failure 2: Insurance Amount Is Below the Required Minimum

The credit requires insurance to cover 110% of the CIF value. The insurance document shows 100% of the CIF value. Article 28(d) requires the minimum amount.

Failure 3: Insurance Currency Is Different from Invoice Currency

The invoice is in USD but the insurance is in EUR. While the credit is in USD, the insurance currency mismatch creates a discrepancy.

Failure 4: Insurance Document Does Not Specify the Currency

The insurance document does not state the currency of coverage. Article 28(f) requires the insurance to be in the credit currency. The absence of a currency specification creates uncertainty.

Deterministic Resolution Architecture

Step 1: Identify the Credit Currency

Determine the currency of the documentary credit. This is the currency in which the insurance must be denominated.

Step 2: Compare the Insurance Currency Against the Credit Currency

Check the insurance document for the currency of coverage. Compare it against the credit currency.

Step 3: Calculate the Required Insurance Amount

Determine the minimum insurance amount. Under CIF or CIP, this is typically 110% of the CIF or CIP value.

Step 4: Compare the Insurance Amount Against the Required Minimum

Verify that the insurance amount meets or exceeds the required minimum.

Step 5: Issue a Discrepancy Notice

If the insurance is in the wrong currency or the amount is insufficient, issue a refusal notice under Article 16.

Step 6: Request a Corrected Insurance Document

The beneficiary must obtain a corrected insurance document from the insurer.

Step 7: Verify and Resubmit

The examining bank verifies the corrected insurance document and confirms compliance.

Conclusion

Insurance currency requirements under Article 28 ensure that the insurance coverage is denominated in the same currency as the credit. This eliminates currency conversion risk for the beneficiary and the applicant. Practitioners must verify the insurance currency and amount at the time of document collection.

FAQ

Can the credit permit insurance in a different currency?

Yes. Article 28(f) states "unless the credit permits otherwise." If the credit expressly permits insurance in a different currency, the insurance may be in that currency.

What if the insurance amount is in the correct currency but the wrong amount?

The insurance amount must meet or exceed the minimum required by the credit. An amount below the minimum is a discrepancy.

Does the insurance currency need to match the invoice currency?

The insurance must be in the credit currency. If the credit and invoice are in the same currency, the insurance should match both. If they differ, the credit currency controls.

Can the insurance be in a basket of currencies?

Article 28(f) does not address basket currencies. If the credit requires a single currency, the insurance should be in that currency.

What if the insurance document shows the amount in words and figures that differ?

ISBP 745 Paragraph E11(b) states that if a document contains a discrepancy between the amount in words and the amount in figures, the amount in words prevails.

Source Notes

Context only. The source dossier returned the following sources for this topic. The underlying query was: "article 28 insurance documents insurance in multi-family documentary credit site:iccwbo.org"

• Incoterms® 2020 — ICC (Published 29 Mar 2023)

• Context: Incoterms rules such as CIF and CIP require the seller to obtain insurance. The insurance amount and currency should reflect the agreed Incoterms terms.

• Uniform Rules for Documentary Credits (UCP 600) - eBook — ICC Academy (Published 12 Dec 2024)

• Context: The UCP 600 text provides the primary source for insurance document requirements under Article 28.

• UCP 600 - Including eUCP Version 2.1 — ICC (Published 31 Jul 2023)

• Context: The full text of UCP 600 and eUCP 2.1 establishes the insurance currency and amount requirements.

• Certified UCP 600 Specialist (CUCP) — ICC Academy (Published 12 Jul 2025)

• Context: The CUCP certification covers insurance document requirements as a core competency area.

• Commentary on UCP 600 — ICC (Published 02 Aug 2019)

• Context: The ICC Commentary provides official interpretation of Article 28 and addresses common insurance currency discrepancies.