The revised Deposit Insurance Act (hereinafter referred to as "the Act") was approved by the Legislative Yuan on January 12, 2007. The Amendments to the Act mainly focus on enhancing related deposit insurance mechanisms, including "replenishing and reforming the deposit insurance fund", "tightening controls over risk", and "strengthening the mechanism for handling failed institutions". As being authorized the rights of ex ante prevention and ex post facto resolution, CDIC will fulfill its missions more effectively through the Act. The key amendments to the Act are as follows:
- Formulating a mechanism for handling systemic crises, including exempting from the minimum resolution cost restriction and adopting a bridge-bank mechanism to deal with the systemic crises.
- Setting the target ratio of the deposit insurance fund at 2% of covered deposits to ensure the adequacy of the deposit insurance fund and increase the confidence of depositors.
- Exercising special inspection and investigation powers to help CDIC carry out its missions of safeguarding depositors and minimizing exposure to loss.
- Adjusting the way of application for the deposit insurance from compulsory participation to submit the application and CDIC with a right of determination to approve or disapprove.
- Separating deposit insurance fund into two accounts, one for regular banking sector and the other for agricultural financial sector.
- Changing the method for calculating the assessment base for the deposit insurance from covered deposits to insurable deposits.
- Tightening controls over insured risk with a mechanism for facilitating coordination among financial safety net participants and sharing information.
- Enhancing the mechanism for fulfilling the responsibilities as a deposit insurer, including improvement on measures of resolution and with the right of requiring insured institutions to build up electronic information database based on CDIC's format.