I. For banks and credit cooperatives, the five-tiereddifferential premium rates which hadbeen
0.03%, 0.04%, 0.05%, 0.06%, and 0.07%, were respectively raised to 0.05%, 0.06%, 0.08%,
0.11%, and 0.15% and to 0.04%, 0.05%, 0.07%, 0.10%, and 0.14% for covereddeposits, with
a flat premium rateof 0.005% for eligibledeposits inexcessofmaximum coverage.
II. For the credit departments of farmers' and fishermen's associations, no adjustments in
premium rates weremade. The risk-based premium rates were still divided into five-tiered
differential premium rates of 0.02%, 0.03%, 0.04%, 0.05%, and 0.06% for covered deposits
respectively, with a flat premium rate of 0.0025% for eligible deposits in excess of maximum
coverage. The main reason for the lack of adjustments was that the agricultural finance
insurancepayout reservewas in theblack and the Financial Restructuring Fund still hadover
NT$20billionappropriated for payouts to the credit departmentsof farmers' and fishermen's
associations. In view of the sufficient capital available to handle the resolution of problem
credit departments of farmers' and fishermen's associations, it was decided to temporarily
leave thepremium ratesunchanged.
Thepremiumadjustmentwas theCDIC'sbiggest ever premium increaseandwashighlyeffective
in accelerating accumulation of the deposit insurance payout special reserve and increasing the
CDIC's ability toundertake risk.
C. Advocating the Limited Coverage System and Supporting Measures to Help the Public
Understand their Rights and Interests
In response to the end of the blanket guarantee and return to the limited coverage deposit
insurance system at the endof 2010, themaximum coveragewas increased fromNT$1.5million
to NT$3 million, effective from January 1, 2011, to further strengthen depositor confidence
and stabilize the financial order. Coverage was also extended to foreign currency deposits
and interest on deposits. The CDIC also planned and carried out a comprehensive awareness
campaign focus on delivering positive and simplemessages of “double of the coverage” via
television, radio, print media, the internet, outdoor media, ATMs and other channels to alleviate
unease over the return to the limited coverage system anddeepenpublic understandingof this
system.
(4) StrengtheningControl of insurance risk
The January 2007 amendment to
the Deposit Insurance Act
specifically established Section 2
“ insurance risk control”and the amendedArticle 22 of the Act granted statutory powers to the
CDIC to collect financial or business information related to an insured institution. The appended
Article 24 empowers the CDIC to inspect specific matters at insured institutions, effectively
strengthening theCDIC’s riskmanagement mechanism and enabling the CDIC tomore actively
fulfill its risk-minimizer role. The CDIC actively controls insurance risk through the following
measures:
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ReviewandOutlook
