Page 15 - CDIC Company Profile Ebook

3. Inspections of statutorily specified matters set out in
the Deposit Insurance Act

(1) In order to achieve the policy objectives of enhancing the effectiveness of
the deposit insurance system, spurring financial institutions to build safe
and sound operations, and maintaining a stable financial order, the CDIC
is authorized by Article 24 of the Deposit Insurance Act to carry out the
following inspections:
A. The accuracy of premium assessment bases and the risk indicators
data for differential premium rates.
B. Whether the insured institution has established electronic data files
of deposits and related items according to the file format and
content stipulated by the CDIC, and whether the file content is
accurate.
C. Whether any event has occurred that would require termination of
the deposit insurance agreement.
D. The assets and liabilities of insured institutions prior to the fulfillment
of insurance responsibilities.
If such an inspection reveals that an insured institution has made any
improper funds transfers or property trades with its controlling financial holding
company, other subsidiaries thereof, or non-credit departments of farmer's
or fishermen's associations, and such activity could potentially jeopardize the
deposit insurance payout special reserves, the CDIC may report to the
competent authority or the central competent authority of the agricultural
finance and undertake inspections, after obtaining their approvals, of
the said financial holding companies, the subsidiaries thereof, and the
non-credit departments of farmers' and fishermen's associations.

(2) In order to strengthen its underwriting pre-review mechanism, in addition
to carrying out the underwriting desk-review of financial institutions
applying to participate in deposit insurance that are required by Article
10 of the Deposit Insurance Act and Article 6 of the Approval Standards
for Financial Institutions Applying to Participate in Deposit Insurance, the
CDIC may also, as necessary, perform on-site underwriting inspections.

Principal Operations >>>> 15