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Page 27 - CDIC Company Profile Ebook
P. 27

Upon founding in 1985                   Subsequent reforms


               Depositor       None                          Addition in May 2006:
               Preference                                    When an insured institution is disposed of by the CDIC with
                                                             the stipulation of the Deposit Insurance Act by the competent
                                                             authority or the central competent authority of the agricultural
                                                             finance for resolution or liquidation upon clearing the debt,
                                                             its deposit liabilities shall take precedence over non-deposit
                                                             liabilities.


               Establishment   None                          Addition in January 2007:
               of two separate                               1.  The reserves were divided into two separate deposit
               deposit insurance                               insurance payout accounts for general financial institutions
               payout special                                  and agricultural financial institutions.
               reserves                                      2.  Both reserve funds have a target ratio of 2% of covered
                                                               deposits.


               Inspection of   If the CDIC deemed it necessary,   1.  Amendments adopted in January 2007:
               insured         and after obtaining the prior approval      The  CDIC  may  in  accordance  with Article  24  of  the
               institutions    of  the  competent  authority  in   Deposit Insurance Act conduct inspections on insured
                               consultation with the Central Bank   institutions on the following items:
                               of  the  R.O.C.  (Taiwan),  the  CDIC   (1)  Accuracy of deposit assessment base and content of
                               may examine the business records   the electronic data files for the calculation of deposit
                               and  accounts  of  an  insured   insurance premiums and the amount of the payout.
                               institution.                  (2)  Any event causing the termination of the deposit insurance
                                                                agreement.
                                                             (3)  Assets and liabilities of insured institutions prior to the
                                                                fulfillment of insurance responsibilities.
                                                             (4)  Property information and information needed to pursue
                                                                civil liabilities for illegal acts or omissions by employees
                                                                of failed insured institutions and for those of problem
                                                                insured institutions that receive financial assistance.
                                                             2.  Addition in January 2012:
                                                                Pursuant to Subparagraph 1, Paragraph 1, Article 24 of
                                                               the Deposit Insurance Act and Item 4, Point 3 of the
                                                               Implementation Scheme of the Deposit Insurance Premium
                                                               System approved by the FSC, in order to confirm the
                                                               accuracy of the data and files related to the risk indicators
                                                               reported by insured institutions, the CDIC shall conduct
                                                               review inspections and evaluation inspections.


               Elimination of   None                         Addition in January 2007:
               limits on payout                              When there is a concern of a serious threat to credit order
               cost                                          and financial stability, after the CDIC obtains the consent of
                                                             the competent authority in consultation with the MOF and
                                                             the Central Bank of the R.O.C. (Taiwan) and with the final
                                                             approval of the Executive Yuan, the limit on payout cost
                                                             may be eliminated.

               Set-off         None                          Addition in January 2007:
                                                             Before handling any payout, the CDIC may offset the debts
                                                             of  a  depositor  against  his/her  deposits  in  the  failed  in-
                                                             sured institution.


               Termination of   If an insured institution violated the   Amendments adopted in January 2007:
               deposit         laws or regulations or the deposit   The scope of reasons for termination of insured status is
               insurance       insurance  agreement  or  engaged   amended to also include the following:
               agreement       in unsound business transactions,   1.  An  insured  institution  is  ordered  and  required  by  the
                               and failed to rectify such violations   competent authority or the central competent authority
                               within the time limit prescribed by   of the agricultural finance to be recapitalized or improve
                               the CDIC, the CDIC shall terminate   its financial or business condition, but fails to meet such
                               its status as an insured institution   requirements within the prescribed time limit; or the time
                               and report such action to the com-  limit is not due but the competent authorities or the CDIC
                               petent authority for disposal.  deem the said insured institution's condition non-improvable.

            Evolution of Taiwan's Deposit Insurance System                                     >>>>      27
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