Excess FDIC private deposit insurance now available.
Over half of 1992 bank failures led to losses by uninsured depositors. Over 21,000 bank account holders had uninsured deposits totaling $600 million, leading to actual losses currently exceeding $200 million. Particularly hard hit were small businesses and retirees.
Known as DEPOSITSURE, the excess deposit insurance is sold directly to bank account holders at rates comparable to those the FDIC charges banks for its coverage (about $.25 annually for each $100 of insurance). It is available through licensed insurance agents in most states. The coverage is provided by General Star Indemnity, a wholly owned subsidiary of General Reinsurance Corp.
The procedures for reimbursing policyholders in case of a bank failure are straightforward. After disbursing the first $100,000 under FDIC deposit insurance, federal regulators issue receiver's certificates to uninsured depositors. On presenting these certificates to the insurance company, policyholders are paid for their covered loss, up to the amount of the deposit insurance purchased.
For further information on DEPOSITSURE, call Joseph Carlson of Centrex Underwriters, Inc., at (901) 767-4754.
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|Title Annotation:||Federal Deposit Insurance Corp.|
|Publication:||Journal of Accountancy|
|Article Type:||Brief Article|
|Date:||May 1, 1993|
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