Federal Deposit Insurance Corporation Improvement Act Of 1991 Title I, Subtitle D
Act providing that stringent regulatory actions may be taken against depository institutions according to their level of capital adequacy: well capitalized; adequately capitalized; under capitalized; significantly under capitalized; and critically under capitalized. If an institution is classified as well capitalized or adequately capitalized, no special regulatory steps must be taken, but those institutions that fall into the three remaining categories are subject to progressively more demanding restrictions. If an institution is declared to be under capitalized, the following applies: the institution must adopt an acceptable capital restoration plan; limits are placed on the institution's growth; capital distributions cannot be made; and acquisitions and establishment of new branches cannot be made without prior approval of its capital plan. If an institution is declared to be significantly under capitalized, the institution must: sell shares; restrict interest paid on deposits; restrict the growth of assets; prohibit the receiving of deposits from correspondent banks; and terminate particular executive officers and/or directors. If an institution is declared to be critically under capitalized, it cannot:
- pay interest on subordinated debt;
- repay principal on subordinated debt;
- participate in highly leveraged transactions without prior FDIC approval;
- make material changes in accounting methods;
- pay excessive compensation or bonuses;
- change its charters or by-laws;
- engage in transactions that require prior notice to the primary regulator to include expansion, acquisition, or the sale of assets.
Popular Insurance Terms
Recommendation of medications that should be prescribed for certain ailments. They can be classified as follows: open or voluntary recommends a list of drugs to physicians that is supposed ...
Legislation in a number of states requiring insurers to pay the face amount of a fire insurance policy in case of total loss to a dwelling (or sometimes another specified type of building), ...
Future benefits to be paid to the policyholders and beneficiaries, assigned surpluses, and miscellaneous debts. These primary liabilities take the form of reserves, which must be listed on ...
Plan that provides protection in the event of legal actions resulting from charges of harassment, discrimination, wrongful termination of employment, defamation, and invasion of privacy. ...
U.S. government agency that administers life insurance, health insurance, welfare, mortgage loans, education, pension benefits, and other programs for veterans of the U.S. armed forces. ...
Coverage under the Homeowners Form-4 (HO-4) for the insured's personal property and loss of use against fire and/or lightning; vandalism and/or malicious mischief; windstorm and/or hail; ...
Technique designed to permit the exchange of a life insurance policy that has an outstanding loan charged against it for another life insurance policy on a tax-free basis. The procedure is ...
Stipulation that no claim will be paid until a loss exceeds a flat dollar amount or a given percentage of the amount of insurance in force. After the loss exceeds this dollar amount or ...
Form of inland marine insurance under which an insured is indemnified for damage or destruction of his or her on-premises property if it is due to radioactive material stored or used within ...
Have a question or comment?
We're here to help.