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
Smallest face amount of life insurance that an insurance company will write on any one person. ...
Coverage that provides for replacement of damaged or destroyed property on a new replacement cost basis without any deduction for depreciation. This is equivalent to replacement cost ...
Endorsement to owners, landlords, and tenants LIABILITY POLICY, MANUFACTURERS AND CONTRACTORS LIABILITY INSURANCE, or other liability policies for business firms that provides liability ...
Plan that provides a legal resident of the state of Oregon access to basic health care through three major components: Medicaid Reform (rationing) extends Medicaid eligibility to those ...
Total estimated cost incurred by a person or persons, a family, or a business resulting from the death or disability of a wage earner (key employee), damage or destruction of property, ...
Model state law designed to govern use of information collected from insurance applications. The law forbids any insurer or agent from impersonating someone else to gain information about ...
Coverage required by the laws of a particular state. For example, many states stipulate minimum amounts of automobile liability insurance that must be carried. ...
Right to insurable interest in property such as the right of a secured creditor in the property pledged as security. ...
Coverage for the insured's personal and real property and the insured's own person. Contrast with third party. ...
Have a question or comment?
We're here to help.