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
Interest adjusted method that measures the cost of life insurance. Named for the late distinguished actuary M. Albert Linton. This method compares a whole life policy with a combination of ...
Term meaning that an exporter of goods that are damaged or destroyed during international shipment relinquishes responsibility for the damage or destruction once the goods leave the point ...
Same as term Elimination Period: form of deductible usually found in disability income insurance; for example, no benefits may be payable for a length of time beginning with the first day ...
Fund that concentrates primarily on short-term government securities, certificates of deposit with maturities less than one year, and high-quality interest-bearing corporate debt. The fund ...
Same as term Morbidity Table: umber of individuals exposed to the risk of illness, sickness, and disease at each age, and the actual number of individuals who incurred an illness, sickness, ...
Still with life. This is a life insurance term used to describe the living benefits available under a life insurance policy such as a monthly retirement payment to an insured. ...
Resident patient of a medical installation. Previously, health insurance benefits were limited to in-patient care. Today health insurance policies provide an extensive list of out-patient ...
Coverage usually provided as part of the storekeepers burglary and robbery insurance in the event merchandise, fixtures, equipment, and furniture are lost due to theft and burglary. ...
Obligations of shipowners for water polluted by spills from their ships. If a ship discharges oil or other polluting or hazardous substances into the water, the shipowner is responsible ...
Have a question or comment?
We're here to help.