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
Coverage in the event that negligent acts and/or omissions by individual (s) and organization (s) result in damage to the environment and a liability suit against these parties. ...
Determination that policies entered into on or after June 21,1988, that fail the 7-pay test (aggregate premiums paid at any time during the first 7 years of the contract exceed the annual ...
Reinstatement of an insurance policy or bond to its original face amount (face of policy) after the payment by the insurer of a loss. The purpose of this type of coverage is to indemnify ...
Payment of premiums and benefits as they come due. In pension plans, known as the "pay as you go basis." The plan depends on new employees coming into the work force so that their ...
Act that prevents employers from rejecting disabled job applicants on the grounds that hiring such an applicant would result in higher employee health care cost. Additionally, if the job ...
Sum of money to be received by an insured in the event a given loss occurs. ...
Hybrid pension plan that provides for the employer to contribute annually a hypothetical percentage, usually 4 to 5%, of the employee's salary to a hypothetical account. This employee's ...
In some life insurance policies, provision that permits the beneficiary, upon the death of the insured, to receive not only the death benefit payable under the policy but also all premiums ...
Right of the policy owner as listed in a policy. An insured has the right to exercise all privileges and receive all benefits of the policy except when restricted by the right of an ...
Have a question or comment?
We're here to help.