Insurance is a means of protection from financial loss in which,in exchange for a fee,a party agrees to compensate another party in the event of a certain loss,damage,or injury. It is a form of risk management,primarily used to hedge against the risk of a contingent or uncertain loss.
The Federal Deposit Insurance Corporation (FDIC) is a United States government corporation supplying deposit insurance to depositors in American commercial banks and savings banks. The FDIC was created by the Banking Act of 1933,enacted during the Great Depression to restore trust in the American banking system. More than one-third of banks failed in the years before the FDIC's creation,and bank runs were common. The insurance limit was initially US$2,500 per ownership category,and this has been increased several times over the years. Since the enactment of the Dodd–Frank Wall Street Reform and Consumer Protection Act in 2010,the FDIC insures deposits in member banks up to $250,000 per ownership category. FDIC insurance is backed by the full faith and credit of the government of the United States,and according to the FDIC,"since its start in 1933 no depositor has ever lost a penny of FDIC-insured funds".
The National Credit Union Administration (NCUA) is a government-backed insurer of credit unions in the United States,one of two agencies that provide deposit insurance to depositors in U.S. depository institutions,the other being the Federal Deposit Insurance Corporation,which insures commercial banks and savings institutions. The NCUA is an independent federal agency created by the United States Congress to regulate,charter,and supervise federal credit unions. With the backing of the full faith and credit of the U.S. government,the NCUA operates and manages the National Credit Union Share Insurance Fund,insuring the deposits of more than 124 million account holders in all federal credit unions and the overwhelming majority of state-chartered credit unions. Besides the Share Insurance Fund,the NCUA operates three other funds:the NCUA Operating Fund,the Central Liquidity Facility (CLF),and the Community Development Revolving Loan Fund (CDRLF). The NCUA Operating Fund,with the Share Insurance Fund,finances the agency's operations.
A savings and loan association (S&L),or thrift institution,is a financial institution that specializes in accepting savings deposits and making mortgage and other loans. The terms "S&L" and "thrift" are mainly used in the United States;similar institutions in the United Kingdom,Ireland and some Commonwealth countries include building societies and trustee savings banks. They are often mutually held,meaning that the depositors and borrowers are members with voting rights,and have the ability to direct the financial and managerial goals of the organization like the members of a credit union or the policyholders of a mutual insurance company. While it is possible for an S&L to be a joint-stock company,and even publicly traded,in such instances it is no longer truly a mutual association,and depositors and borrowers no longer have membership rights and managerial control. By law,thrifts can have no more than 20 percent of their lending in commercial loans—their focus on mortgage and consumer loans makes them particularly vulnerable to housing downturns such as the deep one the U.S. experienced in 2007.
A money market fund is an open-ended mutual fund that invests in short-term debt securities such as US Treasury bills and commercial paper. Money market funds are managed with the goal of maintaining a highly stable asset value through liquid investments,while paying income to investors in the form of dividends. Although they are not insured against loss,actual losses have been quite rare in practice.
The Canada Deposit Insurance Corporation is a Canadian federal Crown Corporation created by Parliament in 1967 to provide deposit insurance to depositors in Canadian commercial banks and savings institutions. CDIC insures Canadians' deposits held at Canadian banks up to C$100,000 in case of a bank failure. CDIC automatically insures many types of savings against the failure of a financial institution. However,the bank must be a CDIC member and not all savings are insured. CDIC is also Canada's resolution authority for banks,federally regulated credit unions,trust and loan companies as well as associations governed by the Cooperative Credit Associations Act that take deposits.
Deposit insurance or deposit protection is a measure implemented in many countries to protect bank depositors,in full or in part,from losses caused by a bank's inability to pay its debts when due. Deposit insurance systems are one component of a financial system safety net that promotes financial stability.
The Financial Institutions Reform,Recovery,and Enforcement Act of 1989 (FIRREA),is a United States federal law enacted in the wake of the savings and loan crisis of the 1980s.
The Federal Savings and Loan Insurance Corporation (FSLIC) was an institution that administered deposit insurance for savings and loan institutions in the United States.
The Federal Deposit Insurance Reform Act of 2005,was an act of the United States Congress on banking regulation. It contained a number of changes to the Federal Deposit Insurance Corporation (FDIC).
Trade credit insurance,business credit insurance,export credit insurance,or credit insurance is an insurance policy and a risk management product offered by private insurance companies and governmental export credit agencies to business entities wishing to protect their accounts receivable from loss due to credit risks such as protracted default,insolvency or bankruptcy. This insurance product is a type of property and casualty insurance,and should not be confused with such products as credit life or credit disability insurance,which individuals obtain to protect against the risk of loss of income needed to pay debts. Trade credit insurance can include a component of political risk insurance which is offered by the same insurers to insure the risk of non-payment by foreign buyers due to currency issues,political unrest,expropriation etc.
Deposit Insurance Agency (DIA) is a Russian state corporation established in January 2004 to manage operation of the deposit insurance system in the Russian Federation. DIA pays insurance compensations to depositors of failed banks. DIA also exercises bankruptcy administrator functions of insolvent banks,non–governmental pension funds and insurance companies,it is responsible for resolution of banks and managing the system of guaranteeing the rights of insured persons in the mandatory pension insurance system.
Insurance in the United States refers to the market for risk in the United States,the world's largest insurance market by premium volume. According to Swiss Re,of the $6.861 trillion of global direct premiums written worldwide in 2021,$2.719 trillion (39.6%) were written in the United States.
A bank failure occurs when a bank is unable to meet its obligations to its depositors or other creditors because it has become insolvent or too illiquid to meet its liabilities. A bank usually fails economically when the market value of its assets declines to a value that is less than the market value of its liabilities. The insolvent bank either borrows from other solvent banks or sells its assets at a lower price than its market value to generate liquid money to pay its depositors on demand. The inability of the solvent banks to lend liquid money to the insolvent bank creates a bank panic among the depositors as more depositors try to take out cash deposits from the bank. As such,the bank is unable to fulfill the demands of all of its depositors on time. A bank may be taken over by the regulating government agency if its shareholders' equity are below the regulatory minimum.
The National Credit Union Share Insurance Fund provides deposit insurance to protect the accounts of credit union members at federally insured institutions in the United States. Created in 1970,the Share Insurance Fund is administered by the National Credit Union Administration,an independent federal financial regulator. The Share Insurance Fund is funded completely by participating credit unions,and not one penny of insured savings has ever been lost by a member of a federally insured credit union. The Share Insurance Fund is backed by the full faith and credit of the United States government.
Bank regulation in the United States is highly fragmented compared with other G10 countries,where most countries have only one bank regulator. In the U.S.,banking is regulated at both the federal and state level. Depending on the type of charter a banking organization has and on its organizational structure,it may be subject to numerous federal and state banking regulations. Apart from the bank regulatory agencies the U.S. maintains separate securities,commodities,and insurance regulatory agencies at the federal and state level,unlike Japan and the United Kingdom. Bank examiners are generally employed to supervise banks and to ensure compliance with regulations.
The Philippine Deposit Insurance Corporation is a Philippine government-run deposit insurance fund. It was established on June 22,1963,by Republic Act 3591. It guarantees deposits up to ₱500,000. The primary function of PDIC is to protect small investors/depositors and build strong confidence in banking. PDIC receives guidance from the International Association of Deposit Insurers.
Deposit Insurance and Credit Guarantee Corporation (DICGC) is a specialised division of Reserve Bank of India which is under the jurisdiction of Ministry of Finance,Government of India. It was established on 15 July 1978 under the Deposit Insurance and Credit Guarantee Corporation Act,1961 for the purpose of providing insurance of deposits and guaranteeing of credit facilities.
Yoo JaeHoon is the Chairman and President of the Korea Deposit Insurance Corporation (KDIC). He is also working as ex-officio Commissioner of the Financial Services Commission,and a member of the Executive Council of the International Association of Deposit Insurers (IADI).
The Rhode Island banking crisis took place in the early 1990s,when approximately a third of the US state of Rhode Island's population lost access to funds in their bank accounts. The events were triggered by the failure of a Providence bank,Heritage Loan &Investment,due to long-term embezzlement by its president. News of its problems led to a bank run in which customers tried to withdraw money from the bank which did not have enough money available. In normal circumstances,depositors would be protected by the bank's insurance,but the state's private insurer had a long history of problems and was unable to fulfill its commitments. When the insurer collapsed,Governor Bruce Sundlun announced the closure of 45 credit unions and banks just hours after his inauguration.
