Deposit Insurance Payouts
Conditions for Payouts
A deposit insurance payout will be made where the Central Bank has determined that a DIC member institution is:
- insolvent, or
- unable or likely to become unable to meet its obligations or is about to suspend payments.
Announcement of payout
If a DIC member institution fails, the DIC will notify depositors by making official announcements in the newspapers, as well as through notices at the premises of the failed DIC member. The DIC will indicate the dates, times and places at which compensation will be made.
Submission/Verification of Claims
Currently, depositors (claimants) are required to complete a claim form to be provided to the failed member institution’s liquidators or the DIC. The form must be accompanied by a Government issued identification and evidence of deposit ownership for verification of the claimant’s identity and of the deposits held with the failed member institution [less any loans outstanding extended by the failed member institution], prior to receipt of compensation.
The claim, must be supported by an affidavit. However, before funds are released, claimants are also required to sign a release form, which subrogates the DIC to their rights against the failed member institution, up to the claim amount. By virtue of this subrogation, he liquidator is required to pay the DIC out of recoveries effected by it from the liquidation of the failed member institution’s assets.
The DIC, upon receipt from the liquidator of the verified claim form, and the Release and Subrogation Form, will ensure that the claim is expeditiously processed and funds paid directly to the claimant.
Timing of submission of Claims
Depositors may file claims with the DIC directly or with the failed institution’s liquidators, up to one year after the closure of the failed member institution. After this time, all rights of the depositor to the insurance will no longer be honoured. Instead, claims made after this time are made against the assets of the institution and are paid, pro rata, as the assets of the closed member institution are collected and sold.
Settlement of Claims—Where and How
Arrangement will be made by the DIC to settle valid claims as soon as possible, but no later than six (6) months after the closure of a member institution. Payment may be made by cheque or by depositing the amount of compensation into new accounts opened for the insured depositors with another DIC member appointed by the DIC.
Again, where the compensation received from the DIC is less than a depositor’s total deposits with the failed DIC member institution, depositors may file a separate claim with the liquidator of the failed institution for the difference.