Deposit Insurance Coverage

The FDIC is amending its deposit insurance regulations to require that: Upon request, an insured depository institution disclose in writing to depositors of employee benefit plan funds, its current Prompt Corrective Action (PCA) capital category, its capital ratios, and whether employee benefit plan deposits would be eligible for ``pass-through'' insurance coverage; upon opening an account comprised of employee benefit plan funds, an insured depository institution disclose in writing its PCA capital category, a description of the requirements for ``pass-through'' insurance coverage and whether, in the institution's judgment, the deposits are eligible for ``pass- through'' deposit insurance; and when employee benefit plan deposits placed with an insured depository institution would no longer qualify for ``pass-through'' insurance coverage, the institution disclose in writing to all existing employee benefit plan depositors within 10 business days the institution's PCA capital category and that new, rolled-over or renewed employee benefit plan deposits will not be eligible for ``pass-through'' deposit insurance coverage. The FDIC is also making a number of technical amendments to its insurance regulations concerning commingled accounts of bankruptcy trustees, joint accounts, accounts for which an insured depository institution is acting in a fiduciary capacity, and accounts for which an insured depository institution is acting as the trustee of an irrevocable trust. The intended effect of the final rule is to provide employee benefit plan depositors important information, not otherwise available, on ``pass-through'' deposit insurance which may be needed to prudently manage their funds. The technical amendments clarify the insurance rules involving commingled accounts of bankruptcy trustees, joint accounts, accounts for which an insured depository institution is acting in a fiduciary capacity, and accounts for which an insured depository institution is acting as the tr