CHAPTER 13. PAYMENTS FROM THE PUBLIC DEPOSIT INSURANCE FUND
IC 5-13-13
Chapter 13. Payments From the Public Deposit Insurance Fund
IC 5-13-13-1
Closed depository; payments to public officers of public fundsdeposited; determination of sums; certification
Sec. 1. (a) Whenever any depository becomes a closed depository,the board shall, as soon as possible and upon the conditionsprescribed in this section, make payment from the insurance fund tothe proper public officers of all public funds that were deposited inthe closed depository in the manner required by this article. Thesepayments shall be made only to the extent the public funds are notcovered by insurance of any federal deposit insurance agency.
(b) For the purpose of determining the sums to be paid on accountof public funds in any closed depository, the department of financialinstitutions shall ascertain the amount of public funds on deposit inany closed depository as disclosed by the records, and certify theamounts to the attorney general, auditor of state, the several publicofficers who have public funds on deposit, and the board fordepositories, which then constitutes a claim on the fund. Thecertification shall be made within twenty (20) days after its specialrepresentative has taken charge of the business and property of anyclosed depository, or the receiver of any national banking associationor state chartered state banks within twenty (20) days afterappointment.
(c) Within ten (10) days after the receipt of a certification undersubsection (b), the several public officers who have public funds ondeposit in the closed depository shall furnish to the attorney generaland the auditor of state:
(1) verified statements of the amount of the public funds ondeposit in the closed depository, as disclosed by their records;
(2) certified copies of the resolution or resolutions under whichthe deposits were made; and
(3) any other information requested by the attorney general andthe auditor of state.
As added by P.L.19-1987, SEC.15. Amended by P.L.5-1988, SEC.38.
IC 5-13-13-2
Amount of public funds in closed depository; determinationprocedure
Sec. 2. (a) After the receipt of the certificate and statementsrequired by section 1 of this chapter, the attorney general and theauditor of state shall ascertain and fix the amount of public funds inthe closed depository deposited in the manner required by thisarticle. The amount of public funds deposited contrary to therequirements of this article are not insured by this article.
(b) The attorney general and the auditor of state shall, within sixty(60) days after the receipt of the certificate and statements, send acopy of their decision by registered mail to the several public officerswho have filed statements and to the department of financial
institutions, or to the receiver if the closed depository is a nationalbanking association.
(c) The department of financial institutions or the receiver shallcause notice of the decision to be published by one (1) publication ina newspaper of general circulation in the county where the closeddepository is situated. This notice must be under the heading "Noticeto Depositors of ____________" (inserting the name of the closeddepository). The costs of the publication shall be charged to theliquidation expense of the closed depository.
(d) Except as otherwise provided in this chapter, the decision ofthe attorney general and the auditor of state, if they agree, is final,and has the same force as a final judgment of a court. However, ifany depositor of the closed depository, within ten (10) days after thepublication of the notice required by this section, files objections tothat decision in writing in any court competent to determine mattersconcerning the closed depository, the auditor of state shall withholdpayment of the claim until the objections are determined by thecourt.
(e) If the attorney general and auditor of state do not send a copyof their decision to the department of financial institutions or to thereceiver of the national banking association within the time requiredby this section, or if objections in writing are made as provided inthis section, the department of financial institutions or any receiveror any treasurer or other person having funds on deposit in the closeddepository may petition any court competent to hear and determinematters pertaining to the liquidation of the closed depository and todetermine the amount of public funds deposited in the mannerrequired by this chapter. The court shall, without delay, hear anddetermine the issues presented by the petition and enter judgmentaccordingly.
As added by P.L.19-1987, SEC.15. Amended by P.L.5-1988, SEC.39.
IC 5-13-13-3
Payment of amount determined; subrogation of board; distributionof assets of closed depository
Sec. 3. (a) Whenever the decision of the attorney general andauditor of state has become final, or whenever a court of competentjurisdiction as provided in section 2 of this chapter has determinedthe amount payable from the insurance fund on account of publicfunds deposited in the closed depository, the board for depositoriesshall, subject to IC 5-13-12-8(c), cause the amount to be paid to thetreasurer or public officer out of the insurance fund.
(b) After payment is made under subsection (a), the board, onbehalf of the public deposit insurance fund, is then subrogated to allof the right, title, and interest of the depositor of the public funds forthe amount of the depository's claim against any federal depositinsurance agency and against the closed depository. The board is sosubrogated to the extent that the insurance fund has paid the loss notreimbursed by the insurance. The board is entitled to share in thedistribution of the assets of the closed depository on the basis ratably
with other depositories, but the insurance fund shall be paid in fullbefore any distribution is made on account of public funds notinsured under the terms of this chapter. The board shall pay any sumor sums received from any distribution into the insurance fund.
As added by P.L.19-1987, SEC.15.
IC 5-13-13-4
Anticipatory warrants; issuance; obligation of board; amounts,form, and rate of interest
Sec. 4. (a) Whenever the assets in the insurance fund are notsufficient to pay the claims of any kind that have been finallydetermined and have become payable, the board for depositoriesshall issue anticipatory warrants for the purpose of raising money forthe immediate payment of the claims. The warrants outstanding andunpaid must not at any time exceed the sum of three hundred milliondollars ($300,000,000). Interest may be paid upon the warrants fromthe date the rate was established by the board for depositories.Interest is payable at the end of each year or for a shorter period asthe warrants remain unpaid.
(b) The warrants are the obligation of the board for depositoriespayable out of the public deposit insurance fund only and do notconstitute a debt, liability, or obligation of the state or a pledge of thefaith and credit of the state. Each warrant must have printed on itsface the words, "This warrant is an obligation of the board fordepositories payable solely out of the public deposits insurance fund,and neither the faith and credit nor the taxing power of the state ispledged to the payment of the principal, the interest, or any otheramount owed on the warrants.".
(c) Subject to the limitations in subsections (a) through (b), thewarrants shall be issued in the individual and gross amounts and inthe form and at the rate of interest approved by the board fordepositories.
As added by P.L.19-1987, SEC.15. Amended by P.L.115-2010,SEC.18.
IC 5-13-13-5
Anticipatory warrants; sale; proceeds; application for allotment ofdefinite amount; record
Sec. 5. (a) The secretary-investment manager on behalf of theboard for depositories has the powers and duties set out in thissection and section 6 of this chapter and shall sell all anticipatorywarrants issued under this chapter at a price not less than par plusaccrued interest. The proceeds of the sale of the warrants shall bepaid into the insurance fund and shall be applied exclusively to thepayment of the claims on account of which the warrants were issued.
(b) Any person may file an application with thesecretary-investment manager for an allotment of a definite amountof the warrants. The secretary-investment manager shall thenapportion to the several applicants an amount of warrants as thesecretary-investment manager sees fit, but no allotments shall be
made in an amount less than two thousand dollars ($2,000).
(c) The secretary-investment manager shall make and retain in thesecretary-investment manager's office a complete record of allwarrants sold to each purchaser and of the post office address of thepurchaser. Purchasers of warrants may notify thesecretary-investment manager of their post office addresses, or of anychange in their addresses, and of the warrants owned or held bythem, and the secretary-investment manager shall change thesecretary-investment manager's sale record accordingly.
As added by P.L.19-1987, SEC.15.
IC 5-13-13-6
Anticipatory warrants; payment; unpaid warrants
Sec. 6. (a) All anticipatory warrants and all interest or thewarrants shall be payable by the secretary-investment manager solelyfrom the money paid into the insurance fund and the money is,except for the payment of expenses incident to the operation of theinsurance fund, exclusively and irrevocably pledged to the paymentof all warrants in the consecutive order in which they were issued.The warrants, as to interest as well as principal, shall be paid out ofthe money in the insurance fund before the payment of any claimsthat may arise and be finally determined subsequent to the issue andsale of any warrants or series of warrants.
(b) When any warrant or series of warrants is outstanding andunpaid, the secretary-investment manager shall, when thesecretary-investment manager has money in the insurance fundsufficient to pay a reasonable amount of the outstanding and unpaidwarrants, notify the persons who, according to thesecretary-investment manager's record, hold the warrants or warrantsthen payable. The secretary-investment manager shall mail eachnotice to the post office address of the person as shown by therecords of sale. The notice must state that the warrant or warrantswill be paid on presentation, and that interest will cease after theexpiration of ten (10) days from the mailing of the notice. At theexpiration of the ten (10) day period, interest ceases on the warrantor warrants.
As added by P.L.19-1987, SEC.15.
IC 5-13-13-7
Shortage of assets in insurance fund; substitution of other security;pledge of other securities by depositories
Sec. 7. (a) At any time when the board for depositories determinesthat the assets of the insurance fund are insufficient to pay itsliabilities, accrued or contingent, or determines that the assessmentsdue or to become due will not be sufficient to maintain the insurancefund in a solvent condition and insure the safekeeping and promptpayment of public funds, the board may enter an order requiring anyor all then constituted depositories to substitute other security, in theamount and type as determined by the board from time to time, tosecure the safekeeping and prompt payment of public funds. The
collateral to be accepted by the board for depositories under thischapter may include, but is not limited to, the following:
(1) United States Treasury securities.
(2) Federal agency securities.
(3) An irrevocable letter of credit issued by a Federal HomeLoan Bank if:
(A) the federal home loan bank issuing the irrevocable letterof credit maintains a rating of at least the third highest levelfrom at least one (1) of the nationally recognized ratingagencies; and
(B) the irrevocable letter of credit provides that the board fordepositories may draw on the letter when necessary tosatisfy losses to the public deposit insurance fund under statelaw.
(b) The board may require any or all then constituted depositoriesto deliver and pledge to the proper local board of finance or to thestate board of finance, under the conditions for joint control of thecollateral by the depositories as may be approved by the board fordepositories, bonds or other obligations that the board determines areacceptable collateral. The market value of these securities, at the timeof delivery, must be an amount determined by the board, which maynot exceed the amount of public funds then on deposit with therespective depositories. The board may require depositories to pledgeacceptable securities to such an extent that the market value of thepledge will at all times be substantially equal to the amount of publicfunds on deposit in the respective depositories.
(c) Whenever an order is in force and the amount of public fundson deposit is at least ten percent (10%) less than the market value ofsecurities pledged to secure the payment, as required by the board,the depository may withdraw the excess amount of pledgedcollateral.
(d) Any order of the board for depositories becomes effectivewithin the time fixed by the board. However, the time ofeffectiveness must not be earlier than thirty (30) days from the dateof entry of the order by the board. The order continues in force untilrescinded by the board. Upon the entry of any order by the board fordepositories, all then constituted depositories affected by the ordershall comply with the order. Upon compliance, and full payment ofall its liabilities by the insurance fund, depositories are not requiredto pay any further assessments for insurance under this chapter untilthe order requiring collateral has been revoked or rescinded and thecollateral returned to the respective depositories.
(e) A depository may elect at any time to pledge and delivercollateral to the board in an amount equal to one hundred percent(100%) of the public funds the depository has on deposit. Adepository that:
(1) elects this option;
(2) has pledged and delivered the collateral to the board; and
(3) has maintained a one hundred percent (100%) collaterallevel continuously for the twelve (12) months immediately
preceding an assessment;
is exempt from paying any assessment authorized by this articlewhile the collateral continues to be maintained with the board.
(f) If the fund balance is zero (0), each depository shall pledge anddeliver collateral to the board equal to the depository's pro rata shareof total deposit accounts of public funds based on an average of thedepository's total deposit accounts of public funds for the previousfour (4) quarters, as reported under this article, as determined by theboard from time to time, with at least fifteen (15) days notice to thedepository, to secure the safekeeping and prompt payment of publicfunds.
As added by P.L.19-1987, SEC.15. Amended by P.L.115-2010,SEC.19.
IC 5-13-13-8
Reopening or reorganization of closed depository
Sec. 8. (a) If in any closed depository there are public funds of thestate or of any political subdivision, the treasurer of state may, withthe consent of the state board of finance, if the public funds belongto the state, and the public officer who has charge of the public fundsof any political subdivision, may, with the consent of the local boardof finance of the political subdivision to which the public fundsbelong, join with other depositors of the closed depository in a planfor reopening or the reorganization of the closed depository.
(b) The treasurer of state may bind the state, or any proper localofficer may bind the political subdivision, as the case may be, afterbeing authorized, as provided in this chapter, in accordance with theterms of the plan for reopening or reorganization.
As added by P.L.19-1987, SEC.15. Amended by P.L.18-1996,SEC.27.