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 funds
deposited; determination of sums; certification
Sec. 1. (a) Whenever any depository becomes a closed depository,
the board shall, as soon as possible and upon the conditions
prescribed in this section, make payment from the insurance fund to
the proper public officers of all public funds that were deposited in
the closed depository in the manner required by this article. These
payments shall be made only to the extent the public funds are not
covered by insurance of any federal deposit insurance agency.
(b) For the purpose of determining the sums to be paid on account
of public funds in any closed depository, the department of financial
institutions shall ascertain the amount of public funds on deposit in
any closed depository as disclosed by the records, and certify the
amounts to the attorney general, auditor of state, the several public
officers who have public funds on deposit, and the board for
depositories, which then constitutes a claim on the fund. The
certification shall be made within twenty (20) days after its special
representative has taken charge of the business and property of any
closed depository, or the receiver of any national banking association
or state chartered state banks within twenty (20) days after
appointment.
(c) Within ten (10) days after the receipt of a certification under
subsection (b), the several public officers who have public funds on
deposit in the closed depository shall furnish to the attorney general
and the auditor of state:
(1) verified statements of the amount of the public funds on
deposit in the closed depository, as disclosed by their records;
(2) certified copies of the resolution or resolutions under which
the deposits were made; and
(3) any other information requested by the attorney general and
the 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; determination
procedure
Sec. 2. (a) After the receipt of the certificate and statements
required by section 1 of this chapter, the attorney general and the
auditor of state shall ascertain and fix the amount of public funds in
the closed depository deposited in the manner required by this
article. The amount of public funds deposited contrary to the
requirements 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 a
copy of their decision by registered mail to the several public officers
who have filed statements and to the department of financial
institutions, or to the receiver if the closed depository is a national
banking association.
(c) The department of financial institutions or the receiver shall
cause notice of the decision to be published by one (1) publication in
a newspaper of general circulation in the county where the closed
depository is situated. This notice must be under the heading "Notice
to Depositors of ____________" (inserting the name of the closed
depository). The costs of the publication shall be charged to the
liquidation expense of the closed depository.
(d) Except as otherwise provided in this chapter, the decision of
the 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, if
any depositor of the closed depository, within ten (10) days after the
publication of the notice required by this section, files objections to
that decision in writing in any court competent to determine matters
concerning the closed depository, the auditor of state shall withhold
payment of the claim until the objections are determined by the
court.
(e) If the attorney general and auditor of state do not send a copy
of their decision to the department of financial institutions or to the
receiver of the national banking association within the time required
by this section, or if objections in writing are made as provided in
this section, the department of financial institutions or any receiver
or any treasurer or other person having funds on deposit in the closed
depository may petition any court competent to hear and determine
matters pertaining to the liquidation of the closed depository and to
determine the amount of public funds deposited in the manner
required by this chapter. The court shall, without delay, hear and
determine the issues presented by the petition and enter judgment
accordingly.
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; distribution
of assets of closed depository
Sec. 3. (a) Whenever the decision of the attorney general and
auditor of state has become final, or whenever a court of competent
jurisdiction as provided in section 2 of this chapter has determined
the amount payable from the insurance fund on account of public
funds deposited in the closed depository, the board for depositories
shall, subject to IC 5-13-12-8(c), cause the amount to be paid to the
treasurer or public officer out of the insurance fund.
(b) After payment is made under subsection (a), the board, on
behalf of the public deposit insurance fund, is then subrogated to all
of the right, title, and interest of the depositor of the public funds for
the amount of the depository's claim against any federal deposit
insurance agency and against the closed depository. The board is so
subrogated to the extent that the insurance fund has paid the loss not
reimbursed by the insurance. The board is entitled to share in the
distribution of the assets of the closed depository on the basis ratably
with other depositories, but the insurance fund shall be paid in full
before any distribution is made on account of public funds not
insured under the terms of this chapter. The board shall pay any sum
or 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 not
sufficient to pay the claims of any kind that have been finally
determined and have become payable, the board for depositories
shall issue anticipatory warrants for the purpose of raising money for
the immediate payment of the claims. The warrants outstanding and
unpaid must not at any time exceed the sum of three hundred million
dollars ($300,000,000). Interest may be paid upon the warrants from
the date the rate was established by the board for depositories.
Interest is payable at the end of each year or for a shorter period as
the warrants remain unpaid.
(b) The warrants are the obligation of the board for depositories
payable out of the public deposit insurance fund only and do not
constitute a debt, liability, or obligation of the state or a pledge of the
faith and credit of the state. Each warrant must have printed on its
face the words, "This warrant is an obligation of the board for
depositories payable solely out of the public deposits insurance fund,
and neither the faith and credit nor the taxing power of the state is
pledged to the payment of the principal, the interest, or any other
amount owed on the warrants.".
(c) Subject to the limitations in subsections (a) through (b), the
warrants shall be issued in the individual and gross amounts and in
the form and at the rate of interest approved by the board for
depositories.
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 of
definite amount; record
Sec. 5. (a) The secretary-investment manager on behalf of the
board for depositories has the powers and duties set out in this
section and section 6 of this chapter and shall sell all anticipatory
warrants issued under this chapter at a price not less than par plus
accrued interest. The proceeds of the sale of the warrants shall be
paid into the insurance fund and shall be applied exclusively to the
payment of the claims on account of which the warrants were issued.
(b) Any person may file an application with the
secretary-investment manager for an allotment of a definite amount
of the warrants. The secretary-investment manager shall then
apportion to the several applicants an amount of warrants as the
secretary-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 the
secretary-investment manager's office a complete record of all
warrants sold to each purchaser and of the post office address of the
purchaser. Purchasers of warrants may notify the
secretary-investment manager of their post office addresses, or of any
change in their addresses, and of the warrants owned or held by
them, and the secretary-investment manager shall change the
secretary-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 the
warrants shall be payable by the secretary-investment manager solely
from the money paid into the insurance fund and the money is,
except for the payment of expenses incident to the operation of the
insurance fund, exclusively and irrevocably pledged to the payment
of all warrants in the consecutive order in which they were issued.
The warrants, as to interest as well as principal, shall be paid out of
the money in the insurance fund before the payment of any claims
that may arise and be finally determined subsequent to the issue and
sale of any warrants or series of warrants.
(b) When any warrant or series of warrants is outstanding and
unpaid, the secretary-investment manager shall, when the
secretary-investment manager has money in the insurance fund
sufficient to pay a reasonable amount of the outstanding and unpaid
warrants, notify the persons who, according to the
secretary-investment manager's record, hold the warrants or warrants
then payable. The secretary-investment manager shall mail each
notice to the post office address of the person as shown by the
records of sale. The notice must state that the warrant or warrants
will be paid on presentation, and that interest will cease after the
expiration of ten (10) days from the mailing of the notice. At the
expiration of the ten (10) day period, interest ceases on the warrant
or 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 determines
that the assets of the insurance fund are insufficient to pay its
liabilities, accrued or contingent, or determines that the assessments
due or to become due will not be sufficient to maintain the insurance
fund in a solvent condition and insure the safekeeping and prompt
payment of public funds, the board may enter an order requiring any
or all then constituted depositories to substitute other security, in the
amount and type as determined by the board from time to time, to
secure the safekeeping and prompt payment of public funds. The
collateral to be accepted by the board for depositories under this
chapter 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 Home
Loan Bank if:
(A) the federal home loan bank issuing the irrevocable letter
of credit maintains a rating of at least the third highest level
from at least one (1) of the nationally recognized rating
agencies; and
(B) the irrevocable letter of credit provides that the board for
depositories may draw on the letter when necessary to
satisfy losses to the public deposit insurance fund under state
law.
(b) The board may require any or all then constituted depositories
to deliver and pledge to the proper local board of finance or to the
state board of finance, under the conditions for joint control of the
collateral by the depositories as may be approved by the board for
depositories, bonds or other obligations that the board determines are
acceptable collateral. The market value of these securities, at the time
of delivery, must be an amount determined by the board, which may
not exceed the amount of public funds then on deposit with the
respective depositories. The board may require depositories to pledge
acceptable securities to such an extent that the market value of the
pledge will at all times be substantially equal to the amount of public
funds on deposit in the respective depositories.
(c) Whenever an order is in force and the amount of public funds
on deposit is at least ten percent (10%) less than the market value of
securities pledged to secure the payment, as required by the board,
the depository may withdraw the excess amount of pledged
collateral.
(d) Any order of the board for depositories becomes effective
within the time fixed by the board. However, the time of
effectiveness must not be earlier than thirty (30) days from the date
of entry of the order by the board. The order continues in force until
rescinded by the board. Upon the entry of any order by the board for
depositories, all then constituted depositories affected by the order
shall comply with the order. Upon compliance, and full payment of
all its liabilities by the insurance fund, depositories are not required
to pay any further assessments for insurance under this chapter until
the order requiring collateral has been revoked or rescinded and the
collateral returned to the respective depositories.
(e) A depository may elect at any time to pledge and deliver
collateral to the board in an amount equal to one hundred percent
(100%) of the public funds the depository has on deposit. A
depository that:
(1) elects this option;
(2) has pledged and delivered the collateral to the board; and
(3) has maintained a one hundred percent (100%) collateral
level continuously for the twelve (12) months immediately
preceding an assessment;
is exempt from paying any assessment authorized by this article
while the collateral continues to be maintained with the board.
(f) If the fund balance is zero (0), each depository shall pledge and
deliver collateral to the board equal to the depository's pro rata share
of total deposit accounts of public funds based on an average of the
depository's total deposit accounts of public funds for the previous
four (4) quarters, as reported under this article, as determined by the
board from time to time, with at least fifteen (15) days notice to the
depository, to secure the safekeeping and prompt payment of public
funds.
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 the
state or of any political subdivision, the treasurer of state may, with
the consent of the state board of finance, if the public funds belong
to the state, and the public officer who has charge of the public funds
of any political subdivision, may, with the consent of the local board
of finance of the political subdivision to which the public funds
belong, join with other depositors of the closed depository in a plan
for reopening or the reorganization of the closed depository.
(b) The treasurer of state may bind the state, or any proper local
officer may bind the political subdivision, as the case may be, after
being authorized, as provided in this chapter, in accordance with the
terms of the plan for reopening or reorganization.
As added by P.L.19-1987, SEC.15. Amended by P.L.18-1996,
SEC.27.