2.2-4403 - Procedure for payment of losses by pooled method.
§ 2.2-4403. Procedure for payment of losses by pooled method.
When the Treasury Board determines that a qualified public depositorysecuring public deposits in accordance with this section is a defaultingdepository, it shall as promptly as practicable take steps to reimbursepublic depositors for uninsured public deposits using the followingprocedures:
1. The Treasury Board shall ascertain the amount of uninsured public depositsheld by the defaulting depository, either with the cooperation of theCommissioner of Financial Institutions, the receiver appointed for suchdepository, or by any other means available.
2. The amount of such uninsured public deposits ascertained as provided insubdivision 1, plus any costs associated with liquidation, shall be assessedby the Treasury Board first against the defaulting depository to the extentof the full realizable market value of the collateral pledged to secure itspublic deposits.
3. In the event the realized value of the pledged collateral in subdivision 2is insufficient to satisfy the liability of the defaulting depository to itspublic depositors and the Treasury Board, the Treasury Board shall assess theremaining liability against all other qualified public depositories securingpublic deposits according to the following ratio: total average publicdeposit balance for each qualified public depository held during theimmediately preceding twelve months divided by the total average publicdeposit balance for the same period held by all qualified public depositoriesunder this section other than the defaulting depository.
4. Assessments made by the Treasury Board in accordance with subdivision 3shall be payable by the close of business on the second business dayfollowing demand. Upon the failure of any qualified public depository to paysuch assessment when due, the State Treasurer shall promptly take possessionof the eligible collateral deposited with the non-paying depository's escrowagent and liquidate the same to the extent necessary to pay the originalassessment plus any additional costs necessary to liquidate the collateral.
5. Upon receipt of such assessments and the net proceeds of the eligiblecollateral liquidated from the State Treasurer, the Treasury Board shallreimburse the public depositors to the extent of the defaulting depository'sliability to them, net of any applicable deposit insurance.
(1973, c. 172, § 2.1-363; 1978, c. 14; 1984, c. 135; 2001, c. 844; 2009, c.64; 2010, cc. 640, 674.)