Chapter 1301:9-3 Credit Union Share Guaranty Corporation

1301:9-3-01 Advancement and withdrawal of capital contribution by participating credit unions.

(A) The credit union share guaranty corporation shall obtain the written approval of the superintendent of insurance as to the percentage amount of the aggregate share capital of a participating credit union, which each participating credit union must contribute and maintain with the credit union share guaranty corporation as a capital contribution, prior to requiring each participating credit union to contribute and maintain such a capital contribution.

(B)(1) The credit union share guaranty corporation shall provide the superintendent of insurance and the superintendent of credit unions with written notification at least thirty days prior to the repayment of any capital contribution, in connection with:

(a) The liquidation of any participating credit union;

(b) The withdrawal of any participating credit union from the credit union share guaranty corporation after such credit union obtains a different form of share guaranty or insurance pursuant to section 1733.041 of the Revised Code or similar state statute; or

(c) The merger of a participating credit union with another credit union, if the shares of the surviving credit union are guaranteed or insured by a different form of guaranty or insurance.

(2) Such written notification shall include:

(a) The name and address of the withdrawing credit union and its state of domicile;

(b) The reason for the withdrawal of the credit union;

(c) Whether or not the guarantee fund will exceed its normal operating level without the account of the withdrawing credit union; and

(d) Any other information which the superintendent of insurance may request.

(C) The credit union share guaranty corporation shall provide the superintendent of credit unions with copies of all written approvals or denials of the superintendent of insurance obtained pursuant to paragraphs (A) and (B) of this rule.

R.C. 119.032 review dates: 11/16/2009 and 11/15/2014

Promulgated Under: 119.03

Statutory Authority: 1761.04

Rule Amplifies: 1761.01(B) , 1761.04(A) , 1761.10 , 3941.13

Prior Effective Dates: None

1301:9-3-02 Documents filed with the superintendent of insurance.

In addition to the applicable requirements set forth in Chapter 1761. and Title XXXIX of the Revised Code, the credit union share guaranty corporation shall simultaneously furnish any documents it is required to file with the superintendent of insurance thereof to the superintendent of credit unions.

R.C. 119.032 review dates: 11/16/2009 and 11/15/2014

Promulgated Under: 119.03

Statutory Authority: 1761.04

Rule Amplifies: 1761.04(A) , 1761.16(F)

Prior Effective Dates: None

1301:9-3-03 Issuance and renewal of certificate of compliance.

(A) The credit union share guaranty corporation shall apply to the superintendent of credit unions for a certificate of compliance with Chapter 1761. of the Revised Code prior to obtaining a license from the superintendent of insurance.

(B) The superintendent of credit unions shall determine whether the credit union share guaranty corporation is in compliance with Chapter 1761. of the Revised Code. The superintendent of credit unions shall notify the credit union share guaranty corporation and the superintendent of insurance of his determination.

(1) If the superintendent of credit unions finds that the credit union share guaranty corporation is in compliance with Chapter 1761. of the Revised Code, the superintendent of credit unions shall issue a certificate of compliance.

(2) If the superintendent of credit unions finds that the credit union share guaranty corporation is not in compliance with Chapter 1761. of the Revised Code, the superintendent of credit unions shall issue a denial with supporting evaluation.

R.C. 119.032 review dates: 11/16/2009 and 11/15/2014

Promulgated Under: 119.03

Statutory Authority: 1761.04

Rule Amplifies: 1761.05(A)(7)

Prior Effective Dates: None

1301:9-3-04 Credit union share guaranty corporation activity.

The credit union share guaranty corporation shall notify the superintendent of credit unions and the superintendent of insurance, in writing, at least five business days prior to taking any action to aid or assist, by an amount which exceeds one hundred thousand dollars, any participating credit union which is in liquidation or incurs financial difficulty. In the event of an emergency, such action may be taken in less than five business days, after notifying the superintendent of insurance and the superintendent of credit unions. As soon as practical the credit union share guaranty corporation must provide documentation to the superintendent of credit unions and the superintendent of insurance stating the reasons for such an emergency and why action must be taken in less than five days. Such actions requiring notice shall include, but are not limited to:

(A) Purchasing an asset from any participating credit union;

(B) Assuming control of the property and business of any participating credit union;

(C) Assisting in the merger, consolidation or liquidation of any participating credit union;

(D) Paying out on behalf of a participating credit union all or a part of any participating credit union's individual member share accounts; or

(E) Otherwise advancing funds to a participating credit union.

Replaces: Part of 1301:9-3-01

R.C. 119.032 review dates: 11/16/2009 and 11/15/2014

Promulgated Under: 119.03

Statutory Authority: 1761.04

Rule Amplifies: 1761.08 , 1761.16(F)

Prior Effective Dates: 1-1-78, 9-1-79, 1-1-91

1301:9-3-05 Necessity of reinsurance or line of credit.

The superintendent of credit unions may consider the following criteria, among others, in determining if it is actuarially or financially necessary for a credit union share guaranty corporation to obtain reinsurance or a line of credit from one or more insurance companies or financial institutions:

(A) The operating level of the credit union share guaranty corporation's guarantee fund has not been maintained at a level of one and three-tenths per cent of the aggregate share capital of the participating credit unions.

(B) The capital contribution contributed by any participating credit union exceeds more than one per cent of the guarantee fund.

(C) Reinsurance is obtained from an insurance company which is not licensed to do business in the state of Ohio pursuant to Title XXXIX of the Revised Code.

R.C. 119.032 review dates: 11/16/2009 and 11/15/2014

Promulgated Under: 119.03

Statutory Authority: 1761.04

Rule Amplifies: 1761.06(B)

Prior Effective Dates: None

1301:9-3-06 Notice of termination, nonrenewal or any other lapse of reinsurance or line of credit.

In the event of the termination, nonrenewal or any other lapse of either the credit union share guaranty corporation's reinsurance or line of credit, the credit union share guaranty corporation shall immediately notify the superintendent of credit unions, the superintendent of insurance, the president of the senate and the speaker of the house. Oral notification shall be followed immediately by written notification. Such written notification, delivered certified mail, return receipt requested, shall include:

(A) An assessment of the financial and actuarial impact and significance of the termination, nonrenewal or other lapse of the reinsurance or line of credit on the credit union share guaranty corporation;

(B) A determination of whether the termination, nonrenewal or other lapse of the reinsurance or line of credit is material or in the ordinary course of business;

(C) The proposed response of the credit union share guaranty corporation to the termination, nonrenewal or other lapse of the reinsurance or line of credit; and

(D) Any other information which may be requested by the superintendent of credit unions, the superintendent of insurance, the president of the senate or the speaker of the house.

R.C. 119.032 review dates: 11/16/2009 and 11/15/2014

Promulgated Under: 119.03

Statutory Authority: 1761.04

Rule Amplifies: 1761.06(B)

Prior Effective Dates: None

1301:9-3-07 Communication with regulatory significance.

Written communication with regulatory significance from a credit union supervisory authority of another state to the credit union share guaranty corporation, as set forth in division (C) of section 1761.06 of the Revised Code, shall mean any correspondence, examination reports, supervisory agreements, or orders or any other document received by a credit union share guaranty corporation from a credit union supervisory authority pertaining to:

(A) A participating credit union with a capital, assets, management, earnings and liquidity (CAMEL) rating, or its equivalent, of four or below;

(B) A participating credit union placed under a supervisory agreement or under any order; or

(C) A participating credit union considered substandard by the credit union share guaranty corporation or the state regulatory authority.

R.C. 119.032 review dates: 11/16/2009 and 11/15/2014

Promulgated Under: 119.03

Statutory Authority: 1761.04

Rule Amplifies: 1761.06(C)

Prior Effective Dates: None

1301:9-3-08 Public representation of credit union share guaranty corporation's status or legal existence.

(A) The credit union share guaranty corporation shall not publicly represent in any manner that it is an agency of the state or federal government or that it is guaranteed in any way by a governmental agency.

(B) The credit union share guaranty corporation shall not publicly represent in any manner that it is licensed under Chapter 3941. of the Revised Code.

R.C. 119.032 review dates: 11/16/2009 and 11/15/2014

Promulgated Under: 119.03

Statutory Authority: 1761.04

Rule Amplifies: 1761.06(C)

Prior Effective Dates: None

1301:9-3-09 Participating credit union financial information.

The financial statements, examination reports, analyses and other information submitted by the superintendent of credit unions or other credit union supervisory authority, the National Credit Union Administration or by participating credit unions to the credit union share guaranty corporation, pursuant to section 1761.08 of the Revised Code, are and shall remain privileged and confidential while in the custody of the credit union share guaranty corporation and as shared with credit union supervisory authorities.

R.C. 119.032 review dates: 11/16/2009 and 11/15/2014

Promulgated Under: 119.03

Statutory Authority: 1761.04

Rule Amplifies: 1761.08(A), (B), (C), (G)

Prior Effective Dates: None

1301:9-3-10 Qualified audit report of a participating credit union.

The credit union share guaranty corporation shall notify the superintendent of credit unions immediately whenever the credit union share guaranty corporation shall require that an audit be conducted of the books and records of a participating credit union. In the event that the audit report, certificate or opinion of the independent certified public accountant is in any way qualified and such qualification is not remedied within three months of the date the participating credit union becomes aware of the qualification, or such shorter period as required by the credit union share guaranty corporation, the credit union share guaranty corporation shall immediately report such qualification in writing to the superintendent of credit unions and the superintendent of insurance.

R.C. 119.032 review dates: 11/16/2009 and 11/15/2014

Promulgated Under: 119.03

Statutory Authority: 1761.04

Rule Amplifies: 1761.06(E)

Prior Effective Dates: None

1301:9-3-11 Normal operating level of guarantee fund.

(A) The credit union share guaranty corporation shall notify the superintendent of credit unions and the superintendent of insurance of the normal operating level of the guarantee fund, as approved by its board of directors, and of any change in the normal operating level of the guarantee fund.

(B) The credit union share guaranty corporation shall request, in writing, the written approval of the superintendent of insurance of any change in such normal operation level as approved by its board of directors.

(C) The credit union share guaranty corporation shall notify the superintendent of credit unions of the approval or disapproval of such normal operating level of the guarantee fund by the superintendent of insurance.

(D) The credit union share guaranty corporation shall notify the superintendent of insurance and the superintendent of credit unions, in writing, within twenty-four hours after the guarantee fund is reduced below the normal operating level approved by the superintendent of insurance.

R.C. 119.032 review dates: 11/16/2009 and 11/15/2014

Promulgated Under: 119.03

Statutory Authority: 1761.04

Rule Amplifies: 1761.10

Prior Effective Dates: None

1301:9-3-12 Credit union share guaranty corporation payout on shares.

When the property and business of a participating credit union have been liquidated or are in the process of liquidation and the proceeds of liquidation are insufficient to pay the full guaranteed amount of each credit union share account, the credit union share guaranty corporation shall notify the superintendent of credit unions and the superintendent of insurance of the amount of the share deficiency upon verification of the share account balances and the date on which such deficiency has been paid.

R.C. 119.032 review dates: 11/16/2009 and 11/15/2014

Promulgated Under: 119.03

Statutory Authority: 1761.04

Rule Amplifies: 1761.11

Prior Effective Dates: None

1301:9-3-13 Approval of investments.

(A) Except as provided in divisions (A)(1) to (A)(6) of section 1761.13 of the Revised Code, a credit union share guaranty corporation shall not invest or deposit its funds in any manner or make any investment in any company, related or unrelated, without obtaining the prior written approval of the superintendent of credit unions.

(B) As used in paragraph (A) of this rule:

(1) "Company" means any corporation, partnership, association, joint stock company or unincorporated organization.

(2) "Investment" means any equity interest, including, general partnership interests, limited partnership interests in which liability is limited to the amount of the investment, and any bonds, notes, debentures or other evidence of indebtedness of any company.

(3) "Related" means the business or activities of the company are similar to the business and activities of the credit union share guaranty corporation with respect to business, trade, products or services.

(4) "Unrelated" means the business or activities of the company are not similar to the business and activities of the credit union share guaranty corporation with respect to business, trade, products or services.

R.C. 119.032 review dates: 11/16/2009 and 11/15/2014

Promulgated Under: 119.03

Statutory Authority: 1761.04

Rule Amplifies: 1761.13(A)(7)

Prior Effective Dates: None

1301:9-3-14 Credit union share guaranty corporation annual report.

(A) The credit union share guaranty corporation shall submit its annual report to the superintendent of credit unions, department of commerce, within one hundred days after the close of the fiscal year. The annual report shall be certified by the oath of the president and secretary of the credit union share guaranty corporation which shall state that the annual report is true and correct in all respects to the best of the knowledge and belief of the signatories. The annual report shall include:

(1) Audited financial statements, prepared in accordance with generally accepted accounting principles, for the fiscal year. Audited financial statements shall include, but not be limited to, a balance sheet and an income statement for the year ended on the balance sheet date. The audited financial statements shall be accompanied by an opinion of an independent certified public accountant. If the opinion of the independent certified public accountant is qualified pursuant to generally accepted auditing standards, the superintendent of credit unions shall require the credit union share guaranty corporation to take such action as he considers appropriate to effect removal of such qualification from the opinion.

(2) Special reports addressing the following areas:

(a) Guarantee fund;

(b) Capital deposits;

(c) Reserves;

(d) Additions; and

(e) Excess premiums.

(3) A report on the standard contract used by the credit union share guaranty corporation. In addition to any standard contract of share guaranty and any amendments thereto not previously submitted, the report shall address the following issues:

(a) The terms of the standard contract and any amendments thereto;

(b) State by state variations in the contract, including any amendments thereto made in the previous calendar year; and

(c) Marketing material and any and all other membership documents and publications used in each state for primary and excess coverage including any changes thereto made in the previous calendar year.

(4) A report on reinsurance and lines of credit in effect for the credit union share guaranty corporation. This report shall include the following items:

(a) Description of the coverage which shall include sources, amount and exceptions;

(b) Credit union share guaranty corporation evaluation of financial need to support the coverage amount; and

(c) Credit union share guaranty corporation evaluation of actuarial need to support the coverage amount.

(5) A report on the risk eligibility standards for participating credit unions.

(6) A crisis contingency plan providing for an event in which the credit union share guaranty corporation is unable to restore its guarantee fund to its normal operating level following the payment of any deficiencies in credit union share accounts or it is otherwise in financially hazardous condition.

(7) A reconciliation of generally accepted accounting principles to statutory accounting principles, including a written description of such difference. Such reconciliation shall include, but not be limited to, the normal operating level of the guarantee fund, as defined in section 1761.10 of the Revised Code.

(B) The annual report shall be in such format and include such additional items as the superintendent of credit unions may from time to time require. The superintendent of credit unions may reject any report or financial statement contained in the annual report or filed pursuant to division (A) of section 1761.16 of the Revised Code, and the superintendent of credit unions shall notify the credit union share guaranty corporation of such rejection and the reasons therefor. Within thirty days after receipt of the rejection notice the credit union share guaranty corporation shall correct any report or financial statement so rejected. Failure to timely correct any report or financial statement is a violation of division (B) of section 1761.16 of the Revised Code.

(C) The credit union share guaranty corporation shall furnish a copy of the annual report to the superintendent of insurance within one hundred days after the close of the fiscal year.

Replaces: Part of 1301:9-3-03

R.C. 119.032 review dates: 11/16/2009 and 11/15/2014

Promulgated Under: 119.03

Statutory Authority: 1761.04

Rule Amplifies: 1761.06(A)

Prior Effective Dates: 1-1-78, 9-1-79, 1-1-91

1301:9-3-15 Actuarial study of capital adequacy and disclosure of examination reports.

(A) The audit examination of the credit union share guaranty corporation by the superintendent of credit unions, conducted not less than every three years, shall include an actuarial study of the capital adequacy of the credit union share guaranty corporation. The credit union share guaranty corporation will be assessed the costs of the actuarial study.

(B) The superintendent of credit unions shall determine when an actuarial study of the capital adequacy of the credit union share guaranty corporation shall be conducted in accordance with division (C) of section 1761.16 of the Revised Code and shall approve in advance any proposal submitted by the share guaranty corporation concerning the scope of, and the company to perform, such study.

(C) The credit union share guaranty corporation shall provide the superintendent of insurance with a copy of the audit examination report upon completion of such examination.

(D) The credit union share guaranty corporation shall provide the superintendent of credit unions with a copy of the examination report prepared by the superintendent of insurance.

(E) The officers, employees, and agents of a credit union share guaranty corporation shall not disclose the contents of the audit examination report and any other special examination report prepared by the superintendent of credit unions to any person other than to the superintendent of insurance and to those officers, employees or agents of the credit union share guaranty corporation and other state regulatory agencies who have a need for such records in the performance of their duties, unless such disclosure has been approved in advance by the superintendent of credit unions.

R.C. 119.032 review dates: 11/16/2009 and 11/15/2014

Promulgated Under: 119.03

Statutory Authority: 1761.04

Rule Amplifies: 1761.16(C), (D)

Prior Effective Dates: None

1301:9-3-16 Quarterly reporting.

The credit union share guaranty corporation shall submit a quarterly report to the superintendent of credit unions within thirty days after the close of the calendar quarter. The quarterly report shall include a financial statement, a guarantee fund report and any other information considered necessary by the superintendent of credit unions in order to assess the financial condition of the credit union share guaranty corporation.

R.C. 119.032 review dates: 11/16/2009 and 11/15/2014

Promulgated Under: 119.03

Statutory Authority: 1761.04

Rule Amplifies: 1761.16(F)

Prior Effective Dates: None