FDIC Shuts Down 3rd Bank This Year

[Norwayguy]

I was hoping that you would know the answer to that one Peter!!

I do know the answer, the guarantee fund does exist however based on that fact that Maine as of Sept 2010 has a little over 35 Million in assets in places it gets complicated, since the failure of an insurer could result in the loss of more than $35 Million but it typically would be spread over multiple states since very few carriers exist and operate in only 1 state (I know there are exceptions) so other state guarantee funds would also come into play.

So my question of does the State Guarantee Fund exist in more than just name isn't as simple as yes and no because there are assets in place however if you look at just one states fund and you compare it to the assets of just 1 domiciled carrier the guarantee assets are puny in comparison. Yes the Carrier has reserves however those reserves could be in "Toxic" assets and decrease in value overnight....Just ask the State of Maines Comptroller who lost $35 Million of the states supposedly liquid and safe assets.

 

[scagnt83]

Moral of the story is that nothing is safe.

You can put cash under the mattress, but if the dollar goes to hell you will need a wheelbarrow to buy a loaf of bread!

You can save up gold bullion in your basement, but if a worldwide catastrophe pops up all anyone will care about are food & guns.... I guess you could use the gold bricks to hit people in the head with and steal their food....

 

[pcwest]

I was told that the state guarantee association does not have a "fund" of money.

When I spoke to the lady who ran it for my state she said when a company goes under, the state then taps the insurance companies for the money.

By the way, when I am in a competitive situation with a bank for a customer, I bring up on my laptop the FDIC list of default banks over the past year. I let the FDIC do the selling for me. I make no comments but wait for the clients to make the comments first.

I use government websites, papers, and other websites to damage creditability.

Bankrate.com is another good website to show the Star Rating system for their bank and the reason why the bank is offering that rate. They are buying customers, and if they go down, we as tax payers step in and take them over. It is a slimmy game.

 

[Norwayguy]

I was told that the state guarantee association does not have a "fund" of money.

When I spoke to the lady who ran it for my state she said when a company goes under, the state then taps the insurance companies for the money.

By the way, when I am in a competitive situation with a bank for a customer, I bring up on my laptop the FDIC list of default banks over the past year. I let the FDIC do the selling for me. I make no comments but wait for the clients to make the comments first.

I use government websites, papers, and other websites to damage creditability.

Bankrate.com is another good website to show the Star Rating system for their bank and the reason why the bank is offering that rate. They are buying customers, and if they go down, we as tax payers step in and take them over. It is a slimmy game.

What I listed was for the state of Maine from the entity that runs the guarantee fund for a couple Northeast states....What I really wanted to do was go back and see whats happened over the last couple of years but it does not provide that info and the Annual Report is 2 pages and kind of reminds me of an annual report from a Mutual ie we'll tell you what we want to tell you and provide no backup for our claims

 

[Charpress]

I believe all states are about the same, but I will speak for mine.

All insurance companies, to do business here, must agree to contribute to equalize the losses to consumers for any company that goes under based on the business they do in the state. So, if State Farm does 10% of all the business, they have obligated themselves to pay 10% of the losses if XYZ Insurance Company goes under or defaults for whatever reason.

In addition, each company has to pay into a reserve each year as part of their cost of doing business in this state. At the present time, our reserve has about $642 million. If a company goes under, the reserve is used first and then the obligation of the other companies would come into play.

We have limits, as do all states, on how much a person can recover. It is basically $250k for annuities and $500k for life insurance.

 

[VolAgent]

I believe all states are about the same, but I will speak for mine.

All insurance companies, to do business here, must agree to contribute to equalize the losses to consumers for any company that goes under based on the business they do in the state. So, if State Farm does 10% of all the business, they have obligated themselves to pay 10% of the losses if XYZ Insurance Company goes under or defaults for whatever reason.

In addition, each company has to pay into a reserve each year as part of their cost of doing business in this state. At the present time, our reserve has about $642 million. If a company goes under, the reserve is used first and then the obligation of the other companies would come into play.

We have limits, as do all states, on how much a person can recover. It is basically $250k for annuities and $500k for life insurance.

To the best of my knowledge, it is the same here, except for the size of the reserves and amount the Guarantee Fund will compensate policyholders. However, the state's policy is similiar to what Virginia is doing with Shenandoah. They will try to find someone to buy the company first.

 

[Charpress]

And speaking of bank failures, has anyone caught on to the fact that if there are 860 banks on the Problem List of banks in danger of failing, and there are 7,760 FDIC banks in the United States, then it follows that

11% of all U.S. banks are on the Problem List?

 

[Norwayguy]

And speaking of bank failures, has anyone caught on to the fact that if there are 860 banks on the Problem List of banks in danger of failing, and there are 7,760 FDIC banks in the United States, then it follows that

11% of all U.S. banks are on the Problem List?

Do they break it out to how much those 860 banks represent in in total bank assets...ie are these tiny banks or huge banks?

 

[Charpress]

Good point. The dollar value is proportionately smaller than the average. Yes, the FDIC does report on dollar values of problem banks. I don't remember the figures, but you're suspicion is correct. Still a huge problem, however.

 

[Norwayguy]

And here is another bank going under

United Western Bank of Denver closing - Financial & Business - Wire - TheSunNews.com

United Western Bank had about $2.05 billion in assets and $1.65 billion in deposits as of Sept. 30. The FDIC and First-Citizens Bank & Trust Co. entered into a loss-share transaction on $1.11 billion of the assets.

The FDIC estimates the cost to the Deposit Insurance Fund will be $312.8 million.



Read more: United Western Bank of Denver closing - Financial & Business - Wire - TheSunNews.com​

​

- - - - - - - - - - - - - - - - - -
As of today there are 8 failed banks from 2010 that still have not been aquired by another bank....And the go as far back as January 2010....I didn't want to look beyond 2010 but right below that January listing I noticed another in Dec 2009.

Also as of today the FDIC has closed 7 banks in 2011.