This Act (the "Act") is enacted to protect the rights and interests of depositors in financial institutions, to maintain credit order, and to enhance sound development of financial businesses.

The term "competent authority", as used in this Act, means the Financial Supervisory Commission.

The Ministry of Finance in conjunction with the Central Bank shall establish the Central Deposit Insurance Corporation (hereinafter referred to as the "CDIC") to conduct the business of deposit insurance. The total capital shall be determined by the Executive Yuan.
Shares of the aforesaid capital shall be subscribed by the Ministry of Finance, the Central Bank and the insured financial institutions. The total capital subscribed by the Ministry of Finance and the Central Bank shall exceed 50% of the said capital.

The CDIC shall be exempt from providing security with the National Treasury.

Any remainder of the annual gross income of the CDIC, after deducting costs, expenses and losses, shall be fully appropriated for deposit insurance payout special reserves.

In conducting the business of deposit insurance of banks, credit cooperatives, and the postal savings and remittance institutions, the CDIC shall set up an account for the general financial deposit insurance payout special reserves.
In conducting the business of deposit insurance of agricultural financial institutions according to Article 8 of the Agricultural Finance Law, the CDIC shall set up an account for the agricultural financial deposit insurance payout special reserves.
The deposit insurance payout special reserves accounts mentioned in the preceding two Paragraphs shall be kept separately.

The annual appropriated amount of the deposit insurance payout special reserves mentioned in Paragraph 1 and 2 of the preceding Article shall be calculated separately according to the ratios of the insurance premiums paid by general insured financial institutions and agricultural insured financial institutions.
The amount of the original deposit insurance payout special reserves, prior to the enforcement of the Amendment to this Act, shall be calculated and recorded year by year according to the ratios mentioned in the preceding Paragraph.

The funds of the CDIC, other than expenditure for normal operation, fulfillment of insurance responsibilities according to the Act, offering of financial assistance, setting up of bridge banks and making of advance payment, shall be invested in government bonds, deposited with the Central Bank or used in other methods approved by the board of directors of the CDIC.

The CDIC shall be liable for any damage arising from an intent or negligent act of the persons-in-charge and employees of the CDIC acting within the scope of fulfillment of insurance responsibilities or bank failure resolutions according to the Act which infringes upon the right of any other person.
Should the damage referred to in the preceding Paragraph results from an act committed with intent or gross negligence of the persons-in-charge and employees of the CDIC, the CDIC shall have the right to claim for reimbursement from the responsible person.