Financial institutions having been duly approved to accept deposits, postal savings or to be consigned to manage trust funds used for the purpose designated by the financial institutions with guaranteed principal and interest (hereinafter referred to collectively as "deposits") shall apply to the CDIC to participate in deposit insurance and become insured institutions upon review and approval by the CDIC. However, the provision set forth in the aforesaid does not apply to the Taiwan branches of a deposit-taking foreign bank whose deposits have been insured by the deposit insurance system in their home countries.
In the event that any financial institution fails to apply for participation in deposit insurance according to the aforementioned provision, the CDIC shall report to the competent authority or the central competent authority of the agricultural finance depending on whether such institution is a general financial institution or an agricultural financial institution to request the replacement of the persons-in-charge or revoke its license.
Provisions set forth in the preceding two Paragraphs do not apply to the insured institutions that have participated in deposit insurance prior to the enforcement of the Amendment to this Act.
The standards for the documents to be submitted by the financial institutions when applying for the participation in deposit insurance and the verification of application qualification according to Paragraph 1 shall be drawn up by the CDIC and submitted to the competent authority for approval and promulgation.

Financial institutions approved as insured institutions by the CDIC shall sign a deposit insurance agreement in writing with the CDIC.
In the event of any modification of this Act and other relevant laws and regulations, stipulations in the deposit insurance agreement relating to such laws and regulations shall also be modified accordingly.

The term "deposit insurance" as used in this Act, shall mean an insurance whose insured subjects are the following deposits within the territory of the Republic of China:
1. Checking deposits
2. Demand deposits
3. Time deposits
4. Deposits required by law to be deposited in certain financial institutions
5. Other deposits that the competent authority has approved as insurable
The deposits mentioned in the preceding Paragraph shall not include the following deposits:
1. Negotiable Certificate of Deposits
2. Amounts due to all levels of government agencies
3. Amounts due to the Central Bank
4. Amounts due to banks, postal institutions handling postal savings and remittance businesses, credit cooperatives, farmers' and fishermen's associations with credit departments, and the Agricultural Bank of Taiwan
5. Other deposits that the competent authority has approved as uninsurable
The deposits within the territory of the Republic of China mentioned in Paragraph 1 shall exclude deposits of offshore banking branches established by banks.

The maximum insurance coverage that the CDIC offers to each depositor of any insured institution shall be determined by the competent authority along with the Ministry of Finance and the Central Bank.
The aforementioned maximum insurance coverage shall mean the maximum amount of deposit principal and its accrued interest until the final business day at the same insured institution being covered by deposit insurance. The CDIC shall use New Taiwan Dollars as the payout currency in fulfilling its insurance responsibilities.
For employee pension accounts opened by organizations, business entities or groups at insured institutions, if the account records and amount of each employee's pension may be clearly distinguished and provided by insured institutions, and insurance premiums for individual pension accounts are paid by insured institutions, the pension of such individual employee and other deposits thereof at the same insured institution shall be protected within the maximum coverage respectively and shall not be limited by the stipulations in the preceding two Paragraphs.

The assessment base shall be calculated based on the total liabilities over underlying deposits after subtracting the uninsured deposits mentioned in Paragraph 2 of Article 12 and shall be calculated once every semiannual period; the standard dates for calculating such base shall be determined by the CDIC.

Insured institutions shall report the total amount of liabilities over the underlying deposits and assessment base to CDIC and make payment of insurance premium within one month of the standard dates mentioned in the preceding Article; the payment methods shall be decided by the CDIC.

The ratio of the remaining amount of each account of the insurance payout special reserves of the CDIC to the insured deposits under the maximum insurance coverage shall be targeted at 2 %.
The deposit insurance premium rates may be differentiated based on the operational risks of the insured institutions, and may be adjusted according to the achievement of the target ratio mentioned in the preceding Paragraph.
The above-mentioned insurance premium rates shall be drawn up by the CDIC and submitted to the competent authority for its approval.

Insured institutions shall indicate the fact, according to the forms and contents prescribed by the CDIC, that the deposits are insured at each of their business locations and indicate in their financial products whether such products are insured or uninsured by deposit insurance.

Insured institutions shall not use the deposit insurance premium rate or relevant information thereof as advertisement.

Prior to distribution of stock dividends and bonuses, as well as remuneration to the directors of the board and supervisors, insured institutions shall complete payment of the insurance premium to the CDIC.

Upon fulfillment of insurance responsibilities, provision of financial assistance, establishment of a bridge bank or processing of advance payments by the CDIC, if the recovered amount is less than cost expended, the difference shall be written off from the insurance payout special reserves. Any further deficiencies shall be recorded in the deferral account and written off from the insurance payout special reserves in the subsequent years.

In the event that an insured institution stops taking deposits, it shall notify the CDIC in writing to terminate the deposit insurance agreement.

In the event where there are needs for the CDIC to collect and analyze the financial information or business information relating to an insured institution for the purpose of insured risk control, CDIC shall obtain such information through the information sharing mechanism established by the competent authority, the central competent authority of the agricultural finance, the Central Bank and the CDIC. In the event of insufficiency, the CDIC may require the insured institutions to report the truth.
The CDIC shall establish coordination mechanisms with the competent authority, the central competent authority of the agricultural finance and the Central Bank for the purpose of handling business crises of insured institutions or any major event affecting financial order.

For the calculation of insurance premium and amount of payout in fulfilling insurance responsibilities, the insured institutions shall establish electronic data files of deposits and related items according to the file format and content stipulated by the CDIC.
The CDIC may request the insured institutions to provide the aforementioned electronic data files, if necessary.

The CDIC may inspect the following items of an insured institution:
1. Accuracy of deposit assessment base and content of the electronic data files stipulated in Paragraph 1 of the preceding Article.
2. Any event causing the termination of the deposit insurance agreement.
3. Assets and liabilities of insured institutions prior to the fulfillment of insurance responsibilities.
4. Property information and information needed to pursue civil liabilities for illegal acts or omissions by employees of failed insured institutions and by those of problem insured institutions that receive financial assistance according to Paragraph 1 of Article 29.
When the CDIC undertakes inspection according to Subparagraph 3 or 4 of the aforesaid Paragraph, if an insured institution has made any improper funds transfers or property trades with its controlling financial holding companies, other subsidiaries thereof, or non-credit departments of farmer's or fishermen's associations with the potential to jeopardize the insurance payout special reserves, the CDIC may report to the competent authority or the central competent authority of the agricultural finance and undertake inspections, after obtaining their approval, of the said financial holding companies, the subsidiaries thereof, and the non-credit departments of farmers' and fishermen's associations.
In undertaking the inspection stipulated in Subparagraph 4 of Paragraph 1, the CDIC may obtain or review relevant property and household registration information from government authorities, financial institutions or securities' central depository agencies.

If an insured institution violates the laws, regulations or deposit insurance agreements, or engages in unsound business operations, the CDIC may give a warning notice of terminating the deposit insurance agreement and require rectification within a stipulated timeframe.

The CDIC shall notify the competent authority or the central competent authority of the agricultural finance and terminate its deposit insurance agreement and make announcements with respect thereof, in the event any one of the followings occurs to an insured institution:
1. Failure to take corrective actions within the stipulated timeframe after the CDIC gives a warning notice of termination of the deposit insurance agreement according to the preceding article.
2. Failure to make improvements upon being ordered by the competent authority or the central competent authority of the agricultural finance to undertake recapitalization or make improvements in financial condition and business operations within a certain timeframe; or being assessed as being unable to make improvements by the aforementioned authorities or the CDIC prior to the deadline.
3. Occurrence of a major fraud or other illegal activities with the potential to increase deposit insurance payouts.

In the event of termination of a deposit insurance agreement by the CDIC according to Article 21 or the preceding Article, the insured institution shall notify its depositors within one month of the date of termination and return the deposit insurance sign issued by the CDIC.
The total deposit balance of each of the abovementioned depositors on the date of termination of the deposit insurance agreement subtracting subsequent withdrawals shall, within the maximum insurance coverage, continue to be insured by the CDIC for one-half year after the termination date. The insured institution with a terminated deposit insurance agreement shall continue to make payment equivalent to the insurance premium to the CDIC.