When an insured institution is closed by the competent authority or the central competent authority of the agricultural finance, the CDIC shall fulfill its insurance responsibilities by any of the following methods:
1. Make payout by cash, remittance, transfer or other payment methods according to the books and records of the closed insured institution and the certificate of outstanding amount of deposits provided by depositors.
2. Consult with other insured institutions to make the same amount of deposits as the amount of payout for the depositors of the closed insured institution and make payment on behalf of the CDIC.
3. Provide other insured institutions or financial holding companies with funds, loans, deposits and guarantees, or purchase the subordinated debts issued by the said insured institutions or financial holding companies, in order to facilitate the acquisition or assumption of all or part of businesses, assets and liabilities of the closed insured institutions.
The estimated cost to the CDIC when it adopts the methods in the Subparagraph 2 and 3 of the previous Paragraph shall be less than the estimated loss arising from the payout subject to Subparagraph 1. However, in the event that there is any potential that will significantly endanger credit order and financial stability, the aforementioned requirement shall not apply if CDIC obtains consent of the competent authority in consultation with the Ministry of Finance and the Central Bank, and with the final approval of the Executive Yuan.
In the case of insufficiency of deposit insurance special reserves account for general financial sector or that for agricultural financial sector as a result of the CDIC's processing of matters under the proviso to the preceding Paragraph, the CDIC can charge special insurance premium from general financial insured institutions and agricultural financial insured institutions respectively. The special insurance premium rates and the collection period shall be drawn up by the CDIC and submitted to the competent authority for its approval.
The operating procedures of the fulfillment of the insurance responsibilities according to the stipulations in Paragraph 1 shall be drawn up by the CDIC and submitted to the competent authority for approval.

In the event that the competent authority or the central competent authority of the agricultural finance appoints any person to act as the conservator or to take over the authorities of the board of directors and supervisors of an insured institution by law, the CDIC may apply the provisions in Subparagraph 3 of Paragraph 1 and Paragraph 2 of the previous Article against other insured institutions or financial holding companies.
The CDIC may provide an insured institution with loans, deposits or other financial assistance, when all the following conditions are met: when the said institution is critically under-capitalized, and the competent authorities deem it non-viable and shall be closed; the aforesaid institution is put under conservatorship or the authorities of its board of directors and supervisors are taken over by the competent authorities; the resolution will cause the situations as stipulated under the proviso to Paragraph 2 of the preceding Article. Its operating procedure shall be drawn up by the CDIC and submitted to the competent authority for approval.
When the CDIC provides the aforesaid loans, deposits or other financial assistance to the insured institution under conservatorship or the credit department of farmers' or fishermen's association whose board of directors and supervisors authorities are taken over, it should request for the full amount of collateral from the financial holding company of the said institution, or any other insured institution that such financial holding company has dominant shares, or from any farmers' or fishermen's association possessing the said credit department.

In situations as stipulated under the proviso to Paragraph 2 of Article 28 if the CDIC is unable to consult with other insured institutions or financial holding companies to acquire or assume the closed insured institution according to Subparagraph 3 of Paragraph 1 of the same Article, it may set up a bridge bank to assume all or part of the business, assets and liabilities of the closed insured institution. However, if the value of the assets of the closed insured institution is greater than that of its liabilities, the receiver shall distribute the remaining assets to its original shareholders according to liquidation procedures.

In any action which the CDIC takes pursuant to the preceding three Articles or Paragraph 2 of Article 41, the CDIC may request the competent authority to negotiate with the Central Bank to receive its approval obtaining special financial accommodation within the range of collaterization.
If the aforesaid financial accommodation exceeds the value of the collateral provided by the CDIC, the competent authority may together with Ministry of Finance and the Central Bank submit to the Executive Yuan for its approval that the excess part shall be guaranteed by the National Treasury.
If the CDIC deems it necessary in case of emergency, and before applying to the Central Bank for special financial accommodation pursuant to the preceding Paragraph, the CDIC may borrow the funds from the other financial institutions. Bankruptcy-related rules of the Company Act and Bankruptcy Act shall not apply when the CDIC processes matters stipulated in the preceding three Articles and Paragraph 2 of Article 41.

A bridge bank is a legal entity and shall be set up upon approval by the competent authority and proceed with business registration. If the process of registration could not be done in a timely manner, it may be completed within fifteen days after the establishment.
The duration of a bridge bank shall not last for more than two years. However, the duration can be extended for one more year upon approval by the competent authority.
A bridge bank is an insured institution with no founding capital required. If necessary, the CDIC may provide working capital.

A bridge bank shall establish a board of directors to decide and execute business matters. The board shall be composed of five to nine directors with one being the chairman.
The chairman of the board shall carry out duties in accordance with board resolutions and represent the bridge bank publicly.
A bridge bank shall have one supervisor responsible for the supervision of the assets and business thereof.
The appointment of the chairman and the directors of the board and the supervisor shall be assigned by the CDIC.

A bridge bank may be exempted from Article 23, Paragraph 2 of Article 28, Article 32 to Article 33-5, Paragraph 2 of Article 36, Article 38 to Article 40, Article 44, Article 60, Article 72 to Article 76 of the Banking Act, when it continues operation within the scope of assumption on business, assets and liabilities of a closed insured institution. If necessary, it may also be exempted from Article 43 of the Banking Act and Article 25 of the Central Bank of Republic of China (Taiwan) Act after the competent authority consults with the Central Bank and grants their approval.
Regulations regarding the establishment of a bridge bank and its business management and operation shall be drawn up by the CDIC and shall be submitted to the competent authority for approval and promulgation.

The Bankruptcy Act shall not apply to a bridge bank.

In the event of any loss results from the categorical assignment of the business, major assets and liabilities to other insured institutions or liquidation of a bridge bank, it shall be set off from the general financial deposit insurance payout special reserves of the CDIC. If there is any insufficiency, it shall be recorded in the deferred account and shall be set off with the same reserves set aside in subsequent years on an annual basis. Earnings, if any, shall be recorded in the said reserves account.

Where a bridge bank assumes the businesses, assets and liabilities of a close insured institution according to Article 30, it may, when applying for registration of changes of the real estate owned by the closed institution, and the movable properties that require registration and all encumbrances of the said institutions, directly process the registration by the certificate issued by the competent authority without paying registration fees. The land value increment tax borne by the original land owner is allowed to be deferred under the name of the land acquirer; the same applies when another insured institution categorically assumes the business, assets and liabilities of the bridge bank according to the stipulation in the preceding Article. However, at the time when the land with the said deferred tax is being transferred from the bridge bank or from the insured institution assuming the bridge bank, the land value increment tax allowed to be deferred at each transfer shall be paid on a priority over all other creditors' rights and mortgage right in the price received from disposition of the said land.

The CDIC shall subrogate all rights of depositors and creditors against the insured institution to the extent of insurance payment in its own name, after taking any action as set forth in Article 28 to Article 30 and Paragraph 2 of Article 41.
When the CDIC takes any action as set forth in Article 28 to Article 30 and Paragraph 2 of Article 41, in case a financial holding company directly or indirectly causes its subsidiary insured institution to conduct any business which is contrary to normal business practices or not profitable, and thus causing the subsidiary insured institution to suffer damages, the CDIC may make compensation claims against such financial holding company on behalf of the said insured institution. The responsible people of the financial holding company shall be liable jointly and severally, with the financial holding company for such damages.
If the farmers' or fishermen's association transfers the properties owned by its credit department to other departments gratuitously or at an unreasonable price, or directly or indirectly causes its credit department to undertake unprofitable businesses, the CDIC may make compensation claims against the farmers' and fishermen's associations to the extent of its insurance payment. The responsible people of the farmers' or fishermen's association shall be liable jointly and severally, with the farmers' or fishermen's association for such damages.

Any action brought by the CDIC under this Act arising out of the transaction in Article 28 to Article 30 and Paragraph 2 of Article 41, may be exempted from The Government Procurement Act and Article 25 to Article 27 of the Budget Act.

Any insured institution publicly traded according to the Securities and Exchange Act that is disposed by the CDIC in accordance with Subparagraph 2 and 3 of Paragraph 1 of Article 28, or Paragraph 1of Article 29, shall make a public announcement and declaration as stipulated by Paragraph 2 of Article 36 of the Securities and Exchange Act and shall use the date of signing the contract as the date of the fact occurrence.

Upon the issue of an order of the competent authority or the central competent authority of the agricultural finance to close an insured institution, the CDIC shall be appointed as the receiver to commence the winding-up procedure, and the winding-up procedure shall apply to the related winding-up articles stipulated by the Banking Act.
To meet the liquidity needs of the creditors of the closed insured institution, the CDIC may, without increasing the costs incurred by the CDIC in taking any action under Paragraph 1 of Article 28, make advance payment against claims filed by the depositors beyond the maximum insurance coverage and by non-deposit creditors based on the anticipated reimbursement ratio derived from an evaluation of the values of assets of the closed insured institution. The aforesaid sums of the advance payment shall be counted item-by-item on the basis of the recovery order of the advance payment claims, and deducted first from the amount finally realized from the liquidation and repaid to the CDIC.
The regulation for calculating and operating the aforesaid advance payment in respect of the depositors beyond the maximum insurance coverage and non-deposit creditors based on the anticipated reimbursement ratio shall be drawn up by the CDIC and be submitted to the competent authority for approval.

When an insured institution is disposed of by the CDIC with the stipulations of this Act by the competent authority or the central competent authority of the agricultural finance for the exit or liquidation upon clearing off the debt, its deposit liabilities shall take precedence over non-deposit liabilities.
The aforementioned deposit liabilities shall mean the deposits stated in Article 12 of this Act; non-deposit liabilities shall mean liabilities other than the deposit liabilities of the insured institution.

Before handling any payout, the CDIC may offset the claims of depositors of a closed insured institution according to the following order of liabilities:
1. Liabilities created by deposits pledged as collateral of the closed insured institution.
2. Liabilities reaching due or deemed to be due according to the applicable agreements, or liabilities fit to be offset in accordance with other laws and regulations.
When the CDIC handling the offset according to Subparagraph 2 of the preceding Paragraph, the offset shall be handled according to the applicable agreements or laws and regulations. However, in the event that there is lack of such agreements or laws and regulations, the depositor's claim other than that insured by the CDIC shall be the offset against the debt first; where there is insufficiency, the insured deposit shall then be used for offset.

The amount of payout the CDIC liable for each depositor shall be the outstanding of deposits after the offset in accordance with the preceding Article up to the limit of the maximum insurance coverage.
The amount of deposits in joint accounts owned by two or more individuals shall be calculated according to the deposit agreement executed by the joint individuals and the closed insured institution. For any individual without such an agreement, the deposits should share equally among joint depositors. The amount of payout should be calculated by aggregating the deposits of the said joint individuals and those in the accounts opened by each of them in his or her own name.

In the event the amount of payout mentioned in Paragraph 1 of the preceding Article is under any of the following situations, it shall be temporarily withheld until the elimination of the causes for the withholding:
1. Deposits being seized by court order.
2. Deposits being mortgaged to a third party.
3. Depositors having already been served notice of bankruptcy with a bankruptcy trustee not yet being selected or in the event of depositor's death with the inheritance registration not yet being completed.
4. Other instances where payments may be withheld in accordance with related laws.