| Article 28 |
（Fulfillment of insurance responsibilities）
When an insured institution ordered to suspend operations by the competent authority or the central competent authority of agricultural finance, the CDIC shall fulfill its insurance responsibilities by any of the following methods:
1. Make payouts by cash, remittance, transfer, or other payment methods according to the books and records of the suspended insured institution and the certificate of the 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 suspended 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 suspended insured institutions.
The estimated cost to the CDIC when it adopts the methods in Subparagraphs 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 from 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 the general financial sector or for the agricultural financial sector as a result of the CDIC's processing of matters under the proviso of the preceding Paragraph, the CDIC can charge special insurance premium from the 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 for fulfilling 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. |
| Article 29 |
（Liquidation or withdrawal measures for closure of insured institutions）
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 mutatis mutandis the provisions of Subparagraph 3 of Paragraph 1 and Paragraph 2 of the preceding Article to 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 the 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. |
| Article 30 |
（Establishment of bridge banks）
In situations as stipulated under the proviso of 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 and members according to liquidation procedures. |
| Article 31 |
（Special financial accommodation）
In any action that 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 for obtaining special financial accommodation within the range of collateralization.
If the aforesaid financial accommodation exceeds the value of the collateral provided by the CDIC, the competent authority may, together with the 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 an emergency, and before applying to the Central Bank for special financial accommodation pursuant to the preceding Paragraph, the CDIC may borrow the funds from 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. |
| Article 32 |
（Bridge bank）
A bridge bank is a juristic person and shall be set up upon approval by the competent authority and proceed with business registration. If the process of registration cannot 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. |
| Article 33 |
（Appointment of the chairman, directors, and supervisors of bridge banks）
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 chairperson.
The chairperson of the board shall carry out duties in accordance with board resolutions and represent the bridge bank.
A bridge bank shall have one supervisor responsible for the supervision of the assets and business thereof.
The appointment of the chairperson, the directors of the board, and the supervisor shall be assigned by the CDIC. |
| Article 34 |
（Bridge banks are not applicable to regulations of the Banking Act）
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 do not apply to a bridge bank when it continues operation within the scope of assumption on business, assets, and liabilities of a suspended insured institution. If necessary, Article 43 of the Banking Act and Article 25 of the Central Bank of the Republic of China (Taiwan) Act may not apply to the bridge bank 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. |
| Article 35 |
（Bridge banks are not applicable to regulations of the Bankruptcy Act）
The Bankruptcy Act shall not apply to a bridge bank. |
| Article 36 |
（Special reserve）
If the business, major assets, and liabilities of the bridge bank are assumed by other insured institutions, or after the business is suspended and liquidated, any losses 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. |
| Article 37 |
（Registration of change ）
Where a bridge bank assumes the businesses, assets, and liabilities of a suspended insured institution according to Article 30, it may, when applying for registration of the alteration of the real estate owned by the suspended 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 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 the disposition of the said land. |
| Article 38 |
（Joint liabilities）
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. |
| Article 39 |
（The Central Deposit Insurance Corporation is not governed by the Government Procurement Act and the Budget Act when fulfilling insurance responsibilities）
Any action taken by the CDIC according to Article 28 to Article 30 and Paragraph 2 of Article 41 of this Act, the Government Procurement Act, and Article 25 to Article 27 of the Budget Act shall not apply to the CDIC. |
| Article 40 |
（Announcements and regulatory reporting for the issuance of shares by insured institutions）
Any insured institution publicly issued its stock according to the Securities and Exchange Act that is disposed of by the CDIC in accordance with Subparagraphs 2 and 3 of Paragraph 1 of Article 28, or Paragraph 1 of 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 execution of the contract as the date of the fact occurrence. |
| Article 41 |
（Liquidation measures for closure of insured institutions）
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 suspended 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 insured amount and by non-deposit creditors based on the anticipated reimbursement ratio derived from an evaluation of the values of assets of the suspended 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 returned to the CDIC.
The regulation for calculating and operating the aforesaid advance payment in respect of the depositors beyond the maximum insured amount and non-deposit creditors based on the anticipated reimbursement ratio shall be drawn up by the CDIC and submitted to the competent authority for approval. |
| Article 42 |
（Sequence of priorities of the Central Deposit Insurance Corporation for processing withdrawals or clearing debts after suspension of business operations of insured institutions）
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. |
| Article 43 |
（clearing debts after suspension of business operations）
Before handling any payout, the CDIC may offset the claims of depositors of a suspended insured institution according to the following debts and orders:
1. Debts created by deposits pledged as collateral of the suspended insured institution.
2. Debts reaching due or deemed to be due according to the applicable agreements or debts fit to be offset in accordance with other laws and regulations.
When the CDIC handles 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 a lack of such agreements or laws and regulations, the depositor's claim other than that insured by the CDIC shall be offset against the debt first; where there is insufficiency, the insured deposit shall then be used for the offset. |
| Article 44 |
（Reimbursement amount）
The amount of payout the CDIC is liable for each depositor shall be the balance of the deposits after the offset in accordance with the preceding Article up to the limit of the maximum insured amount.
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 suspended insured institution. For any individual without such an agreement, the deposits should be shared 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 their name. |
| Article 45 |
（Conditions for temporary retention of reimbursement amount）
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. |