INSURANCE OF ACCOUNTS

Overview NCUA and NCUSIF Dollar Coverage Credit Union Records Insurance Classifications Non Personal Personal

NCUA AND NCUSIF The National Credit Union Administration (NCUA) is an independent agency of the U.S. Government and regulator of credit unions The National Credit Union Share Insurance Fund (NCUSIF) was established in 1970 and insures the deposit funds of member credit unions

Insurance Dollar Coverage Coverage is based on the account ownership Ownership categories are defined by NCUSIF Generally limited to a maximum of $100,000 in each ownership classification

Credit Union Records NCUSIF assumes that funds are owned as shown by the credit union’s records Records it considers Signature cards Certificates Corporate Resolutions Certain computer records

Non-Personal Classifications Corporate, Partnerships and Unincorporated Associations Independent Activity Definition of an Unincorporated Association Public Unit Employee Benefit Plans

Personal Classifications Single Ownership Individual Accounts Individual Accounts with POA Sole Proprietorship Accounts Decedent Estate Accounts Accounts held by Agents, Guardians Custodians or other Fiduciaries Accounts established in another ownership category that do not meet technical requirements for that category Probably Health Savings Accounts

Personal Classifications (Cont.) Joint Accounts Types of joint accounts JTWROS Tenancy in common Community Property Fiduciary Accounts held jointly for two or more persons

Personal Classifications (cont.) Joint Ownership Requirements Signature card All joint owner must sign the card All joint owners must have equal withdrawal rights All joint owners must be natural persons Failure to create a Joint Ownership Account Each owner’s interest is added to the owner’s single ownership account

Joint Insurance Calculation Account Number Account Owner Account Balance A Interest B Interest C Interest #1 A and B $160,000 $80,000 $0 #2 A and C $ 50,000 $25,000 Total $210,000 $105,000 $5,000 uninsured

Payable on Death and Revocable Trust Accounts Trust must be revocable – grantor must be able to change or cancel it at any time Beneficiary must be spouse, child, grandchild, parent, brother or sister of owner

IRA ACCOUNTS Traditional, Roth and SEPs IRA accounts are separately insured from other accounts a depositor may have. All of an individual’s deposits of Traditional, Roth and SEPs IRAs are added together and insured up to $100,000.

IRREVOCABLE TRUSTS An irrevocable trust is a trust for which the owner(grantor) does not reserve the right to change or revoke the trust agreement. Coverdell Educational Savings Accounts insured as irrevocable trust Beneficiary is insured up to $100,000 for each owner(grantor) – no relationship requirement for the beneficiary to the grantor Trust be valid under state law Credit union records must disclose the existence of the trust

SAMPLE INSURANCE OF ACCOUNT CALCULATIONS