Korea provided protection of up to KRW 20 million per depositor (or KRW 50 million won for insurance policyholders) when the deposit insurance scheme was first introduced. However, in the wake of the 1997 Asian financial crisis, blanket guarantees were temporarily introduced in order to minimize the impact of the restructuring of the financial system and ensure the stability of financial transactions. In 2001, limited coverage was reinstated. Since January 1, 2001, the KDIC has insured up to KRW 50 million per depositor including principal and designated interest in case an insured financial institution goes bankrupt due to an insurance contingency (e.g. business suspension, license revocation).

For the remaining amount that is not KDIC-insured, depositors can recover all or part of that when they receive bankruptcy dividends from the bankruptcy estate. The bankruptcy estate pays bankruptcy dividends from remaining assets, if any, after repaying senior debts.

The coverage limit of KRW 50 million is the total amount that a depositor can receive per institution. It is not calculated per type of deposit or per branch. ¡°Per depositor¡± means not only individuals, but also corporate entities. If a depositor of a failed financial institution has an outstanding debt to the institution, the debt will be deducted from the deposit (which is called a set-off) and the remaining amount will be protected.

Insured financial institutions include: banks, insurance companies (life insurers and non-life insurers), investment traders and brokers, merchant banks and mutual savings banks. On February 4, 2009, with the enactment of the Financial Investment Services and Capital Markets Act, asset management firms licensed under the said Act for investment brokerage and trading (excluding investment brokers engaged in electronic securities brokerage services as defined under Article 78 of the Financial Investment Services and Capital Markets Act) were included in coverage.

Local branches of foreign banks, the National Agricultural Cooperatives Federation (NongHyup) and the National Federation of Fisheries Cooperatives (SuHyup) are KDIC-insured. (However, local branches of NongHyup and SuHyup, the National Credit Unions¡¯ Federation of Korea and the Community Credit Cooperatives are not KDIC-insured. They are protected by their own funds established under the relevant legislation.)

The following is a list of KDIC-insured financial products based on information supplied by financial institutions. It may therefore not be accurate or up to date.

• 1 Financial products purchased by the government, local governments (including national, public schools), Bank of Korea, Financial Supervisory Service, KDIC or insured financial institutions are not insured.
• 2 Insurance policies of which the holders and premium payers are corporate entities are not protected. Retirement insurance policies are however excluded from this rule.
• 3 Money that is raised by an overseas branch of a member institution and deemed to be protected by the deposit insurance scheme of the host country is excluded from coverage.