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Deposit Insurance Signage Display, Coverage Explanation and Confirmation Scheme
What is the Deposit Insurance Signage Display, Coverage Explanation and Confirmation Scheme?
Under the Depositor Protection Act, the scheme requires KDIC-insured member institutions to indicate whether the products they are selling are covered by deposit insurance and if so, for how much (including principal and interest) in marketing materials and other product information. It also requires them to provide an explicit explanation of that information and confirm the customer's understanding via signature, etc. when signing a financial contract. It aims to prevent mis-selling and thus avoid damage to financial consumers as well as member institutions.
What Does the Scheme for Deposit Insurance Signage Display Do?
- Depositor Protection Notice
- Member institutions should put the depositor protection notice in marketing materials, bankbooks, account information menu screen, etc. so that customers can easily check whether a financial product offered by them is covered by the KDIC and the details of that coverage.
- Management of the Registry of KDIC-insured Financial Products
- Member institutions must put together a registry of financial products covered by the KDIC that they offer, submit a copy to the KDIC and keep copies at branch offices.
- Management of Informational Materials on the Deposit Insurance System
- The KDIC can develop and distribute booklets and pamphlets on deposit insurance, and member institutions should keep or post them where customers can easily access them at their branches.
- Deposit Insurance Logo
- In accordance with the Depositor Protection Act and related regulations, the KDIC developed logos which provide an intuitive way to see whether a particular product is covered by deposit insurance and provided them to member institutions for use in bankbooks, brochures, posters, etc.
Logo for KDIC-insured Financial Products- Logo for Uninsured Financial Products
- Eligibiility of New Products for Deposit Insurance
- For every new product that they develop and market, member institutions must check with the KDIC whether it is eligible for deposit insurance protection before or after they make it available to customers.
What Does the Scheme for Customer Explanation Do?
- Explanation of Deposit Insurance Coverage
- When entering into a financial contract, officers of member institutions must explain the availability of deposit insurance coverage and the protection limit to the customer using documents and other means of communication (orally in a face-to-face setting).
- Priority of Information for People Who Lack Access to Financial Information
- Member institutions are required to explain deposit insurance coverage before any other information for those who may lack access to financial information like people aged 65 or over, retirees and housewices and get a confirmation of their understanding.
What Does the Scheme for Confirming Customer Understanding Do?
- Confirming the Customer's Understandings of Deposit Insurance Coverage
- Member institutions must get a confirmation that the customer has understood the availability of deposit insurance coverage and the protection limit via signature, signature and seal, audio recording, e-mail or other similar means of telecommunication, mail, authomated phone response and electronic signature.
On-site Inspection of Compliance with the Scheme
Under the Depositor Protection Act, the KDIC visits the branches or websites of member institutions to monitor their compliance with the requiresments of the scheme for deposit insurance signage, coverage explanation and confirmation. Any non-comliance or breach found during those inspections is punishable by a fine, etc. under the Depositor Protection Act.
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