12 CFR 713.6 - What is the permissible deductible?

§ 713.6 What is the permissible deductible?
(a)
(1) The maximum amount of allowable deductible is computed based on a federal credit union's asset size and capital level, as follows:
Assets Maximum deductible
$0 to $100,000 No deductible allowed.
$100,001 to $250,000 $1,000.
$250,000 to $1,000,000 $2,000.
Over $1,000,000 $2,000 plus 1/1000 of total assets up to a maximum of $200,000; for credit unions that have received a composite CAMEL rating of “1” or “2” for the last two (2) full examinations and maintained a net worth classification of “well capitalized” under part 702 of this chapter for the six (6) immediately preceding quarters or, if subject to a risk-based net worth (RBNW) requirement under part 702 of this chapter, has remained “well capitalized” for the six (6) immediately preceding quarters after applying the applicable RBNW requirement, the maximum deductible is $1,000,000.
(2) The deductibles may apply to one or more insurance clauses in a policy. Any deductibles in excess of the above amounts must receive the prior written permission of the NCUA Board.
(b) A deductible may not exceed 10 percent of a credit union's Regular Reserve unless a separate Contingency Reserve is set up for the excess. In computing the maximum deductible, valuation accounts such as the allowance for loan losses cannot be considered.
(c) A federal credit union that has received a composite CAMEL rating of “1” or “2” for the last two (2) full examinations and maintained a net worth classification of “well capitalized” under part 702 of this chapter for the six (6) immediately preceding quarters or, if subject to a risk-based net worth (RBNW) requirement under part 702 of this chapter, has remained “well capitalized” for the six (6) immediately preceding quarters after applying the applicable RBNW requirement is eligible to qualify for a deductible in excess of $200,000. The credit union's eligibility is determined based on it having assets in excess of $1 million as reflected in its most recent year-end 5300 call report. A federal credit union that previously qualified for a deductible in excess of $200,000, but that subsequently fails to qualify based on its most recent year-end 5300 call report because either its assets have decreased or it no longer meets the net worth requirements of this paragraph or fails to meet the CAMEL rating requirements of this paragraph as determined by its most recent examination report, must obtain the coverage otherwise required by paragraph (b) of this section within 30 days of filing its year-end call report and must notify the appropriate NCUA regional office in writing of its changed status and confirm that it has obtained the required coverage.
[64 FR 28720, May 27, 1999, as amended at 70 FR 61716, Oct. 26, 2005; 77 FR 31992, May 31, 2012]

Title 12 published on 2014-01-01

no entries appear in the Federal Register after this date.

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United States Code

Title 12 published on 2014-01-01

The following are ALL rules, proposed rules, and notices (chronologically) published in the Federal Register relating to 12 CFR 713 after this date.

  • 2014-02-27; vol. 79 # 39 - Thursday, February 27, 2014
    1. 79 FR 11184 - Prompt Corrective Action—Risk-Based Capital
      GPO FDSys XML | Text
      NATIONAL CREDIT UNION ADMINISTRATION
      Proposed rule.
      Comments must be received on or before May 28, 2014.
      12 CFR Parts 700, 701, 702, 703, 713, 723, and 747