Starting July 1, banks must provide new deposit insurance disclosures for employee benefit plan accounts.

Under the 1991 banking law, whether insurance coverage passes through to each participant of a benefit plan depends on the bank's capital when the deposit is taken.

Well-capitalized banks are automatically eligible to offer insurance on these accounts, while adequately capitalized banks must get a waiver from the Federal Deposit Insurance Corp. Banks with less than adequate capital don't qualify.

To open an employee benefit plan account, a bank must disclose its capital ratio and tell the customer whether the deposit is insured.

In addition, when existing employee benefit accounts no longer qualify for insurance, the bank must let customers know in writing within 10 days.

To help banks comply with the new requirements, the FDIC has published two optional sample disclosures, one for new accounts and another for current ones that no longer qualify.

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