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DEPOSITOR PROTECTION ACT

DEPOSITOR PROTECTION ACT

INTRODUCTION

Details of Enactment and Amendment

- Enactment: This Act was enacted on December 29, 1995 as Act No. 5042, in order to protect the depositors, etc. by operating a deposit insurance system, in preparation for the situations of financial institutions where under they are unable to pay back the deposits, etc., due to bankruptcy and other causes.
- Amendment: This Act has arrived at its present form as a result of being amended sixteen times subsequently to its enactment. The latest amendment was on July 29, 2005.

Main Contents

- Deposits or installment savings, etc. entrusted to the general banks, special banks, domestic branches of foreign banks, merchant banks, and mutual savings banks, the deposit money put in the securities companies, and the premiums, etc. paid to the insurance companies, shall be subject to the protection under this Act.
- Subject to the provisions of this Act, the depositors, etc. are entitled to their deposits, etc. within the limit of 50 million won even in the case of bankruptcy of the financial institutions.
- A Korea Deposit Insurance Corporation shall be established as an institution in charge of the operation of deposit insurance systems and the reorganization business, etc. of insolvent financial institutions.
- A Deposit Insurance Fund shall be established in the Korea Deposit Insurance Corporation, which is created by the contributions of the Government and financial institutions, the premiums paid by, and the issuance of bonds, etc. by, the financial institutions, in order to pay the deposit insurance and to make fund supports to the financial institutions.
- The Corporation shall pay, upon request by the depositors, etc., the insurance money when any insurance accident occurs, such as the suspension of paying back the deposits, etc., revocation of an authorization or permit for business of the financial institutions, resolution of dissolution, or declaration of bankruptcy, etc.
- The Korea Deposit Insurance Corporation may carry on the refund of claims including deposits, and the recovery of claims including loans, and other reorganization business of insolvent financial institutions, by establishing a reorganizing financial institution for the purpose of smooth reorganization of insolvent financial institutions.
- The Korea Deposit Insurance Corporation may, if necessary, contribute to the insolvent financial institutions, or purchase the securities retained by the insolvent financial institutions.
- The Korea Deposit Insurance Corporation may, when it has rendered any support from the public funds to the insolvent financial institutions, request that the relevant insolvent financial institutions claim for damages against the persons responsible for insolvency, and if necessary, may directly claim for damages, in subrogation of the financial institutions, against the persons responsible for insolvency.
- Assets and liabilities of the deposit insurance fund shall be settled by establishing a fund for redemption of deposit insurance fund bonds in the Korea Deposit Insurance Corporation for the purpose of smooth redemption of the public funds which have been invested for financial restructuring; and special contributions for redemption of deposit insurance fund bonds shall be imposed on insured financial institutions in order to create financial resources for redemption of the public funds.

DEPOSITOR PROTECTION ACT
Amended by Act No. 7615, Jul. 29, 2005

CHAPTER I GENERAL PROVISIONS

Article 1 (Purpose)
The purpose of this Act is to contribute to protecting depositors and maintaining the stability of financial system by efficiently operating a deposit insurance system in order to cope with a situation in which a financial institution is unable to pay deposits due to its bankruptcy. <Amended by Act No. 5492, Dec. 31, 1997>

Article 2 (Definitions)
For the purpose of this Act, the definitions of terms shall be as follows: <Amended by Act No. 5492, Dec. 31, 1997; Act No. 5556, Sep. 16, 1998; Act No. 6018, Sep. 7, 1999; Act No. 6323, Dec. 30, 2000; Act No. 6429, Mar. 28, 2001; Act No. 6807, Dec. 26, 2002; Act No. 6891, May 29, 2003; Act No. 7615, Jul. 29, 2005>
1.The term insured financial institutions means financial institutions which are the objects of application of deposit insurance as prescribed in this Act and which fall under any of the following items:
(a) Financial institutions authorized under Article 8 (1) of the Banking Act;
(b) The Korea Development Bank established under the Korea Development Bank Act;
(c) The Industrial Bank of Korea established under the Industrial Bank of Korea Act;
(d) Deleted; <by Act No. 5403, Aug. 30, 1997>
(e) The National Agricultural Cooperative Federation under the Agricultural Cooperatives Act;
(f) The National Federation of Fisheries Cooperatives under the Fisheries Cooperatives Act;
(g) Deleted; <by Act No. 6018, Sep. 7, 1999>
(h) The Long-Term Credit Bank under the Long-Term Credit Bank Act;
(i) Domestic branch offices and agencies of foreign financial institutions authorized under Article 58 (1) of the Banking Act (excluding domestic branch offices and agencies of foreign financial institutions as prescribed by the Presidential Decree);
(j) Securities companies which obtain permission to conduct the securities business as provided in Article 2 (8) 2 through 4 of the Securities and Exchange Act (excluding the securities companies as prescribed by the Presidential Decree from among those which exclusively conduct a business of buying and selling or brokerage of securities outside the securities market);
(k) Insurers who obtain permission as provided in Article 4 (1) of the Insurance Business Act (excluding insurers who mainly conduct re-insurance or guarantee insurance business and who are prescribed by the Presidential Decree);
(l) Merchant banks as prescribed in the Merchant Banks Act; and
(m) Mutual savings banks as prescribed in the Mutual Savings Banks Act;

2.The term deposits means those falling under any of the following items: Provided, That the scope may be restricted by the Presidential Decree:
(a) Money which insured financial institutions as provided in subparagraph 1 (a) through (i) (hereinafter referred to as banks ) have raised by bearing liabilities from the unspecified persons in the form of deposits, installment deposits, or installments, and money which they have raised through money trusts whose principals are compensated under Article 10 (3) of the Trust Business Act;
(b) Money which insured financial institutions as provided in subparagraph 1 (j) (hereinafter referred to as securities companies ) have received as a deposit from the customers in connection with buying and selling securities or with other transactions, and money which they have raised through money trusts whose principals are compensated under Article 10 (3) of the Trust Business Act;
(c) Insurance premiums which insured financial institutions as provided in subparagraph 1 (k) (hereinafter referred to as insurers ) have received according to the insurance contracts, and money which they have raised through money trusts whose principals are compensated under Article 10 (3) of the Trust Business Act;
(d) Money which insured financial institutions as provided in subparagraph 1 (l) (hereinafter referred to as merchant banks ) and the banks and securities companies that merged with a merchant bank, in accordance with the Act on the Structural Improvement of the Financial Industry, have raised pursuant to Article 7 (1) of the Merchant Banks Act by issuing bills and selling financial products to unspecified persons for the purpose of investing the funds in securities, and pay profits therefrom as dividends;
(e) Money which insured financial institutions as provided in subparagraph 1 (m) (hereinafter referred to as mutual savings banks ) have raised in the form of fraternity dues, installments, deposits and installment deposits; and
(f) Deleted; <by Act No. 6807, Dec. 26, 2002>
3.The term depositors means those who have claims such as deposits against insured financial institutions;
4.The term claims such as deposits means the capital, principal, interest, profits, insurance money, sundry payments and other agreed pecuniary claims which depositors have against insured financial institutions through financial transactions such as deposit;
5.The term insolvent financial institutions means the following insured financial institutions:
(a) Insured financial institutions of which the liabilities exceed their assets as a result of an actual examination of management or insured financial institutions the sound management of which is clearly difficult because their liabilities exceed their assets due to occurrence of large financial losses or non-performing claims, which are determined by the Financial Supervisory Commission or the Deposit Insurance Committee under Article 8;
(b) Insured financial institutions which are in suspension of payment for claims such as deposits or of redemption on borrowed money from other financial institutions; and
(c) Insured financial institutions for which the Financial Supervisory Commission or the Deposit Insurance Committee under Article 8 deems it difficult to pay for claims such as deposits or to redeem borrowed money without financial assistance or special borrowing (excluding borrowing incurred from ordinary financial transactions) from outside;
5-2.The term insolvency-threatened financial institutions means insured financial institutions which are concluded to have a high possibility of becoming insolvent financial institutions due to their weak financial standing by the Deposit Insurance Committee under Article 8;
6.The term financial assistance means the following items which the Korea Deposit Insurance Corporation established under Article 3 provides to be borne from a deposit insurance fund under Article 24 (1) (hereinafter referred to as the deposit insurance fund ) or a fund for redemption of deposit insurance fund bonds under Article 26-3 (1) (hereinafter referred to as the redemption fund ):
(a) Loaning or depositing of funds;
(b) Purchasing assets;
(c) Guaranteeing or accepting obligations; and
(d) Equity shares or contributions; and
7.The term insurance contingency means the following items:
(a)Insured financial institutions payment suspension of claims such as deposits (hereinafter referred to as the categoryoneinsurance contingency ); and
(b)Insured financial institutions cancellation of business authorization and permission, decision of dissolution or declaration of bankruptcy (hereinafter referred to as the categorytwoinsurance contingency ).

CHAPTER II KOREADEPOSITINSURANCE CORPORATION

SECTION 1 Common Provisions

Article 3 (Establishment)
For the purpose of efficiently operating a deposit insurance system, the Korea Deposit Insurance Corporation shall be established under this Act.

Article 4 (Juridical Person)
(1) The Korea Deposit Insurance Corporation (hereinafter referred to as the Corporation ) shall be a special juridical person having no capital.
(2) The Corporation shall be operated under this Act, orders issued under this Act, or the Articles of Incorporation.

Article 5 (Registration)
(1) The Corporation shall be registered as prescribed by the Presidential Decree.
(2) The Corporation shall be formed by registering its incorporation in the location of its main office.
(3) For matters which require registration under the provisions of paragraph (1), the Corporation shall not set up against third parties unless those matters happen following the registration.

Article 5-2 (Offices)
(1) The main office of the Corporation shall be at the Seoul Special Metropolitan City.
(2) The Corporation may, if necessary for conduct of its business, maintain branch offices or sub-branches under the conditions as prescribed by the Articles of Incorporation thereof.
[This Article Newly Inserted by Act No. 6807, Dec. 26, 2002]

Article 6 (Articles of Incorporation)
(1) In the Articles of Incorporation of the Corporation, the following matters shall be entered: <Amended by Act No. 6807, Dec. 26, 2002>
1.Purpose;
2.Name;
3.Location of office;
4.Matters relating to the deposit insurance fund and the redemption fund;
5.Matters relating to the Deposit Insurance Committee;
6.Matters relating to the Board of Directors;
7.Matters relating to the officers and the employees;
8.Matters relating to the business and execution thereof;
9.Matters relating to accounting;
10.Matters relating to changes in the Articles of Incorporation; and
11.Method of public notification.
(2) When the Corporation desires to change its Articles of Incorporation, it shall obtain the authorization of the Minister of Finance and Economy, after a resolution has been passed by the Deposit Insurance Committee established under the provisions of Article 8. <Amended by Act No. 5556, Sep. 16, 1998; Act No. 6807, Dec. 26, 2002>

Article 7 (Prohibition of Use of Similar Names)
None other than the Corporation shall use as its name, the Korea Deposit Insurance Corporation or other similar names.

SECTION 2 Deposit Insurance Committee

Article 8 (Deposit Insurance Committee)
(1) A Deposit Insurance Committee (hereinafter referred to as the Committee ) shall be established in the Corporation. <Amended by Act No. 6807, Dec. 26, 2002>
(2) The Committee shall establish the basic direction relating to the operation of the Corporation, under this Act, orders issued under this Act, or the Articles of Incorporation, and shall deliberate upon matters such as operation plans of the funds.

Article 9 (Composition of Committee)
(1) The Committee shall be composed of nine members as follows: <Amended by Act No. 5492, Dec. 31, 1997; Act No. 5556, Sep. 16, 1998; Act No. 6173, Jan. 21, 2000; Act No. 6323, Dec. 30, 2000>
1.The President of the Corporation;
2.The Vice Minister of Finance and Economy;
3.The Vice Minister of Planning and Budget;
4.The Vice Chairman of the Financial Supervisory Commission;
5. The Vice Governor of the Bank of Korea;
6.through 12.Deleted; and <by Act No. 6323, Dec. 30, 2000>

13.One member commissioned by the Minister of Finance and Economy, and three members commissioned by the Minister of Finance and Economy on the recommendation of the Minister of Planning and Budget, the Chairman of the Financial Supervisory Commission and the Governor of the Bank of Korea, respectively.
(2) Qualifications for members referred to in paragraph (1) 13 shall be prescribed by the Presidential Decree. <Amended by Act No. 5492, Dec. 31, 1997; Act No. 6173, Jan. 21, 2000>
(3) Each member referred to in paragraph (1) 13 shall be appointed for a term of three years, and may be re-appointed. <Amended by Act No. 5492, Dec. 31, 1997; Act No. 6173, Jan. 21, 2000>

Article 9-2 (Prohibition of Political Activities)
Notwithstanding the provisions of Article 6 of the Political Parties Act, a member provided in Article 9 (1) 13 shall not join any political party, nor participate in any political activity.
[This Article Newly Inserted by Act No. 6807, Dec. 26, 2002]

Article 9-3 (Guarantee of Members Status)
(1) A member provided in Article 9 (1) 13 shall not be discharged from his/her office against his/her own will during his/her term of office unless he/she falls under any of the following subparagraphs:
1.When he/she falls under any subparagraph of Article 16;
2.When he/she has great difficulty in performing his/her duties due to any mental or physical disability; and
3.When he/she becomes unfit for the discharge of his/her duties as a member for a violation of any duty under this Act.
(2) Where a member provided in Article 9 (1) 13 is discharged due to any such cause as referred to in paragraph (1), no act performed by him/her as a member before he/she is discharged shall lose its effect.
[This Article Newly Inserted by Act No. 6807, Dec. 26, 2002]

Article 10 (Operation)
(1) The office of Chairman of the Committee shall be assumed by the President of the Corporation.
(2) The Chairman shall represent the Committee and exercise general control over the business of the Committee.
(3) When the Chairman is unable to perform his duties for compelling reasons, the members under Article 9 (1) 2 through 5 in accordance with the order prescribed thereby shall assume the duties and responsibility of the Chairman. <Amended by Act No. 5492, Dec, 31, 1997; Act No. 6173, Jan. 21, 2000>
(4) The Committee shall make resolutions with the attendance of a majority of all the members and with the affirmative vote of a majority of the members present: Provided, That the financial assistance under Article 38-4 (3) shall be decided upon by the affirmative vote of two-thirds or more of all the members. <Amended by Act No. 6807, Dec. 26, 2002>
(5) through (9) Deleted. <by Act No. 6323, Dec. 30, 2000>

(10) The Committee shall prepare the minutes of the Committee, and make them public as determined by the Committee. <Newly Inserted by Act No. 6323, Dec. 30, 2000>
(11) The Committee may, if necessary, have those who are deemed to represent the insured financial institutions or the related specialists, etc. attend the Committee, and hear their opinions. <Newly Inserted by Act No. 6323, Dec. 30, 2000>
(12) Matters necessary for the operation of the Committee shall be prescribed by the Presidential Decree. <Amended by Act No. 5492, Dec, 31, 1997; Act No. 6323, Dec. 30, 2000>

SECTION 3 Officers and Employees

Article 11 (Officers)
(1) The Corporation shall have one President, one Vice President, not more than four Directors, and one Auditor. <Amended by Act No. 5492, Dec, 31, 1997; Act No. 6807, Dec. 26, 2002>
(2) The President shall be appointed and dismissed by the President of the Republic of Korea upon the recommendation of the Minister of Finance and Economy. <Amended by Act No. 5556, Sep. 16, 1998>
(3) The Vice President and Directors shall be appointed and dismissed by the Minister of Finance and Economy upon the recommendation of the President of the Corporation. <Amended by Act No. 5556, Sep. 16, 1998; Act No. 6807, Dec. 26, 2002>
(4) An Auditor shall be appointed and dismissed by the Minister of Finance and Economy. <Amended by Act No. 5556, Sep. 16, 1998>
(5) The President, the Vice President, the Directors and the Auditor (hereinafter referred to as officers ) shall be appointed for a term of three years, and may be re-appointed. <Amended by Act No. 6807, Dec. 26, 2002>
(6) When there is a vacancy among the officers, it shall be filled by a new appointment, and the term of office of the new appointee shall be reckoned from the date on which he was appointed.

Article 12 (Duties of Officers)
(1) The President shall represent the Corporation, and exercise general control over the business of the Corporation.
(2) The Vice President shall assist the President, and Directors assist the President and the Vice President; and each of them shall take partial charge of the business of the Corporation under the Articles of Incorporation. <Amended by Act No. 6807, Dec. 26, 2002>
(3) When the President is unable to perform his duties, an officer shall act as the President, in the order as provided for in the Articles of Incorporation.
(4) The Auditor shall inspect and audit the business and the accounting of the Corporation.

Article 13 (Guarantee of Officers' Status)
Except in cases falling under one of the following subparagraphs, no officer shall be discharged from his/her office against his/her own will before the end of his term:
1.The officers are under any of the subparagraphs of Article 16;
2.The officers have violated this Act, an order under this Act or the Articles of Incorporation; and
3.The officers have difficulty extremely in performing his/her duties due to mental or physical disability.

Article 14 (Board of Directors)
(1) The Board of Directors shall be established in the Corporation.
(2) The Board of Directors shall be composed of the President, Vice President, and Directors. <Amended by Act No. 6807, Dec. 26, 2002>
(3) The Board of Directors shall resolve principal matters relating to the business of the Corporation.
(4) The President shall convene the Board of Directors, and shall be the Chairman.
(5) The Board of Directors shall make resolutions with the attendance of a majority of all the members and with the affirmative vote of a majority of the members present.
(6) The Auditor may state his views by attending the meetings of the Board of Directors.

Article 15 (Appointment and Dismissal of Employees)
The President shall appoint and dismiss the employees of the Corporation.

Article 15-2 (Appointment of Legal Representatives)
(1) The President may appoint from among the Vice President, Directors, and employees of the Corporation legal representatives who shall have the authority to act on judicial or extrajudicial matters with respect to the business of the Corporation. <Amended by Act No. 6807, Dec. 26, 2002>
(2) The scope of employees who can be appointed as agents to act on trial under the provisions of paragraph (1) shall be prescribed by the Presidential Decree.
[This Article Newly Inserted by Act No. 6173, Jan. 21, 2000]

Article 15-3 (Request for Dispatch of Public Officials, etc.)
(1) The President may, where deemed necessary for the conduct of business, request the administrative agency, corporation, or organization concerned to dispatch a public official, officer, or employee under its control (hereafter in this Article referred to as the dispatched employee ). In this case, he/she shall do so after prior consultation with the Minister of Finance and Economy.
(2) In seeking consultation under the latter part of paragraph (1), the President shall submit to the Minister of Finance and Economy a document stating the number of dispatched employees, the period of dispatch, the reasons for a request for dispatch, and the qualifications for dispatched employees.
(3) The dispatched employees under paragraph (1) shall be regarded as the employees of the Corporation in connection with the conduct of business under Article 18.
[This Article Newly Inserted by Act No. 6807, Dec. 26, 2002]

Article 16 (Disqualifications)
A person who falls under any of the following subparagraphs shall not be an officer of the Corporation, and a person who falls under subparagraph 2 shall not be an employee of the Corporation: <Amended by Act No. 6323, Dec. 30, 2000>
1.A person who is not a national of the Republic of Korea; and
2.A person falling under any of subparagraphs of Article 33 of the State Public Officials Act.

Article 17 (Duty of Prohibition of Concurrent Positions)
(1) An officer and an employee shall not engage in any business activity for profit other than their respective positions, and may not engage in any other position without the approval of those authorized to appoint them. <Amended by Act No. 6807, Dec. 26, 2002>
(2) Deleted. <by Act No. 6807, Dec. 26, 2002>
(3) An officer or an employee of the Corporation, or a person who held such positions in the Corporation, shall not divulge any confidential information learned from performing his/her duties.

SECTION 4 Duties

Article 18 (Scope of Duties)
(1) The Corporation shall carry out duties listed in the following subparagraphs in order to achieve the purpose of this Act: <Amended by Act No. 5492, Dec, 31, 1997; Act No. 6323, Dec. 30, 2000; Act No. 6807, Dec. 26, 2002>
1.Management and operation of the deposit insurance fund;
1-2.Management and operation of the redemption fund;
1-3. Vicarious exercise of right to claim compensation for damages under Article 21-2;
2.Receipt of insurance premiums under the provisions of Article 30 and special contributions for redemption of deposit insurance fund bonds under the provisions of Article 30-3 (hereinafter referred to as the special contributions );
3.Payment of insurance money under the provisions of Articles 31 and 32;
4.Resolution of insolvent financial institutions under the provisions of Articles 35-2 through 38;
5.Duties incidental to the duties of subparagraphs 1 through 4;
6.Duties commissioned or designated by the Government for the protection of depositors; and
7.Other business as determined by other Acts and subordinate statutes.
(2) The Corporation may, after deliberation by the Committee, enact provisions necessary for the execution of its duties.

Article 19 Deleted.
<by Act No. 5492, Dec, 31, 1997>

Article 20 (Business Agency)
(1) The Corporation may, if necessary, mandate part of its duties to other agencies (hereinafter referred to as agencies ). <Amended by Act No. 5556, Sep. 16, 1998; Act No. 5702, Jan. 29, 1999>
(2) The scope of the agencies shall be prescribed by the Presidential Decree.

Article 21 (Request to Insured Financial Institutions for Submission of Data)
(1) The Corporation may request an insured financial institution and the financial holding company which has such insured financial institution as its subsidiary, etc. under the Financial Holding Companies Act to submit the data related to the business and financial status of such insured financial institution and financial holding company to the extent necessary for carrying out its duties such as the determination of the insured financial institution as an insolvent financial institution under subparagraph 5 of Article 2 or as a failing or insolvency-threatened financial institution under subparagraph 5-2 of Article 2, the establishment and receipt of insurance premiums and special contributions under Articles 30 and 30-3, the calculation and payment of insurance money under Articles 31 and 32, and the resolution of insolvent financial institutions under Articles 35-2 through 38. <Amended by Act No. 5492, Dec. 31, 1997; Act No. 6274, Oct. 23, 2000; Act No. 6323, Dec. 30, 2000; Act No. 6807, Dec. 26, 2002>
(2) Where an insured financial institution is deemed to be threatened with insolvency on the basis of the data, etc. submitted under paragraph (1) in the light of the standards as set by the Presidential Decree or its insurance contingency is not confirmed under paragraph (5), the Corporation may investigate the business and the financial status of the insured financial institution and the financial holding company which has such insured financial institution as its subsidiary, etc. under the Financial Holding Companies Act. <Amended by Act No. 5492, Dec. 31, 1997; Act No. 6274, Oct. 23, 2000; Act No. 6323, Dec. 30, 2000; Act No. 6807, Dec. 26, 2002>
(3) The Corporation may ask the Governor of the Financial Supervisory Service (hereinafter referred to as the Financial Supervisory Service Governor ) established under the Act on the Establishment, etc. of Financial Supervisory Organizations to conduct an examination of an insured financial institution and the financial holding company which has such insured financial institution as its subsidiary, etc. under the Financial Holding Companies Act and deliver the results of the examination, or to allow a member of the Corporation to participate jointly in the examination of such insured financial institution and financial holding company under the Financial Holding Companies Act, subject to a resolution of the Committee thereon, by setting the specific scope as deemed necessary to protect depositors and maintain the stability of the financial system. In this case, the Financial Supervisory Service Governor shall comply with such request, regardless of the provisions of Article 66 (3) of the Act on the Establishment, etc. of Financial Supervisory Organizations. <Amended by Act No. 5492, Dec. 31, 1997; Act No. 6274, Oct. 23, 2000; Act No. 6807, Dec. 26, 2002>
(4) Where it is deemed necessary for the protection of depositors, the Corporation may ask the Financial Supervisory Service Governor to present data relating to an insured financial institution and the financial holding company which has such insured financial institution as its subsidiary, etc. under the Financial Holding Companies Act by setting the specific scope. In this case, the Financial Supervisory Service Governor shall comply with such request. <Newly Inserted by Act No. 5556, Sep. 16, 1998; Act No. 6274, Oct. 23, 2000; Act No. 6807, Dec. 26, 2002>
(5) Where it is deemed necessary to judge the risks of insurance contingency by an insured financial institution, the Corporation may ask the Financial Supervisory Service Governor to ascertain within one month whether or not the data submitted under paragraph (4) are true through the examination, etc. of the insured financial institution and the financial holding company which has such insured financial institution as its subsidiary, etc. under the Financial Holding Companies Act. <Newly Inserted by Act No. 6807, Dec. 26, 2002>
(6) The Corporation may, in case where deemed that there exist the risks of insurance contingency as a result of investigations under paragraph (2), notify the Financial Supervisory Commission thereof and request it to take adequate measures. In this case, the Financial Supervisory Commission in receipt of such a request shall comply with such request unless there exist any special reasons. <Newly Inserted by Act No. 6323, Dec. 30, 2000>

Article 21-2 (Vicarious Exercise of Right to Claim Compensation for Damages, etc.)
(1) The Corporation may, when what falling under each of the following subparagraphs takes place, request any insolvent financial institution or any insolvency-threatened financial institution (hereinafter referred to as an insolvent financial institution, etc. , and including only in this Article the liquidated corporation or the bankrupt foundation) to seek compensation for damages from the former and present officers and employees deemed to be responsible for such insolvency and such fear to become insolvent, any person stipulated in each subparagraph of Article 401-2 (1) of the Commercial Act, the obligors who have failed to perform the obligations (if the obligors are the corporations, including the former and present officers and employees of relevant corporations, the persons stipulated in each subparagraph of Article 401-2 (1) of the Commercial Act, and the principal shareholders prescribed by the Presidential Decree) and any third person (hereinafter referred to as persons related to insolvency ): <Amended by Act No. 6323, Dec. 30, 2000>
1.Where payment of any insurance money is decided or such insurance money is paid under the provisions of Articles 31 and 34 (1);
2.Where any financial institution for resolution established pursuant to Article 36-3 (1) decides on takeover of business or contract, or payment of claims such as deposits or takes over business or contract, or pays claims such as deposits;
3.Where financial assistance is decided or financial assistance is provided under the provisions of Article 38; and
4.Deleted. <by Act No. 6323, Dec. 30, 2000>
(2) The request made by the Corporation under the provisions of paragraph (1) shall be in writing that specifies the reasons thereof, method of claim, and claim period.
(3) The Corporation may, if any insolvent financial institution, etc. does not comply with the request made under the provisions of paragraph (1), promptly claim compensation for damages on behalf of such insolvent financial institution, etc.
(4) The Corporation may, if any insolvent financial institution, etc. files a lawsuit to claim compensation for damages referred to in paragraph (1), participate in such suit to assist such insolvent financial institution, etc. during a period for which such suit is pending. In this case, the provisions of Articles 71 through 77 of the Civil Procedure Act shall be applied mutatis mutandis. <Amended by Act No. 6626, Jan. 26, 2002>
(5) Where the Corporation wins a lawsuit by exercising vicariously the right to claim compensation for damages under the provisions of paragraph (3) or participate under paragraph (4) in a lawsuit under paragraph (4) upon the request of an insolvent financial institution, etc., any expenses accruing therefrom shall be borne by such insolvent financial institution, etc.
(6) Where an insolvent financial institution, etc. goes bankrupt, any claim for expenses referred to in paragraph (5) which are not borne by such insolvent financial institution, etc. shall be deemed a foundation claim.
(7) The Corporation may, when deemed necessary to claim compensation for damages, to exercise vicariously the right to claim compensation for damages or to participate in a lawsuit under paragraphs (1) through (4), investigate the business and the status of property of the relevant insolvent financial institution, etc. and the persons related to insolvency: Provided, That the scope of any third person among the persons related to insolvency shall be limited to an accounting corporation or a certified public accountant. <Amended by Act No. 6323, Dec. 30, 2000; Act No. 6807, Dec. 26, 2002>
(8) The provisions of paragraphs (1) through (6) shall apply mutatis mutandis to any insured financial institution that survives after the takeover of any insolvent financial institution, etc. by a third person or a merger with insolvent financial institution, etc. In this case, the Corporation may ask such insured financial institution to furnish data necessary to claim compensation for damages from persons responsible for such insolvency or participate in any lawsuit, and such insured financial institution shall comply with such request from the Corporation unless special reasons exist for not complying with such request.
(9) The persons conducting the investigation under paragraph (7) shall carry the identification indicating their authority, and show it to the parties concerned. <Newly Inserted by Act No. 6323, Dec. 30, 2000>
(10) Matters necessary for the method and procedure, etc. for the investigation under paragraph (7) shall be prescribed by the Presidential Decree. <Newly Inserted by Act No. 6323, Dec. 30, 2000>
[This Article Newly Inserted by Act No. 6173, Jan. 21, 2000]

Article 21-3 (Request for Data)
(1) The Corporation may, when it is deemed necessary for the request for the claim of compensation for damages, the vicarious exercise of the right to claim compensation for damages or participation in a lawsuit under Article 21-2 (1) through (4), ask the heads of central administrative agencies concerned, local governments and public institutions prescribed by the Presidential Decree (hereafter referred to as pubic institutions in this Article) to furnish data or information pertaining to assets of persons involved in such insolvency.
(2) The heads of public institutions shall, upon receiving a request referred to in paragraph (1), comply with such request unless there exist any special reasons.
[This Article Newly Inserted by Act No. 6173, Jan. 21, 2000]

SECTION 5 Treasury and Accounting

Article 22 (Accounting)
The fiscal year of the Corporation shall be in accordance with the fiscal year of the Government.

Article 23 (Budget and Settlement of Accounts)
The budget and settlement of accounts of the Corporation shall be approved by the Minister of Finance and Economy through a resolution of the Committee. <Amended by Act No. 5556, Sep. 16, 1998>

Article 24 (Setting Up of Deposit Insurance Fund)
(1) A deposit insurance fund shall be established in the Corporation for the receipt of insurance premiums under Article 30, the payment of insurance money under Articles 31 and 32, the purchase of claims such as deposits under Article 35-2, investments under Article 36-3 (4), and the support of funds under Articles 36-5 (3) and 38. <Amended by Act No. 5492, Dec. 31, 1997; Act No. 5556, Sep. 16, 1998; Act No. 6323, Dec. 30, 2000; Act No. 6807, Dec. 26, 2002>
(2) The following subparagraphs shall be the sources of revenue for the deposit insurance fund: <Amended by Act No. 5492, Dec. 31, 1997; Act No. 5556, Sep. 16, 1998; Act No. 6323, Dec. 30, 2000; Act No. 6807, Dec. 26, 2002>
1.Contributions from insured financial institutions;
2.Contributions from the Government;
2-2.Funds created from the issuance of deposit insurance fund bonds;
2-3.State property granted by the Government to the Corporation under Article 24-2;
3.Borrowings under the provisions of Article 26;
4.Insurance premiums received under the provisions of Article 30 (1);
4-2.Funds collected from claims acquired under Article 35;
4-3. Funds collected from claims such as deposits purchased under Article 35-2;
5.Funds recovered from those funds provided for the resolution of insolvent financial institutions under the provisions of Article 36-5 (3), or 38; and
6.Operating profits of the deposit insurance fund and other revenues.
(3) The expenditure of the deposit insurance fund shall consist of insurance money, redemption of the principal and interest of deposit insurance fund bonds, payments to depositors under Article 35-2, investments under Article 36-3 (4), funds and related incidental expenses for supporting the resolution, etc. of insolvent financial institutions under Article 36-5 (3) or 38, redemption of borrowed money and its interest, and transfer, etc. to accounts managing funds necessary for the operation of the Corporation under Article 24-3 (1). <Amended by Act No. 5492, Dec. 31, 1997; Act No. 5556, Sep. 16, 1998; Act No. 6323, Dec. 30, 2000; Act No. 6807, Dec. 26, 2002>
(4) The contributions under the provisions of paragraph (2) 1 shall be determined separately for each insured financial institution by taking into account the balance of deposits of each insured financial institution, within the scope of not exceeding one percent (ten percent for merchant banks and mutual savings banks) of its paid-in capital or capital contribution. The amount, time and method of payment shall be prescribed by the Presidential Decree. <Amended by Act No. 5492, Dec. 31, 1997; Act No. 6429, Mar. 28, 2001>

Article 24-2 (Gratuitous Transfer of State Property)
(1) If the Government deems it necessary to protect depositors and assure the stability of the credit order, it may transfer the miscellaneous property under Article 4 (4) of the State Properties Act to the Corporation gratuitously, notwithstanding the provisions of Article 44 of the same Act.
(2) The transfer under paragraph (1) shall be subject to the prior consent of the National Assembly after the deliberation of the State Council and the approval of the President of the Republic of Korea: Provided, That if it is deemed particularly necessary to protect depositors and assure the stability of the credit order, such transfer shall only be subject to an ex post facto approval of the National Assembly.
[This Article Newly Inserted by Act No. 5421, Dec. 13, 1997]

Article 24-3 (Separate Audit of Accounts)
(1) The deposit insurance fund and the redemption fund shall keep their accounting separate from that of each other and the funds necessary for the operation of the Corporation. <Newly Inserted by Act No. 5556, Sep. 16, 1998; Act No. 6807, Dec. 26, 2002>
(2) The deposit insurance fund and the redemption fund shall establish separate accounts for banks, securities companies, insurers, merchant banks, mutual savings banks, and credit unions, and keep their accounting separate from each other, but for insurers, they shall be further separately audited as life insurance and non-life insurance. <Amended by Act No. 6429, Mar. 28, 2001; Act No. 6807, Dec. 26, 2002>
(3) The Committee shall determine an overall transfer of assets and liabilities between accounts under paragraph (2), transactions such as loans, transaction between accounts under paragraph (2) and the Corporation, and the methods, etc. of distributing expenses for the operation of the Corporation. <Amended by Act No. 5556, Sep. 16, 1998>
(4) The deposit insurance fund and the redemption fund may not have transaction relations with each other. <Newly Inserted by Act No. 6807, Dec. 26, 2002>
[This Article Newly Inserted by Act No. 5492, Dec. 31, 1997]

Article 25 (Operation of Surplus Cash)
When there is a cash surplus in the deposit insurance fund and the redemption fund, the Corporation may use such surplus in accordance with the methods falling under the following subparagraphs: <Amended by Act No. 5492, Dec. 31, 1997; Act No. 5556, Sep. 16, 1998; Act No. 6807, Dec. 26, 2002>
1.Purchase of government bonds and public bonds, or other securities designated by the Committee;
2.Deposit in insured financial institutions designated by the Committee; and
3.Other methods prescribed by the Minister of Finance and Economy.

Article 26 (Loan)
(1) When necessary for the matters as provided in the following subparagraphs, the Corporation may, notwithstanding the provisions of Article 79 of the Bank of Korea Act, borrow funds at the account of the deposit insurance fund or the redemption fund from the Government, the Bank of Korea, insured financial institutions or other institutions as determined by the Presidential Decree, subject to prior approval of the Minister of Finance and Economy, as prescribed by the Presidential Decree: Provided, That in the case of subparagraph 3, borrowing from the Bank of Korea shall be temporary (the period thereof shall not be longer than one year): <Amended by Act No. 6807, Dec. 26, 2002>
1.Execution of duties under Article 18 (1) 3 and 4;
2.Redemption of the principal of and the interest on, deposit insurance fund bonds, or borrowings borne by the deposit insurance fund; and
3.Expenditure under Article 26-3 (3) 1 through 3.
(2) The Government may guarantee the redemption of the principal of and the interest on borrowings from the Bank of Korea under paragraph (1). <Newly Inserted by Act No. 5492, Dec. 31, 1997>

Article 26-2 (Issue of Deposit Insurance Fund Bonds)
(1) The Corporation may issue deposit insurance fund bonds at the account of the deposit insurance fund through a decision by the Committee to raise funds necessary for the protection of depositors and the stability of the credit order. <Amended by Act No. 6807, Dec. 26, 2002>
(2) Where the Corporation intends to issue deposit insurance fund bonds, it shall determine the amount, terms, and the methods of issuance and redemption at every issuance and report them to the Minister of Finance and Economy. <Amended by Act No. 5556, Sep. 16, 1998; Act No. 6807, Dec. 26, 2002>
(3) The necessary matters for the issuance of deposit insurance fund bonds shall be determined by the Committee. <Amended by Act No. 6807, Dec. 26, 2002>
(4) The extinctive prescription of deposit insurance fund bonds shall terminate at the lapse of five years for principal and two years for interest. <Amended by Act No. 6807, Dec. 26, 2002>
(5) The Government may guarantee the redemption of the principal of and interest on deposit insurance fund bonds. <Amended by Act No. 6807, Dec. 26, 2002>
(6) Deposit insurance fund bonds shall be deemed bonds under Article 2 (1) 3 of the Securities and Exchange Act. <Amended by Act No. 6807, Dec. 26, 2002>
[This Article Newly Inserted by Act No. 5492, Dec. 31, 1997]

Article 26-3 (Establishment, etc. of Fund for Redemption of Deposit Insurance Fund Bonds)
(1) A fund for redemption of deposit insurance fund bonds shall be established at the Corporation to adjust the debts incurred by the deposit insurance fund (limited to those incurred by December 31, 2002) in the course of backing the restructuring of insured financial institutions.
(2) The following subparagraphs shall be the sources of revenue for the redemption fund:
1.Contributions from the fund for redemption of public funds under Article 4 of the Fund for Management and Redemption of Public Funds Act;
2.Funds raised by the issuance of fund bonds for redemption of deposit insurance fund bonds under paragraph (4) (hereinafter referred to as redemption fund bonds );
3.Borrowings under Article 26 (1);
4.Special contributions paid under Article 30-3;
5.Funds collected from claims acquired under Article 35;
6.Funds collected from claims such as deposits purchased under Article 35-2;
7.Funds recovered from those funds provided for the resolution, etc. of insolvent financial institutions under Article 36-5 (3) or 38; and
8.Operating profits of the redemption fund and other revenues.
(3) The redemption fund shall be used for the following:
1.Redemption of the principal of and the interest on deposit insurance fund bonds (limited to those issued by December 31, 2002) and redemption fund bonds;
2.Insurance money, payments to depositors under Article 35-2, and support money and incidental expenses for the resolution, etc. of insolvent financial institutions under Article 36-5 (3) or 38;
3.Redemption of borrowings and interest thereon; and
4.Transfer to the management account of funds necessary for the operation of the Corporation under Article 24-3 (1).
(4) The Corporation may, where necessary for redemption of the principal and interest of deposit insurance fund bonds and redemption fund bonds, issue redemption fund bonds at the redemption fund account subject to a resolution by the Committee thereon. In this case, the provisions of Article 26-2 (2) through (6) shall apply mutatis mutandis.
[This Article Newly Inserted by Act No. 6807, Dec. 26, 2002]

SECTION 6 Supervision

Article 27 (Supervision)
(1) The Minister of Finance and Economy shall guide and supervise the duties of the Corporation, and may give necessary orders. <Amended by Act No. 5556, Sep. 16, 1998>
(2) When a disposition of the Corporation under this Act is unlawful, or when deemed necessary for the protection of depositors, the Minister of Finance and Economy may cancel all or part of such disposition, or suspend the execution of such disposition. <Amended by Act No. 5556, Sep. 16, 1998>

Article 28 (Report and Inspection)
(1) When deemed necessary, the Minister of Finance and Economy may have the Corporation report matters pertaining to its duties, accounting, and properties, or have public officials who belong to the Minister of Finance and Economy examine the state of the Corporation s business, books and records, documents, facilities, or other matters. <Amended by Act No. 5556, Sep. 16, 1998>
(2) Where the public officials who belong to the Minister of Finance and Economy conduct an examination under the provisions of paragraph (1), such officials shall carry certificates indicating their authorities and show the certificates to the relevant person.

CHAPTER III DEPOSIT INSURANCE

Article 29 (Insurance Relations)
(1) Insurance relations among the Corporation, an insured financial institution, and depositors shall be formed and effected when a depositor holds claims such as deposits against an insured financial institution. <Amended by Act No. 5492, Dec. 31, 1997>
(2) Any insured financial institution shall indicate whether insurance relations have been created and their contents under paragraph (1) on such terms and conditions as the Corporation may determine. <Newly Inserted by Act No. 5492, Dec. 31, 1997; Act No. 5556, Sep. 16, 1998>
(3) The Corporation may investigate whether any insured financial institution has indicated whether insurance relations have been built and their contents under the provisions of paragraph (2). <Newly Inserted by Act No. 6173, Jan. 21, 2000>

Article 30 (Payment of Premiums)
(1) Each insured financial institution shall pay to the Corporation as insurance premiums the amount (one hundred thousand won where the amount is less than one hundred thousand won) calculated by multiplying a balance of deposits (an amount as determined by the Presidential Decree in consideration of liability reserves under Article 120 of the Insurance Business Act for insurers) by the rate as determined by the Presidential Decree not exceeding 5/1,000. In this case, the rate may be set differently taking into account the management and financial status by insured financial institutions and accumulated amounts of accounts under Article 24-3 (2). <Amended by Act No. 5556, Sep. 16, 1998; Act No. 6891, May 29, 2003>
(2) Notwithstanding the provisions of paragraph (1), with regard to an insured financial institution falling under any of the following subparagraphs, the Corporation may, through a resolution of the Committee, reduce all or part of the contributions under Article 24 (2) 1 and of the insurance premiums and arrears under paragraphs (1) and (3), or defer their payment by fixing a specified period: <Amended by Act No. 5492, Dec. 31, 1997; Act No. 6807, Dec. 26, 2002>
1.An insured financial institution which is related to an insurance contingency when such insurance contingency occurs; and
2.An insured financial institution about which, in view of its financial status, there is concern over the possibility of a suspension of payment of deposits or whose sound business is extremely difficult.
(3) Where an insured financial institution does not pay the insurance premiums referred to in paragraph (1), by the specified time, such insured financial institution shall pay to the Corporation arrears in addition to the insurance premiums as prescribed by the Presidential Decree. <Amended by Act No. 5492, Dec. 31, 1997>
(4) The method and time of payment and other necessary matters pertaining to the insurance premiums and arrears under the provisions of paragraphs (1) and (3) shall be prescribed by the Presidential Decree.
(5) The Corporation shall have the right to receive the contributions under Article 24 (2) 1 and the insurance premiums and arrears under paragraphs (1) and (3) to be paid by the insured financial institutions whereto an insurance contingency takes place, in preference to other bonds, next to the national and local taxes. <Newly Inserted by Act No. 6323, Dec. 30, 2000; Act No. 6807, Dec. 26, 2002>

Article 30-2 (Obligation of Insured Financial Institutions to Maintain Confidentiality)
Any insured financial institution and its officers and employees (including persons who have served as officers and employees) shall be prohibited from using contents of insurance premiums set differently by insured financial institution under the provisions of the latter part of Article 30 (1) for any advertisements, making public or leaking such insurance premiums to persons other than the officers and employees of the insured financial institution concerned: Provided, That the same shall not apply to the case where it is deemed necessary to protect depositors and to the case of contents prescribed by the Presidential Decree.
[This Article Newly Inserted by Act No. 6173, Jan. 21, 2000]

Article 30-3 (Special Contributions for Redemption of Deposit Insurance Fund Bonds)
(1) Insured financial institutions shall every year pay to the Corporation the amount of money (if it is less than one hundred thousand won, one hundred thousand won) obtained by multiplying the remainder of deposits (in the case of an insurer, the amount of money as determined by the Presidential Decree in consideration of the liability reserves under Article 120 of the Insurance Business Act) by such a rate as determined by the Presidential Decree within the limit of 0.3 percent, as annual special contributions. <Amended by Act No. 6891, May 29, 2003>
(2) The provisions of Article 30 (2) through (5) shall apply mutatis mutandis to the payment of special contributions under paragraph (1).
[This Article Newly Inserted by Act No. 6807, Dec. 26, 2002]

Article 31 (Payment of Insurance Money)
(1) When an insurance contingency occurs to an insured financial institution, the Corporation shall pay the insurance money, upon the request of the depositors of the insured financial institution concerned: Provided, That with respect to a categoryoneinsurance contingency, there shall be a payment decision of the insurance money under the provisions of Article 34. <Amended by Act No. 5492, Dec. 31, 1997>
(2) In case of a category one insurance contingency, the Corporation may in advance pay the depositors part of their claims such as deposits upon the request of depositors as prescribed by the Presidential Decree. <Amended by Act No. 5492, Dec. 31, 1997>
(3) The Corporation shall make public notification as to the initiation date of payment of insurance money, its duration, payment method, and other necessary matters under the provisions of paragraph (1) or (2) as prescribed by the Presidential Decree. <Amended by Act No. 6173, Jan. 21, 2000>
(4) An insured financial institution which is newly established due to a merger or conversion, an insured financial institution which survives after a merger, or an insured financial institution after a conversion, and an insured financial institution which no longer exists due to such a merger or conversion or an insured financial institution before such a conversion shall be deemed to exist as independent insured financial institutions in the application of the provisions of paragraph (1) for one year from the date of registration of the merger or the date of registration of the conversion. <Amended by Act No. 6807, Dec. 26, 2002>
(5) Where a categorytwoinsurance contingency occurs after a categoryone insurance contingency, the categorytwoinsurance contingency shall not be deemed to be an independent insurance contingency in applying the provisions of paragraph (1). <Newly Inserted by Act No. 5556, Sep. 16, 1998>
(6) The Corporation may, in paying the insurance money under paragraph (1), where the depositors correspond to the persons related to insolvency under Article 21-2 (1) or are in the special relations prescribed by the Presidential Decree with the persons related to insolvency, reserve the payment of insurance money within the limit of 6 months from the date of public notice on the initiation date, etc. of payment of insurance money under paragraph (3) (hereinafter referred to as the date of public notice on payment of insurance money ), under the conditions as prescribed by the Presidential Decree, against the claims such as deposits of the relevant depositors. <Newly Inserted by Act No. 6323, Dec. 30, 2000>
(7) The limitation of the right by depositors to claim the insurance money under the provisions of paragraph (1) shall be extinguished unless such right is exercised for five years from the initiation date of payment referred to in paragraph (3). <Newly Inserted by Act No. 6173, Jan. 21, 2000>
(8) In payment of the insurance money under paragraph (1), the Corporation may set up against the holder of the right to claim the insurance money with a plea which the insured financial institution, to which the insurance contingency occurred, has against the depositors. <Newly Inserted by Act No. 6807, Dec. 26, 2002>

Article 32 (Calculation, etc. of Insurance Money)
(1) The insurance money paid to each depositor by the Corporation under the provisions of Article 31 shall be the amount obtained by deducting the total amount of debts (excluding surety obligations) owed by each depositor to his corresponding insured financial institution from the total amount of claims such as deposits of each depositor as of the date of public notice on payment of insurance money: Provided, That this shall not apply where it is otherwise determined by the Presidential Decree. <Amended by Act No. 5492, Dec. 31, 1997; Act No. 5556, Sep. 16, 1998; Act No. 6323, Dec. 30, 2000>
(2) The maximum amount of insurance money under paragraph (1) shall be limited to the amount as determined by the Presidential Decree in view of the amount of per capita gross domestic production and the size of protected deposits. <Amended by Act No. 6323, Dec. 30, 2000>
(3) Where there is an amount received in advance (hereinafter referred to as provisional payment ) by each depositor under the provisions of Article 31 (2), the insurance money shall be the amount obtained by deducting the provisional payment from the amount referred to in paragraphs (1) and (2).
(4) Where the amount of the provisional payment paid to each depositor exceeds the insurance money under the provisions of paragraphs (1) and (2), the depositor shall return such excess amount to the Corporation.

Article 33 (Notification of Insurance Contingency, etc.)
(1) When an insurance contingency occurs, an insured financial institution shall promptly notify the Corporation of such fact without delay. <Amended by Act No. 5702, Jan. 29, 1999>
(2) Where one of the following events occurs, the Minister of Finance and Economy, the Financial Supervisory Commission or the Financial Supervisory Service Governor shall promptly notify the Corporation: <Amended by Act No. 5492, Dec. 31, 1997; Act No. 5556, Sep. 16, 1998; Act No. 7428, Mar. 31, 2005>
1.When a suspension of payment of claims such as deposits or suspension of business of an insured financial institution is ordered;
2.When the authorization or permission of business for an insured financial institution is cancelled, or the dissolution resolution of an insured financial institution is approved; and
3.When a notification, under the provisions of Article 115 of the Bankruptcy Act, is received from the court.
3.When a notification, under the provisions of Article 115 of the Debtor Rehabilitation and Bankruptcy Act, is received from the court. Enforcement Date: Apr. 1, 2006

Article 34 (Payment Decision)
(1) In case of a category one insurance contingency, in accordance with a resolution of the Committee, the Corporation shall make a decision on whether or not to pay the insurance money within two months from the date of the receipt of the notification, under the provisions of Article 33. <Amended by Act No. 5492, Dec. 31, 1997>
(2) The Corporation, by obtaining the approval from the Minister of Finance and Economy, may extend the time limit of paragraph (1) by a period not exceeding one month. <Amended by Act No. 5556, Sep. 16, 1998>
Article 35 (Acquisition of Claims)
The Corporation, within the scope of such payment, shall acquire the rights of the depositors against the insolvent financial institution, when it pays insurance money and provisional payment. <Amended by Act No. 5492, Dec. 31, 1997>

CHAPTER IV LIQUIDATIONOFINSOLVENT FINANCIAL INSTITUTIONS

Article 35-2 (Purchase of Claims such as Deposits)
(1) Where the Corporation pays insurance money under Article 31 (1), it may purchase claims such as deposits related to such insurance contingency concerned.
(2) The Corporation shall, in purchasing claims such as deposits under paragraph (1), pay an amount obtained by estimating the worth of claims such as deposits (hereinafter referred to as estimated payment ) under paragraph (3) upon the request of depositors. In this case, where an amount calculated by deducting actually paid expenses from the collected claims such as deposits which have been purchased by the Corporation exceeds an estimated payment, it shall pay the excess amount additionally to the depositors.
(3) An estimated payment shall be the amount calculated by multiplying the value of claims such as deposits purchased by the Corporation from such depositors based on the date of public notice on payment of insurance money (excluding claims such as deposits equivalent to surety obligations of depositors liable for it, and claims such as deposits which are the object of collateral) by estimated payment rates under Article 35-3. <Amended by Act No. 5556, Sep. 16, 1998>
[This Article Newly Inserted by Act No. 5492, Dec. 31, 1997]

Article 35-3 (Estimated Payment Rates)
Where the Corporation purchases claims such as deposits under Article 35-2 (1), it shall, if the bankruptcy proceedings are initiated in the light of financial status of the relevant insolvent financial institution, determine estimated payment rates, taking into consideration an estimated amount to be reimbursed for claims such as deposits related the insolvent financial institution concerned.
[This Article Newly Inserted by Act No. 5492, Dec. 31, 1997]

Article 35-4 (Approval for Payment of Estimated Payment)
Where the Corporation intends to pay an estimated payment under Article 35-2 (2), it shall obtain approval from the Minister of Finance and Economy through a resolution by the Committee, after determining estimated payment rates under Article 35-3, and the period and method of purchase of claims such as deposits. <Amended by Act No. 5556, Sep. 16, 1998>
[This Article Newly Inserted by Act No. 5492, Dec. 31, 1997]

Article 35-5 (Purchase Announcement)
Where the Corporation obtains approval under Article 35-4, it shall publicly announce the fact, in such manner as prescribed by the Presidential Decree.
[This Article Newly Inserted by Act No. 5492, Dec. 31, 1997]

Article 35-6 (Korea Deposit Insurance Corporation s Right of Setoff by Subrogation)
The Corporation may, on behalf of depositors, set off claims such as deposits of respective depositors (excluding claims such as deposits offered by depositors to relevant insured financial institutions as collateral for others) and obligations (excluding surety obligations) for which depositors are liable to the relevant insured financial institutions as of the date of payment announcement of insurance money.
[This Article Newly Inserted by Act No. 5556, Sep. 16, 1998]

Article 35-7 (Duties of Managers)
Where the officers or employees of the Corporation are appointed as managers under the provisions of Article 14-6 (1) of the Act on the Structural Improvement of the Financial Industry, the provisions of Article 21-3 shall apply mutatis mutandis to their duties. <Amended by Act No. 6807, Dec. 26, 2002>
[This Article Newly Inserted by Act No. 6173, Jan. 21, 2000]

Article 35-8 (Duties of Liquidators or Bankruptcy Trustees)
(1) Where an insured financial institution (including one whose contracts are decided to be transferred under the Act on the Structural Improvement of the Financial Industry and to which the Corporation intends to give financial assistance), which is subject to the payment of insurance money or the provision of financial assistance by the Corporation, is dissolved or goes bankrupt, a court shall appoint the Corporation or one of its officers and employees as a liquidator or bankruptcy trustee to efficiently collect the funds provided, regardless of the provisions of Article 531 of the Commercial Act or Article 147 of the Bankruptcy Act and the provisions of any Act governing the appointment of a liquidator or bankruptcy trustee. <Newly Inserted by Act No. 6807, Dec. 26, 2002>
(2) Where the Corporation is appointed as a liquidator or bankruptcy trustee under paragraph (1), the provisions of Article 539 (2) of the Commercial Act and Articles 157, 187, and 188 of the Bankruptcy Act shall not apply. <Newly Inserted by Act No. 6807, Dec. 26, 2002>
(3) Where a shareholders meeting is not held under the provisions of Articles 533 (1) and 540 (1) of the Commercial Act after the Corporation or one of its officers and employees has been appointed as a liquidator under paragraph (1), the Financial Supervisory Commission s approval shall be considered approval from such shareholders meeting. <Amended by Act No. 6323, Dec. 30, 2000; Act No. 6807, Dec. 26, 2002>
(4) Where the Corporation or one of its officers and employees has been appointed as a liquidator or bankruptcy trustee under paragraph (1), the provisions of Article 21-3 shall apply mutatis mutandis to his duties. <Amended by Act No. 6323, Dec. 30, 2000; Act No. 6807, Dec. 26, 2002>
(5) The Corporation or one of its officers and employees who has been appointed as a liquidator or bankruptcy trustee under paragraph (1) shall be prohibited from claiming any remunerations for his duties: Provided, That the same shall not apply to justifiable expenses which have been spent to perform his duties. <Amended by Act No. 6323, Dec. 30, 2000; Act No. 6807, Dec. 26, 2002>
[This Article Newly Inserted by Act No. 6173, Jan. 21, 2000]

Article 35-9 (Subscription to Liability Insurance)
(1) The Corporation may request the insured financial institutions (limited to the insured financial institutions satisfying the criteria determined by the Presidential Decree) to subscribe to the insurance to make up for the damages to the property of relevant insured financial institutions due to the default or delict of the officers and employees of relevant insured financial institutions (hereinafter referred to as the liability insurance ).
(2) The Corporation may, in case where the insured financial institution fails to comply with the request for subscribing to the insurance under paragraph (1), conclude a contract subscribing to the insurance in behalf of the relevant insured financial institutions.
(3) The Corporation may, in case where the insured financial institution fails to bear the insurance premiums, etc. of a contract of the insurance subscription concluded under paragraph (2), deduct such an amount from the insurance premium paid by the relevant insured financial institution under Article 30 (1). In this case, the amount equivalent to it shall be considered to have been unpaid as the insurance premium.
(4) Matters necessary for the request for subscription to the liability insurance under paragraph (1) or (2), or the method and procedure for the proxy shall be prescribed by the Presidential Decree.
[This Article Newly Inserted by Act No. 6323, Dec. 30, 2000]

Article 36 (Good Offices for Mergers, etc.)
The Corporation may offer good offices for the merger, transfer or business takeover by third parties between the insolvent financial institutions, etc. or the financial holding company which has the relevant insolvent financial institution as its subsidiary, etc. under the Financial Holding Companies Act (hereinafter referred to as merger between insolvent institutions, etc. ), in case where deemed necessary for the protection of depositors, etc. and the maintenance of financial system s stability. <Amended by Act No. 5492, Dec. 31, 1997; Act No. 6323, Dec. 30, 2000>

Article 36-2 (Request for Contract Transfers, etc.)
(1) Where deemed necessary for the protection of depositors and where any insolvent financial institution falls below standards as determined by the Presidential Decree, the Corporation may request the Financial Supervisory Commission to take necessary measures against the insolvent financial institution, such as ordering the transfer of contracts and application for bankruptcy, etc.
(2) The Financial Supervisory Commission which has been requested by the Corporation under paragraph (1) shall notify the Corporation of the results without delay.
[This Article Newly Inserted by Act No. 5492, Dec. 31, 1997]

Article 36-3 (Establishment of Financial Institution for Resolution)
(1) The Corporation may establish a financial institution for taking over business or contracts of insolvent financial institutions or conducting resolution process (hereinafter referred to as the financial institution for resolution ) on approval by the Minister of Finance and Economy as deemed necessary for the protection of depositors and maintenance of stability of the financial system. <Amended by Act No. 5556, Sep. 16, 1998; Act No. 6173, Jan. 21, 2000>
(2) Any financial institution for resolution shall be a stock company.
(3) The Corporation shall prepare the Articles of Incorporation of a financial institution for resolution including the following matters: <Newly Inserted by Act No. 5556, Sep. 16, 1998>
1.Purpose;
2.Name;
3.Total amount of capital stock;
4.Total number of stocks issued at its incorporation;
5.Face value per stock;
6.Site of its main office; and
7.Method of public notice.
(4) The capital stock of any financial institution for resolution shall be invested in full by the Corporation from the deposit insurance fund s charge. <Amended by Act No. 5556, Sep. 16, 1998; Act No. 6807, Dec. 26, 2002>
(5) Any financial institution for resolution may use titles such as bank, securities company, insurer, merchant bank, mutual savings bank or credit union, and the provisions of Articles 35 through 36, 37 through 39 shall apply to such institution as it is deemed an insolvent financial institution with regard to the resolution of insolvent financial institutions. <Amended by Act No. 6429, Mar. 28, 2001>
[This Article Newly Inserted by Act No. 5492, Dec. 31, 1997]

Article 36-4 (Appointment and Powers of Officers)
(1) Any financial institution for resolution shall have a President, not more than two Directors, and an Auditor.
(2) The President, Directors, and Auditor shall be appointed by the Corporation. In this case, it shall obtain approval from the Minister of Finance and Economy in appointing the President. <Amended by Act No. 5556, Sep. 16, 1998>
(3) The President shall represent the financial institution for resolution and exercise general control over its business thereof.
(4) The Corporation may dismiss the President, Directors, or Auditor when deemed necessary. In this case, it shall obtain approval from the Minister of Finance and Economy in dismissing the President. <Amended by Act No. 5556, Sep. 16, 1998>
(5) No person who has interest in the insolvent financial institution shall be appointed as President, Director, or Auditor.
(6) The provisions of Articles 12 (2) through (4), 14 and 15 shall apply mutatis mutandis to financial institutions for resolution.
[This Article Newly Inserted by Act No. 5492, Dec. 31, 1997]

Article 36-5 (Business Scope of Financial Institutions for Resolution)
(1) Any financial institution for resolution shall carry out the payment of claims such as deposits, collection of claims such as loans, or other business necessary for the efficient performance of resolution business which is approved by the Minister of Finance and Economy. <Amended by Act No. 5556, Sep. 16, 1998>
(2) An amount of claims such as deposits paid by the financial institution for resolution to depositors under paragraph (1) shall be limited to insurance money and an estimated payment, and the payment shall be deducted from insurance money referred to in Article 32. <Amended by Act No. 5556, Sep. 16, 1998>
(3) The Corporation may provide funds within the scope necessary for the operation of the financial institution for resolution in accordance with a decision by the Committee.
(4) The Corporation shall direct and supervise the affairs of the financial institution for resolution as prescribed by the Presidential Decree.
(5) The Financial Supervisory Service Governor may, when deemed necessary, request the financial institution for resolution to furnish necessary data within a certain scope or the Corporation to inspect the financial institution for resolution. In this case, the financial institution for resolution or the Corporation shall, upon receipt of such request, comply with it unless there exist any special causes. <Newly Inserted by Act No. 6173, Jan. 21, 2000>
[This Article Newly Inserted by Act No. 5492, Dec. 31, 1997]

Article 36-6 (Incorporation Registration and Announcement)
(1)Where the Corporation establishes a financial institution for resolution under Article 36-3, it shall register with the court having jurisdiction over the location of the main office of the financial institution for resolution.
(2)Where the Corporation establishes the financial institution for resolution, it shall publically announce its establishment.
(3)The necessary matters for the registration under paragraph (1) and the announcement under paragraph (2) shall be determined by the Presidential Decree.
[This Article Newly Inserted by Act No. 5492, Dec. 31, 1997]

Article 36-7 (Business Period of Financial Institutions for Resolution)
(1)The business period of a financial institution for resolution shall be up to five years: Provided, That the business period may be extended upon approval of the Minister of Finance and Economy. <Amended by Act No. 5556, Sep. 16, 1998; Act No. 7027, Dec. 31, 2003>
(2)The Corporation shall dissolve a financial institution for resolution upon approval from the Minister of Finance and Economy in case of a termination of business period of the financial institution for resolution, merger, or transfer or taking over of business between the financial institution for resolution and an insured financial institution or the assumption of the financial institution for resolution by a third party. <Amended by Act No. 5556, Sep. 16, 1998>
(3)Where the Corporation deems that any financial institution for resolution's continuance of doing business is likely to damage the interests of depositors, it may dissolve the financial institution for resolution on approval from the Minister of Finance and Economy. <Amended by Act No. 5556, Sep. 16, 1998>
[This Article Newly Inserted by Act No. 5492, Dec. 31, 1997]

Article 36-8 (Relation with Other Acts)
(1)Except as otherwise provided for in this Act, the Bank of Korea Act, the Banking Act, the Securities and Exchange Act, the Insurance Business Act, the Merchant Banks Act, the Mutual Savings Bank Act, the Credit Unions Act and the provisions of Articles 288, 289 (1) and (2), 295, 297 through 299, 299-2, 300, 317, 382 through 385, 389 (1), 393, 409 through 410, and 517 through 520 of the Commercial Act shall not apply to financial institutions for resolution. <Amended by Act No. 5556, Sep. 16, 1998; Act No. 6429, Mar. 28, 2001>
(2) If there are special provisions concerning financial institutions for resolution in this Act, this Act shall prevail over the Commercial Act.
[This Article Newly Inserted by Act No. 5492, Dec. 31, 1997]

Article 37 (Application for Financial Assistance)
Any person who intends to take over or merge an insolvent financial institution, etc. or a financial holding company which has the relevant insolvent financial institution as its subsidiary, etc. under the Financial Holding Companies Act, or take over its business or contracts, may apply to the Corporation for financial assistance. <Amended by Act No. 5556, Sep. 16, 1998; Act No. 6323, Dec. 30, 2000>
[This Article Wholly Amended by Act No. 5492, Dec. 31, 1997]

Article 38 (Financial Assistance to Insured Financial Institution)
(1) The Corporation may, in case where falling under any of the following subparagraphs, based on a resolution by the Committee, render the financial assistance to an insured financial institution or the financial holding company which has the relevant insured financial institution as its subsidiary, etc. under the Financial Holding Companies Act: <Amended by Act No. 6323, Dec. 30, 2000>
1.Where there exists an application for financial assistance under Article 37 or where deemed necessary for making the merger of insolvent financial institution, etc. go smoothly;
2.Where deemed that the improvement of financial structures of insolvent financial institution, etc. is necessary for the protection of depositors and the stability of credit orders; and
3.Where there exists a request by the Financial Supervisory Commission under Article 12 (1) of the Act on the Structural Improvement of the Financial Industry.
(2) The standards, methods, and conditions and other necessary matters for financial assistance under paragraph (1) shall be prescribed by the Presidential Decree. <Newly Inserted by Act No. 5492, Dec. 31, 1997; Act No. 6323, Dec. 30, 2000>

Article 38-2 Deleted.
<by Act No. 6323, Dec. 30, 2000>

Article 38-3 (Special Case for Transfer of Credits)
(1) The Corporation and the financial institution for resolution (hereafter referred to as the Corporation, etc. in this Article) shall, when they are transferred with designated credits through the acquisition of assets falling under any of the following subparagraphs, be deemed to have requirements for setting up against any person under the provisions of Article 450 of the Civil Act by publishing the fact of the transfer of such designated credits in two daily newspapers or more (one nationally circulated newspaper or more shall be included): Provided, That any debtor, any person who has pledged his property to secure another s obligation and other interested persons can not set up against the Corporation, etc. on the grounds of what has occurred with the transfers of credits prior to such publication: <Amended by Act No. 6807, Dec. 26, 2002>
1.Assets that is transferred to the Corporation in relation to payment of insurance money under the provisions of Article 31 (1) or financial assistance under the provisions of Article 38;
2.Assets that any financial institution for resolution transfers to the Corporation; and
3.Assets that is transferred to any financial institution for resolution in relation to business under the provisions of Article 36-5 (1).
(2) The Corporation, etc. shall, when it makes the publication under paragraph (1), keep and administer data pertaining to the transferred credits and make such data accessible to interested persons. In this case, the Committee shall determine the keeping and administration of such data, and standards as well as procedures necessary for making such data accessible to such interested persons.
[This Article Newly Inserted by Act No. 6173, Jan. 21, 2000]

Article 38-4 (Principle of Minimum Expenditure)
(1) Where the Corporation pays insurance money or renders financial assistance to an insured financial institution and a financial holding company which has such insured financial institution as its subsidiary, etc. under the Financial Holding Companies Act, it shall do so in such a manner as to minimize any loss to the deposit insurance fund.
(2) The Corporation shall prepare and keep the documents proving that insurance money or financial assistance is given in accordance with paragraph (1).
(3) Where it is deemed by the Committee that the liquidation, bankruptcy, etc. of an insolvent financial institution, etc. might seriously undermine the stability of financial system, the Corporation may pay insurance money or render financial assistance in any other manner than described in paragraph (1).
(4) Detailed matters concerning the standards, procedures, etc. for the principle of minimum expenditure under paragraphs (1) through (3) shall be prescribed by the Presidential Decree.
[This Article Newly Inserted by Act No. 6807, Dec. 26, 2002]

Article 38-5 (Principle of Fair Apportionment of Loss)
(1) The Corporation shall render financial assistance to an insured financial institution on the premise that any loss incurred by the insured financial institution due to its insolvency shall be subject to being apportioned fairly among the persons liable therefor.
(2) The Corporation shall render financial assistance to an insured financial institution after entering into a written agreement (hereinafter referred to as the agreement ) with such institution on the implementation of a plan for ensuring the soundness of its management as prescribed by the Presidential Decree. In this case, the agreement shall contain the following matters for restoring the sound management of the insured financial institution:
1.The goal of the insured financial institution to meet the standards for financial soundness, including the ratio of equity capital, as determined by the Presidential Decree;
2.The goal of the insured financial institution to meet the standards for profitability, including the earning rate on assets, as determined by the Presidential Decree;
3.The goal of the insured financial institution to meet the standards for financial soundness, including the ratio of non-performing claims, as determined by the Presidential Decree;
4.A concrete implementation plan for the restructuring of the insured financial institution, such as the adjustment of personnel, organization, wages, and for raising its funds as may be necessary for attaining the goals as described in subparagraphs 1 through 3;
5.A written consent to the matters subject to the consent of the trade union of the insured financial institution in connection with subparagraph 4;
6.A supplementary implementation plan to be executed by the insured financial institution, such as the freezing of the gross personnel expenses, in case where it fails to attain the goals under subparagraph 1 through 3; and
7.Other matters as prescribed by the Presidential Decree.
(3) Where the Corporation has entered into an agreement, it shall disclose the agreement by means of electronic document, etc.: Provided, That this shall not apply to the agreement that might have an important influence on the management of the insured financial institution, as prescribed by the Presidential Decree.
(4) The Corporation shall check, on a quarterly basis, the results of the fulfillment of the agreement and report to the Committee.
(5) The Corporation may, in order to check the results of fulfillment under paragraph (4), ask the insured financial institution concerned to report on its business or assets or to submit its data, or to allow its staff members to be present and state their opinions.
(6) Where any officer or employee of an insured financial institution which is given financial assistance falls under any of the following subparagraphs, the Corporation may have the head of the institution correct it or may request the head of the institution to dismiss the officer concerned or suspend his duties, or to take disciplinary action against the employee concerned:
1.Where he/she fails to fulfill the agreement;
2.Where he/she prepares falsely any report or data requested by the Corporation in accordance with this Article or the agreement or neglects to submit such report or data;
3.Where he/she refuses, obstructs, or evades the execution of duties by the Corporation under this Article or the agreement; and
4.Where he/she neglects to comply with the order or demand of the Corporation for correction or disciplinary action.
[This Article Newly Inserted by Act No. 6807, Dec. 26, 2002]

Article 39 (Special Case of Continuation of Business)
With regard to the business of an insured financial institution which has taken over all of the business of an insolvent financial institution under the provisions of Article 37, the provisions of Article 9 (1) of the Act on the Structural Improvement of the Financial Industry shall apply mutatis mutandis. <Amended by Act No. 5257, Jan. 13, 1997; Act No. 5492, Dec. 31, 1997>

CHAPTER V PENAL PROVISIONS

Article 40 (Penal Provisions)
Any person falling under any of the following subparagraphs shall be punished by imprisonment with prison labor for not more than two years or by a fine not exceeding ten million won:
1.A person who has leaked secrets in violation of the provisions of Article 17 (3); and
2.A person who has advertised, published or leaked contents of insurance premiums set differently by insured financial institution in violation of the provisions of Article 30-2.
[This Article Wholly Amended by Act No. 6173, Jan. 21, 2000]

Article 41 (Penal Provisions)
Any person falling under any of the following subparagraphs shall be punished by imprisonment with prison labor for not more than one year or by a fine not exceeding five million won:
1.A person who has failed to furnish data or furnished false data in violation of Article 21 (1) or the later part of Article 21-2 (8); and
2.A person who has rejected, hindered or dodged investigation in violation of Article 21 (2) or Article 21-2 (7).
[This Article Wholly Amended by Act No. 6173, Jan. 21, 2000]

Article 42 (Legal Fiction as Public Officials in Application of Criminal Act)
(1) Any officers and employees of the Corporation, and any officers and employees of agencies under the provisions Article 20 shall be regarded as public officials in the application of Articles 129 through 132 of the Criminal Act.
(2) The scope of the employees under the provisions of paragraph (1) shall be prescribed by the Presidential Decree.

Article 43 (Joint Penal Provisions)
When a representative or an agent, an employee or other employed person of an insured financial institution commits any act of violating the provisions of subparagraph 2 of Article 40 or Article 41 in relation to the business of the insured financial institution, the insured financial institution shall be sentenced to a fine as stated in the same Article, in addition to punishing the offender. <Amended by Act No. 5492, Dec. 31, 1997; Act No. 6173, Jan. 21, 2000>

Article 44 (Fine for Negligence)
(1) Any person falling under any of the following subparagraphs shall be punished by a fine for negligence not exceeding two million won: <Amended by Act No. 6173, Jan. 21, 2000>
1.A person who has violated the provisions of Article 7, 29 (2) or 33 (1); and
2.A person who has rejected, hindered or dodged investigation under the provisions of Article 29 (3).
(2) The fine for negligence under the provisions of paragraph (1) shall be levied and collected by the Minister of Finance and Economy in such manner as prescribed by the Presidential Decree. <Amended by Act No. 5556, Sep. 16, 1998>
(3) A person who is dissatisfied with the disposition of the fine for negligence under the provisions of paragraph (2) may file an objection with the Minister of Finance and Economy within thirty days from the date of having received the notice of such disposition. <Amended by Act No. 5556, Sep. 16, 1998>
(4) When a person who received a disposition of the fine for negligence under the provisions of paragraph (2) files an objection under the provisions of paragraph (3), the Minister of Finance and Economy shall, without delay, inform the competent court, and the competent court which has received such information shall render a judgement on the disposition of the fine for negligence under the Non-Contentious Case Litigation Procedure Act. <Amended by Act No. 5556, Sep. 16, 1998>
(5) When an objection is not filed within the period under the provisions of paragraph (3), nor is the fine for negligence paid, the Minister of Finance and Economy shall collect the fine for negligence following the example of a disposition of national taxes in arrears. <Amended by Act No. 5556, Sep. 16, 1998>

ADDENDA

Article 1 (Enforcement Date)
This Act shall enter into force on June 1, 1996: Provided, That the provisions of Sections 3 and 4 shall enter into force on January 1, 1997.

Article 2 (Incorporation Committee)
(1) The Minister of Finance and Economy shall, within three months from the date of the promulgation of this Act, organize an incorporation committee by entrusting ten incorporation commissioners or less, and have such incorporation commissioners handle business matters pertaining to the preparation for the incorporation of the Corporation.
(2) The incorporation committee shall draw up the Articles of Incorporation of the Corporation and receive the authorization of the Minister of Finance and Economy.
(3) When the incorporation committee receives the authorization under the provisions of paragraph (2), it shall make a registration of incorporation of the Corporation.
(4) When the incorporation committee completes the registration of incorporation under the provisions of paragraph (3), it shall transfer its duties and property to the President of the Corporation, and when the transfer is completed, the incorporation commissioners shall be regarded as discharged thereupon.
(5) When necessary, the incorporation committee may execute its duties with the dispatched service of officers or employees of the concerned insured banks or institutions with the consent of said insured banks or institutions.
(6) The Government may, within the limit of its budget, make contributions to the incorporation committee to defray the expenditure required in the preparation for the incorporation of the Corporation.

Article 3 Omitted.

ADDENDA <Act No. 5257, Jan. 13, 1997>

Article 1 (Enforcement Date)
This Act shall enter into force on March 1, 1997.

Articles 2 through 5 Omitted.

ADDENDA <Act No. 5403, Aug. 30, 1997>

Article 1 (Enforcement Date)
This Act shall enter into force on the date of its promulgation.

Articles 2 through 8 Omitted.

ADDENDUM <Act No. 5421, Dec. 13, 1997>

This Act shall enter into force on the date of its promulgation.

ADDENDA <Act No. 5492, Dec. 31, 1997>

Article 1 (Enforcement Date)
(1) This Act shall enter into force on April 1, 1998: Provided, That the amendments to subparagraphs 1, 5 and 5-2 of Article 2, and Articles 26 (2), 26-2 and 37 through 38-2, and the amendments to Articles 5, 6 (1) and (3), and 7 of the Addenda shall enter into force on the date of its promulgation, and the provisions of Article 7 of the Addenda shall remain in force until March 31, 1998.
(2) Until March 31, 1998, with regard to the enforcement of the provisions enumerated in the proviso of paragraph (1): for the powers of the Financial Supervisory Commission, the Monetary Board shall exercise them over insured financial institutions listed in subparagraph 1 (a) and (i) of Article 2, the Minister of Finance and Economy over insured financial institutions listed in (b) through (h) and (k) through (m) of the same subparagraph, and the Securities and Exchange Commission over insured financial institutions listed in (j) of the same subparagraph, respectively; for the powers and operations of the Korea Deposit Insurance Corporation, the Korea Deposit Insurance Corporation shall exercise them over insured financial institutions listed in subparagraph 1 (a) through (i) of Article 2, the Securities and Exchange Commission over insured financial institutions listed in (j) (a fund management company under Article 69-2 (1) of the Securities and Exchange Act over the business of bond issue under Article 26-2), the Insurance Supervisory Board over insured financial institutions listed in (k) of the same paragraph, and the Credit Management Fund over insured financial institutions listed in (l) and (m) of the same subparagraph, respectively; for the powers and operations of the Operating Committee, the Operating Committee of the Korea Deposit Insurance Corporation shall exercise them over insured financial institutions listed in subparagraph 1 (a) through (i) of Article 2, the Securities and Exchange Commission over insured financial institutions listed in (j) of the same subparagraph, the Management Committee of the Insurance Guarantee Fund over insured financial institutions listed in (k) of the same subparagraph, and the Operating Committee of the Credit Management Fund over insured financial institutions listed in (l) and (m) of the same subparagraph, respectively; and for the deposit insurance fund, insured financial institutions listed in subparagraph 1 (a) through (i) of Article 2 shall be deemed the deposit insurance fund, insured financial institutions listed in subparagraph (j) of the same subparagraph, the Securities Investors Protection Fund, insured financial institutions listed in (k) of the same subparagraph, the Insurance Guarantee Fund, and insured financial institutions listed in (l) and (m) of the same subparagraph, the Credit Management Fund, respectively.

Article 2 (General Transitional Measures)
(1) Any authorization, permission or other acts done by the Insurance Supervisory Board in relation to the Insurance Guarantee Fund, by the Credit Management Fund in relation to contribution operation business accounts, or by the National Credit Union Federation in relation to the Credit Unions Stabilization Fund under the previous provisions at the time of the entry into force of this Act shall be deemed acts done by the Korea Deposit Insurance Corporation under this Act.
(2) Any registration, report or other acts done to the Insurance Supervisory Board in relation to the Insurance Guarantee Fund, to the Credit Management Fund in relation to contribution operation business accounts, or to the National Credit Union Federation in relation to the Credit Unions Stabilization Fund under the Previous provisions at the time of the entry into force of this Act shall be deemed acts done to the Korea Deposit Insurance Corporation under this Act.

Article 3 (Transitional Measures on Contributions, etc.)
(1)Contributions which merchant banks and mutual savings and finance companies paid to the Credit Management Fund on business authorization under Article 5, and contributions which the Credit Unions Stabilization Fund received under Article 83-22 of the Credit Unions Act prior to the entry into force of this Act shall be contributions made to the deposit insurance fund under this Act.
(2)Contributions which insurers paid to the Insurance Guarantee Fund under Article 197-10 of the Insurance Business Act, contributions which merchant banks and mutual savings and finance companies paid to the Credit Management Fund after the closing of each business year under Article 5 of the Credit Management Fund Act, and contributions which Credit unions paid to the Credit Unions Stabilization Fund under Article 83-22 of the Credit Unions Act prior to the entry into force of this Act shall be deemed insurance premiums under this Act.
(3) Where the Korea Deposit Insurance Corporation extends loans to the Securities Investors Protection Fund under the amendment to Article 6 of the Addenda, the rights and duties of the Securities Investors Protection Fund over the loaned money shall be succeeded to by universal title by the Korea Deposit Insurance Corporation on April 1, 1998.

Article 4 (Transitional Measures on Policy Committee Members and Officers of the Korea Deposit Insurance Corporation)
Members commissioned under Article 9 (1) 6 of the previous provisions and officers of the Korea Deposit Insurance Corporation prior to the entry into force of this Act shall discharge their functions until members or officers under this Act are commissioned or appointed.

Article 5 (Dispatch of Related Personnel)
(1) Where deemed necessary to prepare for the integration of the Securities Investors Protection Fund, the Insurance Guarantee Fund, contribution operation business accounts of the Credit Management Fund and the Credit Unions Stabilization Fund, the Korea Deposit Insurance Corporation may receive a dispatch of related personnel in charge of the business and have them carry out its necessary functions.
(2) The Korea Deposit Insurance Corporation shall prepare data on business, an inventory of property, and financial status of each Fund and report them to the Minister of Finance and Economy through a decision by the Policy Committee within one month after the entry into force of this Act.

Article 6 (Special Case for Operation of Funds Created through Bond Issue)
(1) Funds which the Korea Deposit Insurance Corporation raised through the issue of bonds under Article 26-2 prior to March 31, 1998, may be extended loans to the Securities Investors Protection Fund, the Insurance Guarantee Fund, the Credit Management Fund or the Credit Unions Stabilization Fund, notwithstanding the provisions of Article 25.
(2) Funds raised under paragraph (1) shall be deemed to have been issued at the relevant account of the deposit insurance fund under Article 24-3 (1) after April 1, 1998.
(3) Notwithstanding the provisions of Article 31 of the Credit Management Fund Act, funds borrowed by Credit Management Fund from the Korea Deposit Insurance Corporation in accordance with the provisions of paragraph (1) shall be audited separately as special accounts.

Article 7 Omitted.

Article 8 (Support for Budget of Credit Management Fund)
The Korea Deposit Insurance Corporation may contribute to the Credit Management Fund expenses required for the budget of the Credit Management Fund set under Article 4 (2) of the Addenda of the Act on the Establishment, etc. of Financial Supervisory Organizations until the Financial Supervisory Service is established after the entry into force of this Act.

ADDENDA <Act No. 5556, Sep. 16, 1998>

Article 1 (Enforcement Date)
This Act shall enter into force on the date of its promulgation: Provided, That the amendment to subparagraph 2 (d) of Article 2 shall enter into force on October 1, 1998.

Article 2 (Examples of Application to Insurance Premiums)
The amendment to Article 30 (1) shall apply to the portion of insurance premiums for which obligation for payment is first created after the entry into force of this Act.

Article 3 (Examples of Application to Ceiling on Insurance Premium Rate)
With regard to the amendment to Article 30 (1), where the rate ceiling on the balance of deposits on which each insured financial institution must pay annual insurance premiums is not altered through a review of the Regulatory Reform Committee, the previous provisions of Article 30 (1) 1 through 6 shall apply until August 31, 2008. <Amended by Act No. 6807, Dec. 26, 2002>

Article 4 (Examples of Application to Calculation of Insurance Money)
(1) The amendment to Article 32 (1) shall apply to insurance premiums announced and paid under Article 31 (3) first after the entry into force of this Act.
(2) The amendment to Article 35-2 (3) shall apply to an estimated payment announced and paid under Article 35-5 first after the entry into force of this Act.

Article 5 (Transitional Measures on Notes Guaranteed by Merchant Banks)
Money raised by draft guarantees by merchant banks under the previous provisions at the time of entry into force of this Act shall be deemed deposits under the amendment to subparagraph 2 (d) of Article 2.

Article 6 (Special Cases on Financial Institutions for Resolution)
(1) Financial institutions established with authorization from the Minister of Finance and Economy under Article 3 (1) of the Merchant Banks Act in order to carry out the business of resolution business of insolvent financial institutions at the time of the entry into force of this Act (hereafter referred to as bridge financial institutions ) shall be deemed financial institutions for resolution established on approval by the Minister of Finance and Economy under the amendment to Article 36-3.
(2) Any authorization, permission or other acts done by bridge financial institutions and any registration, report or other acts done to bridge financial institutions prior to the entry into force of this Act shall be deemed done by or to financial institutions for resolution.
(3) Any establishment registration and announcement of a bridge financial institution at the time of the entry into force of this Act shall be deemed an establishment registration and announcement of a financial institution for resolution under this Act.

ADDENDUM <Act No. 5702, Jan. 29, 1999>

This Act shall enter into force on the date of its promulgation.

ADDENDA <Act No. 6018, Sep. 7, 1999>

Article 1 (Enforcement Date)
This Act shall enter into force on July 1, 2000. (Proviso Omitted.)

Articles 2 through 21 Omitted.

ADDENDA <Act No. 6173, Jan. 21, 2000>

Article 1 (Enforcement Date)
This Act shall enter into force on the date of its promulgation.

Article 2 (Duration Period of Regulation)
(1) The amended provisions of Article 30-2 shall take force by the date on which five years lapse from the date of enforcement of this Act.
(2) The amended provisions of Article 30-2, unless their valid term under the provisions of paragraph (1) is extended after going through a request for a review under the provisions of Article 8 (3) of the Framework Act on Administrative Regulations or they are revised by the date on which five years lapse from the date of enforcement of this Act, shall lose their effect.
(3) The amended provisions of subparagraph 2 of Article 40 shall apply to any person who has violated the amended provisions of Article 30-2 during a period for which such amended provisions have been effective in accordance with the provisions of paragraph (1) even after such amended provisions lose their effect in accordance with the provisions of paragraph (2).

ADDENDA <Act No. 6274, Oct. 23, 2000>

Article 1 (Enforcement Date)
This Act shall enter into force one month after the date of its promulgation.

Articles 2 through 6 Omitted.

ADDENDA <Act No. 6323, Dec. 30, 2000>

(1) (Enforcement Date) This Act shall enter into force on January 1, 2001.
(2) (Transitional Measures on Unpaid Insurance Premiums) In applying the amendment to Article 30 (5), with respect to the unpaid insurance premiums at the time when this Act enters into force, the previous provisions shall govern.

ADDENDA<Act No. 6429, Mar. 28, 2001>

Article 1 (Enforcement Date)
This Act shall enter into force on the date as prescribed by the Presidential Decree within the limit not exceeding two years from the promulgation date of this Act. (Proviso Omitted.) Enforcement date of this Act shall be Mar. 1, 2002 pursuant to the Presidential Decree No. 17519, Feb. 25, 2002

Articles 2 through 11 Omitted.

ADDENDA<Act No. 6626, Jan. 26, 2002>

Article 1 (Enforcement Date)
This Act shall enter into force on July 1, 2002.

Articles 2 through 7 Omitted.

ADDENDA<Act No. 6807, Dec. 26, 2002>

Article 1 (Enforcement Date)
(1)This Act shall enter into force on January 1, 2003: Provided, That the amended provisions of subparagraphs 1 (n) and 2 (f) of Article 2 and Article 35-7 shall enter into force on January 1, 2004.
(2)In applying the amended provisions of Article 35-7, with respect to an officer or employee of the Corporation appointed as a custodian under Article 86-2 (5) of the Credit Unions Act prior to December 31, 2003, the previous provisions shall prevail.

Article 2 (Period of Validity)
The amended provisions of Article 30-3 shall be effective until December 31, 2027.

Article 3 (Special Cases for Appointment of Vice President)
(1) With respect to the amended provisions of Article 11, the previous provisions shall prevail until the day when the Minister of Finance and Economy appoints a Vice President.
(2) Where a person who holds the post of a Director at the time of the entry into force of this Act is appointed first Vice President in accordance with the amended provisions of Article 11, the Vice President s term of office shall be the remainder of the Director s term of office.

Article 4 (Special Cases for Financial Resources, etc. of Redemption Fund)
The amended provisions of Article 26-3 (2) 5 through 7 and (3) 2 shall apply only in the following cases: <Amended by Act No. 7027, Dec. 31, 2003>
1.Where any insurance contingency occurs on or before December 31, 2002; and
2.Where an insured financial institution is decided or recognized by the Financial Supervisory Commission or the Committee to be an insolvent financial institution, etc. on or before December 31, 2002 (excluding the cases where a financial assistance is newly rendered under Article 38 after the reasons for decision and recognition with respect to the provisions of subparagraph 5 or 5-2 of Article 2 have been resolved through a financial assistance rendered by the Corporation to the relevant insolvent financial institution, etc.).

Article 5 (Special Cases for Liquidator and Bankruptcy Trustee)
Where the Corporation or an officer or employee thereof is appointed as a liquidator or bankruptcy trustee under Article 20 (1) of the Special Act on the Management of Public Funds, the previous provisions of Article 35-8 (3) through (5) shall apply.

Article 6 (Special Cases for Payment of Special Contributions by Credit Unions)
In applying the amended provisions of Article 30-3, notwithstanding the amended provisions of subparagraphs 1 (n) and 2 (f) of Article 2, the previous provisions of subparagraphs 1 (n) and 2 (f) of Article 2 shall prevail from January 1, 2006 to December 31, 2017.

Article 7 (Transitional Measures following Change of Name of Policy Committee)
The Policy Committee as mentioned in the previous provisions at the time of the entry into force of this Act shall be deemed the Deposit Insurance Committee under this Act. In this case, the members of the Policy Committee commissioned in accordance with the previous provisions shall be deemed to be commissioned as the members of the Deposit Insurance Committee under this Act.

Article 8 (Transitional Measures following Dispatch of Public Officials, etc.)
The employees dispatched to the Corporation at the time of the entry into force of this Act shall be deemed to be dispatched in accordance with the amended provisions of Article 15-3.

Article 9 (Transitional Measures on Accounting, etc. of Redemption Fund)
The assets, liabilities, and other rights and obligations (excluding insurance premiums the payment date of which has not arrived until the enforcement date of this Act) which belong to the deposit insurance fund at the time of the entry into force of this Act shall be subject to universal succession by the redemption fund under the amended provisions of Article 26-3: Provided, That the accounts of credit unions established at the deposit insurance fund at the time of the entry into force of this Act shall be closed on January 1, 2010, and the assets, liabilities, and other rights and obligations shall be transferred to the National Credit Union Federation of Korea under Article 61 of the Credit Unions Act, on the said date, according to the standards, methods, and procedures as determined by the Minister of Finance and Economy. <Amended by Act No. 7027, Dec. 31, 2003>

Article 10 (Liquidation of Redemption Fund)
The redemption fund shall be liquidated not later than December 31, 2027, and the remainder of the assets, liabilities, and other rights and obligations shall revert to the National Treasury or the deposit insurance fund, as determined by the Minister of Finance and Economy.

Article 11 Omitted.

ADDENDA<Act No. 6891, May 29, 2003>

Article 1 (Enforcement Date)
This Act shall enter into force three months after the date of its promulgation. (Proviso Omitted.)

Articles 2 through 34 Omitted.

ADDENDUM <Act No. 7027, Dec. 31, 2003>

This Act shall enter into force on the date of its promulgation: Provided, That the amended provisions of Article 36-7 shall apply on and after December 27, 2003.

ADDENDA<Act No. 7428, Mar. 31, 2005>

Article 1 (Enforcement Date)
This Act shall enter into force one year after the date of its promulgation.

Articles 2 through 6 Omitted.

ADDENDA<Act No. 7615, Jul. 29, 2005>

Article 1 (Enforcement Date)
This Act shall enter into force on the date of its promulgation.

Article 2 Omitted.

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