17-2246. Share insurance required; conversion to federal insurance required, when.
17-2246
17-2246. Share insurance required; conversion to federal insurance required, when. (a) (1) Every credit union which is organized and operating under the laws of the state of Kansas, except a corporate credit union, shall insure the shares of each shareholder of such credit union.
(2) Every credit union shall insure the shares of each shareholder of such credit union with the national credit union share insurance fund, or its successor, or with an insurer approved by the state commissioner of insurance or guarantee corporation approved by the administrator, for such purpose as hereinafter provided in an amount not less than that provided by the national credit union administration, except that the administrator may grant a reasonable extension of time for compliance therewith under such rules and regulations as the administrator may adopt.
(b) (1) Notwithstanding the provisions of paragraph (2) of subsection (a), every credit union which is organized and operating under the laws of the state of Kansas and not currently insured by the national credit union share insurance fund (NCUSIF), except a corporate credit union, shall make application for insurance with the NCUSIF within 120 days of the effective date of this act.
(2) The application for NCUSIF insurance shall be filed with the Kansas state department of credit unions, then forwarded to the national credit union administration.
(3) Every credit union chartered after the effective date of this act shall obtain NCUSIF coverage prior to commencing business.
(4) The administrator may suspend the charter, merge, liquidate, or take possession of any credit union which fails to comply with the provisions of this section or which loses or allows such coverage to lapse.
(c) (1) Notwithstanding the provisions of paragraph (2) of subsection (a), every credit union shall obtain a certificate of insurance from the NCUSIF within 18 months of the effective date of this act.
(2) The administrator may extend, for a period up to 18 months, the date by which a credit union must obtain such certificate upon satisfactory evidence that the credit union has made and is making good faith efforts to acquire the coverage.
(3) Any credit union which is unable to comply with this subsection shall be liquidated by the administrator, unless the administrator approves the merger or consolidation of such credit union with a NCUSIF insured credit union.
(4) Every credit union shall maintain their current share insurance during the conversion process.
(d) Every credit union shall forward a copy of the NCUSIF certificate of insurance to the administrator within 30 days after the credit union receives the certificate.
(e) (1) Every credit union shall take every action legally required to maintain NCUSIF insurance coverage in full force and effect, and shall refrain or desist from taking any action that is likely to cause termination of NCUSIF insurance coverage.
(2) The administrator shall order the merger, consolidation, or liquidation of any credit union whose NCUSIF insurance is terminated.
(f) No bylaw amendment of any nonfederal insurer shall be binding upon any Kansas credit union unless and until approved by the Kansas state department of credit unions.
History: L. 1975, ch. 136, § 1; L. 1981, ch. 103, § 1; L. 1991, ch. 78, § 1; L. 1992, ch. 225, § 23; July 1.