2023 New York Laws › BNK - Banking › Article 10-A - State Savings and Loan Insurance Fund › 420-K - Termination of Insurance.

§ 420-k.  Termination  of insurance. 1. Whenever in the opinion of the
fund any insured savings and loan association has  continued  unsafe  or
unsound  practices  in  conducting the business of such savings and loan
association, or has  knowingly  or  negligently  permitted  any  of  its
officers  or agents to violate any provision of any law or regulation to
which the insured savings and loan association  is  subject,  said  fund
shall  first give to the superintendent a statement with respect to such
practices or violations for  the  purpose  of  securing  the  correction
thereof  and  shall  give  a  copy  thereof  to  the  savings  and  loan
association. Unless such correction shall be made within one hundred and
twenty days or such shorter period of time as the  superintendent  shall
require,  the fund, if it shall determine to proceed further, shall give
to the savings and loan association not less than thirty  days'  written
notice  of  intention  to  terminate  the status of the savings and loan
association as an insured savings and loan association, and shall fix  a
time  and  place for a hearing before the fund or a person designated by
the fund. The fund shall make written findings. Unless the  savings  and
loan  association  shall  appear  at  the  hearing  by a duly authorized
representative, it shall be deemed to have consented to the  termination
of  its  status  as an insured savings and loan association. If the fund
shall find that any unsafe or unsound practice or violation specified in
such notice has been established and has not been corrected  within  the
time  above  prescribed  in  which to make such correction, the fund may
issue its order  terminating  the  insured  status  of  the  association
effective  on a date subsequent to such finding and to the expiration of
the time specified in such notice  of  intention.  The  order  shall  be
subject  to review under article seventy-eight of the civil practice law
and rules. In the event of the termination of such status, insurance  of
its  accounts  to  the extent that they were insured on the date of such
order  of  termination,   less   any   amounts   thereafter   withdrawn,
repurchased, or redeemed which reduce the insured accounts of an insured
member  below  the  amount  insured  on  the  date  of such order, shall
continue for a period of two years, but no investments or deposits  made
after  the  date of such order of termination shall be insured. The fund
shall have the right to examine  such  association  from  time  to  time
during  the  two-year  period aforesaid.   Such insured savings and loan
association shall be obligated to pay, within thirty days after any such
order of termination, as a final insurance premium, a sum equivalent  to
twice  the  last  annual  insurance  premium  paid  by  it  pursuant  to
subdivision one of section four hundred twenty-h of this chapter. In the
event of the termination of insurance of accounts as herein provided the
savings and loan association which was  the  insured  savings  and  loan
association  shall give prompt notice in writing sent to all its account
holders that it has ceased to be an insured savings and loan association
and it may include in such notice the fact that insured accounts, to the
extent not withdrawn, repurchased, or redeemed, remain insured  for  two
years  from  the  date  of  such  termination,  but it shall not further
represent itself in any manner as an insured association.  In the  event
of  failure to give the notice to account holders as herein provided the
fund is authorized to give such notice.
2. (a) At any time after five years of membership, but not before,  an
insured   savings  and  loan  association  may  submit  to  the  fund  a
certificate  of  intention  to   terminate   its   membership   therein.
Termination  shall  become effective on the first day of the sixth month
following the submission of the certificate provided that:
(i) The member pay a termination fee  equivalent  to  twice  the  last
annual  premium  paid  by it pursuant to subdivision one of section four

hundred twenty-h of this chapter; this fee shall not extend  or  enlarge
insurance coverage.
(ii)  The insured savings and loan association sends to each holder of
a savings account a notice in writing not later than  two  months  after
submission  of the certificate; the notice shall be in a form prescribed
by the fund and shall set forth the facts of the termination.
(b) The fund may elect to  refund  to  the  association  its  original
capital  contribution  to  the  fund  subject to terms it may prescribe,
provided that such refund is made within two  years  of  termination  of
membership.