(a)The board for depositories shall manage
and operate the insurance fund. All expenses incident to the
administration of the fund shall be paid out of the money accumulated
in it subject to the direction of the board for depositories. Money in the
fund may not be expended, removed, or transferred from the fund for
any purpose other than the following unless the expenditure, the
removal, or transfer is first reviewed by the budget committee:
(1)Paying expenses of administering the fund.
(2)Investing, reinvesting, and exchanging investments as
described in subsection (d).
(3)Paying claims on insured public deposits under IC 5-13-13.
(4)Making payments required by contracts executed under
section 3(a)(6) of this chapter.
(5)Making deposits of uninvested funds under section 3(a)(8) of
t
Free access — add to your briefcase to read the full text and ask questions with AI
(a) The board for depositories shall manage
and operate the insurance fund. All expenses incident to the
administration of the fund shall be paid out of the money accumulated
in it subject to the direction of the board for depositories. Money in the
fund may not be expended, removed, or transferred from the fund for
any purpose other than the following unless the expenditure, the
removal, or transfer is first reviewed by the budget committee:
(1) Paying expenses of administering the fund.
(2) Investing, reinvesting, and exchanging investments as
described in subsection (d).
(3) Paying claims on insured public deposits under IC 5-13-13.
(4) Making payments required by contracts executed under
section 3(a)(6) of this chapter.
(5) Making deposits of uninvested funds under section 3(a)(8) of
this chapter.
(6) Paying allowable expenses as provided in section 4 of this
chapter.
(b) Effective January 1 and July 1 in each year, the board shall
before those dates redetermine the amount of the reserve to be
maintained by the insurance fund. The establishment or any change in
the reserve for losses shall be determined by the board based on
information the board considers, including but not limited to capital
adequacy, liquidity, and asset quality, and a study to be made or
updated by actuaries, economists, or other consultants based on the
history of losses, earnings on the funds, conditions of the depositories,
economic conditions affecting particular depositories or depositories
in general, and any other factors that the board considers relevant in
making its determination. The reserve determined by the board must be
sufficient to ensure the safekeeping and prompt payment of public
funds to the extent they are not covered by insurance of any federal
deposit insurance agency.
(c) At the end of each biennial period during which depositories
have had public funds on deposit under this chapter and paid the
assessments levied by the board, the board shall compute its receipts
from assessments and all other sources and its expenses and losses and
determine the profit derived from the operation of the fund for the
period. Until the amount of the reserve for losses has been
accumulated, all assessments levied for a biennial period shall be
retained by the fund. The amount of the assessments, if any, levied by
the board shall, to the extent the fund exceeds the reserve for losses at
the end of a biennial period commencing July 1 of each odd-numbered
year, be distributed to the depositories that had public funds on deposit
during the biennial period in which the assessments were paid. The
distribution shall be made to the respective depositories in the
proportion that the total assessments paid by each depository during
that period bears to the total assessments then paid by all depositories.
A distribution to which any closed depository would otherwise be
entitled shall be set off against any claim that the insurance fund may
have against the closed depository.
(d) The board may invest, reinvest, and exchange investments of the
insurance fund in excess of the cash working balance in any of the
following:
(1) In bonds, notes, certificates, and other valid obligations of the
United States, either directly or, subject to the limitations in
subsection (e), in the form of securities of or other interests in an
open-end no-load management-type investment company or
investment trust registered under the provisions of the Investment
Company Act of 1940, as amended (15 U.S.C. 80a et seq.).
(2) In bonds, notes, debentures, and other securities issued by a
federal agency or a federal instrumentality and fully guaranteed
by the United States either directly or, subject to the limitations
in subsection (e), in the form of securities of or other interests in
an open-end no-load management-type investment company or
investment trust registered under the provisions of the Investment
Company Act of 1940, as amended (15 U.S.C. 80a et seq.).
(3) In bonds, notes, certificates, and other valid obligations of a
state or of an Indiana political subdivision that are issued under
law, the issuers of which, for five (5) years before the date of the
investment, have promptly paid the principal and interest on their
bonds and other legal obligations.
(4) In bonds or other obligations of the Indiana finance authority
issued under IC 5-1.2.
(5) In investments permitted the state under IC 5-13-10.5.
(6) In guarantees of economic development obligations or credit
enhancement obligations, or both, for the purposes of retaining
and increasing employment in enterprises in Indiana, subject to
the limitations and conditions set out in this subdivision,
subsection (e), and section 8 of this chapter. An individual
guarantee of the board under this subdivision must not exceed
eight million dollars ($8,000,000).
(7) In guarantees of bonds or notes issued under IC 5-1.5-4-1,
subject to the limitations and conditions set out in subsection (e)
and section 8 of this chapter.
(8) In bonds, notes, or other valid obligations of the Indiana
finance authority that have been issued in conjunction with the
authority's acquisition, development, or improvement of property
or other interests for an economic development project (as
defined in IC 5-1.2-2) that the authority has undertaken for the
purposes of retaining or increasing employment in existing or new
enterprises in Indiana, subject to the limitations in subsection (e).
(9) In notes or other debt obligations of counties, cities, and towns
that have been issued under IC 6-1.1-39 for borrowings from the
industrial development fund under IC 5-28-9 for purposes of
retaining or increasing employment in existing or new enterprises
in Indiana, subject to the limitations in subsection (e).
(10) In bonds or other obligations of the Indiana housing and
community development authority.
(e) The investment authority of the board under subsection (d) is
subject to the following limitations:
(1) For investments under subsection (d)(1) and (d)(2), the
portfolio of an open-end no-load management-type investment
company or investment trust must be limited to:
(A) direct obligations of the United States and obligations of a
federal agency or a federal instrumentality that are fully
guaranteed by the United States; and
(B) repurchase agreements fully collateralized by obligations
described in clause (A), of which the company or trust takes
delivery either directly or through an authorized custodian.
(2) Total outstanding investments in guarantees of economic
development obligations and credit enhancement obligations
under subsection (d)(6) must not exceed the greater of:
(A) ten percent (10%) of the available balance of the insurance
fund; or
(B) fourteen million dollars ($14,000,000).
(3) Total outstanding investments in guarantees of bond bank
obligations under subsection (d)(7) must not exceed the greater
of:
(A) twenty percent (20%) of the available balance of the
insurance fund; or
(B) twenty-four million dollars ($24,000,000).
(4) Total outstanding investments in bonds, notes, or other
obligations of the Indiana finance authority under subsection
(d)(8) may not exceed the greater of:
(A) fifteen percent (15%) of the available balance of the
insurance fund; or
(B) twenty million dollars ($20,000,000).
However, after June 30, 1988, the board may not make any
additional investment in bonds, notes, or other obligations of the
Indiana finance authority issued under IC 4-4-11 (before its
repeal), and the board may invest an amount equal to the
remainder, if any, of:
(i) fifteen percent (15%) of the available balance of the
insurance fund; minus
(ii) the board's total outstanding investments in bonds, notes,
or other obligations of the Indiana finance authority issued
under IC 4-4-11 (before its repeal);
in guarantees of economic development obligations or credit
enhancement obligations, or both, as authorized by subsection
(d)(6). In such a case, the outstanding investments, as authorized
by subsection (d)(6) and (d)(8), may not exceed in total the
greater of twenty-five percent (25%) of the available balance of
the insurance fund or thirty-four million dollars ($34,000,000).
(5) Total outstanding investments in notes or other debt
obligations of counties, cities, and towns under subsection (d)(9)
may not exceed the greater of:
(A) ten percent (10%) of the available balance of the insurance
fund; or
(B) twelve million dollars ($12,000,000).
(f) For purposes of subsection (e), the available balance of the
insurance fund does not include the outstanding principal amount of
any fund investment in a corporate note or obligation or the part of the
fund that has been established as a reserve for losses.
(g) All interest and other income earned on investments of the
insurance fund and all amounts collected by the board accrue to the
fund.
(h) Members of the board and any officers or employees of the
board are not subject to personal liability or accountability by reason
of any investment in any of the obligations listed in subsection (d).