The FDIC recently released their Supervisory Insights for Summer 2017, which stress liquidity risk. One insurance product that has made its return over the last several years to assist with liquidity is the Excess Deposit Bond (EDB) coverage. This single-policy solution insures depositors in excess of FDIC insurance limits, allowing banks to attract and retain larger deposits without pledging securities, or using letters of credit.
Banks can provide EDB to all account and depositor types. Banks electing to use this product will complete a Specified Account Holder form annually, listing the depositor and the amount the bank wishes to insure the customers deposit for. The bank will then receive a master policy which includes an insurance certificate for each depositor. Premiums are calculated based on limits used, rather than limits available, making this a very cost-effective product. A further benefit is the inclusion of pro-rated refunds for the bank, should an insured depositor withdraw some or all of their excess funds prior to the master policy renewal.
MBIS is owned and operated by the Wisconsin Bankers Association and the Minnesota Bankers Association, while also being endorsed by the North Dakota Bankers Association. As an insurance agency run by those defending and advocating for banking, you can rest assured MBIS will always have your best interests in mind. Further, as an independent agency, MBIS has access to a variety of insurance providers to help them tailor plans to meet the specific needs of banks.