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Q&A

What is the Depositors' and Investors' Guarantee Fund?
The Depositors’ and Investors’ Guarantee Fund (DIGF) is a non-profit organisation that operates in accordance with the Act on Deposit Guarantees and an Investor Compensation Scheme. The role of the Fund is to provide a minimum level of protection to deposit owners and customers of financial institutions authorised by law to engage in securities trading.

Which companies are members of the Fund?
Commercial banks, savings banks, companies providing investment services, and other parties engaged in securities trading pursuant to law are members of the Fund. The same applies to these parties’ branch offices within the EEA.

List of membership companies  (size 217 kb)

What does the Depositors' and Investors' Guarantee Fund guarantee?
The Fund is divided into two parts: the Deposit Division and the Securities Division. The Deposit Division guarantees deposits in banks and savings banks. Deposit refers to any credit balance resulting from financial deposits or transfers in normal banking transactions, which a commercial bank or savings bank is under obligation to refund under existing legal or contractual terms. However, this guarantee does not extend to bonds, bills of exchange, or other claims issued by a commercial bank or savings bank in the form of securities. The Securities Division guarantees that securities, unit share certificates, or cash are available for their owners if the need arises. In this way, the Securities Division guarantees lost securities, unit share certificates, or money. Securities refers to securities that are either in the custody or under the administration or supervision of a Member Company, which is under obligation to effect refunding or return thereof in accordance with existing laws or contracts. Cash refers to cash deposited by an investor with a Member Company in connection with securities trading. It is appropriate to note that undertakings engaged in investment services are required to keep customers’ funds securely separated from their own funds, which means that there is little likelihood that a company’s customers will lose money if the company becomes insolvent. The Securities Division does not guarantee the market value of securities funds, as such funds’ market value is determined by the value of the underlying assets.

How large an amount is guaranteed?
The European Union directives on deposit insurance and securities stipulate that minimum insurance in the EEA shall total at least 20,000 euros. The Depositors' and Investors' Guarantee Fund guarantees mimimum 20,887 euros for each customer in each of the membership companies.

If the minimum amount guaranteed is 20,887 euros, what is the maximum guarantee?
The Depositors' and Investors' Guarantee Fund guarantees the entire amount on deposit if its assets are sufficient. When the Fund’s assets are not sufficient to guarantee the payment of the total deposit balance, payments are distributed so as to cover in full each claim up to 20,887 euros, with amounts in excess reimbursed proportionally up to the limit of the Fund’s assets. No further claims can be made against the Fund at a later stage even if losses suffered by the claimants have not been compensated in full.

What are the Fund’s assets?
By law, the assets of the Deposit Division of the Fund shall total 1% of total deposits, and the assets of the Securities Division shall be 100 million Icelandic krónur.

Is the minimum guarantee amount paid for each bank account?
No. The guarantee provided by the Fund extends to the total amount of each individual or company’s balance (that is, each national ID number) in each bank. Therefore, a customer who owns several accounts in the same bank will receive payment of the minimum amount, or 20,887 euros .

What happens if more than one deposit institution becomes insolvent at the same time?
The minimum amount guaranteed by the Fund is based on each national ID number in each bank. If a deposit owner has accounts in more than one deposit institution – two, for example – and both of them become insolvent at the same time, the customer in question will receive two payments equalling the combined balance of the deposits in the two banks or, at least, twice the minimum payment.

When does the Fund remit payments?
The Depositors' and Investors' Guarantee Fund is required to pay deposit owners if member companies are unable, in the opinion of the Financial Supervisory Authority, to pay the amount that the customers have requested from the member company (companies) in question. The opinion of the Financial Supervisory Authority shall have been made available no later than three weeks after the Authority first obtains confirmation that the relevant member company has not rendered payment to its customers. Furthermore, the Fund is obliged to pay deposit owners if the estate of a member company is subjected to bankruptcy proceedings.

How long does it take the Fund to remit payment?
The Fund expedites payment insofar as is possible. By law, the Fund shall remit payment within three months of the time the Financial Supervisory Authority renders an opinion that the deposit institution in question cannot remit payment or the company is subjected to bankruptcy proceedings. The Minister of Business Affairs can extend the payment deadline, however, upon receipt of an opinion by the Financial Supervisory Authority.

How do I file a claim with the Depositors' and Investors' Guarantee Fund?
Claim forms can be found on the Depositors' and Investors' Guarantee Fund’s website. Completed claim forms shall be sent to the Depositors’ and Investors’ Guarantee Fund, Borgartun 35, 105 Reykjavik.

Does the Fund guarantee deposits in foreign currency?
Yes. No distinction is made between deposits in Icelandic krónur and those in other currencies. The Fund can reimburse the value of the deposit balance in Icelandic krónur.

Are deposits in foreign branches of Icelandic banks guaranteed by the Fund?
Yes. The Fund’s guarantees extend to all customers of Icelandic banks and their branches, both domestic and foreign, irrespective of legal address. Foreign deposits with subsidiaries of Icelandic banks are guaranteed by the guarantee funds in the countries concerned.

Where do owners of deposits in foreign branches turn if an Icelandic bank becomes insolvent?
Because of the supplemental deposit insurance that some foreign branches of Icelandic banks have with foreign guarantee funds, the Fund has concluded collaboration agreements with a large number of foreign guarantee funds. The agreements guarantee collaboration between the Icelandic Fund and its foreign counterparts in the event of a crisis. If supplemental deposit insurance exists, foreign deposit owners should turn to the guarantee fund in their home country. If such supplemental deposit insurance is not in place, they should turn to the Icelandic Depositors' and Investors' Guarantee Fund.

Does it cost anything to apply for reimbursement from the Icelandic Depositors' and Investors' Guarantee Fund?
No. The Fund’s service is rendered free of charge.

When is it appropriate to turn to the Icelandic Depositors' and Investors' Guarantee Fund?
Cases are only addressed by the Fund when the Financial Supervisory Authority has declared that the member company has become insolvent or when the member company has requested bankruptcy proceedings. If consumers have comments on the operations of member companies, the Financial Supervisory Authority operates an information and guidance service for consumers. Further information can be found on the Financial Supervisory Authority website:
www.fme.is