Information Leaflet – A Deposit Guarantee Scheme Reimburses a Limited Amount to Compensate Account Holders Whose Bank in Estonia Has Failed
Deposit Guarantee Scheme Estonia: The Estonian Tagatisfond provides bank deposit protection to eligible account holders of credit institutions that fail or are likely to fail. The fund also provides compensation to investors of financial institutions in times of insolvency. The objective of the fund is to guarantee protection of funds of depositors, investors, unit-holders and policyholders of mandatory funded pensions, and thereby to increase the reliability and stability of the financial sector.
Secured Deposit Limit: Deposits including accumulated interest are compensated in full, but compensation shall not be larger than 100,000 euros. Investors may be compensated up to 20.000 euros.
Additional Compensation: Natural persons may receive additional compensation up to 70.000 euro for deposits derived from private immovable property. Such additional coverage is only available within six months as of the transfer of the private immovable property.
Exclusions from DGS coverage: deposits of the state and financial intermediaries, deposits whose holders have unperformed obligations to the credit institution to the extent of these obligations, and deposits associated with money laundering.
Claim Filing Procedure: The failure of a licensed and supervised credit institutions in Estonia triggers a payout event. The Tagatisfond then appoints and instructs an agent bank to assist with the claim filing and verification procedures. The receivers will contact the depositors and investment service clients of the bank directly. Confirmation of claim eligibility follows the claim verification by the agent bank. Creditors must identify themselves and provide sufficient claim evidence.
Repayment Timeframe: Deposits are compensated within up to 17 working days. Investors should receive compensation at the latest within one month of the value of the investment to be compensated being confirmed by the Guarantee Fund. The Guarantee Fund, the receivers and the agent bank will give notification about compensation separately in accordance with the law.
Repayment Conditions: If the depositor is listed by the guarantee fund as having the right to receive compensation, the compensation will be paid out by transfer to a bank account nominated by the depositor or in cash at the request of the depositor. Investors will only be paid compensation by transfer of funds to a bank account nominated by the investor.
DGS Claim Rejections: Claims that are not satisfied through the Guarantee Fund will be treated during the liquidation procedures for the bank. The receivers will report the collection, handling and settlement of claims separately as laid out by law. Depositors can submit their claims to the receivers for these amounts.
Scheme Architecture: Licensed and supervised credit institutions in Estonia must participate in the Tagatisfond. Members of the fund make periodic contributions and pay premiums to substantiate its value. Such value is needed to compensate eligible creditors of member institutions in case of default. The current value of the fund is approximately 250 million euros.
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