§ 15  The Deposit Guarantee

(1)       The Fund has a duty to cover any losses that a depositor incurs with respect to deposits made with a member institution, unless otherwise stated in Section 19-9 of the Act. Here deposits are deemed to be each credit balance on named accounts, and liabilities in accordance with the deposit certificate of the named individual, with the exception of deposits from other financial institutions. In this context deposits are also deemed to include balances in connection with payment transfers or other normal bank services, and interest not yet due.

(2)       If a depositor has total deposits that exceed NOK 2 million in the relevant member institution, the Fund is not obliged to cover losses on that part of the overall deposit that exceeds this amount. If the member institution is permitted to offset deposits and liabilities, the depositor’s total deposits are reduced by the amount of any liabilities, which have fallen due, that he or she may have in respect of other agreements. The MoF may issue statutory regulations allowing the ceiling for compulsory coverage of losses on certain special types of deposit or of deposits from specific depositors to be set at a higher level than that stipulated in this paragraph’s first sentence.

(3)       The Fund is not obliged to cover losses on:

a. deposits from mutual funds and other collective investment enterprises
b. deposits with an unusually high interest rate or other financial benefits when such benefits have contributed to a deterioration of the institutions' financial situation.

(4)      The Fund is not permitted to cover losses on:

a. deposits from companies in the same group as the member institution
b. deposits comprising the proceeds of a criminal act for which a legally binding judgement has been handed down.

(5)       To pass decisions to cover losses in excess of the amount the Guarantee Fund is obliged to cover in accordance with paragraphs 1 and 2 above, require the approval of at least five board members.

§ 16  Settlement under the Deposit Guarantee Scheme

(1)       The Fund shall cover losses on deposits in accordance with Section 19-10 of the Act.

§ 17  Support measures

(1)       In order to enable member institutions as stated in § 1(3)(a)(b) to fulfil their obligations or continue in operation, or, if necessary, have their business transferred to another institution, the Fund can grant support by:

a. issuing guarantees or providing other support in order to secure or cover losses on deposits that cannot be covered in accordance with § 15 above
b. providing liquidity support, providing loans or guarantees for borrowings or the fulfilment of other obligations
c. injecting equity or issuing equity guarantees in order to ensure that the business can continue or be wound up
d. covering losses incurred by all, or specific groups of, creditors as a result of inadequate liquidity or capital adequacy

(2)       Support granted under Section 19-11 of the Act may, instead, be granted to the parent company of a financial group. In such cases the parent company must immediately pass on the support to the member institution.

(3)       Resolutions with respect to support can only be made within the parameters established under § 19. In assessing whether support should be granted, the board must place particular emphasis on maintaining public confidence in the banking system, and to the Fund's finances. This includes comparing the costs of using support measures with the costs that would have been incurred if the matter were to end in public administration and settlement in accordance with the deposit guarantee scheme. To pass a decision of support requires the approval of at least five board members, where the reasons for approval must be documented in the Fund's board minutes.


§ 18  Conditions for support

(1)       The Fund's board decides whether and to what extent a member institution is granted support as stated in § 17 above, and the manner in which this is extended.

(2)       A member institution which has received support or guarantees from the Fund shall implement the instructions issued by the Fund’s board in order to secure against losses. The member institution shall provide regular reports to the Fund’s board with respect to the member’s position and operations, as specifically determined by the Fund’s board.

(3)       The Fund's board may require a member institution receiving support from the Fund to enter into negotiations on a merger with another member institution or other financial institution, or that amendments be made to the member institution's management or business.

§ 19  Maximum limit for the Guarantee Fund's total liabilities

(1)       The board may not pass a decision in accordance with § 17 and § 18 unless the Fund's residual capital after the support measure along with future receipts of the annual levy and guarantee capital, as well as other available capital, are deemed to be sufficient to meet the Fund's liabilities under the deposit guarantee scheme.

(2)       Pursuant to Section 19-11(7) of the Act, the Guarantee Fund may not, without the consent of the MoF, issue any guarantee or incur other liabilities in connection with the deposit guarantee or support measures that, taken together, make up more than twice the Fund's minimum capital, as set out in § 4.