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 Insurance Fund |
The System has
an insurance fund to insure the timely payment of principal of and interest on
Farm Credit Debt Securities, to the extent funds are available. The Farm Credit System Insurance Corporation administers the Farm Credit Insurance Fund. The Insurance Corporation is a Government-controlled
corporation that was established in the late 1980s. The
Insurance Corporation is administered by a board of directors consisting of the
Farm Credit Administration Board.
To achieve or maintain the Insurance Fund at the statutorily defined “secure base amount” of 2% of aggregate insured debt obligations (or such other percentage as the Insurance Corporation determines is actuarially sound), the Insurance Corporation has the authority to assess premiums on the System Banks. When the amount of the Insurance Fund exceeds the secure base amount, the Insurance Corporation is required to reduce the premiums, but it still must ensure that reduced premiums are sufficient to maintain the level of the Insurance Fund at the secure base amount.
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