The Florida Senate

280.08  Procedure for payment of losses.--When the Treasurer determines that a default or insolvency has occurred, he or she shall provide notice as required in s. 280.085(1) and implement the following procedures:

(1)  The Treasurer, in cooperation with the Director of the Division of Banking of the Department of Banking and Finance or the receiver of the qualified public depository in default, shall ascertain the amount of funds of each public depositor on deposit at such depository and the amount of deposit insurance applicable to such deposits.

(2)  The potential loss to public depositors shall be calculated by compiling claims received from such depositors. Such claims shall be validated by the Treasurer. The loss to public depositors shall be satisfied, insofar as possible, first through any applicable deposit insurance and then through the sale of securities pledged by the defaulting depository.

(3)  If the loss to public depositors is not covered by such insurance or the proceeds of such sale, the Treasurer shall provide coverage of the remaining loss by assessment against the other qualified public depositories of the same type as the depository in default. However, if the sale of securities cannot be accomplished within 7 days, the Treasurer may proceed with the assessment to qualified public depositories. Such assessment shall be determined by multiplying the total amount of the loss to all public depositors by a percentage which represents the average share of public fund deposits held by that depository during the previous 12 months divided by the average total public deposits held by all depositories of the same type during the same 12-month period.

(4)  Each qualified public depository shall pay its assessment to the Treasurer within 7 business days after it receives notice of the assessment. If a depository fails to pay its assessment when due, the Treasurer shall satisfy the assessment by selling securities pledged by that depository.

(5)  The Treasurer shall distribute the funds to the public depositors of the qualified public depository in default according to their validated claims. The Treasurer, at his or her discretion, may make partial payments to public depositors that have experienced a loss of public funds which payments are critical to the immediate operations of the public entity. The public depositor requesting partial payment of a claim shall provide the Treasurer with written documentation justifying the need for partial payment.

(6)  Public depositors receiving payment under the provisions of this section shall assign to the Treasurer any interest they may have in funds that may subsequently be made available to the qualified public depository in default. If the qualified public depository in default or its receiver provides the funds to the Treasurer, the Treasurer shall distribute the funds, plus all accrued interest which has accumulated from the investment of the funds, if any, to the depositories which paid assessments on the same pro rata basis as the assessments were paid.

(7)  Expenses incurred by the Treasurer in connection with a default or insolvency which are not normally incurred by the Treasurer in the administration of this act must be paid out of the proceeds from the sale of pledged collateral.

History.--s. 3, ch. 81-285; s. 5, ch. 85-259; s. 13, ch. 87-409; s. 8, ch. 88-185; s. 191, ch. 95-148; s. 10, ch. 96-216.