7.1.1 Identification of Insurance Eligible Accounts
The identification of Insurance Eligible Accounts involves looking at the inclusion and exclusion criteria. The application requires users to provide the following inclusion criteria:
Ownership Category
The application allocates the insurance limit separately for each ownership category level. Ownership categories include single accounts, joint accounts, trust accounts and so on. As per Perbadanan Insurans Deposit Malaysia (PIDM), a separate limit is assigned to a depositor combination based on the ownership category of accounts and hence users must provide the ownership categories that get a separate limit. If a customer gets a single limit irrespective of whether the accounts are held as single, joint or a combination, the ownership category should have a single default value.
Product Type
The list of product types that are covered under the respective jurisdiction’s deposit insurance scheme. The insurance limit is allocated to only those accounts of a customer whose product types match those that are covered by the deposit insurance. In the case of Malaysia, PIDM covers all types of deposits such as current accounts, savings accounts and term deposits, which must be provided as inputs.
Product Type Prioritization
The sequence in which the insured amount is to be allocated to each product type is captured. For instance, product prioritization may be specified as current account, savings account and term deposit. This indicates that the insured amount is allocated first to a current account held by the customer. After current accounts have been fully covered, the remaining amount is allocated to savings accounts and finally to term deposits.
If product type prioritization is not specified, the default allocation will be proportionate to the EOP balance of each account irrespective of the product type.
Currency Eligibility for Insurance
The list of currencies in which the accounts are denominated that are eligible for insurance coverage under a deposit insurance scheme. Some jurisdictions cover foreign currency deposits under their deposit insurance schemes. If eligible currencies are specified for the purpose of insurance, then the insured balance is allocated to all accounts belonging to the particular legal entity which have the associated attributes required for assigning the insured balance. For instance, if Perbadanan Insurans Deposit Malaysia (PIDM) insures only Malaysian Ringgit denominated deposits. The eligible currency against the PIDM insurance scheme should be provided as Malaysian Ringgit.
The application includes insurance exemption criteria covering deposits of foreign sovereigns, central and state governments, and banks and so on. Deposits that are eligible for insurance under a particular insurance scheme are identified based on the inclusion and exclusion criteria as specified by the users.