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Financial Institution Letter
SUBJECT: Risk-Related Premium System 
Summary: Beginning with the semiannual deposit insurance assessment period that starts on January 1, 2004, the FDIC's internal process for evaluating insured institutions' requests for review of their assessment risk classifications will be uniform regardless of the nature of the request for review. The FDIC has also clarified the information it considers in assigning assessment risk classifications. 

The Federal Deposit Insurance Corporation (FDIC) is providing insured institutions with updated information about deposit insurance assessments. For the semiannual assessment period beginning January 1, 2004, and subsequent assessment periods, the FDIC will use a streamlined internal process for evaluating an insured institution's request for a review of its assessment risk classification. In addition, the FDIC has clarified what information it considers in assigning assessment risk classifications.

Since June 30, 1995, assessment payments have been required quarterly; however, each institution is assigned an assessment risk classification semiannually. Both quarterly payments for a particular semiannual assessment period are at the same assessment risk classification rate. The two semiannual periods are January 1 through June 30, and July 1 through December 31. The FDIC notifies institutions of their assessment risk classification no less than 15 days prior to the first payment for the semiannual period. This notice is mailed in mid-June for the July 1 assessment period and in mid-December for the January 1 assessment period. The attached "Determination of Assessment Risk Classifications" explains the process the FDIC uses to determine assessment risk classifications, and it clarifies the information the FDIC considers when assigning these classifications.

Since January 1, 1997, the amount charged by the Financing Corporation (FICO) has been separate from, and in addition to, deposit insurance assessments for all insured institutions. The FICO rate is adjusted quarterly to reflect changes in the assessment base. The current FICO rate is reflected on the quarterly assessment invoice.

An institution may request a review of its assessment risk classification. The attached "Determination of Assessment Risk Classifications" explains how to request a review. Before rendering a final decision on such a request, the FDIC previously used an internal process, set forth in Financial Institution Letter (FIL)-30-2000, that required multiple steps for certain requests for review of the supervisory subgroup. The FDIC has streamlined this internal process so that in all cases institutions need only submit one request for review of their risk classification. If a request is denied, the institution will be able to appeal that decision to the Assessment Appeals Committee.

An institution may also request a revision of the computation of its quarterly assessment payment. The process for requesting a revision of the computation of the quarterly assessment payment is outlined on each assessment invoice.

If an institution requests both a review of its assessment risk classification and a revision of the computation of its quarterly assessment payment, a separate request must be completed for each. Regardless of the request made, the institution must ensure that funds in an amount at least equal to the invoiced amount are available in the designated account for payment of its assessment. Any subsequent adjustments will be made in accordance with Section 327 of the FDIC's Rules and Regulations.

If you have questions, or do not receive your assessment invoice and the incorporated assessment risk classification notice within 15 days of the required mailing date, please call the FDIC's toll-free Assessment Hotline at 1-800-759-6596 (202-898-7090 in the Washington, D.C., area). Staff will be available to answer your questions on business days between 8:30 a.m. and 4:30 p.m., Eastern Time.

For your reference, FDIC Financial Institution Letters may be accessed from the FDIC's Web site at . This FIL supersedes FIL-30-2000, dated May 25, 2000.

Arthur J. Murton



Attachment: Determination of Assessment Risk Classifications

Distribution: Insured Banks, Savings Associations and Branches of Foreign Banks

NOTE: Paper copies of FDIC financial institution letters may be obtained through the FDIC's Public Information Center, 801 17th Street, NW, Room 100, Washington, DC 20434 (1-877-275-3342 or (703) 562-2200). 

Last Updated: November 28, 2003