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Financial Institution Letter
Retained Asset Accounts and FDIC Deposit Insurance Coverage
Summary: FDIC Chairman Sheila C. Bair recently sent the attached letter to the National Association of Insurance Commissioners (NAIC) addressing the FDIC's concerns about the adequacy of disclosures provided by insurance companies when distributing insurance proceeds to consumers through Retained Asset Accounts (RAAs). Recent media reports indicate that many RAA recipients incorrectly think these products are deposit. 

Insured depository institutions that participate in any function relating to RAAs (participating banks) must be vigilant in minimizing consumer confusion about FDIC insurance coverage. Participating banks should work with the insurance companies offering RAAs to make sure that all documents provided to consumers appropriately reflect the participating banks' role in the transactions and disclose to policyholders and beneficiaries whether or not the RAAs are insured by the FDIC. 


  • A retained asset account is an insurance company product in which the beneficiary of a life insurance policy receives proceeds in the form of an account provided by the insurance company in lieu of a lump sum payment.
  • Participating banks perform various administrative functions relating to RAAs.c
  • Information provided to the FDIC indicates that RAAs generally are not FDIC insured. RAAs may be insured by the FDIC only if the insurance company holds the funds in a fiduciary capacity for policyholders/beneficiaries in a deposit account at an insured depository institution.
  • To minimize confusion, participating banks should ensure that their role in RAA arrangements is properly disclosed in any materials that are provided to customers, even when these materials are distributed by another party.
  • Participating banks should satisfy themselves that the insurance company is making clear disclosures to customers and beneficiaries regarding the FDIC insurance status of the RAA product.

FDIC-Insured Institutions 

Suggested Routing: 
Chief Executive Officer 
Head of Deposit and Branch Operations 
Chief Compliance Officer 
Training Officer 

FDIC financial institution letters (FILs) may be accessed from the FDIC's Web site at

To receive FILs electronically, please visit

Paper copies of FDIC financial institution letters may be obtained through the FDIC's Public Information Center, 3501 Fairfax Drive, E-1002, Arlington, VA 22226 (1-877-275-3342 or 703-562-2200). 


Additional Related Topics:

  • 12 CFR 330 (Deposit Insurance Rules)
  • Third-Party Risk: Guidance for Managing Third-Party Risk (FIL-44-2008)
Last Updated: August 11, 2010