A nominee account is held by an agent; a guardian; a custodian; or the Supreme/Parish Court for the benefit of a principal or ward, a minor or patient (referred to as the beneficiary) as the case may be. The parties to a nominee account may be:
- The agent and its principal
- The guardian and its minor or patient
- The custodian and its custodee
- The Supreme Court on behalf of a beneficiary
Deposit Insurance Coverage for the principal/ward of Nominee
Deposit insurance coverage recognizes the principals/wards, a minor or patient of a nominee as a depositor for the purpose of deposit insurance entitlement. As such, each beneficiary of a nominee is insured up to $1,200,000 separately from the other deposits that are held by them in other capacities and other nominee accounts.
Example 1:
In his capacity as agent, John Brown was entrusted with $3,000,000 for two principals, Dwayne Burke and Jessica Simpson, apportioned equally. He then deposits this money in a savings account (Account A) for the principals at ABC Bank. In addition, John Brown has a personal account with a balance of $600,000 (Account B) and Jessica Simpson has a certificate of deposit with $350,000 (Account C) at ABC Bank.
The following would apply in a payout:
| Deposit Insurance Computation | ||||
|---|---|---|---|---|
| Depositor | Account | Total Deposits | Insured Deposits | Uninsured Deposits |
| John Brown: | ||||
| For Dwayne Burke | A | $1,500,000 | $1,200,000 | $300,000 |
| For Jessica Simpson | A | $1,500,000 | $1,200,000 | $300,000 |
| John Brown (individual account) | B | $600,000 | $600,000 | $0 |
| Jessica Simpson(individual account) | B | $350,000 | $350,000 | $0 |
The accounts held by John Brown for $600,000 (Account B) and Jessica Simpson’s certificate of deposit for $350,000 (Account C) would both be insured separately as Individual accounts for $600,000 and $350,000 respectively.
Deposit Insurance Entitlement for principal/ward of Nominee Accounts with the Same Parties
Two or more nominee accounts are considered to have the same deposit insurance entitlement if they share the same principle/ward and nominee. Deposits for a beneficiary in more than one nominee account with the same parties are aggregated and insured up to the maximum coverage limit. Of note, these deposits are insured separately from the other deposits of the beneficiary that are maintained in other ownership capacities.
Example 2:
Ryan James was entrusted with $1,400,000 as an agent for Jonathan Smith. Mr James deposited the money in two different accounts at ABC Bank; $700,000 in a savings account (Account A) and the other $700,000 in a certificate of deposit (CD) (Account B).
The following would apply in a payout:
| Deposit Insurance Computation | ||||
|---|---|---|---|---|
| Depositor | Account | Total Deposits | Insured Deposits | Uninsured Deposits |
| Ryan James: | ||||
| For Johnathan Smith | A & B | 1,400,000 | $1,200,000 | $200,000 |
Deposit Insurance Entitlement for Beneficiaries of Nominee Accounts with Different Parties
Two or more nominee accounts are eligible for deposit insurance entitlement if the principal/ward or the nominee is not the same. Deposits that are held by different nominees for the same principal/ward are insured separately from each other and from the other deposits that are held by the same beneficiary (ies) in other ownership categories.
Example 3:
John Brown maintains a savings account (Account A) at ABC Bank with a balance of $750,000 as an agent for Jonathan Smith. Susan Simms is also an agent for Jonathan Smith and maintains a certificate of deposit (Account B) with a balance of $1,000,000 at ABC Bank on his behalf.
The following would apply in a payout:
| Deposit Insurance Computation | ||||
|---|---|---|---|---|
| Depositor | Account | Total Deposits | Insured Deposits | Uninsured Deposits |
| John Brown: | ||||
| For Johnathan Smith | A | $750,000 | $750,000 | $0 |
| Susan Simms: | ||||
| For Johnathan Smith | B | $1,000,000 | $1,000,000 | $0 |
