Temporary high balances
Where depositors have deposits resulting from the following situations referred to as “temporary high balances”, the standard EUR 100,000 protection is increased to EUR 2,500,000, provided that said amounts have been credited or may have been legally transferred less than 12 months prior to the unavailability of the deposits:
1. Deposits arising from real estate transactions in respect of private residential property, as well as compensation for claims incurred in respect of private residential property.
Covered are real estate transactions on primary or secondary residences. Moreover, the Luxembourg legislator has decided to include coverage of compensation received by an insurer as a result of a loss suffered regarding a private residential property. This targets, e.g. the case of a person receiving compensation following a fire or a flooding of his/her dwelling.
2. Deposits that fulfill a social purpose and are related to a particular life event of a depositor, such as wedding, divorce, retirement, individual or collective dismissal, disability or death.
The aforementioned list of life events is non-exhaustive. This includes, e.g. the bank account that young spouses have opened on the occasion of their wedding, the proceeds of the liquidation of the community property in the event of divorce, the allowances payable on retirement, the indemnities resulting from the individual or collective dismissal, disability benefits, as well as inheritance.
3. Deposits resulting from the payment of insurance benefits or compensation for victims of criminal offences or wrongful convictions.
The Fonds de garantie des dépôts Luxembourg (FGDL, Luxembourg Deposit Guarantee Fund), will at first repay deposits up to the standard limit of EUR 100,000. The depositor who deems to be entitled to a higher refund must subsequently apply to the FGDL, by transmitting any documents needed by the FGDL to verify the merit of the application. A simple copy of documents issued by a Luxembourg administrative authority or by an administrative authority of another Member State of the European Union is deemed sufficient for that purpose. For any other document, a certified copy is required. The additional repayment deadline is three months from the date the FGDL receives all the necessary documents. Total compensation by the FGDL may not exceed EUR 2,500,000 for all of the depositor’s accounts with a failed bank. The repayment of deposits which do not fulfill any of the above conditions remains limited to EUR 100,000.
The procedures for calculating the repayment and the eligibility criteria for the above-mentioned deposits still need to be specified by a grand-ducal regulation in accordance with Article 171(2) of the Law of 18 December 2015, as amended.