When any passbook, certificate or instrument, negotiable or nonnegotiable, transferable or nontransferable, issued by a Connecticut bank or Connecticut credit union in connection with a deposit account or share account has been lost, stolen or destroyed, all persons in whose names such account is held, or their respective legal representatives, may make written application to such bank or credit union for either the payment of the balance then due on such account or for the issuance of a duplicate passbook, certificate or instrument for such account. Such application shall be signed by each person in whose name such account is then held according to the records of the bank or credit union, and shall be in such form, together with such sureties and such reasonable representations, warranties, agreements and indemnifications as are acceptable to such bank or credit union. Upon receipt of such application and proof satisfactory to it of the identity of the person or persons making such application, such bank or credit union shall, at its option, either pay the balance then due on such account to such applicant or applicants or issue a duplicate passbook, certificate or instrument for such account and, upon such payment or issuance, all liability of such bank or credit union to any person making such application and based on the existence of the original passbook, certificate or instrument terminates.