It shall be unlawful, on and after the date three years following the effective date of this act, for any state association to operate without insurance of its accounts by the Federal Savings and Loan Insurance Corporation as defined in subsection (20) of section 5 of P.L. 1963, c. 144 (C. 17:12B-5), (hereinafter referred to as “FSLIC insurance”).

a. Within one year of the effective date of this act, every state association shall, as a condition to operate in this State, apply for FSLIC insurance.

b. Any state association which has failed to apply for FSLIC insurance within one year of the effective date of this act, or which has been denied a commitment for FSLIC insurance, shall, within 90 days thereafter, begin steps to merge with an insured association, or transfer, sell or exchange in bulk its assets to an insured association, or a banking institution as defined in subsection (2) of section 1 of P.L. 1948, c. 67 (C. 17:9A-1). Liquidation following the transfer, sale or exchange in bulk of its assets shall be managed and directed by the thereupon to be dissolved state association’s board of directors in accordance with the provisions of section 205 and sections 207 through 212 of P.L. 1963, c. 144 (C. 17:12B-205 and 17:12B-207 through 17:12B-212).

c. A state association may apply in writing for an extension of time to obtain FSLIC insurance or to consummate a merger or bulk sale. The commissioner may grant one or more 90-day extensions of time, but not exceeding one year, for a state association to obtain FSLIC insurance or cease its operations as provided by this section.

L. 1987, c. 225, s. 6.