Old Court Savings & Loan Inc. is one of about a hundred Maryland state-chartered savings and loan institutions insured by Maryland Savings Shares Insurance Corp. MSSIC is a private insurance fund. Unlike the Federal Savings and Loan Insurance Corp., which insures federally chartered S&Ls and some state S&Ls, and which has the full faith and credit of the U.S. government behind it, MSSIC is not financially backed by the state of Maryland.

Like FSLIC, it insures deposits up to $100,000. Customers can have multiple accounts, all insured to the limit. MSSIC was founded by an act of the legislature in 1962 following the collapse of several state savings institutions and the loss of customer deposits. MSSIC boasts that no depositor has lost a penny since then.

MSSIC has $295 million in assets, including $90 million in its liquidity fund to help S&Ls out of cash crises. MSSIC also has a $50 million line of credit from a consortium of banks around the country as well as access to the Federal Reserve's discount window. MSSIC is actually better capitalized than FSLIC. However, Congress has resolved that FSLIC will have the ultimate guarantee of the Treasury.

Nearly two-thirds of Maryland's savings and loans are privately insured by MSSIC. In the past, S&Ls sought state charters and MSSIC insurance because of the greater freedom they allowed compared with federal charters and insurance. MSSIC thrifts, for example, were free to offer market rates on deposits when their competitors were constrained by lower interest rate ceilings set by Congress.

With interest rate deregulation due to be completed next year, the reasons for Maryland S&Ls maintaining MSSIC insurance are diminishing. The Ohio savings and loan crisis created additional incentives for state-chartered institutions to seek federal coverage.

About half a dozen of MSSIC's biggest members, representing 30 to 40 percent of the deposit liabilities, have signaled their intention to leave MSSIC and seek FSLIC coverage. (Notice must be given a year in advance.) About 20 MSSIC thrifts are too small to qualify or do not meet the standards for federal insurance. It is not clear how many of the others are in good enough financial condition to get federal insurance.