Great Western Wants to Drop Out of FSLIC

Great Western, the nation’s third-largest savings and loan, today sought to leave the federal insurance fund that backs the troubled S&L; industry and join the fund that insures banks.

The institution, which calls itself Great Western Bank although it is a savings and loan, said it planned the switch to escape millions of dollars in special federal levies intended to help bail out failing, often ill-managed S&Ls.;

The Federal Savings & Loan Insurance Corp. has spent billions of dollars in recent months to rescue faltering thrifts, and estimates of the total cost of restoring the industry to health range from $50 billion to $100 billion.

Beverly Hills-based Great Western Financial Corp., the parent firm of Great Western, said it had applied to federal regulators to switch its insurance from the FSLIC, which insures thrift accounts up to $100,000, to the Federal Deposit Insurance Corp., which insures bank accounts to the same level.

Congress, to block an exodus of healthy S&Ls; from the industry insurance fund, imposed a moratorium on such conversions in 1987 and renewed it in August. But Great Western said it had filed documents making it eligible for an exemption to the moratorium, and expected to be allowed to switch to FDIC insurance.