WASHINGTON (AP) — US banks will prepay about $45 billion in premiums to replenish a federal deposit insurance fund now in the red, under a plan adopted by federal regulators.

The Federal Deposit Insurance Corp. board voted yesterday to mandate the early payments of premiums for 2010 through 2012. Amid the struggling economy and rising loan defaults, 120 banks have failed so far this year costing the insurance fund more than $28 billion.

To address concerns of small banks in weak financial condition, the FDIC also set up an exemption process for those that prove the prepaid fees would be a hardship.

The FDIC expects the cost of bank failures to grow to about $100 billion over the next four years. It is the first time the agency has required prepaid insurance fees.

The idea behind it is for banks to spread the costs over three years rather than paying a one-time fee that would deplete their capital reserves.

The deposit insurance fund stood at $10.4 billion at the end of June — already its lowest point since 1992 — and since has fallen into deficit. That hasn't occurred since the savings-and-loan crisis of the late 1980s and early 1990s.

Still, depositors' money is guaranteed — up to $250,000 per account — by the FDIC.

The new prepaid insurance premiums were proposed by the FDIC in late September and opened to public comment.