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(a) The posting of a security deposit may be required by the board if the board determines that a security deposit is necessary for a particular self-insured.
(b) A security deposit, if required, must be in the amount of $300,000 or 125 percent of the total outstanding accrued workers' compensation liabilities, whichever is greater.
(c) An employer who believes it should be exempted from posting a security deposit shall submit to the board a statement of reasons for exemption.
(d) Acceptable security deposits include
(1) surety bonds in a form acceptable to the board and written by a corporate surety authorized to transact business in Alaska;
(2) United States government bonds, notes, or bills;
(3) any bonds or securities issued by the State of Alaska and guaranteed by the full faith and credit of the state;
(4) certificates of deposit issued by a duly chartered commercial bank, but only to the extent protected by the Federal Deposit Insurance Corporation;
(5) saving certificates issued by a savings and loan association, but only to the extent protected by the Federal Savings and Loan Insurance Corporation;
(6) a financial guarantee endorsement in a form acceptable to the board issued as part of an acceptable excess insurance policy;
(7) an irrevocable letter of credit from a financial institution authorized to do business in Alaska under AS 06.01.010 - 06.40.190; or
(8) a certificate of deposit issued by a credit union, but only to the extent protected by the National Credit Union Association.
(e) A security deposit under this section will be valued at its current market value and must be readily convertible to cash.
(f) Security deposits will be assigned to the Commissioner of Labor and Workforce Development, his successors or assigns. The deposits will be administered by the Commissioner of Revenue. Interest accruing on a negotiable security deposit will be collected and transmitted at least annually to the self-insurer, provided that the self-insurer is not in default under AS 23.30.170 .
(g) If a self-insurer defaults under AS 23.30.170 or files for bankruptcy, the Commissioner of Labor and Workforce Development will, through the use of the security deposit, obtain sufficient money to pay benefits and compensation awarded or secure a replacement policy of coverage. All deposits will remain in the custody of the Commissioner of Labor and Workforce Development until such time as all obligations of the self-insurer have been fully discharged. At that time the board will return any remaining security deposit to the self-insurer.
(h) A security deposit may be exchanged or replaced by the self-insurer, upon 30 days' written notice to the board, with other acceptable security in the same amount as long as the self-insurer is not in default under AS 23.30.170 . No assignment of a security deposit will be released until an acceptable security deposit of equal value has been substituted.
(i) A self-insurer that ceases to self-insure shall notify the board and may recover the securities deposited with the board upon posting a special release bond issued by a corporate surety in an amount equal to the total value of the securities. The special release bond must cover all existing liabilities under the Act and remain in force until all obligations under the Act have been fully discharged.
History: Eff. 11/20/83, Register 88; am 7/20/97, Register 143
Authority: AS 23.30.005
Editor's note: As of Register 151 (October 1999), the regulations attorney made technical revisions under AS 44.62.125 (b)(6) to reflect the name change of the Department of Labor to the Department of Labor and Workforce Development made by ch. 58, SLA 1999 and the corresponding title change of the commissioner of labor.
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Last modified 7/05/2006