Florida Regulations 69L-5.108

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§ 69L-5.108 Security Deposits. (repealed)

Repealed. (03-09-10)

(1) Each individually self-insured employer shall, as a condition for the approval and continuation of its self-insurance privilege, provide a qualifying security deposit to secure the payment of compensation. The qualifying security deposit shall be held by the division, or by a depository authorized by the division, exclusively for the benefit of workers' compensation claimants. The security shall not be subject to assignment, execution, attachment, or any legal process whatsoever, except as necessary to guarantee compensation under these rules. (2) The surety bond or security deposit amount required of an individual self-insurer shall be a minimum of $100,000. This security deposit shall be in addition to any security deposit required pursuant to that required by paragraph 4L- 5.109(7)(a), F.A.C. If the division determines the self-insurer does not have the necessary financial strength to ensure the payment of current and estimated future claims when due, the division shall act in accordance with Section 440.38(1)(b)1., Florida Statutes. (3) Self-insured employers qualifying under the alternate financial summary method shall post a security deposit in the form of an irrevocable letter of credit, Form |^SI-6|, in favor of the division drawn on a United States bank insured through the Federal Deposit Insurance Corporation. Form |^SI-6|, Irrevocable Letter of Credit, is hereby incorporated by reference in Rule Chapter 4L-5, F.A.C. The version of the form required by this rule shall bear the date September 1996 (9/96). A copy of Form SI-6 may be obtained from the Division of Workers' Compensation, Bureau of Monitoring and Audit, Self-Insurance Section, 200 East Gaines Street, Tallahassee, FL 32399-4224. For the first three years of self-insurance such security deposit shall be equal to the greater of the initial security deposit or 150% of the actuarially computed cumulative loss reserve amount. Commencing with the fourth year of self-insurance the security deposit shall be equal to 150% of the actuarially computed cumulative loss reserve. Such security deposit shall be adjusted annually. (4) If all or a portion of a self-insurer's outstanding workers' compensation liabilities are guaranteed by separate surety bonds or cash security deposits, then the amount so guaranteed may be deducted from the security deposit requirements. It shall be the responsibility of the self-insurer to request a reduction pursuant to this paragraph and to provide such documentation to the division as necessary to determine the amount of the reduction. Any security deposit maintained in accordance with Section 440.38(1)(b)2., Florida Statutes, shall not be deducted from current requirements under this rule. (5) Security deposits and surety bonds posted by self-insurers with no remaining unpaid liabilities resulting from injuries incurred prior to September 17, 1982, who are members of the Florida Self-Insurers Guaranty Association, Inc. shall provide that these bonds are payable directly to the Florida Self-Insurers Guaranty Association, Inc. (6) The division is authorized to bring suit upon any surety bond posted to procure prompt payment of compensation benefits awarded or due under Chapter 440, Florida Statutes. In the event that the self-insurer is a member of the Florida Self-Insurers Guaranty Association, Inc., the Florida Self-Insurers Guaranty Association, Inc., shall be authorized to bring suit upon the surety bond. (7) Any securities held by the division may be exchanged or replaced by the depositor with other securities of like nature and amount. Any surety bond may be exchanged or replaced with another surety bond, provided the required ninety (90) days notice of termination of liability is given to the division. Whenever an employer discontinues or desires to replace securities with a surety bond, it shall so notify the division and may recover the securities deposited with the division upon posting, in lieu thereof, a special release bond issued by a corporate surety in an amount equal to the total value of such securities. The special release bond shall cover all existing liabilities under the law and shall remain in force for a period in accordance with the statute of limitations in the Florida Workers' Compensation Law and until such time as all obligations under Chapter 440, Florida Statutes, have been fully discharged. (8) All bonds or securities issued by the State of Florida or the U.S. Government which are posted as security deposits shall be reviewed annually by the division to determine market value in relation to the deposit requirement. In the event the market value is less than the deposit requirement, the division shall consider the self-insurer's financial condition, the amount that the market value is less than the deposit requirement, along with the likelihood that such securities will be needed to provide benefits, and act in accordance with Section 440.38(1)(b)1., Florida Statutes. (9) To be acceptable to the division, security deposits must conform with Section 440.38(1)(b)4., Florida Statutes. (10) Security deposits shall be assigned to the division in writing on Form |^SI-32| Assignment of Securities. Form |^SI-32| is hereby incorporated by reference into Rule Chapter 4L-5, F.A.C. The version of the form required by this rule shall bear the date September 1996 (9/96). A copy of Form |^SI-32| may be obtained from the Division of Workers' Compensation, Bureau of Monitoring and Audit, Self-Insurance Section, 200 East Gaines Street, Tallahassee, FL 32399-4224. These assignments shall be kept on file with the division. Once the qualifying security deposit has been properly assigned to the division, the division shall file a Standard Form - Form |^UCC-1|, State of Florida Financing Statement, with the Office of the Secretary of State in order to assist in the perfection of its security interest in the deposit. The |^UCC-1| is hereby incorporated by reference into Rule Chapter 4L-5, F.A.C. The version of the form required by this rule shall bear the year 1993. A copy of the form may be obtained from the Division of Workers' Compensation, Bureau of Monitoring and Audit, Self-Insurance Section, 200 East Gaines Street, Tallahassee, FL 32399-4224. Any and all fees associated with the filing of the UCC 1 Form with the Office of the Secretary of State shall be assessed to the individual self-insurer posting the security deposit and must be paid prior to or in conjunction with the signing of the security agreement. Said fees are non-refundable. Nonpayment of fees in conjunction with the filing of the UCC 1 Form shall result in the denial of the application of the self-insurer by the division, or in revocation of the self-insurance privilege under Rule 4L-5.105, F.A.C., should that privilege already be in full force and effect. Specific Authority 440.38(1)(b) FS. Law Implemented 440.38(1)(b) FS. History-New 5-19-97, Formerly 38F-5.108.