Ariz. Admin. Code § 20-5-1522

Current through Register Vol. 30, No. 49, December 6, 2024

Section R20-5-1522 - Letter of Credit

A. A Self-Insurer may post a letter of credit as security if:

1. The letter of credit is registered to: "The Industrial Commission of Arizona, in trust for the fulfillment by [INSERT SELFINSURER'S NAME] of its obligations under the Arizona Workers' Compensation laws"

2. The bank issuing the letter of credit is a federal or Arizona-chartered bank upon which demand may be made and from which funds will be immediately payable on demand;

3. The letter of credit includes the name and address of the Self-Insurer;

4. An authorized representative of the issuing bank executes the letter of credit;

5. The original letter of credit and original amendments to a letter of credit are provided to the Commission;

6. The initial letter of credit is valid for a period of one year from the effective date;

7. The issuing bank does not have an affiliate relationship with the Self-Insurer;

8. The letter of credit includes a provision that the letter of credit automatically extends for consecutive periods of one year, unless the issuing bank provides written notice to the Commission 60 days before the expiration of any one-year term that the issuing bank will not renew the letter of credit for the additional period;

9. The letter of credit states the amount available under the letter of credit, which shall be no less than the amount the Self-Insurer is required to post as security under this Article; and

10. The letter of credit includes a statement that the Commission may make a demand on the letter of credit by providing the issuing bank a signed statement by an official of the Commission stating either that the Self-Insurer has failed to comply with its workers' compensation obligations or failed to renew or substitute acceptable security for its workers' compensation liability 30 days before the expiration of the letter of credit.

B. The written notice required in subsection (A)(8) shall be sent to the Division via e-mail or by mail with delivery confirmation.

Ariz. Admin. Code § R20-5-1522

New section made by final rulemaking at 28 A.A.R. 3435, effective 10/5/2022.