La. Admin. Code tit. 40 § I-1709

Current through Register Vol. 50, No. 11, November 20, 2024

Section I-1709 - Acceptable Securities or Surety

A. The securities acceptable to the Office of Workers' Compensation Administration as a security deposit shall be U.S. Government Bonds; irrevocable letters of credit issued by a federal or state bank pre-approved by the office of Workers' Compensation; Surety Bonds in a form prescribed by the Office which are issued by any corporate surety which meets the qualifications prescribed in §1709 B; and other forms of security deemed acceptable by the director of the Office of Workers' Compensation. Self-insurers must have all funded securities made payable to the Office of Workers' Compensation.

B. Any corporate surety, to be eligible for writing self-insurers' bonds in the state of Louisiana, shall be an admitted or approved carrier by the insurance commissioner of the state of Louisiana to transact such a business in the state, shall have its latest financial statement on file with the insurance commissioner and the Office of Workers' Compensation Administration; and shall at all times show assets, including surplus to policyholders, at least equal to the latest Insurance Commission requirements for admission of a new company to do business in the state. The policyholders and financial ratings, as shown in the most current issue of Best's Key Rating Guide, Property-Casualty, shall not be less than "B" and "IV," respectively. In the event a company is not rated by Best's, a corporate surety may be approved at the discretion of the office.

C. All such securities shall be filed with the Office of Workers' Compensation for deposit under custody receipt. The office shall be authorized to sell and/or collect, in the case of default of the employer or group, such amount thereof as shall yield sufficient funds to pay compensation liabilities. The office shall likewise be authorized to bring suit upon any surety bond so posted, to procure prompt payment of compensation liabilities. Interest accruing on any negotiable securities so deposited shall be collected and transmitted to the depositor, provided he is not in default in the payment of compensation or the annual premium tax. All deposits shall remain in the custody of the office until such time as the workers' compensation claims, which the deposits secure, have been fully satisfied.

D. Any securities held by the office 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 30 days notice of termination of liability is given to the office. Whenever an employer discontinues business in the state or desires to terminate his status as a self-insurer, or desires to replace securities with a surety bond, he shall so notify the office and may recover the securities deposited with the office 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 Workers' Compensation Act and shall remain in force in accordance with the prescriptive and preemptive period provided at R.S. 23:1209, and until such time, to be determined by the office, that all obligations under the Act have fully discharged.

La. Admin. Code tit. 40, § I-1709

Promulgated by the Department of Employment and Training, Office of Workers' Compensation, LR 17:961 (October 1991).

AUTHORITY NOTE: Promulgated in accordance with R.S. 23:1168 of Act 938 of 1988 Regular Session.