Md. Code Regs. 09.32.01.07

Current through Register Vol. 51, No. 12, June 14, 2024

Section 09.32.01.07 - Collateral Security Posted by Certain Reimbursers

A. Amount and Adjustment of Collateral.

(1) Nonprofit organizations that elect to make payments instead of contributions shall file collateral approved by the Secretary.

(2) The Secretary shall review the sufficiency of the collateral annually based on the previous year's taxable wages or on any other basis the Secretary deems appropriate. If the amount of existing collateral is less than the employer's average annual benefit costs for the preceding 2 years, the amount of the collateral shall be increased to equal the average annual benefit costs. The amount of the collateral may not exceed the maximum State tax rate multiplied by that employer's taxable payroll for the prior year.

(3) When the collateral is increased, the adjusted collateral shall be filed within 30 days of the Secretary's demand.

B. Collateral shall be posted with the Secretary in a form acceptable to the Secretary, which may include one or more of the following forms:

(1) A corporation bond issued by a company licensed to issue surety-type bonds;

(2) Cash deposit;

(3) Treasury notes or other evidence of federal indebtedness;

(4) Bonds or other evidence of indebtedness insured by the State that bind the full faith and credit of the State; or

(5) Irrevocable and unconditional letters of credit.

Md. Code Regs. 09.32.01.07

Regulations .07, Obligations of Employers, adopted effective June 24, 1991 (18:12 Md. R. 1340)