The Director may not accept as a deposit to secure incurred liabilities for the payment of compensation and the performance of obligations of a self-insured ER.

The Director may not accept as a deposit to secure incurred liabilities for the payment of compensation and the performance of obligations of a self-insured ER.

• A. Cash.
• B. Securities.
• C. Surety Bonds.
• D. Certificate of Deposit.

Answer: (D)

Deposits to secure incurred liabilities must be readily available to cover the employer’s workers’ compensation obligations. The Department typically accepts liquid forms such as cash, marketable securities, or a surety bond because these can be accessed quickly to pay claims. A certificate of deposit, however, is a time deposit that locks funds for a term and imposes penalties for early withdrawal, making it not readily usable when immediate payment is needed. Therefore, a CD cannot be accepted as the deposit to secure incurred liabilities.

Deposits to secure incurred liabilities must be readily available to cover the employer’s workers’ compensation obligations. The Department typically accepts liquid forms such as cash, marketable securities, or a surety bond because these can be accessed quickly to pay claims. A certificate of deposit, however, is a time deposit that locks funds for a term and imposes penalties for early withdrawal, making it not readily usable when immediate payment is needed. Therefore, a CD cannot be accepted as the deposit to secure incurred liabilities.