Florida Administrative Code › 69 - DEPARTMENT OF FINANCIAL SERVICES › 69L - Division of Workers' Compensation › Chapter 69L-5 - RULES FOR SELF-INSURERS UNDER THE WORKERS' COMPENSATION ACT › Section 69L-5.218 - Security Deposits

Current through Reg. 50, No. 138; July 16, 2024
(1) Current
				Self-Insurers and Former Self-Insurers, other than Governmental Entities, that
				have a current Investment Grade Credit Rating shall maintain a minimum Security
				Deposit of $100,000.
(2) Current
				Self-Insurers, other than Governmental Entities, that do not have a current
				Investment Grade Credit Rating shall provide a Security Deposit in an amount
				equal to the greater of the actuarially determined outstanding loss reserves
				discounted to present value, using a four percent (4%) discount rate, or the
				actuarially determined outstanding loss reserves forecasted to a date one year
				in the future, discounted to such forecasted date using a four percent (4%)
				discount rate, as calculated in its Actuarial Report. In no case, shall the
				amount of the Security Deposit be less than $100,000.
(3) Former Self-Insurers, other than
				Governmental Entities, that do not have an Investment Grade Credit Rating shall
				provide a Security Deposit equal to the actuarially determined outstanding loss
				reserves discounted to present value at a four percent (4%) discount rate. In
				no case shall the amount of the Security Deposit be less than
				$100,000.
(4) In the event that a
				Current Self-Insurer or Former Self-Insurer does not have a current published
				Credit Rating, the Association or the Department shall determine an equivalent
				rating by performing an analysis of the Financial Statements provided in
				accordance with Rule  69L-5.209, F.A.C., and the
				amount of the Security Deposit shall be determined using the equivalent rating
				as the Credit Rating. A Current Self-Insurer or Former Self-Insurer that
				disagrees with the equivalent rating may provide a current Credit Rating. If
				the Current Self-Insurer or Former Self-Insurer provides a current Credit
				Rating, the security deposit requirement will be determined using the current
				Credit Rating instead of the equivalent rating and any excess security deposit
				will be released.
(5) As of the
				effective date of this rule, Current Self-Insurers and Former Self-Insurers
				that do not have an Investment Grade Credit Rating, or an equivalent rating at
				least equal to an Investment Grade Credit Rating as determined by the
				Association, shall provide the required security deposit increase amount in
				accordance with subsection (2) or (3), above, as applicable, within twelve (12)
				months of the effective date of this rule. However, within this twelve (12)
				month period, any Current Self-Insurer or Former Self-Insurer who experiences a
				deterioration in its Credit Rating or equivalent rating as determined by the
				Association to a Credit Rating that is less than an Investment Grade Credit
				Rating shall be required to provide an Actuarial Report and to post the
				security increase amount as determined by subsection (2) or (3), above, as
				applicable, immediately upon request by the Department. The provisions of this
				subparagraph expire twelve (12) months after the effective date of this
				rule.
(6) The Security Deposit
				shall be maintained until the authorization holder is a Former Self-Insurer who
				has demonstrated that there is no remaining value to its self-insured workers'
				compensation claims and the statute of limitations has run on closed claims.
				Prior to the release of the Security Deposit, the Former Self-Insurer and its
				Qualified Servicing Entity(ies) shall provide signed affidavits stating that
				all self-insured workers' compensation claims have been settled or the statute
				of limitations has run on closed claims.
(7) If the self-insurer is a FSIGA Member,
				the Security Deposit must be submitted to and executed in favor of the
				Association. The Security Deposit shall be held by the Association or the
				Department exclusively for the benefit of workers' compensation claimants. The
				Security Deposit shall not be subject to assignment, execution, attachment, or
				any legal process whatsoever, except as necessary to guarantee the payment of
				workers' compensation benefits under chapter 440, F.S.
For FSIGA Members, security deposit forms DFS-F2-SI-4F
				  (Self-Insurer's Surety Bond for FSIGA Member) and Form DFS-F2-SI-6
				  (Self-Insurer's Irrevocable Letter of Credit) can be obtained from and shall be
				  submitted to the:
Florida Self-Insurers Guaranty Association, Inc.
1427 E. Piedmont Dr., 2nd Floor
Tallahassee, Florida 32308
(8) A Security Deposit shall consist of, at
				the option of the employer:
(a) A surety bond
				on Form DFS-F2-SI-4F (Self-Insurer's Surety Bond for FSIGA Member), effective
				08/09, as incorporated by reference, which shall be issued by a corporation
				surety authorized to transact surety business by the Florida Department of
				Financial Services, Office of Insurance Regulation, and whose financial
				strength and size ratings from A. M. Best Company are not less than "A" and "V"
				respectively; or
(b) An irrevocable
				letter of credit on Form DFS-F2-SI-6 (Self-Insurer's Irrevocable Letter of
				Credit), effective 08/09, as incorporated by reference, which shall be issued
				by a financial institution located within the State of Florida and the deposits
				of which are insured through the Federal Deposit Insurance
				Corporation.