24.29.611 SECURITY DEPOSIT--CRITERIA
(1) When a security deposit is required under ARM 24.29.610, it may be a surety bond, government bond, letter of credit, or certificate of deposit acceptable to the department and the guaranty fund. When a security deposit is required, the following criteria apply:
(a) The department shall accept a surety bond only from companies certified by the United States Department of Treasury as "Companies Holding Certificates of Authority as Acceptable Sureties on Federal Bonds and as Acceptable Reinsuring Companies," as published in the most recent Federal Register.
(i) A surety bond issued by a company that has a Best's rating of "A" or better and a financial size rating of X or greater will be approved.
(ii) A surety bond issued by a company that is rated by Best's, but does not meet the criteria specified in (1)(a)(i) will be considered for approval at the discretion of the department, with the concurrence of the guaranty fund.
(iii) A surety bond issued by a company not rated by Best's will be considered for approval at the discretion of the department, with the concurrence of the guaranty fund.
(b) The security deposit must name the department as obligee and must be held by the department as security for payment of all liabilities likely to be incurred under the Workers' Compensation Act, or the Occupational Disease Act for occupational diseases that occurred before July 1, 2005. The department, with the concurrence of the guaranty fund, shall retain a security deposit until all liabilities have been paid. In the event liabilities have not been met by the self-insurer, the department shall proceed pursuant to 39-71-2108, MCA. If the self-insurer has placed multiple forms of security deposits, the department shall, at its discretion, convert the deposits needed to pay claims.
(c) A security deposit in the form of a surety bond or letter of credit must include a statement that the grantor of the security deposit is required to give to the principal, the department and the guaranty fund, 60 days notice of its intent to terminate future liability. The grantor of the security deposit is not relieved of liability for injuries occurring prior to the effective date of termination.
(d) The security deposit must be issued on the forms prescribed by the department.
(e) A security deposit in the form of a certificate of deposit must be issued by a financial institution located within the United States and must be fully insured by a federally chartered insurance corporation.
(f) Letters of credit must be issued by a financial institution located within the United States with investment grade ratings issued by Moody's Investors Service, Standard & Poor's, or Fitch Ratings. If ratings from those rating entities are not available, the approval of the financial institution will be made at the discretion of the department, with the concurrence of the guaranty fund.
History: 39-71-203, 39-71-2106, MCA; IMP, 39-71-403, 39-71-2106, MCA; NEW, 1996 MAR p. 1151, Eff. 5/1/96; AMD, 2012 MAR p. 1666, Eff. 8/24/12.