(a) The Office may take any of the actions set forth in paragraph
(b) of this section when an insurance carrier--
(1) Defaults on any of its LHWCA obligations;
(2) Fails to renew any deposited letter of credit or substitute a
new letter of credit, indemnity bond or acceptable negotiable securities
in its place;
(3) Fails to renew any deposited negotiable securities at maturity
or substitute a letter of credit, indemnity bond or acceptable
negotiable securities in their place;
(4) Has State insolvency proceedings initiated against it; or
(5) Fails to comply with any of the terms of the Agreement and
Undertaking.
(b) When any of the conditions set forth in paragraph (a) of this
section occur, the Office may, within its discretion and as appropriate
to the security instrument--
(1) Bring suit under any indemnity bond;
(2) Draw upon any letters of credit;
(3) Seize any negotiable securities, collect the interest and
principal as they may become due, and sell or otherwise liquidate the
negotiable securities or any part thereof.
(c) When the Office, within its discretion, determines that it no
longer needs to collect the interest and principal of any negotiable
securities seized pursuant to paragraphs (a) and (b) of this section, or
to retain the proceeds of their sale, it must return any of the
carrier's negotiable securities still in its possession and any
remaining proceeds of their sale.
