Division of Longshore and Harbor Workers' Compensation; Insurer
Security Deposits; Request for Information [Notices] [02/22/2002]
Division of Longshore and Harbor Workers' Compensation; Insurer
Security Deposits; Request for Information [02/22/2002]
Volume 67, Number 36, Page 8449-8450
[[Page 8449]]
-----------------------------------------------------------------------
Part VIII
Department of Labor
-----------------------------------------------------------------------
Office of Workers' Compensation Programs
-----------------------------------------------------------------------
Division of Longshore and Harbor Workers' Compensation; Insurer
Security Deposits; Request for Information; Notice
[[Page 8450]]
-----------------------------------------------------------------------
DEPARTMENT OF LABOR
Office of Workers' Compensation Programs
Division of Longshore and Harbor Workers' Compensation; Insurer
Security Deposits; Request for Information
Security Deposits
The Division of Longshore and Harbor Workers' Compensation (DLHWC)
has long required a security deposit from all self-insured employers,
and from insurers under certain conditions. These security deposits
provide the funds that may be necessary to continue timely benefit
payments to claimants without shifting the cost to all other self-
insurers and insurance carriers, through increased assessments for the
Special Fund, in the event that an employer's or insurer's insolvency
would otherwise prevent payments.
In the recent past, DLHWC has required deposits from insurers based
on the A.M. Best rating of the individual insurer; if an insurer's
rating is A-or lower at the initial application for authorization, or
falls to that level during participation, DLHWC requires a deposit. The
amount of the deposit is based on DLHWC's evaluation of the insurer's
exposure and financial history. The minimum deposit requirement has
been $200,000 for insurers with a small and minimally exposed claims
base.
DLHWC is seeking industry input into the evaluation of the security
deposit practice. This Notice to the Industry is an invitation to
submit your insight, ideas, and suggestions to DLHWC about how to
improve the industry evaluation process to determine the circumstances
under which DLHWC should require an individual insurance company to
deposit securities as a condition of providing insurance in the
Longshore system. Are there alternative rating mechanisms that would
provide DLHWC with earlier and more objective ratings? Are there other
methods of monitoring the financial condition of companies that would
be more useful? What are the alternatives to the requirement of a
security deposit that would adequately protect workers and the
Longshore Special Fund from the costs of insurer insolvency? What
incentives might be offered to companies to help avoid the problem?
What industry-driven practices might be adopted that would provide
equivalent protections? DLHWC is eager to consider your ideas.
This request constitutes a general solicitation of comments from
the public. No person is required to supply specific information
pertaining to the commenter, other than that necessary for self-
identification, as a condition of the agency's full consideration of
the comment. Please respond not later than March 25, 2002. Written
responses, on letterhead, should be addressed to: Michael Niss,
Director, Division of Longshore & Harbor Workers' Compensation, U.S.
Department of Labor, Constitution Ave. NW., Suite C-4315, Washington,
DC 20210.
Electronic responses may be submitted to mniss@dol-esa.gov. Please
use the subject line, ``Insurer Security Suggestions,'' and include
your name, title, company, address, telephone number, and email address
in your submission.
Signed at Washington, DC, this 15th day of February, 2002.
Michael Niss,
Director, Division of Longshore & Harbor Workers' Compensation, Office
of Workers' Compensation Programs.
[FR Doc. 02-4308 Filed 2-21-02; 8:45 am]
BILLING CODE 4510-CF-P
|