(a) The Branch will issue a decision on the application determining
the extent of an insurance carrier's unsecured LHWCA obligations and
fixing the amount of security the carrier must deposit to fully secure
payment of its unsecured obligations. The Branch will transmit its
decision to the applicant in a way it considers appropriate.
(b) The Branch may consider a number of factors in setting the
security deposit amount including, but not limited to, the--
(1) Financial strength of the carrier as determined by private
insurance rating organizations;
(2) Financial strength of the carrier's insureds in the Longshore
industry;
(3) Extent to which State guaranty funds secure the carrier's LHWCA
obligations in the event the carrier defaults on its obligations or
becomes insolvent;
(4) Carrier's longevity in writing LHWCA or other workers'
compensation coverage;
(5) Extent of carrier's exposure for LHWCA coverage; and
(6) Carrier's payment history in satisfying its LHWCA obligations.
(c) In setting the security deposit amount, the Branch will follow
these criteria:
(1) Carriers who hold the highest rating awarded by each of the
three insurance rating services designated by the Branch and posted on
the Internet at http://www.dol.gov/esa/owcp/dlhwc/lstable.htm for both
the current rating year and the immediately preceding year will not be
required to deposit security.
(2) Carriers whose LHWCA obligations are fully secured by one or
more State guaranty funds, as evaluated by OWCP under Sec. 703.202 of
this subpart, will not be required to deposit security.
(3) The Branch will require all carriers not meeting the
requirements of paragraphs (c)(1) or (2) of this section
[[Page 921]]
to deposit security for their LHWCA obligations not secured by a State
guaranty fund, as evaluated by OWCP under Sec. 703.202 of this subpart.
For carriers that write only an insignificant or incidental amount of
LHWCA insurance, the Branch will require a deposit in an amount
determined by the Branch from time to time. For all other carriers, the
Branch will require a minimum deposit of one third (33\1/3\ percent) of
a carrier s outstanding LHWCA obligations not secured by a State
guaranty fund, but may require a deposit up to an amount equal to the
carrier's total outstanding LHWCA obligations (100 percent) not secured
by a State guaranty fund.
(d) If a carrier believes that a lesser deposit would fully secure
its LHWCA obligations, the carrier may request a hearing before the
Director of the Division of Longshore and Harbor Workers' Compensation
(Longshore Director) or the Longshore Director's representative.
Requests for hearing must be in writing and sent to the Branch within 10
days of the date of the Branch's decision. The carrier may submit new
evidence and/or argument in support of its challenge to the Branch's
decision and must provide any additional documentation OWCP requests.
The Longshore Director or his representative will notify the carrier of
the hearing date within 10 days of receiving the request. The Longshore
Director or his representative will issue the final agency decision on
the application within 60 days of the hearing date, or, where evidence
is submitted after the hearing, within 60 days of the receipt of such
evidence, but no later than 180 days after receiving the carrier's
request for a hearing.
