ESA Federal Register Notice

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]]

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Part VIII





Department of Labor





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Office of Workers' Compensation Programs



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Division of Longshore and Harbor Workers' Compensation; Insurer 
Security Deposits; Request for Information; Notice


[[Page 8450]]


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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