If an employer has an aggregate excess (stop-loss) workers' compensation policy, does the employer receive credit against the security deposit?

• A. Yes, full credit is allowed.
• B. No, credit is not given.
• C. Credit depends on policy year.
• D. Only for private self-insurance.

Answer: (B)

The key idea is that the security deposit for a self-insured workers’ compensation program is a state-required guarantee to cover the employer’s own liability for benefits. An aggregate excess (stop-loss) policy shifts the high-cost claims to a reinsurer, but it does not fund or reduce the employer’s obligation to the state. Because the deposit is intended to ensure solvency and timely benefit payments regardless of external reinsurance, the department does not provide a credit against the security deposit for having stop-loss coverage. So even with stop-loss in place, the employer still must meet the full security deposit requirement. The stop-loss helps manage exposure, but it doesn’t change the amount the state requires as security.