The Director may not accept as a deposit to secure incurred liabilities for the payment of compensation and the performance of obligations of a self-insured ER.

• A. Cash
• B. Securities
• C. Surety Bonds
• D. Certificate of Deposit.

Answer: (B)

In this context, the deposit used to secure incurred liabilities must be readily available to satisfy workers’ compensation payments and performance of obligations if the self-insured employer cannot meet them. Securities are not acceptable because they carry market risk and may not be instantly convertible to cash without potential loss or delay. The funds need to be quickly and reliably available, not tied up in fluctuating assets.

Cash, surety bonds, and certificates of deposit fit that requirement well: cash is immediately usable, surety bonds guarantee the obligation, and CDs are insured and relatively liquid assets.