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. Which is not an acceptable deposit?

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

Answer: (B)

Deposits to secure incurred liabilities must be readily available and stable enough to cover ongoing compensation and performance obligations. Securities fall short of this requirement because their value can fluctuate with market conditions, and converting them to cash quickly may incur losses or delays. In contrast, cash is immediately usable, a certificate of deposit is a bank-held instrument that can be relied on as a funded deposit, and a surety bond provides a guaranteed payment up to the bond amount if the employer fails to meet obligations. Thus, securities are not acceptable as a deposit, while cash, a CD, and a surety bond meet the need for prompt, reliable security for incurred liabilities.