The ER has an aggregate excess (stop loss) workers comp policy. Does the ER receive credit against the security deposit?

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Prepare for the California Self‑Insurance Plans (SIP) Exam with our interactive quiz. Benefit from multiple-choice questions, detailed explanations, and essential tips to enhance your knowledge and succeed in your exam!

Multiple Choice

The ER has an aggregate excess (stop loss) workers comp policy. Does the ER receive credit against the security deposit?

Explanation:
Security deposits for self-insured workers’ comp are collateral to ensure the employer can pay future benefits, even if other funding sources falter. An aggregate excess (stop-loss) policy is there to reimburse the employer for losses that exceed a set retention; it does not provide cash to the state or directly reduce the employer’s required collateral. Because the deposit guarantees funds for ongoing claims independent of whether a stop-loss policy exists, no credit against the security deposit is allowed simply because of aggregate excess coverage.

Security deposits for self-insured workers’ comp are collateral to ensure the employer can pay future benefits, even if other funding sources falter. An aggregate excess (stop-loss) policy is there to reimburse the employer for losses that exceed a set retention; it does not provide cash to the state or directly reduce the employer’s required collateral. Because the deposit guarantees funds for ongoing claims independent of whether a stop-loss policy exists, no credit against the security deposit is allowed simply because of aggregate excess coverage.

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