The security deposit of a private self-insurer shall apply to all subsidiaries and affiliates included under the master certificate of consent to self-insure.

• A. Yes
• B. No
• C. Only if approved by the manager
• D. Only if affiliates are included

Answer: (A)

Security deposits for a private self-insurer act as a financial guarantee for the obligations of the entire self-insured group. When a master certificate of consent to self-insure covers the parent company plus its subsidiaries and affiliates, those entities are part of the same self-insured enterprise. The security deposit posted by the self-insurer is intended to back the liabilities of everyone included under that master certificate, so it applies to all subsidiaries and affiliates that are included. If an affiliate isn’t included under the master certificate, the deposit wouldn’t automatically cover it.