The security deposit of a private self-insurer shall not apply to all subsidiaries and affiliates included under the master certificate of consent to self-insure.

• A. True
• B. False
• C. Only if approved by the manager
• D. Not specified

Answer: (B)

A private self-insurer’s security deposit acts as a financial guarantee for all workers’ compensation obligations within the group covered by the master certificate. When subsidiaries and affiliates are included under that master certificate, their payroll liabilities fall under the same self-insurance arrangement, so the security deposit safeguards those entities as well. Therefore, the deposit does apply to all subsidiaries and affiliates included under the master certificate. The statement claiming it does not apply is not correct. If a subsidiary isn’t included under the master certificate, then it wouldn’t be covered by that deposit, but inclusion means the deposit extends to them.