What is alternative composite deposit?

• A. A security deposit whereby all eligible private self insurers collectively secure aggregate self insured liabilities through the self insurer's security fund.
• B. A savings account for the insured employee.
• C. A loan to the self-insurers.
• D. An insurance policy.

Answer: (A)

An alternative composite deposit is a pooled security arrangement that lets eligible private self-insurers back their combined liabilities by contributing to a common security fund, rather than posting individual deposits or bonds. This fund covers aggregate self‑insured liabilities, providing a collective guarantee for workers’ compensation obligations if any member can’t meet them. It also helps smaller employers participate in self-insurance by sharing the financial risk across the group. It’s not a savings account for employees, a loan to the self‑insurers, or an insurance policy, which is why the pooled security deposit concept best matches the idea.