What is the role of the Self-Insurers Security Fund when a self-insurer becomes insolvent?

• A. It assumes payment of workers' compensation obligations
• B. It reduces rates
• C. It collects taxes
• D. It pays penalties

Answer: (A)

The Self-Insurers Security Fund is a safety net that protects workers when a self-insured employer cannot meet its workers’ compensation obligations. If a self-insurer becomes insolvent, the fund steps in to pay the owed benefits to injured employees, ensuring there’s no gap in coverage. It isn’t about lowering rates, collecting taxes, or paying penalties—the fund’s purpose is to guarantee continuation of benefits for claimants when the employer can’t pay. The fund is financed to provide this backstop and may seek reimbursement from responsible parties afterward, but its primary role is to assume those payment obligations when insolvency occurs.