Which statement about deposits and subsidiaries under the master certificate is true?

• A. The deposits apply to all subsidiaries and affiliates included under the master certificate.
• B. The deposits apply only to the primary self-insurer.
• C. Subsidiaries have separate deposits not tied to the master certificate.
• D. Deposits are not used for subsidiaries under the master certificate.

Answer: (A)

Under a master certificate, the financial security posted to back the self-insurance program covers the entire group of employers included in that certificate. That means deposits secure the obligations of all subsidiaries and affiliates that are part of the master certificate, not just the primary self-insurer. So deposits apply to all subsidiaries included under the master certificate. The other statements misstate the scope—some suggesting only the primary entity is secured, or that subsidiaries have separate deposits, or that deposits aren’t used for subsidiaries—contradicting how a master certificate aggregates and secures the group’s obligations.