Section R20-5-1111. Posting of Other Bonds or Treasury Notes of the United States Instead of Guaranty Bond; Registration; Deposit

A.      Instead of providing a guaranty bond under R20-5-1110, a self-insurer may deposit with the Commission for transmittal through the Arizona State Treasurer to the Treasurer’s desig- nated bank, bonds or treasury notes of the United States of America if the bonds or treasury notes are guaranteed as to principal and interest by the United States of America or by any agency or instrumentality of the United States of America.

B.       The self-insurer shall ensure that bonds or treasury notes of the United States of America deposited with Commission under this subsection are registered to: “The Industrial Commission of Arizona, in trust for the fulfillment by -------- of its obliga- tions under the Arizona Workers’ Compensation Laws.” The self-insured shall ensure that any contract between the self- insured and the custodial bank provides that the bonds or trea- sury notes are held for: “The Industrial Commission of Ari- zona, in trust for the fulfillment by -------- of its obligations under the Arizona Workers’ Compensation Laws.”

C.      If one or more of the self-insurer’s claims are assigned to the state compensation fund under A.R.S. § 23-966, the Commis- sion shall:

1.        Collect or order collection of the principal, or market value of the security, whichever is greater, as it becomes due;

2.        Sell or order the sale of the security or any part of the security; or

3.        Apply or order the application of the proceeds to the pay- ment of any unpaid obligations of the self-insurer, as determined by the Commission, in the event of the default in the payment of its obligations.

D.      The self-insurer may arrange for interest on bonds or treasury notes of the United States of America deposited under this subsection to be paid to the self-insurer.

E.       Bonds or treasury notes deposited according to this Article by a self-insurer shall be in an amount not less than the security deposit amount required under R20-5-1109.

Historical Note

New Section made by final rulemaking at 11 A.A.R.

1008, effective April 4, 2005 (Supp. 05-1).