Ariz. Admin. Code § R20-5-1522 - Letter of Credit
A. A
Self-Insurer may post a letter of credit as security if:
1. The letter of credit is registered to:
"The Industrial Commission of Arizona, in trust for the fulfillment by [INSERT
SELFINSURER'S NAME] of its obligations under the Arizona Workers' Compensation
laws"
2. The bank issuing the
letter of credit is a federal or Arizona-chartered bank upon which demand may
be made and from which funds will be immediately payable on demand;
3. The letter of credit includes the name and
address of the Self-Insurer;
4. An
authorized representative of the issuing bank executes the letter of
credit;
5. The original letter of
credit and original amendments to a letter of credit are provided to the
Commission;
6. The initial letter
of credit is valid for a period of one year from the effective date;
7. The issuing bank does not have an
affiliate relationship with the Self-Insurer;
8. The letter of credit includes a provision
that the letter of credit automatically extends for consecutive periods of one
year, unless the issuing bank provides written notice to the Commission 60 days
before the expiration of any one-year term that the issuing bank will not renew
the letter of credit for the additional period;
9. The letter of credit states the amount
available under the letter of credit, which shall be no less than the amount
the Self-Insurer is required to post as security under this Article;
and
10. The letter of credit
includes a statement that the Commission may make a demand on the letter of
credit by providing the issuing bank a signed statement by an official of the
Commission stating either that the Self-Insurer has failed to comply with its
workers' compensation obligations or failed to renew or substitute acceptable
security for its workers' compensation liability 30 days before the expiration
of the letter of credit.
B. The written notice required in subsection
(A)(8) shall be sent to the Division via e-mail or by mail with delivery
confirmation.
Notes
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