Section 260-RICR-50-05-1.18 - FINANCINGA. Basic Surety Bond: Prefer AA rating, if necessary A. Rating A- (minus) lowest accepted but usually only with other surety forms.1. Our forms, as by law (WC Act) that we, Department of Labor & Training - Workers' Compensation, require in substance. Form is not filed with any other state agency but is the form devised and designed by the Department for its use. The only direction is from the Department - it is not a state fund form nor is it a statutory form issued by the Insurance Division of Business Regulation, etc., but is a form that can be managed and tailored to a specific self-insurance situation under RI Workers' Compensation Act sections that apply (R.I. Gen. Laws §§ 28-29-22, and 28-36-1; 28-36-2).2. The bond can be for more than one year in duration although certificates of self-insurance by law are a maximum of one year. Bonds can be continuous. Bond would be canceled effective date to coincide with bond date - certificate date or before if applicable. Our bonds are not to be considered as stacking. Bonds may be retired with Department approval.3. Bond is continuous form, meaning that for certain period of time it is for claims arising out of that period of time so designated. It continues in force but only for claims arising out of stated initial penal period if employer cannot meet WC obligations caused by these claims incurred in that covered period or found to be caused in that covered period.4. A continuation certificate to an existing bond can extend the bond money into a second year or period of time therefore diluting original bond money.5. A canceled bond still is viable for claims within scope of bond.6. A retired bond does not have any penal liability and ceases to be a surety.B. A certificate of deposit, FDIC backed, is acceptable in approved banking institution. A letter of credit is acceptable, on approved bank. Cash in banks (FDIC) combinations acceptable. Municipal bond funds and other escrows or trusts, T-Bills, restricted accounts or endowments acceptable. Other financial instruments can be acceptable as used for last resort payments after asset depletion and employer not able to pay claims or a given period pursuant to Director approval.C. Cash accounts, imprest accounts, payroll accounts and other types of payment accounts may be required.D. Excess coverage shall be required with stop loss provisions, retention and aggregate provisions as per each applicant and renewal amount to be determined in each case.E. Captive insurance company policy allowable. A carrier does not have to be licensed in RI to furnish bond or other coverage if the Department accepts such coverage. The Department prefers companies licensed in RI. Captive may not write business other than that of parent company.F. Complete financial disclosure of the company, its' officers, owners interests, companion companies, parent subsidiaries and similar connected entities are needed. Tax records needed. Loan arrangements and obligations, pending lawsuits, EPA violations, are examples of financial consideration.G. It is preferred that claims be paid on RI banks and/or RI institutions by check. We do allow other arrangements but if outside, RI institution is used, employer must agree to cash such instruments for employee to prevent a delay in delivery of benefits (especially weekly check).H. The Department prefers companies not use a payroll account for such WC payments. The Department may limit or prohibit intermingling of such funds.I. Director and Officer coverage will be required.J. General liability policy will be required. On any certificate required, the amount of deductible must be available and cannot be changed without Department approval.K. No change on any source of coverage may be made nor any adjustment of any coverage may be made without consult and express approval of the Director or Designee of Director of the Department.260 R.I. Code R. 260-RICR-50-05-1.18
Amended effective 11/28/2018