(a) Group self-insurers shall deposit with the chair securities, cash, surety bonds and/or irrevocable letters of credits, in an aggregate amount as determined by the chair, but not less than:

1. (1) the combined annual payroll of the group members multiplied by the current manual rates promulgated by the New York compensation insurance rating board; or
2. (2) one and one-half times the group self-insurers' retention as specified on the certificate of excess insurance filed with the chair which limits the liability of a group on a specific, per occurrence basis with respect to claims; but
3. (3) in no event shall such security amount be less than the product of the statutory maximum weekly compensation rate for total disability multiplied by 52, multiplied by 30.

(c) The group self-insurer's security deposit shall be in a form prescribed herein:

1. (1) The applicant shall deposit with the chair securities of the kind specified in subdivisions (1), (2), (3), (4) and (5), and paragraph (a) of subdivision (7), of section 235 of the Banking Law. Such securities shall be registered in the name of “Chair, Workers' Compensation Board, State of New York.” Interest paid on securities on deposit will be regularly remitted to the group self-insurer for whose account they are deposited, so long as such group self-insurer complies with this Part and the provisions of the Workers' Compensation Law, and is not in default in the payment of compensation, assessments or other obligation under the Workers' Compensation Law.
2. (2) A cash deposit may be made in lieu of securities, surety bond or letters of credit. Such cash deposit will be deposited in an interest-bearing account in the name of “Chair, Workers' Compensation Board, State of New York” and shall be in an account authorized by the Comptroller of the State of New York. Such cash deposit is to be by certified check. Interest paid on the cash deposit will be regularly remitted to the group self-insurer for whose account it is deposited so long as such group self-insurer complies with the provisions of the Workers' Compensation Law and is not in default in the payment of compensation, assessments or other obligation under the Workers' Compensation Law.
3. (3) Surety bonds accepted in lieu of securities, cash, or letters of credit shall be undertaken and enforced in the name of the “Chair, Workers' Compensation Board, State of New York” and shall be in form approved by the chair and issued by a company authorized by the superintendent of insurance to write business as a surety in the State of New York.

4. (4) A letter of credit must comply with all requirements set forth in Regulation 133 of the New York State Insurance Department, codified as Part 79 of Title 11 of the Official Compilation of Codes, Rules and Regulations of the State of New York, except that:

   1. (i) the beneficiary shall be the Chair, Workers' Compensation Board, State of New York;
   2. (ii) the evergreen clause shall provide for at least 60 days' written notice to the chair of the Workers' Compensation Board prior to the expiration date for nonrenewal;
   3. (iii) a bank, to be a qualified bank, may in lieu of a determination by the Securities Evaluation Office of the National Association of Insurance Commissioners for purposes of section 79.1(e)(3) of Title 11 of the Official Compilation of Codes, Rules and Regulations of the State of New York, have either a long-term debt rating equal to Baa/BBB or better by Moody's or Standard & Poor's or the equivalent thereto from any other securities rating service, and/or a short-term debt rating of P2/A2 from Moody's or Standard & Poor's or the equivalent thereto from any other securities rating service;
   4. (iv) the letter of credit shall additionally provide that any legal proceedings with respect thereto be subject to the jurisdiction of the courts of the State of New York; and
   5. (v) the form and content thereof shall be acceptable to the chair.

(e) The chair may draw upon any security deposits made pursuant to subdivision (a) of this section:

1. (1) to satisfy any claims, liabilities, obligations, expenses or assessments of a group self-insurer; or
2. (2) when a group self-insurer shall have failed to renew or replace a letter(s) of credit within 30 days prior to the expiration date of such letters or to substitute its deposit with cash, securities or a surety bond of equal value. The chair will provide the group self-insurer with notice prior to drawing upon any security deposits.