(b) An applicant which has been approved to become a self-insurer shall either:

1. (1) deposit with the chair, and keep on deposit, securities of the kind specified in subdivisions 1, 2, 3, 4, and 5 and paragraph (a) of subdivision 7 of section 235 of the New York State Banking Law, in an amount required by the chair. Securities deposited shall be registered in the name of “Chair, Workers' Compensation Board, State of New York.” Interest paid on securities deposited with the chair shall be remitted to the self-insurer for whose account they are deposited, as long as the self-insurer complies with article 9 of the Workers' Compensation Law and with these regulations and rules; or
2. (2) deposit with the chair and keep on deposit cash in an amount required by the chair. Cash deposits shall 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, automated clearing house (ACH), or wire transfer. Interest paid on the cash deposit shall be remitted to the self-insurer for whose account the cash is deposited, so long as such self-insurer complies with article 9 of the Workers' Compensation Law and with these regulations and rules; or
3. (3) file irrevocable letters of credit issued by a qualified bank; or

4. (4) in lieu of securities, cash or letters of credit and at the discretion of the chair, file with the chair the bond of a surety company authorized to do business in this State, in form and penal sum acceptable to the chair and conditioned on the payment by the self-insurer of all its obligations and the obligations of each and every employer for whose employees the self-insurer provides benefits under article 9 of the Workers' Compensation Law. Each surety bond shall be undertaken and may be enforced in the name of “Chair, Workers' Compensation Board, State of New York”;

   1. (i) to be a qualified surety company, the surety company must have a credit rating of B+ or better from A.M. Best or the equivalent from any other rating service;
   2. (ii) if the rating of the surety bond issuer falls below the criteria established in section 361.3(b)(4)(i) of this Part, the self-insurer will have to replace the surety bond within 60 days of the rating determination by the chair with another deposit allowable under the law; or
5. (5) deposit or file with the chair a combination of such securities, cash, irrevocable letters of credit and surety bonds.

(c) To be acceptable, a letter of credit filed pursuant to paragraph (a)(3) of this section must comply with all requirements set forth in Regulation 133 of the New York State Insurance Department, codified as 11 NYCRR Part 79, except that:

1. (1) the beneficiary shall be the “Chair, Workers' Compensation Board, State of New York”;
2. (2) the evergreen clause shall provide for at least 60 days' written notice to the chair of the Workers' Compensation Board prior to the expiry date for nonrenewal;

3. (3) 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 11 NYCRR 79.1(e)(3), 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:

   1. (i) if the rating of the issuing bank falls below the criteria established in section 361.3(c)(3) of this Part, the self-insurer will have to replace the letter of credit within 60 days of the rating determination by the chair with another deposit allowable under the law;
4. (4) 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. (5) the form, amount and content thereof shall be acceptable to the chair.

(d) For employers self-insuring for both disability benefits and paid family leave benefits, the self-insurer shall deposit securities and/or cash with the chair, and/or file an acceptable surety bond and/or irrevocable letters of credit, in an aggregate amount and/or penal sum calculated as follows and subject to the chair’s discretion:

1. (1) employers’ full annual wages multiplied by up to one percentum;
2. (2) in no case an amount less than $10,000.

(e) For employers self-insuring for disability benefits only, the self-insurer shall deposit securities and/or cash with the chair, and/or file an acceptable surety bond and/or irrevocable letters of credit, in an aggregate amount and/or penal sum calculated as follows and subject to the chair’s discretion:

1. (1) one-half the estimated contributions of the employees of the employer for the ensuing year or one-half of the estimated or actual contributions of the employees which would have been paid by the employees during the preceding year, whichever is the greater; or

2. (2) at the chair’s discretion, as determined under Table 1 in section 376.1(c) of this Title.

   (f) Consolidation of security deposits.

3. (1) A corporation which has qualified as, or has applied to become, a self-insurer pursuant to the provisions of subdivision (3) of section 211 of the Workers’ Compensation Law may apply to the chair for permission to establish a consolidated deposit with one or more subsidiary corporations of which it is the owner, directly or indirectly, of at least a majority of the voting shares. Such application shall be accompanied by an agreement, in the form prescribed by the chair, duly approved by the board of directors of each corporation that the corporate parties and the aggregate amount of securities and/or cash, the aggregate amount of the penal sums of the surety bonds and/or the aggregate amount of the letters of credit deposited or to be deposited with the chair by them, individually and collectively, at all times shall be liable and shall be available, at the discretion of the chair, for the payment of any and all compensation, death benefits, administrative expenses, assessments, and/or other charges or obligations for which the corporation and/or each and every one of the subsidiary corporations shall be liable under the Workers’ Compensation Law and under the rules and regulations of the Workers’ Compensation Board and/or of its chair.

4. (2) A not-for-profit corporation which has qualified as, or has applied to become, a self-insurer pursuant to the provisions of subdivision (3) of section 211 of the Workers' Compensation Law may apply to the chair for permission to establish a consolidated deposit with one or more not-for-profit corporations of which it is the owner, directly or indirectly, of at least a majority interest. For purposes of this section, a determination of majority interest shall be based on: Such application shall be accompanied by an agreement, in the form prescribed by the chair, duly approved by the board of directors of each not-for-profit corporation that the corporate parties and the aggregate amount of securities and/or cash, the aggregate amount of the penal sums of the surety bonds and/or the aggregate amount of the letters of credit deposited or to be deposited with the chair by them, individually and collectively, at all times shall be liable and shall be available, at the discretion of the chair, for the payment of administrative expenses, assessment, and/or other charges or obligations for which the corporation and/or each and every one of the entities in which the not-for-profit corporation has a majority ownership interest shall be liable under the Workers' Compensation Law and under the rules and regulations of the Workers' Compensation Board and/or of its chair.

   1. (i) the majority of the members of each such entity; or
   2. (ii) the majority of the board of directors or comparable governing body of each such entity; or
   3. (iii) the same central authority which appoints or controls the appointment of the board of trustees or similar body and exercises direct, complete and active control over the finances, properties, operations and activities of separate legal entities.
5. (3) The chair, in his or her discretion, may permit the establishment of a consolidated deposit of securities and/or cash in an amount and/or the filing of surety bonds in an aggregate penal sum and/or of letters of credit in an aggregate amount which shall be determined in accordance with the provisions of the Workers' Compensation Law and with the rules and regulations promulgated thereunder.