Division of Longshore and Harbor Workers' Compensation Guidance for Insurance Carrier Security Deposit Requirements

The Office of Workers' Compensation Program is issuing this guidance to clarify the securitization requirements for insurance carriers authorized under the Longshore and Harbor Workers' Compensation Act (LHWCA) and its extensions. This guidance establishes a rubric which allows OWCP to adjust the insurance carriers' obligations based on their fiscal stability and performance within the Longshore industry and serves to establish a clear and standardized process for determining the amount of collateral an authorized insurance carrier must deposit to cover its potential liabilities. This clarification benefits insurance carriers by providing predictability which aids in capital planning and avoids arbitrary or unexpected security adjustments. This also helps to standardize compliance across the industry and ensures authorized carriers secure their critical obligations. This sub-regulatory guidance does not supersede existing regulations and is intended to provide insurance carriers (carriers) with clarification on the posting of security deposits to collateralize liabilities.