If the ER has an aggregate excess (stop loss) workers' comp policy, does the ER receive credit against the security deposit?

If the ER has an aggregate excess (stop loss) workers' comp policy, does the ER receive credit against the security deposit?

• A. No
• B. Yes
• C. No, aggregate excess is not legal
• D. Yes, Aggregate excess is legal

Answer: (A)

Security deposits for California workers’ comp self-insurance are there to guarantee the employer can cover benefits if needed. A credit against that deposit only comes from things that actually reduce the state’s risk or substitute for the state’s security. An aggregate excess (stop-loss) policy protects the employer by reimbursing large losses after a threshold, but it does not reduce the state’s exposure or provide a direct offset against the required deposit. The stop-loss contract is between the employer and the insurer, not the state, so there isn’t a credit against the security deposit for having aggregate stop-loss coverage.

Security deposits for California workers’ comp self-insurance are there to guarantee the employer can cover benefits if needed. A credit against that deposit only comes from things that actually reduce the state’s risk or substitute for the state’s security. An aggregate excess (stop-loss) policy protects the employer by reimbursing large losses after a threshold, but it does not reduce the state’s exposure or provide a direct offset against the required deposit. The stop-loss contract is between the employer and the insurer, not the state, so there isn’t a credit against the security deposit for having aggregate stop-loss coverage.