Md. Code Regs. 09.32.01.07 - Collateral Security Posted by Certain Reimbursers
A. Amount and Adjustment of Collateral.
(1) Nonprofit organizations that elect to
make payments instead of contributions shall file collateral approved by the
Secretary.
(2) The Secretary shall
review the sufficiency of the collateral annually based on the previous year's
taxable wages or on any other basis the Secretary deems appropriate. If the
amount of existing collateral is less than the employer's average annual
benefit costs for the preceding 2 years, the amount of the collateral shall be
increased to equal the average annual benefit costs. The amount of the
collateral may not exceed the maximum State tax rate multiplied by that
employer's taxable payroll for the prior year.
(3) When the collateral is increased, the
adjusted collateral shall be filed within 30 days of the Secretary's
demand.
B. Collateral
shall be posted with the Secretary in a form acceptable to the Secretary, which
may include one or more of the following forms:
(1) A corporation bond issued by a company
licensed to issue surety-type bonds;
(2) Cash deposit;
(3) Treasury notes or other evidence of
federal indebtedness;
(4) Bonds or
other evidence of indebtedness insured by the State that bind the full faith
and credit of the State; or
(5)
Irrevocable and unconditional letters of credit.
Notes
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