Which of the following is NOT an accepted form of payment for a security deposit to be self-insured?

• A. Securities
• B. Surety bonds
• C. Credit Card
• D. Irrevocable letters of credit

Answer: (C)

The option identifying credit cards as a form of payment for a security deposit to be self-insured is correct because credit cards do not provide a tangible, reliable financial assurance that can be utilized in the specific context of self-insurance. In self-insurance, entities typically need to demonstrate their ability to fund obligations through assets that hold value and can be readily accessed.

Securities, surety bonds, and irrevocable letters of credit are all acceptable forms of payment for security deposits in the context of self-insurance because they represent financial instruments or guarantees that ensure the availability of funds if needed. Securities can be liquidated for cash if necessary, surety bonds provide a guarantee from a bonding company, and irrevocable letters of credit are firm commitments from banks to guarantee a payment will be made under certain conditions. These options comply with the requirements for securing financial obligations effectively, whereas a credit card does not offer such security or guaranteed funding in the same reliable manner.