(a) If the department determines that an employer has been delinquent in paying contributions owed to the fund for two or more calendar quarters, the department may require an employer to deposit and keep on deposit with the department a sum equal to the contributions payable to the fund for the four completed calendar quarters immediately preceding the delinquency. If the employer does not have four completed payroll quarters immediately before the delinquency, the department shall estimate the employer's annual contributions, based on contributions payable for the completed payroll quarters. In lieu of the deposit, the department may accept a bond or other security equal in value to the required deposit. The deposit, bond, or other security accepted by the department does not relieve the employer from making contributions to the fund or paying delinquent contributions, interest, and penalties as provided in this chapter. After notice and opportunity for hearing related to the application of the security, the department may immediately apply all or part of the deposit, bond, or other approved security to the employer's delinquent contributions, interest, or penalties arising under this chapter.

(b) Unless precluded by other law, the deposit, bond, or other security accepted by the department shall take priority over all other liens, claims, or encumbrances and shall be exempt from any process, attachment, garnishment, or execution.

(c) If an employer ceases to be an employer subject to this chapter, the department shall, upon receipt of all payments due the fund, refund to the employer the deposits remaining to the employer's credit and shall cancel any bond or other security accepted by the department under this section. The department may return, in whole or part, the deposit, bond, or other security accepted by the department under this section to the employer if the employer is current in paying contributions under this section for eight consecutive quarters.