11-981

11-981. Payment of benefits, losses and claims;
establishment of trust funds

A. In addition to authority granted pursuant to other provisions of law or city
charter, any city, town, county, any special health care district organized pursuant to
title 48, chapter 31 or other political subdivision that is located in a county with a
population of more than one million persons and whose governing body is composed of
members of a county board of supervisors may procure insurance from any insurer
authorized by the director of the department of insurance or may establish a
self-insurance program for the management and administration of a system for direct
payment of benefits, losses or claims or any combination of insurance and direct
payments, and including risk management consultation, to provide:

1. Health, accident, life or disability benefits for employees and officers of the
city, town, county, any special health care district organized pursuant to title 48,
chapter 31 or other political subdivision that is located in a county with a population
of more than one million persons and whose governing body is composed of members of a
county board of supervisors and their dependents.

2. Payment of any property loss sustained or lawful claim of liability or
fortuitous loss made against the city, town, county, any special health care district
organized pursuant to title 48, chapter 31 or other political subdivision that is located
in a county with a population of more than one million persons and whose governing body
is composed of members of a county board of supervisors or its elected or appointed
officials, employees or officers if such elected or appointed officials, employees or
officers are acting within the scope of employment or authority.

B. If any city, town, county, any special health care district organized pursuant
to title 48, chapter 31 or other political subdivision that is located in a county with a
population of more than one million persons and whose governing body is composed of
members of a county board of supervisors establishes a self-insurance program for the
management and administration of a system for direct payment of benefits, losses or
claims pursuant to subsection A, the governing body of such city, town, county, any
special health care district organized pursuant to title 48, chapter 31 or other
political subdivision that is located in a county with a population of more than one
million persons and whose governing body is composed of members of a county board of
supervisors shall place all funds into a trust fund for the purposes of this section in
amounts as determined appropriate by the governing body of the city, town, county, any
special health care district organized pursuant to title 48, chapter 31 or other
political subdivision that is located in a county with a population of more than one
million persons and whose governing body is composed of members of a county board of
supervisors, except that any city, town, county, any special health care district
organized pursuant to title 48, chapter 31 or other political subdivision that is located
in a county with a population of more than one million persons and whose governing body
is composed of members of a county board of supervisors establishing such a trust fund
shall:

1. Designate a risk management consultant or insurance administrator licensed
pursuant to title 20, chapter 2, article 3 or 9, and such license shall be verified by
the governing body of the city, town, county, any special health care district organized
pursuant to title 48, chapter 31 or other political subdivision that is located in a
county with a population of more than one million persons and whose governing body is
composed of members of a county board of supervisors.

2. The trust shall be administered by at least five joint trustees, of whom no more
than one may be a member of the governing body of the city, town, county, any special
health care district organized pursuant to title 48, chapter 31 or other political
subdivision that is located in a county with a population of more than one million
persons and whose governing body is composed of members of a county board of supervisors
and no more than one may be an employee of the city, town, county, any special health
care district organized pursuant to title 48, chapter 31 or other political subdivision
that is located in a county with a population of more than one million persons and whose
governing body is composed of members of a county board of supervisors.

3. The trustees of the trust must be bonded, a stop-loss provision must be
incorporated in the trust agreement and an annual audit must be performed by an external
auditor and a copy of the report kept on file in the offices of the governing body of the
city, town, county, any special health care district organized pursuant to title 48,
chapter 31 or other political subdivision that is located in a county with a population
of more than one million persons and whose governing body is composed of members of a
county board of supervisors for a period of not less than five years.

4. Not make any expenditure from the trust fund for any purpose not specified in
this article.

C. Expenditures during the fiscal year from the trust fund and monies in the trust
fund at the close of the fiscal year shall not be subject to the provisions of title 42,
chapter 17, article 3.

D. In the event that such a trust fund is no longer used by the city, town, county,
any special health care district organized pursuant to title 48, chapter 31 or other
political subdivision that is located in a county with a population of more than one
million persons and whose governing body is composed of members of a county board of
supervisors for the purposes herein set forth, it shall revert during that fiscal year to
the general fund of such city, town, county, any special health care district organized
pursuant to title 48, chapter 31 or other political subdivision that is located in a
county with a population of more than one million persons and whose governing body is
composed of members of a county board of supervisors.

E. The authority granted to a city, town, county, any special health care district
organized pursuant to title 48, chapter 31 or other political subdivision that is located
in a county with a population of more than one million persons and whose governing body
is composed of members of a county board of supervisors by this section is not subject to
title 20, except that any health, life, accident or disability benefit plan shall conform
to the benefits required by title 20.

F. This section shall not be construed to authorize any city, town, county, any
special health care district organized pursuant to title 48, chapter 31 or other
political subdivision that is located in a county with a population of more than one
million persons and whose governing body is composed of members of a county board of
supervisors to procure insurance from any insurer not authorized by the director of the
department of insurance.