IC 27-1-29.1
Chapter 29.1. Political Subdivision Catastrophic Liability Fund
IC 27-1-29.1-1 "Commission" defined
Sec. 1. As used in this chapter, "commission" refers to the Indiana
political subdivision risk management commission established by
IC 27-1-29-5. As added by P.L.272-1987, SEC.7.
IC 27-1-29.1-2 "Fund" defined
Sec. 2. As used in this chapter "fund" refers to the political
subdivision catastrophic liability fund established by this chapter. As added by P.L.272-1987, SEC.7.
IC 27-1-29.1-3 "Liability" defined
Sec. 3. As used in this chapter, "liability" means an obligation
arising from:
(1) multiple claims for the payment of money that are within the
limits set forth in IC 34-13-3-4 (or IC 34-4-16.5-4 before its
repeal) and that arise from a single catastrophic occurrence; or
(2) any other claim for which coverage is provided for members
of the fund under rules adopted by the commission. As added by P.L.272-1987, SEC.7. Amended by P.L.1-1998,
SEC.146.
IC 27-1-29.1-4 "Member" defined
Sec. 4. As used in this chapter "member" refers to any political
subdivision that has a membership in the fund, as provided in section
9 of this chapter. As added by P.L.272-1987, SEC.7.
IC 27-1-29.1-5 "Political subdivision" defined
Sec. 5. As used in this chapter, "political subdivision" has the
meaning set forth in IC 34-6-2-110. As added by P.L.272-1987, SEC.7. Amended by P.L.3-1989,
SEC.152; P.L.1-1998, SEC.147.
IC 27-1-29.1-6 "Underlying coverage" defined
Sec. 6. As used in this chapter, "underlying coverage" refers to
any liability insurance policy that names a member of the fund or its
officials or employees as a named insured, an additional named
insured, an insured, or an additional insured. As added by P.L.272-1987, SEC.7. IC 27-1-29.1-7 Establishment of fund; purpose; administration; expenses;
depositories; investment
Sec. 7. (a) The political subdivision catastrophic liability fund is
established for the purpose of:
(1) paying a part of certain liabilities of members of the fund
under this chapter;
(2) receiving assessments paid by fund members to replenish
the fund and to pay the principal of the interest on bonds or
notes issued by the commission under IC 27-1-29-17(b)(1); and
(3) receiving money from any other source.
(b) The fund shall be administered by the commission, using the
powers granted in IC 27-1-29-7, as modified by this chapter.
(c) The expenses of administering the fund shall be paid from
money in the fund.
(d) All money received by the commission under this chapter,
whether as assessments, proceeds from the sale of bonds, or
revenues, are trust funds, to be held and applied solely as provided
in this chapter. Current operating funds shall be kept in depositories
selected by the commission. The commission shall deposit with the
treasurer of state the money in the fund not currently needed to meet
the obligations of the fund, and the treasurer of state shall invest such
money for the commission in accordance with the provisions of any
resolution or trust agreement that the commission may adopt or enter
into under this chapter or IC 27-1-29. Interest that accrues from these
investments shall be credited to the commission and to the fund.
(e) Money in the fund at the end of a fiscal year does not revert to
the state general fund. As added by P.L.272-1987, SEC.7. Amended by P.L.159-1988,
SEC.1.
IC 27-1-29.1-8 Reserve account; issuance of bonds to establish account; use of
funds
Sec. 8. (a) The commission shall establish a reserve account in the
fund. A balance of at least five million dollars ($5,000,000) must
remain in the reserve account. To provide money to establish the
reserve account, the commission may issue bonds under
IC 27-1-29-17(b)(1). The bonds issued to provide money for the
establishment of the reserve account may not exceed a total amount
of forty million dollars ($40,000,000).
(b) Money in the reserve account shall be held and applied solely
to pay claims against the fund that cannot be paid from other money
in the fund. As added by P.L.272-1987, SEC.7.
IC 27-1-29.1-9 Membership eligibility; rights and duties
Sec. 9. All political subdivisions that satisfy the criteria for
membership under the rules of the commission are eligible for
membership in the fund. A political subdivision is not required to be
a member of the political subdivision risk management fund under
IC 27-1-29 to be eligible for membership in the fund established by
this chapter. Each member of the fund:
(1) shall contribute to the fund in the amount of the assessment
charged the member under this chapter; and
(2) is entitled to the partial payment of certain liabilities from
the fund under this chapter. As added by P.L.272-1987, SEC.7.
IC 27-1-29.1-10 Liabilities qualifying for partial payment from fund; notice of
claim
Sec. 10. (a) The commissioner, using money from the fund, shall
pay a part of every liability that qualifies for partial payment under
this chapter and under the terms of the coverage provided by the
commission according to rules adopted under this chapter.
(b) A liability of a member of the fund that has no underlying
coverage or that has occurrence basis underlying coverage qualifies
for partial payment under this chapter if it:
(1) is a liability covered under the coverage document issued by
the commission to the member;
(2) arises out of an act or omission that takes place while the
political subdivision bearing the liability is a member of the
fund; and
(3) satisfies the minimum total amount requirement set forth in
section 12 of this chapter.
(c) A liability of a member of the fund that has claims made basis
underlying coverage qualifies for partial payment under this chapter
if it:
(1) is a liability covered under the coverage document issued by
the commission to the member;
(2) arises out of an act or omission with respect to which a
claim is made while the political subdivision bearing the
liability is a member of the fund;
(3) is covered by the underlying coverage; and
(4) satisfies the minimum total amount requirement set forth in
section 12 of this chapter.
(d) For the purposes of subsection (c)(2) and section 11 of this
chapter, the question of when and how a claim is made shall be
determined by the provisions of the insurance policy providing the
underlying coverage. However, if the underlying coverage is not
applicable to a liability, a claim is considered to have been made for
purposes of subsection (c)(2) when notice of a claim giving rise to
the liability is received by the fund member from the claimant or the
claimant's representative. As added by P.L.272-1987, SEC.7. Amended by P.L.159-1988,
SEC.2.
IC 27-1-29.1-11 Preexisting liabilities qualifying for partial payment
Sec. 11. A liability that arises out of an act or omission that takes
place before the political subdivision bearing the liability becomes
a member of the fund does not qualify for partial payment under this
chapter unless the liability:
(1) is expressly covered by the provisions of a coverage
document that:
(A) is issued to the fund member; and
(B) is in effect when the claim is made; and
(2) is also covered by the underlying coverage that is claims
made basis coverage. As added by P.L.272-1987, SEC.7.
IC 27-1-29.1-12 Liabilities of members that are or are not also members of political
subdivision risk management fund; conditional payment
Sec. 12. (a) A liability of a member of the fund that is not a
member of the political subdivision risk management fund under
IC 27-1-29 does not qualify for partial payment under this chapter
unless the total amount of the liability exceeds:
(1) one million dollars ($1,000,000); or
(2) another sum that is:
(A) greater than one million dollars ($1,000,000); and
(B) approved by the commission as a provision of the fund
member's coverage because the fund member has underlying
coverage with limits of liability that exceed one million
dollars ($1,000,000).
(b) A liability of a member of the fund that is also a member of
the political subdivision risk management fund under IC 27-1-29
does not qualify for partial payment under this chapter unless the
amount of the liability exceeds the amount of liability payable by the
commission under IC 27-1-29 under the terms of the coverage
document that is issued to the fund member and applicable to the
liability. As added by P.L.272-1987, SEC.7.
IC 27-1-29.1-13 Liability partial payment determination; formula
Sec. 13. The amount that is to be paid by the commission toward
the satisfaction of a liability qualifying for partial payment under this
chapter is determined in STEP FOUR of the following formula:
STEP ONE: If the total amount of the liability exceeds five
million dollars ($5,000,000), subtract five million dollars
($5,000,000) from the total amount of the liability.
STEP TWO: Add the remainder under STEP ONE to the
minimum total amount figure that applies to the liability under
section 12 of this chapter.
STEP THREE: Add to the sum determined under STEP TWO
the total amount expended by the commission under section 16
of this chapter in defending the member of the fund against
claims giving rise to the liability.
STEP FOUR: Subtract the sum determined under STEP
THREE from the total amount of the liability. As added by P.L.272-1987, SEC.7.
IC 27-1-29.1-14 Excess coverage provided
Sec. 14. The coverage of a liability under this chapter is excess of
any and all other valid and collectible insurance and coverage under
liability risk management, risk sharing, and risk financing pools or
funds. As added by P.L.272-1987, SEC.7.
IC 27-1-29.1-15 Single or installment payments; limits
Sec. 15. An amount payable under section 13 of this chapter that
is no more than ten thousand dollars ($10,000) may be paid in a
single, immediate payment. An amount payable under section 13 of
this chapter that is greater than ten thousand dollars ($10,000) shall
be paid:
(1) in installments under section 18(c) of this chapter; or
(2) under a structured settlement negotiated under section 18(d)
of this chapter. As added by P.L.272-1987, SEC.7.
IC 27-1-29.1-16 Defense of claims; expenses
Sec. 16. The commission may associate with a member of the
fund in the defense of a claim and, if no defense is provided by the
insurer providing the fund member's underlying coverage, the
commission may defend the member and control that defense.
Amounts expended by the commission from the fund under this
section must be deducted under section 13 of this chapter from the
amount to be paid by the commission toward the satisfaction of a
liability. As added by P.L.272-1987, SEC.7.
IC 27-1-29.1-17 Biannual recognition of liabilities; payment; proration in event of
insufficient funds
Sec. 17. On June 30 and December 31 of every year, the
commission shall recognize every liability that has qualified for
partial payment under this section during the six (6) month period
that ended on that day. The commission shall pay the part of each
liability that is payable under section 13 of this chapter within fifteen
(15) days after the liability is recognized as qualifying for partial
payment. However, if the balance in the fund is insufficient to pay
the full payable amount of every liability that has qualified for partial
payment during a six (6) month period, the commission shall pay a
prorated portion of each liability that qualified for partial payment
during the period. Any part of the payable amount of a liability left
unpaid due to the prorating of payments under this subsection must
be paid before the payment of liabilities that qualify for partial
payment during any of the following six (6) month periods. As added by P.L.272-1987, SEC.7.
IC 27-1-29.1-18 Punitive damages; bodily injury or property damage; installment
payments; structured settlements
Sec. 18. (a) No amount may be paid from the fund in respect of
punitive damages paid by or assessed against a member of the fund.
(b) No amount may be paid from the fund in the case of a liability
based upon bodily injury or property damage arising out of the
discharge, dispersal, release, or escape of smoke, vapors, soot, fumes,
acids, alkalis, toxic chemicals, liquids, gases, waste materials, or
other irritants, contaminants, or pollutants into or upon land, the
atmosphere, or any watercourse or body of water unless the
discharge, dispersal, release, or escape:
(1) is caused by an act or omission of a political subdivision
that is a member of the fund; and
(2) occurs as a result of:
(A) a household hazardous waste; or
(B) a conditionally exempt small quantity generator (as
described in 40 CFR 261.5(a);
collection, disposal, or recycling project conducted by or
controlled by the political subdivision.
(c) The commissioner may pay a liability of a member of the fund
in a series of annual payments. The amount of any annual payment
under this subsection based upon the injury to or death of one (1)
person in any one (1) occurrence must be one hundred thousand
dollars ($100,000) or more, except for the final payment in a series
of payments.
(d) The commission may negotiate a structured settlement of any
claim.
(e) As used in this section, "household hazardous waste" means
solid waste generated by households that consists of or contains a
material that is:
(1) ignitable, as described in 40 CFR 261.21;
(2) corrosive, as described in 40 CFR 261.22;
(3) reactive, as described in 40 CFR 261.23; or
(4) toxic, as described in 40 CFR 261.24. As added by P.L.272-1987, SEC.7. Amended by P.L.256-1995,
SEC.2.
IC 27-1-29.1-19 Notice of intent to become member of fund
Sec. 19. (a) A political subdivision may become a member of the
fund by filing a written notice of its intent to become a member with
the commission by the latter of the following dates:
(1) December 31, 1987.
(2) The date exactly six (6) months before the expiration date
of the liability insurance policy covering the political
subdivision on December 31, 1987.
(b) Each political subdivision that files a notice of intent to
become a member by the latter of the two (2) dates set forth in
subsection (a) shall be granted membership in the fund. A political
subdivision that files a notice of intent to become a member after the
latter of the two (2) dates set forth in subsection (a) may be admitted
to or rejected for membership in the fund at the discretion of the
commission. As added by P.L.272-1987, SEC.7.
IC 27-1-29.1-20 Implementing rules; coverage limitations; commission powers;
rules governing relinquishment of membership in fund
Sec. 20. (a) The commission shall adopt rules under IC 4-22-2 to
implement this chapter.
(b) The commission, in accordance with the rules adopted under
subsection (a), may, in whole or in part, conform or limit the
coverage provided to a member of the fund under this chapter (as
described in the coverage document issued to the member by the
commission) with the provisions of insurance policies providing
underlying coverage to the fund member.
(c) In accordance with the rules adopted under subsection (a), the
commission may provide, to a member of the fund that is not a
member of the political subdivision risk management fund under
IC 27-1-29, coverage of a liability that exceeds the amount of one
million dollars ($1,000,000) but that is subject to reduction by
exhaustion of the aggregate limits of liability in the fund member's
underlying coverage.
(d) In accordance with the rules adopted under subsection (a), the
commission may provide, to a member of the fund that is also a
member of the political subdivision risk management fund under
IC 27-1-29, coverage of liabilities for which no coverage is provided
under IC 27-1-29.
(e) Except as otherwise specifically provided in this chapter, the
commission has the same powers in the administration of the fund as
it has in the administration of the political subdivision risk
management fund under IC 27-1-29-7(b). A rule adopted by the
commission to establish the procedure by which a political
subdivision can withdraw from membership in the fund may not
provide that a political subdivision continues to be a member of the
fund more than twelve (12) months after the political subdivision
gives notice to the commissioner of its intention to relinquish its
membership. As added by P.L.272-1987, SEC.7.
IC 27-1-29.1-21 Relinquishment of membership in fund; prerelinquishment
liabilities; assessments
Sec. 21. After relinquishing its membership in the fund, a political
subdivision remains liable for its pro rata share of assessments to pay
for liabilities of fund members that arose out of claims based upon
acts or omissions that took place while the political subdivision was
a member of the fund. If a political subdivision fails to pay an
assessment to which it is subject under this chapter, the commission
may give notice to any department or agency of the state (including
the treasurer of state or the auditor of state) that is the custodian of
money payable to the delinquent political subdivision after the date
of the notice, that the political subdivision is in default on the
payment of an assessment under this chapter. After receiving this
notice, the department or agency shall withhold the delinquent
amount from the money payable to the political subdivision and pay
over the money to the commission to be applied against the
delinquent assessment. As added by P.L.272-1987, SEC.7.
IC 27-1-29.1-22 Assessments on members of fund
Sec. 22. (a) The commission shall impose an assessment to be
paid by each member of the fund. The assessments to be paid by
members of the fund shall be determined by the commission and
must be fair to all members, in consideration of the uniform
application of actuarial principles and underwriters' rating principles
and in consideration of the need to pay the principal of and interest
on bonds or notes issued under IC 27-1-29-17(b)(1). A member shall
pay its assessment in accordance with rules of the commission.
(b) The assessment for the first twelve (12) months of a political
subdivision's membership in the fund shall be no greater than the
payment made by the political subdivision to a commercial insurer
for like coverage for the twelve (12) month period immediately
preceding the political subdivision's application to become a
member. In the case of an applicant not insured by a commercial
insurer, the department shall set the amount of the assessment for the
first twelve (12) months of membership in accordance with
subsection (a). As added by P.L.272-1987, SEC.7.
IC 27-1-29.1
Chapter 29.1. Political Subdivision Catastrophic Liability Fund
IC 27-1-29.1-1 "Commission" defined
Sec. 1. As used in this chapter, "commission" refers to the Indiana
political subdivision risk management commission established by
IC 27-1-29-5. As added by P.L.272-1987, SEC.7.
IC 27-1-29.1-2 "Fund" defined
Sec. 2. As used in this chapter "fund" refers to the political
subdivision catastrophic liability fund established by this chapter. As added by P.L.272-1987, SEC.7.
IC 27-1-29.1-3 "Liability" defined
Sec. 3. As used in this chapter, "liability" means an obligation
arising from:
(1) multiple claims for the payment of money that are within the
limits set forth in IC 34-13-3-4 (or IC 34-4-16.5-4 before its
repeal) and that arise from a single catastrophic occurrence; or
(2) any other claim for which coverage is provided for members
of the fund under rules adopted by the commission. As added by P.L.272-1987, SEC.7. Amended by P.L.1-1998,
SEC.146.
IC 27-1-29.1-4 "Member" defined
Sec. 4. As used in this chapter "member" refers to any political
subdivision that has a membership in the fund, as provided in section
9 of this chapter. As added by P.L.272-1987, SEC.7.
IC 27-1-29.1-5 "Political subdivision" defined
Sec. 5. As used in this chapter, "political subdivision" has the
meaning set forth in IC 34-6-2-110. As added by P.L.272-1987, SEC.7. Amended by P.L.3-1989,
SEC.152; P.L.1-1998, SEC.147.
IC 27-1-29.1-6 "Underlying coverage" defined
Sec. 6. As used in this chapter, "underlying coverage" refers to
any liability insurance policy that names a member of the fund or its
officials or employees as a named insured, an additional named
insured, an insured, or an additional insured. As added by P.L.272-1987, SEC.7. IC 27-1-29.1-7 Establishment of fund; purpose; administration; expenses;
depositories; investment
Sec. 7. (a) The political subdivision catastrophic liability fund is
established for the purpose of:
(1) paying a part of certain liabilities of members of the fund
under this chapter;
(2) receiving assessments paid by fund members to replenish
the fund and to pay the principal of the interest on bonds or
notes issued by the commission under IC 27-1-29-17(b)(1); and
(3) receiving money from any other source.
(b) The fund shall be administered by the commission, using the
powers granted in IC 27-1-29-7, as modified by this chapter.
(c) The expenses of administering the fund shall be paid from
money in the fund.
(d) All money received by the commission under this chapter,
whether as assessments, proceeds from the sale of bonds, or
revenues, are trust funds, to be held and applied solely as provided
in this chapter. Current operating funds shall be kept in depositories
selected by the commission. The commission shall deposit with the
treasurer of state the money in the fund not currently needed to meet
the obligations of the fund, and the treasurer of state shall invest such
money for the commission in accordance with the provisions of any
resolution or trust agreement that the commission may adopt or enter
into under this chapter or IC 27-1-29. Interest that accrues from these
investments shall be credited to the commission and to the fund.
(e) Money in the fund at the end of a fiscal year does not revert to
the state general fund. As added by P.L.272-1987, SEC.7. Amended by P.L.159-1988,
SEC.1.
IC 27-1-29.1-8 Reserve account; issuance of bonds to establish account; use of
funds
Sec. 8. (a) The commission shall establish a reserve account in the
fund. A balance of at least five million dollars ($5,000,000) must
remain in the reserve account. To provide money to establish the
reserve account, the commission may issue bonds under
IC 27-1-29-17(b)(1). The bonds issued to provide money for the
establishment of the reserve account may not exceed a total amount
of forty million dollars ($40,000,000).
(b) Money in the reserve account shall be held and applied solely
to pay claims against the fund that cannot be paid from other money
in the fund. As added by P.L.272-1987, SEC.7.
IC 27-1-29.1-9 Membership eligibility; rights and duties
Sec. 9. All political subdivisions that satisfy the criteria for
membership under the rules of the commission are eligible for
membership in the fund. A political subdivision is not required to be
a member of the political subdivision risk management fund under
IC 27-1-29 to be eligible for membership in the fund established by
this chapter. Each member of the fund:
(1) shall contribute to the fund in the amount of the assessment
charged the member under this chapter; and
(2) is entitled to the partial payment of certain liabilities from
the fund under this chapter. As added by P.L.272-1987, SEC.7.
IC 27-1-29.1-10 Liabilities qualifying for partial payment from fund; notice of
claim
Sec. 10. (a) The commissioner, using money from the fund, shall
pay a part of every liability that qualifies for partial payment under
this chapter and under the terms of the coverage provided by the
commission according to rules adopted under this chapter.
(b) A liability of a member of the fund that has no underlying
coverage or that has occurrence basis underlying coverage qualifies
for partial payment under this chapter if it:
(1) is a liability covered under the coverage document issued by
the commission to the member;
(2) arises out of an act or omission that takes place while the
political subdivision bearing the liability is a member of the
fund; and
(3) satisfies the minimum total amount requirement set forth in
section 12 of this chapter.
(c) A liability of a member of the fund that has claims made basis
underlying coverage qualifies for partial payment under this chapter
if it:
(1) is a liability covered under the coverage document issued by
the commission to the member;
(2) arises out of an act or omission with respect to which a
claim is made while the political subdivision bearing the
liability is a member of the fund;
(3) is covered by the underlying coverage; and
(4) satisfies the minimum total amount requirement set forth in
section 12 of this chapter.
(d) For the purposes of subsection (c)(2) and section 11 of this
chapter, the question of when and how a claim is made shall be
determined by the provisions of the insurance policy providing the
underlying coverage. However, if the underlying coverage is not
applicable to a liability, a claim is considered to have been made for
purposes of subsection (c)(2) when notice of a claim giving rise to
the liability is received by the fund member from the claimant or the
claimant's representative. As added by P.L.272-1987, SEC.7. Amended by P.L.159-1988,
SEC.2.
IC 27-1-29.1-11 Preexisting liabilities qualifying for partial payment
Sec. 11. A liability that arises out of an act or omission that takes
place before the political subdivision bearing the liability becomes
a member of the fund does not qualify for partial payment under this
chapter unless the liability:
(1) is expressly covered by the provisions of a coverage
document that:
(A) is issued to the fund member; and
(B) is in effect when the claim is made; and
(2) is also covered by the underlying coverage that is claims
made basis coverage. As added by P.L.272-1987, SEC.7.
IC 27-1-29.1-12 Liabilities of members that are or are not also members of political
subdivision risk management fund; conditional payment
Sec. 12. (a) A liability of a member of the fund that is not a
member of the political subdivision risk management fund under
IC 27-1-29 does not qualify for partial payment under this chapter
unless the total amount of the liability exceeds:
(1) one million dollars ($1,000,000); or
(2) another sum that is:
(A) greater than one million dollars ($1,000,000); and
(B) approved by the commission as a provision of the fund
member's coverage because the fund member has underlying
coverage with limits of liability that exceed one million
dollars ($1,000,000).
(b) A liability of a member of the fund that is also a member of
the political subdivision risk management fund under IC 27-1-29
does not qualify for partial payment under this chapter unless the
amount of the liability exceeds the amount of liability payable by the
commission under IC 27-1-29 under the terms of the coverage
document that is issued to the fund member and applicable to the
liability. As added by P.L.272-1987, SEC.7.
IC 27-1-29.1-13 Liability partial payment determination; formula
Sec. 13. The amount that is to be paid by the commission toward
the satisfaction of a liability qualifying for partial payment under this
chapter is determined in STEP FOUR of the following formula:
STEP ONE: If the total amount of the liability exceeds five
million dollars ($5,000,000), subtract five million dollars
($5,000,000) from the total amount of the liability.
STEP TWO: Add the remainder under STEP ONE to the
minimum total amount figure that applies to the liability under
section 12 of this chapter.
STEP THREE: Add to the sum determined under STEP TWO
the total amount expended by the commission under section 16
of this chapter in defending the member of the fund against
claims giving rise to the liability.
STEP FOUR: Subtract the sum determined under STEP
THREE from the total amount of the liability. As added by P.L.272-1987, SEC.7.
IC 27-1-29.1-14 Excess coverage provided
Sec. 14. The coverage of a liability under this chapter is excess of
any and all other valid and collectible insurance and coverage under
liability risk management, risk sharing, and risk financing pools or
funds. As added by P.L.272-1987, SEC.7.
IC 27-1-29.1-15 Single or installment payments; limits
Sec. 15. An amount payable under section 13 of this chapter that
is no more than ten thousand dollars ($10,000) may be paid in a
single, immediate payment. An amount payable under section 13 of
this chapter that is greater than ten thousand dollars ($10,000) shall
be paid:
(1) in installments under section 18(c) of this chapter; or
(2) under a structured settlement negotiated under section 18(d)
of this chapter. As added by P.L.272-1987, SEC.7.
IC 27-1-29.1-16 Defense of claims; expenses
Sec. 16. The commission may associate with a member of the
fund in the defense of a claim and, if no defense is provided by the
insurer providing the fund member's underlying coverage, the
commission may defend the member and control that defense.
Amounts expended by the commission from the fund under this
section must be deducted under section 13 of this chapter from the
amount to be paid by the commission toward the satisfaction of a
liability. As added by P.L.272-1987, SEC.7.
IC 27-1-29.1-17 Biannual recognition of liabilities; payment; proration in event of
insufficient funds
Sec. 17. On June 30 and December 31 of every year, the
commission shall recognize every liability that has qualified for
partial payment under this section during the six (6) month period
that ended on that day. The commission shall pay the part of each
liability that is payable under section 13 of this chapter within fifteen
(15) days after the liability is recognized as qualifying for partial
payment. However, if the balance in the fund is insufficient to pay
the full payable amount of every liability that has qualified for partial
payment during a six (6) month period, the commission shall pay a
prorated portion of each liability that qualified for partial payment
during the period. Any part of the payable amount of a liability left
unpaid due to the prorating of payments under this subsection must
be paid before the payment of liabilities that qualify for partial
payment during any of the following six (6) month periods. As added by P.L.272-1987, SEC.7.
IC 27-1-29.1-18 Punitive damages; bodily injury or property damage; installment
payments; structured settlements
Sec. 18. (a) No amount may be paid from the fund in respect of
punitive damages paid by or assessed against a member of the fund.
(b) No amount may be paid from the fund in the case of a liability
based upon bodily injury or property damage arising out of the
discharge, dispersal, release, or escape of smoke, vapors, soot, fumes,
acids, alkalis, toxic chemicals, liquids, gases, waste materials, or
other irritants, contaminants, or pollutants into or upon land, the
atmosphere, or any watercourse or body of water unless the
discharge, dispersal, release, or escape:
(1) is caused by an act or omission of a political subdivision
that is a member of the fund; and
(2) occurs as a result of:
(A) a household hazardous waste; or
(B) a conditionally exempt small quantity generator (as
described in 40 CFR 261.5(a);
collection, disposal, or recycling project conducted by or
controlled by the political subdivision.
(c) The commissioner may pay a liability of a member of the fund
in a series of annual payments. The amount of any annual payment
under this subsection based upon the injury to or death of one (1)
person in any one (1) occurrence must be one hundred thousand
dollars ($100,000) or more, except for the final payment in a series
of payments.
(d) The commission may negotiate a structured settlement of any
claim.
(e) As used in this section, "household hazardous waste" means
solid waste generated by households that consists of or contains a
material that is:
(1) ignitable, as described in 40 CFR 261.21;
(2) corrosive, as described in 40 CFR 261.22;
(3) reactive, as described in 40 CFR 261.23; or
(4) toxic, as described in 40 CFR 261.24. As added by P.L.272-1987, SEC.7. Amended by P.L.256-1995,
SEC.2.
IC 27-1-29.1-19 Notice of intent to become member of fund
Sec. 19. (a) A political subdivision may become a member of the
fund by filing a written notice of its intent to become a member with
the commission by the latter of the following dates:
(1) December 31, 1987.
(2) The date exactly six (6) months before the expiration date
of the liability insurance policy covering the political
subdivision on December 31, 1987.
(b) Each political subdivision that files a notice of intent to
become a member by the latter of the two (2) dates set forth in
subsection (a) shall be granted membership in the fund. A political
subdivision that files a notice of intent to become a member after the
latter of the two (2) dates set forth in subsection (a) may be admitted
to or rejected for membership in the fund at the discretion of the
commission. As added by P.L.272-1987, SEC.7.
IC 27-1-29.1-20 Implementing rules; coverage limitations; commission powers;
rules governing relinquishment of membership in fund
Sec. 20. (a) The commission shall adopt rules under IC 4-22-2 to
implement this chapter.
(b) The commission, in accordance with the rules adopted under
subsection (a), may, in whole or in part, conform or limit the
coverage provided to a member of the fund under this chapter (as
described in the coverage document issued to the member by the
commission) with the provisions of insurance policies providing
underlying coverage to the fund member.
(c) In accordance with the rules adopted under subsection (a), the
commission may provide, to a member of the fund that is not a
member of the political subdivision risk management fund under
IC 27-1-29, coverage of a liability that exceeds the amount of one
million dollars ($1,000,000) but that is subject to reduction by
exhaustion of the aggregate limits of liability in the fund member's
underlying coverage.
(d) In accordance with the rules adopted under subsection (a), the
commission may provide, to a member of the fund that is also a
member of the political subdivision risk management fund under
IC 27-1-29, coverage of liabilities for which no coverage is provided
under IC 27-1-29.
(e) Except as otherwise specifically provided in this chapter, the
commission has the same powers in the administration of the fund as
it has in the administration of the political subdivision risk
management fund under IC 27-1-29-7(b). A rule adopted by the
commission to establish the procedure by which a political
subdivision can withdraw from membership in the fund may not
provide that a political subdivision continues to be a member of the
fund more than twelve (12) months after the political subdivision
gives notice to the commissioner of its intention to relinquish its
membership. As added by P.L.272-1987, SEC.7.
IC 27-1-29.1-21 Relinquishment of membership in fund; prerelinquishment
liabilities; assessments
Sec. 21. After relinquishing its membership in the fund, a political
subdivision remains liable for its pro rata share of assessments to pay
for liabilities of fund members that arose out of claims based upon
acts or omissions that took place while the political subdivision was
a member of the fund. If a political subdivision fails to pay an
assessment to which it is subject under this chapter, the commission
may give notice to any department or agency of the state (including
the treasurer of state or the auditor of state) that is the custodian of
money payable to the delinquent political subdivision after the date
of the notice, that the political subdivision is in default on the
payment of an assessment under this chapter. After receiving this
notice, the department or agency shall withhold the delinquent
amount from the money payable to the political subdivision and pay
over the money to the commission to be applied against the
delinquent assessment. As added by P.L.272-1987, SEC.7.
IC 27-1-29.1-22 Assessments on members of fund
Sec. 22. (a) The commission shall impose an assessment to be
paid by each member of the fund. The assessments to be paid by
members of the fund shall be determined by the commission and
must be fair to all members, in consideration of the uniform
application of actuarial principles and underwriters' rating principles
and in consideration of the need to pay the principal of and interest
on bonds or notes issued under IC 27-1-29-17(b)(1). A member shall
pay its assessment in accordance with rules of the commission.
(b) The assessment for the first twelve (12) months of a political
subdivision's membership in the fund shall be no greater than the
payment made by the political subdivision to a commercial insurer
for like coverage for the twelve (12) month period immediately
preceding the political subdivision's application to become a
member. In the case of an applicant not insured by a commercial
insurer, the department shall set the amount of the assessment for the
first twelve (12) months of membership in accordance with
subsection (a). As added by P.L.272-1987, SEC.7.
IC 27-1-29.1
Chapter 29.1. Political Subdivision Catastrophic Liability Fund
IC 27-1-29.1-1 "Commission" defined
Sec. 1. As used in this chapter, "commission" refers to the Indiana
political subdivision risk management commission established by
IC 27-1-29-5. As added by P.L.272-1987, SEC.7.
IC 27-1-29.1-2 "Fund" defined
Sec. 2. As used in this chapter "fund" refers to the political
subdivision catastrophic liability fund established by this chapter. As added by P.L.272-1987, SEC.7.
IC 27-1-29.1-3 "Liability" defined
Sec. 3. As used in this chapter, "liability" means an obligation
arising from:
(1) multiple claims for the payment of money that are within the
limits set forth in IC 34-13-3-4 (or IC 34-4-16.5-4 before its
repeal) and that arise from a single catastrophic occurrence; or
(2) any other claim for which coverage is provided for members
of the fund under rules adopted by the commission. As added by P.L.272-1987, SEC.7. Amended by P.L.1-1998,
SEC.146.
IC 27-1-29.1-4 "Member" defined
Sec. 4. As used in this chapter "member" refers to any political
subdivision that has a membership in the fund, as provided in section
9 of this chapter. As added by P.L.272-1987, SEC.7.
IC 27-1-29.1-5 "Political subdivision" defined
Sec. 5. As used in this chapter, "political subdivision" has the
meaning set forth in IC 34-6-2-110. As added by P.L.272-1987, SEC.7. Amended by P.L.3-1989,
SEC.152; P.L.1-1998, SEC.147.
IC 27-1-29.1-6 "Underlying coverage" defined
Sec. 6. As used in this chapter, "underlying coverage" refers to
any liability insurance policy that names a member of the fund or its
officials or employees as a named insured, an additional named
insured, an insured, or an additional insured. As added by P.L.272-1987, SEC.7. IC 27-1-29.1-7 Establishment of fund; purpose; administration; expenses;
depositories; investment
Sec. 7. (a) The political subdivision catastrophic liability fund is
established for the purpose of:
(1) paying a part of certain liabilities of members of the fund
under this chapter;
(2) receiving assessments paid by fund members to replenish
the fund and to pay the principal of the interest on bonds or
notes issued by the commission under IC 27-1-29-17(b)(1); and
(3) receiving money from any other source.
(b) The fund shall be administered by the commission, using the
powers granted in IC 27-1-29-7, as modified by this chapter.
(c) The expenses of administering the fund shall be paid from
money in the fund.
(d) All money received by the commission under this chapter,
whether as assessments, proceeds from the sale of bonds, or
revenues, are trust funds, to be held and applied solely as provided
in this chapter. Current operating funds shall be kept in depositories
selected by the commission. The commission shall deposit with the
treasurer of state the money in the fund not currently needed to meet
the obligations of the fund, and the treasurer of state shall invest such
money for the commission in accordance with the provisions of any
resolution or trust agreement that the commission may adopt or enter
into under this chapter or IC 27-1-29. Interest that accrues from these
investments shall be credited to the commission and to the fund.
(e) Money in the fund at the end of a fiscal year does not revert to
the state general fund. As added by P.L.272-1987, SEC.7. Amended by P.L.159-1988,
SEC.1.
IC 27-1-29.1-8 Reserve account; issuance of bonds to establish account; use of
funds
Sec. 8. (a) The commission shall establish a reserve account in the
fund. A balance of at least five million dollars ($5,000,000) must
remain in the reserve account. To provide money to establish the
reserve account, the commission may issue bonds under
IC 27-1-29-17(b)(1). The bonds issued to provide money for the
establishment of the reserve account may not exceed a total amount
of forty million dollars ($40,000,000).
(b) Money in the reserve account shall be held and applied solely
to pay claims against the fund that cannot be paid from other money
in the fund. As added by P.L.272-1987, SEC.7.
IC 27-1-29.1-9 Membership eligibility; rights and duties
Sec. 9. All political subdivisions that satisfy the criteria for
membership under the rules of the commission are eligible for
membership in the fund. A political subdivision is not required to be
a member of the political subdivision risk management fund under
IC 27-1-29 to be eligible for membership in the fund established by
this chapter. Each member of the fund:
(1) shall contribute to the fund in the amount of the assessment
charged the member under this chapter; and
(2) is entitled to the partial payment of certain liabilities from
the fund under this chapter. As added by P.L.272-1987, SEC.7.
IC 27-1-29.1-10 Liabilities qualifying for partial payment from fund; notice of
claim
Sec. 10. (a) The commissioner, using money from the fund, shall
pay a part of every liability that qualifies for partial payment under
this chapter and under the terms of the coverage provided by the
commission according to rules adopted under this chapter.
(b) A liability of a member of the fund that has no underlying
coverage or that has occurrence basis underlying coverage qualifies
for partial payment under this chapter if it:
(1) is a liability covered under the coverage document issued by
the commission to the member;
(2) arises out of an act or omission that takes place while the
political subdivision bearing the liability is a member of the
fund; and
(3) satisfies the minimum total amount requirement set forth in
section 12 of this chapter.
(c) A liability of a member of the fund that has claims made basis
underlying coverage qualifies for partial payment under this chapter
if it:
(1) is a liability covered under the coverage document issued by
the commission to the member;
(2) arises out of an act or omission with respect to which a
claim is made while the political subdivision bearing the
liability is a member of the fund;
(3) is covered by the underlying coverage; and
(4) satisfies the minimum total amount requirement set forth in
section 12 of this chapter.
(d) For the purposes of subsection (c)(2) and section 11 of this
chapter, the question of when and how a claim is made shall be
determined by the provisions of the insurance policy providing the
underlying coverage. However, if the underlying coverage is not
applicable to a liability, a claim is considered to have been made for
purposes of subsection (c)(2) when notice of a claim giving rise to
the liability is received by the fund member from the claimant or the
claimant's representative. As added by P.L.272-1987, SEC.7. Amended by P.L.159-1988,
SEC.2.
IC 27-1-29.1-11 Preexisting liabilities qualifying for partial payment
Sec. 11. A liability that arises out of an act or omission that takes
place before the political subdivision bearing the liability becomes
a member of the fund does not qualify for partial payment under this
chapter unless the liability:
(1) is expressly covered by the provisions of a coverage
document that:
(A) is issued to the fund member; and
(B) is in effect when the claim is made; and
(2) is also covered by the underlying coverage that is claims
made basis coverage. As added by P.L.272-1987, SEC.7.
IC 27-1-29.1-12 Liabilities of members that are or are not also members of political
subdivision risk management fund; conditional payment
Sec. 12. (a) A liability of a member of the fund that is not a
member of the political subdivision risk management fund under
IC 27-1-29 does not qualify for partial payment under this chapter
unless the total amount of the liability exceeds:
(1) one million dollars ($1,000,000); or
(2) another sum that is:
(A) greater than one million dollars ($1,000,000); and
(B) approved by the commission as a provision of the fund
member's coverage because the fund member has underlying
coverage with limits of liability that exceed one million
dollars ($1,000,000).
(b) A liability of a member of the fund that is also a member of
the political subdivision risk management fund under IC 27-1-29
does not qualify for partial payment under this chapter unless the
amount of the liability exceeds the amount of liability payable by the
commission under IC 27-1-29 under the terms of the coverage
document that is issued to the fund member and applicable to the
liability. As added by P.L.272-1987, SEC.7.
IC 27-1-29.1-13 Liability partial payment determination; formula
Sec. 13. The amount that is to be paid by the commission toward
the satisfaction of a liability qualifying for partial payment under this
chapter is determined in STEP FOUR of the following formula:
STEP ONE: If the total amount of the liability exceeds five
million dollars ($5,000,000), subtract five million dollars
($5,000,000) from the total amount of the liability.
STEP TWO: Add the remainder under STEP ONE to the
minimum total amount figure that applies to the liability under
section 12 of this chapter.
STEP THREE: Add to the sum determined under STEP TWO
the total amount expended by the commission under section 16
of this chapter in defending the member of the fund against
claims giving rise to the liability.
STEP FOUR: Subtract the sum determined under STEP
THREE from the total amount of the liability. As added by P.L.272-1987, SEC.7.
IC 27-1-29.1-14 Excess coverage provided
Sec. 14. The coverage of a liability under this chapter is excess of
any and all other valid and collectible insurance and coverage under
liability risk management, risk sharing, and risk financing pools or
funds. As added by P.L.272-1987, SEC.7.
IC 27-1-29.1-15 Single or installment payments; limits
Sec. 15. An amount payable under section 13 of this chapter that
is no more than ten thousand dollars ($10,000) may be paid in a
single, immediate payment. An amount payable under section 13 of
this chapter that is greater than ten thousand dollars ($10,000) shall
be paid:
(1) in installments under section 18(c) of this chapter; or
(2) under a structured settlement negotiated under section 18(d)
of this chapter. As added by P.L.272-1987, SEC.7.
IC 27-1-29.1-16 Defense of claims; expenses
Sec. 16. The commission may associate with a member of the
fund in the defense of a claim and, if no defense is provided by the
insurer providing the fund member's underlying coverage, the
commission may defend the member and control that defense.
Amounts expended by the commission from the fund under this
section must be deducted under section 13 of this chapter from the
amount to be paid by the commission toward the satisfaction of a
liability. As added by P.L.272-1987, SEC.7.
IC 27-1-29.1-17 Biannual recognition of liabilities; payment; proration in event of
insufficient funds
Sec. 17. On June 30 and December 31 of every year, the
commission shall recognize every liability that has qualified for
partial payment under this section during the six (6) month period
that ended on that day. The commission shall pay the part of each
liability that is payable under section 13 of this chapter within fifteen
(15) days after the liability is recognized as qualifying for partial
payment. However, if the balance in the fund is insufficient to pay
the full payable amount of every liability that has qualified for partial
payment during a six (6) month period, the commission shall pay a
prorated portion of each liability that qualified for partial payment
during the period. Any part of the payable amount of a liability left
unpaid due to the prorating of payments under this subsection must
be paid before the payment of liabilities that qualify for partial
payment during any of the following six (6) month periods. As added by P.L.272-1987, SEC.7.
IC 27-1-29.1-18 Punitive damages; bodily injury or property damage; installment
payments; structured settlements
Sec. 18. (a) No amount may be paid from the fund in respect of
punitive damages paid by or assessed against a member of the fund.
(b) No amount may be paid from the fund in the case of a liability
based upon bodily injury or property damage arising out of the
discharge, dispersal, release, or escape of smoke, vapors, soot, fumes,
acids, alkalis, toxic chemicals, liquids, gases, waste materials, or
other irritants, contaminants, or pollutants into or upon land, the
atmosphere, or any watercourse or body of water unless the
discharge, dispersal, release, or escape:
(1) is caused by an act or omission of a political subdivision
that is a member of the fund; and
(2) occurs as a result of:
(A) a household hazardous waste; or
(B) a conditionally exempt small quantity generator (as
described in 40 CFR 261.5(a);
collection, disposal, or recycling project conducted by or
controlled by the political subdivision.
(c) The commissioner may pay a liability of a member of the fund
in a series of annual payments. The amount of any annual payment
under this subsection based upon the injury to or death of one (1)
person in any one (1) occurrence must be one hundred thousand
dollars ($100,000) or more, except for the final payment in a series
of payments.
(d) The commission may negotiate a structured settlement of any
claim.
(e) As used in this section, "household hazardous waste" means
solid waste generated by households that consists of or contains a
material that is:
(1) ignitable, as described in 40 CFR 261.21;
(2) corrosive, as described in 40 CFR 261.22;
(3) reactive, as described in 40 CFR 261.23; or
(4) toxic, as described in 40 CFR 261.24. As added by P.L.272-1987, SEC.7. Amended by P.L.256-1995,
SEC.2.
IC 27-1-29.1-19 Notice of intent to become member of fund
Sec. 19. (a) A political subdivision may become a member of the
fund by filing a written notice of its intent to become a member with
the commission by the latter of the following dates:
(1) December 31, 1987.
(2) The date exactly six (6) months before the expiration date
of the liability insurance policy covering the political
subdivision on December 31, 1987.
(b) Each political subdivision that files a notice of intent to
become a member by the latter of the two (2) dates set forth in
subsection (a) shall be granted membership in the fund. A political
subdivision that files a notice of intent to become a member after the
latter of the two (2) dates set forth in subsection (a) may be admitted
to or rejected for membership in the fund at the discretion of the
commission. As added by P.L.272-1987, SEC.7.
IC 27-1-29.1-20 Implementing rules; coverage limitations; commission powers;
rules governing relinquishment of membership in fund
Sec. 20. (a) The commission shall adopt rules under IC 4-22-2 to
implement this chapter.
(b) The commission, in accordance with the rules adopted under
subsection (a), may, in whole or in part, conform or limit the
coverage provided to a member of the fund under this chapter (as
described in the coverage document issued to the member by the
commission) with the provisions of insurance policies providing
underlying coverage to the fund member.
(c) In accordance with the rules adopted under subsection (a), the
commission may provide, to a member of the fund that is not a
member of the political subdivision risk management fund under
IC 27-1-29, coverage of a liability that exceeds the amount of one
million dollars ($1,000,000) but that is subject to reduction by
exhaustion of the aggregate limits of liability in the fund member's
underlying coverage.
(d) In accordance with the rules adopted under subsection (a), the
commission may provide, to a member of the fund that is also a
member of the political subdivision risk management fund under
IC 27-1-29, coverage of liabilities for which no coverage is provided
under IC 27-1-29.
(e) Except as otherwise specifically provided in this chapter, the
commission has the same powers in the administration of the fund as
it has in the administration of the political subdivision risk
management fund under IC 27-1-29-7(b). A rule adopted by the
commission to establish the procedure by which a political
subdivision can withdraw from membership in the fund may not
provide that a political subdivision continues to be a member of the
fund more than twelve (12) months after the political subdivision
gives notice to the commissioner of its intention to relinquish its
membership. As added by P.L.272-1987, SEC.7.
IC 27-1-29.1-21 Relinquishment of membership in fund; prerelinquishment
liabilities; assessments
Sec. 21. After relinquishing its membership in the fund, a political
subdivision remains liable for its pro rata share of assessments to pay
for liabilities of fund members that arose out of claims based upon
acts or omissions that took place while the political subdivision was
a member of the fund. If a political subdivision fails to pay an
assessment to which it is subject under this chapter, the commission
may give notice to any department or agency of the state (including
the treasurer of state or the auditor of state) that is the custodian of
money payable to the delinquent political subdivision after the date
of the notice, that the political subdivision is in default on the
payment of an assessment under this chapter. After receiving this
notice, the department or agency shall withhold the delinquent
amount from the money payable to the political subdivision and pay
over the money to the commission to be applied against the
delinquent assessment. As added by P.L.272-1987, SEC.7.
IC 27-1-29.1-22 Assessments on members of fund
Sec. 22. (a) The commission shall impose an assessment to be
paid by each member of the fund. The assessments to be paid by
members of the fund shall be determined by the commission and
must be fair to all members, in consideration of the uniform
application of actuarial principles and underwriters' rating principles
and in consideration of the need to pay the principal of and interest
on bonds or notes issued under IC 27-1-29-17(b)(1). A member shall
pay its assessment in accordance with rules of the commission.
(b) The assessment for the first twelve (12) months of a political
subdivision's membership in the fund shall be no greater than the
payment made by the political subdivision to a commercial insurer
for like coverage for the twelve (12) month period immediately
preceding the political subdivision's application to become a
member. In the case of an applicant not insured by a commercial
insurer, the department shall set the amount of the assessment for the
first twelve (12) months of membership in accordance with
subsection (a). As added by P.L.272-1987, SEC.7.
