Senate File 2337 - Enrolled PAG LIN 1 1 SENATE FILE 2337 1 2 1 3 AN ACT 1 4 RELATING TO THE PURCHASE OF LIABILITY INSURANCE AND TO SELF- 1 5 INSURANCE BY THE ASSOCIATION OF IOWA FAIRS. 1 6 1 7 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 1 8 1 9 Section 1. Section 87.4, Code 2007, is amended to read as 1 10 follows: 1 11 87.4 GROUP AND SELF=INSURED PLANS == TAX EXEMPTION == PLAN 1 12 APPROVAL. 1 13 For the purpose of complying with this chapter, groups of 1 14 employers by themselves or in an association with any or all 1 15 of their workers, may form insurance associations as hereafter 1 16 provided, subject to such reasonable conditions and 1 17 restrictions as may be fixed by the insurance commissioner; 1 18 and membership in such mutual insurance organization as 1 19 approved, together with evidence of the payment of premiums 1 20 due, shall be evidence of compliance with this chapter. 1 21 A self=insurance association formed under this section and 1 22 an association comprised of cities or counties, or both, or 1 23 the association of county fairs or a fair as defined in 1 24 section 174.1, or community colleges as defined in section 1 25 260C.2 or school corporations, or both, or other political 1 26 subdivisions, which have entered into an agreement under 1 27 chapter 28E for the purpose of establishing a self=insured 1 28 program for the payment of workers' compensation benefits are 1 29 exempt from taxation under section 432.1. 1 30 A plan shall be submitted to the commissioner of insurance 1 31 for review and approval prior to its implementation. The 1 32 commissioner shall adopt rules for the review and approval of 1 33 a self=insured group plan provided under this section. The 1 34 rules shall include, but are not limited to, the following: 1 35 1. Procedures for submitting a plan for approval including 2 1 the establishment of a fee schedule to cover the costs of 2 2 conducting the review. 2 3 2. Establishment of minimum financial standards to ensure 2 4 the ability of the plan to adequately cover the reasonably 2 5 anticipated expenses. 2 6 A self=insured program for the payment of workers' 2 7 compensation benefits established by an association comprised 2 8 of cities or counties, or both, or the association of county 2 9 fairs or a fair as defined in section 174.1, or community 2 10 colleges, as defined in section 260C.2, or other political 2 11 subdivisions, which have entered into an agreement under 2 12 chapter 28E, is not insurance, and is not subject to 2 13 regulation under chapters 505 through 523C. Membership in 2 14 such an association together with payment of premiums due 2 15 relieves the member from obtaining insurance as required in 2 16 section 87.1. Such an association is not required to submit 2 17 its plan or program to the commissioner of insurance for 2 18 review and approval prior to its implementation and is not 2 19 subject to rules or rates adopted by the commissioner relating 2 20 to workers' compensation group self=insurance programs. Such 2 21 a program is deemed to be in compliance with this chapter. 2 22 The workers' compensation premium written on a municipality 2 23 which is a member of an insurance pool which provides workers' 2 24 compensation insurance coverage to a statewide group of 2 25 municipalities, as defined in section 670.1, shall not be 2 26 considered in the determination of any assessments levied 2 27 pursuant to an agreement established under section 515A.15. 2 28 Sec. 2. NEW SECTION. 174.8A LIABILITY INSURANCE. 2 29 The association of Iowa fairs, or a fair, shall have the 2 30 power to join a local government risk pool as provided in 2 31 section 670.7. 2 32 Sec. 3. Section 670.7, Code 2007, is amended to read as 2 33 follows: 2 34 670.7 INSURANCE. 2 35 1. The governing body of a municipality may purchase a 3 1 policy of liability insurance insuring against all or any part 3 2 of liability which might be incurred by the municipality or 3 3 its officers, employees, and agents under section 670.2 and 3 4 section 670.8 and may similarly purchase insurance covering 3 5 torts specified in section 670.4. The governing body of a 3 6 municipality may adopt a self=insurance program, including but 3 7 not limited to the investigation and defense of claims, the 3 8 establishment of a reserve fund for claims, the payment of 3 9 claims, and the administration and management of the 3 10 self=insurance program, to cover all or any part of the 3 11 liability. The governing body of a municipality may join and 3 12 pay funds into a local government risk pool to protect itself 3 13 against any or all liability. The governing body of a 3 14 municipality may enter into insurance agreements obligating 3 15 the municipality to make payments beyond its current budget 3 16 year to provide or procure the policies of insurance, 3 17 self=insurance program, or local government risk pool. The 3 18 premium costs of the insurance, the costs of a self=insurance 3 19 program, the costs of a local government risk pool, and the 3 20 amounts payable under the insurance agreements may be paid out 3 21 of the general fund or any available funds or may be levied in 3 22 excess of any tax limitation imposed by statute. However, for 3 23 school districts, the costs shall be included in the district 3 24 management levy as provided in section 296.7 if the district 3 25 has certified a district management levy. If the district has 3 26 not certified a district management levy, the cost shall be 3 27 paid from the general fund. Any independent or autonomous 3 28 board or commission in the municipality having authority to 3 29 disburse funds for a particular municipal function without 3 30 approval of the governing body may similarly enter into 3 31 insurance agreements, procure liability insurance, adopt a 3 32 self=insurance program, or join a local government risk pool 3 33 within the field of its operation. 3 34 2. The procurement of this insurance constitutes a waiver 3 35 of the defense of governmental immunity as to those exceptions 4 1 listed in section 670.4 to the extent stated in the policy but 4 2 shall have no further effect on the liability of the 4 3 municipality beyond the scope of this chapter, but if a 4 4 municipality adopts a self=insurance program or joins and pays 4 5 funds into a local government risk pool the action does not 4 6 constitute a waiver of the defense of governmental immunity as 4 7 to the exceptions listed in section 670.4. 4 8 3. The existence of any insurance which covers in whole or 4 9 in part any judgment or award which may be rendered in favor 4 10 of the plaintiff, or lack of any such insurance, shall not be 4 11 material in the trial of any action brought against the 4 12 governing body of a municipality, or its officers, employees, 4 13 or agents and any reference to such insurance, or lack of 4 14 insurance, is grounds for a mistrial. A self=insurance 4 15 program or local government risk pool is not insurance and is 4 16 not subject to regulation under chapters 505 through 523C. 4 17 4. The association of county fairs as defined in section 4 18 174.1, or a fair, shall be deemed to be a municipality as 4 19 defined in this chapter only for the purpose of joining a 4 20 local government risk pool as provided in this section. 4 21 4 22 4 23 4 24 JOHN P. KIBBIE 4 25 President of the Senate 4 26 4 27 4 28 4 29 PATRICK J. MURPHY 4 30 Speaker of the House 4 31 4 32 I hereby certify that this bill originated in the Senate and 4 33 is known as Senate File 2337, Eighty=second General Assembly. 4 34 4 35 5 1 5 2 MICHAEL E. MARSHALL 5 3 Secretary of the Senate 5 4 Approved , 2008 5 5 5 6 5 7 5 8 CHESTER J. CULVER 5 9 Governor