Local governments could form approved shared risk coverage programs

Two or more local governments could form a shared risk coverage program after getting approval from the insurance commissioner. A local government includes a city, town, county, school district, and certain special-purpose local entities. At least two would have to join to form a program. The governments would have to approve the agreement through their governing bodies and submit an operating plan. The commissioner would have to approve the program before it is established and find that its plan can provide enough money for current and future obligations.

Programs would have to report their finances and meet oversight and investment rules. These rules would apply to political subdivision risk management programs operating under the proposed chapter. Programs would have to file annual and quarterly financial statements and report their financial strength each year. The commissioner could require corrective plans or take control when specified financial or other control events occur. Programs could invest only in listed types of assets, and at least 20 percent of their assets would have to be held in cash or cash equivalents. Annual financial statements and financial strength reports would be due by March 1 each year.

Programs would have to keep claims analysis and claims management information confidential while making annual financial statements public. These rules would cover political subdivision risk management programs formed or affirmed under the proposed chapter. Other program information would remain subject to the state’s public records law, except where the proposed chapter provides otherwise.