Insurance Requirements for Political Subdivisions

Insurance Requirements for Political Subdivisions. The Mississippi Tort Claims Board (the Board) was established pursuant to HB 417, Regular Session 1993, and Section 11-46-1 et seq. of the Mississippi Code of 1972, as amended. Section 11-46-17(3) requires that "All political subdivisions shall, from and after October 1, 1993, obtain such policy or policies of insurance, establish such self insurance reserves, or provide a combination of such insurance and reserves as necessary to cover all risks of claims and suits for which political subdivisions may be liable under this chapter; provided, except any political subdivision shall not be required to obtain pollution liability insurance. However, this shall not limit any cause if action against such political subdivision relative to limits of liability under the Tort Claims Act. Such policy or policies of insurance or such self insurance may contain any reasonable limitations or exclusions not contrary to Mississippi state statutes or case law as are normally included in commercial liability insurance policies generally available to political subdivisions. All such plans of insurance and/or reserves shall be submitted for approval to the Board. The Board shall issue a Certificate of Coverage to each political subdivision whose plan of insurance and/or reserves it approves in the same manner as provided in subsection (2) of this section. Whenever any political subdivision fails to obtain the Board's approval of any plan of insurance and/or reserves, the political subdivision shall act in accordance with the rules and regulations of the Board and obtain a satisfactory plan of insurance and/or reserves to be approved by the board." A. Purchase of Liability Insurance: 1. Any political subdivision purchasing a liability policy or policies shall purchase such policy only from an insurance company with a minimum Best rating of B+, or with a certification from the Department of Insurance, or a determination by the Tort Claims Board, that such insurance company has a sound financial condition. This paragraph shall not be construed as a delegation of authority by the Tort Claims Board to any person or entity, and the Tort Claims Board specifically reserves unto itself the authority to approve or disapprove such insurance company based on other appropriate criteria. 2. Minimum limits of such liability policies must meet or exceed the statutory limitations of liability as established by the Tort Claims Act. 3. All such policies must be presented to the board in the form of a copy of the declaration page of such policy or policies. 4. Each subdivision shall purchase such insurance and shall present same to the board for approval and issuance of a Certificate of Coverage. B. Pooling of Two (2) or More Political Subdivisions: 1. For the purpose of purchasing one or more liability policies of insurance, all purchases shall be made only from an insurance company with a minimum Best rating of B+ or with a certification from the Department of Insurance that such insurance company has the financial condition equivalent to a minimum Best rating of B+. This paragraph shall not be construed as a delegation of authority by the Tort Claims Board to any person or entity, and the Tort Claims Board specifically reserves unto itself the authority to approve or disapprove such insurance company based on other appropriate criteria. 2. Minimum limits of liability purchased must meet or exceed the limitations of liability as established in the Tort Claims Act. 3. Any two (2) or more political subdivisions agreeing to form a pool and self-insure must submit to the Board plans for establishing adequate amounts to be reserved for payment of claims, amounts reserved to be allocated toward any expenses of the pool, and what funds shall be used to establish said reserves. Each political subdivision participating in said pool shall reveal any and all funds it plans to use to participate in the pool. 4. The Board must be furnished with an executed copy of the pooling agreement supported by appropriate resolutions or orders of the participating political subdivisions. The pooling agreement shall reflect the rights and responsibilities of the participants. The agreement shall provide for insurance over and above the aggregate of the pool assets to minimize further risk to pool participants for additional contributions during the plan year. The first layer of coverage above the pool aggregate shall extend from the pool amount to Five Million Dollars ($5,000,000). If an umbrella coverage is deemed necessary by the Board, an additional amount of such coverage may be required. C. A Political Subdivision Self-Insuring Alone: 1. A political subdivision choosing to self-insure must submit to the Board a plan to establish adequate amounts to be reserved for payment of claims against the political subdivision. Such plan shall reveal those funds to be used to establish reserves, how the self-insurance program shall be administered and how claims against the self-insured shall be paid, as well as expenses for administration, investigation, defense, etc., shall be paid. Any and all funds to be used to establish reserves for payment of claims and expenses must be revealed. 2. In addition to the reserves identified by the applicant, the self-insuring political subdivisions shall be required to obtain a first layer of insurance coverage above the aggregate amount of the reserve. Additional umbrella coverage may also be required in some cases. The amounts and types of such coverages shall be determined by the Board upon submission of application by the political subdivision on a case by case determination. D. Submission of Plans for Approval: 1. All plans for purchasing insurance, formation of a pool by two (2) or more political subdivisions or a political subdivision choosing to self-insure must be submitted to "the Board for approval or rejection. If approved, a Certificate of Coverage shall be issued for the political subdivisions. 2. If a plan is rejected by the Board, or if any political subdivision fails to obtain approval of the Board of any plan of insurance and/or reserves, the political subdivision shall act in accordance with the rules and regulations of the Board and obtain a satisfactory plan of insurance and/or reserves to be approved by the Board. 3. The Board shall have the authority to pursue judicial enforcement of the requirements of Section 11-46-1 et seq. of the Mississippi Code of 1972, as amended and these regulations in any court of competent jurisdiction; and, take all other reasonable and necessary actions to carry out the powers and duties of the Board under Section 11-46-1 et seq. of the Mississippi Code of 1972, as amended and these regulations. E. Combinations of Insurance Policies and Reserves: Any pool or self-insurance plan may contain a combination of insurance policies purchased and adequate reserves established for payment of claims. The plan must be submitted to the Board for approval and any such plan must comply with applicable of Sections 100 through 104 above. F. Subrogation Rights: The Department of Finance and Administration shall have such subrogation rights as prescribed by the Act and Amendments thereof against third parties. G. Address: All applications and communications should be submitted to: Lee Ann McElroy, Administrator Mississippi Tort Claims Board P. O. Box 267 Jackson, MS 39205