537.705. Effect of participation in fund--use of funds, limits--board of trustees, duties--staff--board to be notified of claims, when--board may contract with independent insurance agents. - Missouri Statutes

Effect of participation in fund--use of funds, limits--board oftrustees, duties--staff--board to be notified of claims, when--boardmay contract with independent insurance agents.

537.705. 1. All public entities in Missouri shall have the option ofparticipating in the fund and making annual contributions to the fund inthe amount determined by the board in accordance with the provisions ofsection 379.470, RSMo, relating to rates established by insurers.Participation in the fund has the same effect as purchase of insurance bythe public entity, as otherwise provided by law, and shall have the sameeffect as a self-insurance plan adopted by the governing body of anypolitical subdivision of the state. Moneys in the fund shall be availablefor:

(1) The payment and settlement of all claims for which coverage hasbeen obtained by any public entity in accordance with coverages offered bythe board;

(2) The payment and settlement of tort claims against any officer oremployee of a participating public entity for which coverage has beenobtained by any public entity in accordance with coverages offered by theboard when the claim is upon conduct of such officer or employee arisingout of and performed in connection with his or her official duties onbehalf of the participating public entity;

(3) Attorney's fees and expenses incurred in the settlement anddefense of such entities and persons for claims specified in thissubsection.

2. No amount in excess of the amount specified by section 537.756shall be paid from the fund for the payment and settlement of claimsarising out of any single occurrence.

3. The board of trustees of the fund will negotiate the settlement ofand provide the defense of any claim for which coverage has been obtainedby any public entity in accordance with coverages offered by the board.The board of trustees of the fund shall make the final determination on thesettlement of any claim, or any portion of any claim, which requirespayment from the fund. For any year in which any public entity does notmake a yearly contribution to the fund, the board of trustees of the fundshall not be responsible, in any way, for negotiating the settlement of anyclaim arising from an occurrence in that year, providing any defense of anyclaim arising from an occurrence in that year, making any payment on anyclaim arising from an occurrence in that year, or making any payment on anyjudgment on any claim arising from an occurrence in that year. Any publicentity which discontinues its participation in the fund may not resumeparticipation for a period of three years from the date it discontinuesparticipation.

4. All staff for the Missouri public entity risk management fundshall be provided by the office of administration except as otherwisespecifically determined by the board. The fund shall reimburse the officeof administration for all costs of providing staff required by thissubsection. Such reimbursement shall be made on an annual basis, pursuantto contract negotiated between the fund and the office of administration.As established in section 537.700, the Missouri public entity riskmanagement fund is a body corporate and politic, and the state of Missourishall not be liable in any way with respect to claims made against the fundor against entities or individuals covered by the fund, nor with respect toany expense of operation of the fund. Money in the fund is not state moneynor is it money collected or received by the state.

5. Each participating public entity shall notify the board oftrustees of the fund within seven working days of the time notice isreceived that a claim from an occurrence has been made against the entity,or one of its officers or employees. The public entity shall supplyinformation to the board of trustees of the fund concerning any claim uponrequest. It shall also notify the board of trustees of the fund upon theclosing of any claim.

6. The board may contract with independent insurance agents,authorizing such agents to accept contributions to the fund from publicentities on behalf of the board upon such terms and conditions as the boarddeems necessary, and may provide a reasonable method of compensating suchagents. Such compensation shall not be additional to the contribution tothe fund.

(L. 1986 H.B. 1435 & 1461, A.L. 1993 S.B. 88, A.L. 1999 S.B. 295 & 46)

(2003) Section does not violate payment of punitive damages but does not prohibit such coverage. Naucke v. Missouri Public Entity Risk Management Fund, 95 S.W.3d 166 (Mo.App.W.D.).