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    Subdivision 1. Alternatives to conventional insurance. The commissioner may implement
programs of insurance or alternatives to the purchase of conventional insurance. This authority
does not extend to areas of risk subject to: (1) collective bargaining agreements, (2) plans
established under section 43A.18, or (3) programs established under sections 176.5401 to
176.611, except for the Department of Administration. The mechanism for implementing possible
alternatives to conventional insurance is the risk management fund created in subdivision 2.
    Subd. 2. Risk management fund. (a) All state agencies, political subdivisions, and
the Minnesota State Colleges and Universities, may, in cooperation with the commissioner,
participate in insurance programs and other funding alternative programs provided by the risk
management fund.
(b) When an entity described in paragraph (a) enters into an insurance or self-insurance
program, each entity shall contribute the appropriate share of its costs as determined by the
(c) The money in the fund to pay claims arising from state activities and for administrative
costs, including costs for the adjustment and defense of the claims, is appropriated to the
(d) Interest earned from the investment of money in the fund shall be credited to the fund and
be available to the commissioner for the expenditures authorized in this subdivision.
(e) The fund is exempt from the provisions of section 16A.152, subdivision 4. In the event
that proceeds in the fund are insufficient to pay outstanding claims and associated administrative
costs, the commissioner, in consultation with the commissioner of finance, may assess entities
participating in the fund amounts sufficient to pay the costs. The commissioner shall determine
the proportionate share of the assessment of each entity.
    Subd. 3. Responsibilities. The commissioner shall:
(1) review the state's exposure to various types of potential risks in consultation with affected
entities and advise them as to the reduction of risk and fiscal management of those losses;
(2) be responsible for statewide risk management coordination, evaluation of funding and
insuring alternatives, and the approval of all insurance purchases in consultation with affected
(3) identify ways to eliminate redundant efforts in the management of state risk management
and insurance programs;
(4) maintain the state risk management information system; and
(5) administer and maintain the state risk management fund.
    Subd. 4. Competitive bidding. The commissioner may request bids from insurance carriers
or negotiate with insurance carriers and may enter into contracts of insurance carriers that in the
judgment of the division are best qualified to underwrite and service the insurance programs.
    Subd. 5. Risk management fund not considered insurance. A state agency, including
an entity defined as a part of the state in section 3.732, subdivision 1, clause (1), may procure
insurance against liability of the agency and its employees for damages resulting from the torts
of the agency and its employees. The procurement of this insurance constitutes a waiver of the
limits of governmental liability under section 3.736, subdivisions 4 and 4a, only to the extent
that valid and collectible insurance, including where applicable, proceeds from the Minnesota
Insurance Guaranty Association, exceeds those limits and covers the claim. Purchase of insurance
has no other effect on the liability of the agency and its employees. Procurement of commercial
insurance, participation in the risk management fund under this section, or provisions of an
individual self-insurance plan with or without a reserve fund or reinsurance does not constitute a
waiver of any governmental immunities or exclusions.
History: 1986 c 455 s 3; 1988 c 613 s 18; 1992 c 513 art 4 s 32; 1993 c 192 s 111; 1994 c
634 art 1 s 17; 1996 c 398 s 21; 2001 c 162 s 7,8; 2006 c 212 art 1 s 2

Official Publication of the State of Minnesota
Revisor of Statutes