A. There is created the "public liability fund". The fund and any income from the fund shall be held in trust, deposited in a segregated account and invested by the general services department with the prior approval of the state board of finance.

B. Money deposited in the public liability fund may be expended by the risk management division of the general services department:

(1) to purchase tort liability insurance for state agencies and their employees and for any local public body participating in the public liability fund and its employees;

(2) to contract with one or more consulting or claims adjusting firms pursuant to the provisions of Section 41-4-24 NMSA 1978;

(3) to defend, save harmless and indemnify any state agency or employee of a state agency or a local public body or an employee of such local public body for any claim or liability covered by a valid and current certificate of coverage to the limits of such certificate of coverage;

(4) to pay claims and judgments covered by a certificate of coverage;

(5) to contract with one or more attorneys or law firms on a per-hour basis, or with the attorney general, to defend tort liability claims against governmental entities and public employees acting within the scope of their duties;

(6) to pay costs and expenses incurred in carrying out the provisions of this section;

(7) to create a retention fund for any risk covered by a certificate of coverage;

(8) to insure or provide certificates of coverage to school bus contractors and their employees, notwithstanding Subsection F of Section 41-4-3 NMSA 1978, for any comparable risk for which immunity has been waived for public employees pursuant to Section 41-4-5 NMSA 1978, if the coverage is commercially unavailable; except that coverage for exposure created by Sections 41-4-9, 41-4-10 and 41-4-12 NMSA 1978 shall be provided to its member public school districts and participating other educational entities of the public school insurance authority, by the authority, and except that coverage shall be provided to a contractor and his employees only through the public school insurance authority or its successor, unless the district to which the contractor provides services has been granted a waiver by the authority or the authority is not offering the coverage for the fiscal year for which the division offers its coverage. A local school district to which the division may provide coverage may provide for marketing and servicing to be done by licensed insurance agents who shall receive reasonable compensation for their services; and

(9) to insure or provide certificates of coverage for any ancillary coverage typically found in commercially available liability policies provided to governmental entities, if the coverage is commercially unavailable.

C. No settlement of any claim covered by the public liability fund in excess of twenty-five thousand dollars ($25,000) shall be made unless the settlement has first been approved in writing by the director of the risk management division of the general services department. This subsection shall not be construed to limit the authority of an insurance carrier, covering any liability under the Tort Claims Act, to compromise, adjust and settle claims against governmental entities or their public employees.

D. Claims against the public liability fund shall be made in accordance with rules or regulations of the director of the risk management division of the general services department. If the director of the risk management division has reason to believe that the fund would be exhausted by payment of all claims allowed during a particular state fiscal year, pursuant to regulations of the risk management division, the amounts paid to each claimant and other parties obtaining judgments shall be prorated, with each party receiving an amount equal to the percentage his own payment bears to the total of claims or judgments outstanding and payable from the fund. Any amounts due and unpaid as a result of such proration shall be paid in the following fiscal years.

History: 1953 Comp., § 5-14-20.1, enacted by Laws 1977, ch. 386, § 17; 1978, ch. 166, § 4; 1982, ch. 8, § 3; 1983, ch. 301, § 75; 1986, ch. 102, § 8; 1989, ch. 373, § 6; 1996 (1st S.S.), ch. 3, § 5; 2000, ch. 27, § 4; 2001, ch. 177, § 1.

Cross references. — For state board of finance, see 6-1-1 NMSA 1978.

For general services department, see 9-17-3 NMSA 1978.

For risk management division, see 15-7-2 NMSA 1978.

For powers of the risk management division in regard to the Tort Claims Act, see 15-7-3 NMSA 1978.

The 2001 amendment, effective June 15, 2001, substituted "twenty-five thousand dollars ($25,000)" for "five thousand dollars ($5,000)", in Subsection C.

The 2000 amendment, effective March 6, 2000, added Subsection B(7) and redesignated the remaining paragraphs in Subsection B accordingly, deleted "including any transfers to the fund from the risk reserve" following "reason to believe that the fund" from the second sentence in Subsection D, and deleted former Subsection E, concerning excess cash balances in the public liability fund.

The 1996 amendment, effective March 21, 1996, inserted "of the general services department" in several places throughout the section; in Subsection A, deleted former Paragraphs (7) and (8) which provided for the creation of a retention fund and to cover personal injury liability risks of governmental entities, redesignated the remaining paragraphs and made related changes, and deleted "group" preceding "insurance" in the first sentence of Paragraph (7); in Subsection D, inserted "public liability" preceding "fund" in the first sentence, and inserted "including any transfers to the fund from the risk reserve" in the second sentence; and added Subsection E.

The 1989 amendment, effective June 16, 1989, inserted near the middle of the first sentence of Subsection B(9) "coverage for exposure created by Sections 41-4-9, 41-4-10 and 41-4-12 NMSA 1978 shall be provided to its member public school districts and participating other educational entities of the public school insurance authority, by the authority and except that".

Am. Jur. 2d, A.L.R. and C.J.S. references. — Liability or indemnity insurance carried by governmental unit as affecting immunity from tort liability, 68 A.L.R.2d 1437.

Coverage under all-risk insurance, 30 A.L.R.5th 170.