58-20-20. Mutual agreement for indemnification.

(a) An agreement made under this Article shall contain provisions for:

(1) A system or program of loss control;

(2) The termination of membership;

(3) The payment by the Club of all claims for which a member incurred liability during the period of his membership;

(4) The non-payment of claims where a member has individually retained the risk, or where the risk is not specifically covered, or where the amount of the claim exceeds the coverage provided by the Club;

(5) The assessment of members;

(6) The payment of contributions from members to satisfy deficiencies;

(7) The maintenance of claim reserves equal to known incurred losses and loss adjustment expenses and to an estimate of incurred but not reported losses; and

(8) Final accounting and settlement of the obligations or refunds to a terminating member when all incurred claims are settled.

(b) The agreement required by this section may also include provisions authorizing the Club to:

(1) To establish offices where necessary in this State, and employ necessary staff to carry out its purposes;

(2) Retain legal counsel, actuaries, claims adjusters, auditors, engineers, private consultants, and advisors, and other persons as the board of trustees or the administrator deem to be necessary;

(3) Amend or repeal its bylaws;

(4) Purchase, lease, or rent real and personal property as it deems necessary; and

(5) Enter into agreements with financial institutions that permit it to issue checks or other negotiable instruments in its own name.