58-23-15. Contract.

A contract or agreement made pursuant to this Article must contain provisions:

(1) For a system or program of loss control;

(2) For termination of membership including either:

a. Cancellation of individual members of the pool by the pool; or

b. Election by an individual member of the pool to terminate its participation;

(3) Requiring the pool to pay all claims for which each member incurs liability during each member's period of membership, except where a member has individually retained the risk, where the risk is not covered, and except for amount of claims above the coverage provided by the pool.

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

(5) For a final accounting and settlement of the obligations of or refunds to a terminating member to occur when all incurred claims are concluded, settled, or paid;

(6) That the pool may establish offices where necessary in this State and employ necessary staff to carry out the purposes of the pool;

(7) That the pool may 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;

(8) That the pool may make and alter bylaws and rules pertaining to the exercise of its purpose and powers;

(9) That the pool may purchase, lease, or rent real and personal property it deems to be necessary; and

(10) That the pool may enter into financial services agreements with financial institutions and that it may issue checks in its own name.