9-7-123. Economic development projects; insurance fund.

(a) The authority may insure payments required by a loan, lease or other credit arrangement for any project or economic development project financed, under terms and conditions prescribed by the authority. The authority may establish one (1) or more separate accounts and may require the payment of fees or premiums, establish application fees and prescribe application, notification, contract and guaranty forms, rules, regulations and guidelines.

(b) Insurance acquired by the authority shall:

(i) Be for a project or an economic development project meeting policies and objectives of this act;

(ii) Be through an applicant approved by the authority;

(iii) Contain amortization provisions satisfactory to the authority; and

(iv) Be for a principal amount, in a form and contain terms for payment of property insurance, repairs, alterations, taxes, assessments, delinquency charges and default remedies as the authority determines necessary.

(c) The authority may enter into an insurance contract, guarantee or other agreement or contract for the insurance fund and any insured loan, lease or other credit agreement. The agreement or contract may contain terms necessary for the insurance program subject to established requirements, including terms relating to loan documentation, review, approval procedures, origination and servicing rights and responsibilities, default obligations and other loan procedures and obligations.

(d) Any contract for insurance made under this section shall provide that claims are payable from the insurance fund or a separate account in the insurance fund. The obligation of the authority to make payments under any insurance contract is limited solely to the insurance fund and is not a debt or liability of the state. Any insurance contract and any rule, regulation or guideline of the authority implementing the insurance program may contain other terms, provisions or conditions the authority considers necessary. Any premium for insuring a loan payment under this section may be determined on a basis, payable by a person in an amount and at a time determined by the authority. The premium amount may differ among any insured loan, lease or other credit agreement.

(e) The authority shall establish an insurance fund held by a trustee or other fiduciary designated by the authority. All insurance fees and premiums shall be deposited into the fund along with up to two million five hundred thousand dollars ($2,500,000.00) prior to April 1, 1985 and an additional one million five hundred thousand dollars ($1,500,000.00) thereafter from other revenues and assets of the authority as the authority considers necessary to comply with any contract or agreement entered into under this section.

(f) The insurance fund shall be used to satisfy any claim resulting from a defaulted loan, lease or other credit agreement. The fund may also be used for any other purpose prescribed by the authority pursuant to guaranty contracts with financial institutions under this section including the protection of the authority's interest in projects during periods of delinquency or upon default.

(g) The minimum reserve requirement for the insurance fund shall be an amount provided by agreement, resolution or indenture with bond holders. No additional loan, lease or other credit agreement may be insured if the amount available in the insurance fund is less than the minimum reserve requirement.