In this title the following words have the meanings indicated. “Fund” means the State Insurance Trust Fund. “Program” means the State Insurance Program.

The General Assembly finds that it is desirable for the State to have a program of purchased insurance and self-insurance against loss, damage, and liability that the State may incur. The General Assembly intends that the State: insure against loss, damage, and liability as fully as permitted by law or agreement; and have a program for central administration of purchased insurance and self-insurance.

There is a State Insurance Program for providing and administering purchased insurance and self-insurance for the State, including: insurance on State property; insurance that federal law requires; insurance trust agreements; and insurance against other risk or commitment of the State. There is a State Insurance Trust Fund. The Fund consists of: each General Fund and special fund appropriation in the State budget to the Treasurer or a unit of the State government for self-insurance; each General Fund and special fund appropriation to the State Insurance Trust Fund for payment under Title 12, Subtitle 5 of the State Government Article; each premium that a unit of the State government pays for protection under the Fund; each payment for a loss under purchased insurance; and each payment from salvage or other recovery that results from a loss paid through the Program. The General Assembly intends that the State budget include sufficient General Fund appropriations to provide in the State Insurance Trust Fund a reserve that the Treasurer considers adequate to cover losses under § 9-105 of this title.

Subject to any limitation in an agreement or law, the Treasurer is responsible for the Program. The Treasurer shall administer the Fund. Notwithstanding any law that authorizes a unit of the State government to buy insurance, the Treasurer may: buy the insurance in accordance with Division II of this article; or require the unit to obtain approval before the unit buys the insurance. The Treasurer shall adopt necessary regulations: to set policies and procedures for payment on losses, including adjustment and approval; to collect from private insurers on losses; and otherwise to carry out the duties of the Treasurer under this title. The Office of the Attorney General and the State Fire Marshal shall cooperate with and assist the Treasurer in carrying out the duties of the Treasurer under this title.

The Treasurer shall provide self-insurance for: loss of or damage to State motor vehicles; loss of or damage to hulls of State vessels; loss of or damage to State real property, to the extent that purchased insurance does not cover the loss or damage; and loss as a result of a settlement or judgment to the extent that the Board of Public Works pays the loss under Title 12, Subtitle 5 of the State Government Article. The Treasurer may provide self-insurance for loss of or damage to State personal property, including fine arts. However, for any fine art item that the Treasurer determines is irreplaceable, the indemnity shall be only for repair of damage. To the extent that funds are available in the State budget, the Treasurer may provide self-insurance for any other loss risk that the Treasurer finds appropriate. To the extent that funds are available in the State budget, the Treasurer: shall provide purchased insurance as required by law; and may provide any other purchased insurance that the Treasurer considers appropriate to the interests of the State. To the extent that funds are available in the State budget, the Treasurer shall provide sufficient self-insurance, purchased insurance, or both to cover the liability of the State and its units and personnel under the Maryland Tort Claims Act.

If a unit of the State government is funded by special or federal funds, the Treasurer shall assess the unit a premium for coverage under the Fund that is needed to pay losses due to total protection or applicable deductions on purchased insurance. After considering the potential exposure of the Fund and its loss experience, the Treasurer shall try to set premiums so as to produce funds that approximate the payments from the Fund.

Subject to the limitations in this section, the Treasurer shall pay a unit of the State government for a loss that is covered under § 9-105 of this title, without regard to whether the unit is funded wholly or partly from general, special, or federal funds. The unit of the State government that had State property at the time of its loss or damage and the Treasurer jointly shall determine the value of the property. The Office of the Attorney General shall determine and certify to the Treasurer the value of a liability claim against the State. The Treasurer may not pay from the Fund any money for loss or liability in excess of the value certified under this subsection. Notwithstanding any other provision of this title, the 1st $1,000 of value of each loss, damage, or liability occurrence of a unit shall be paid from its appropriations in the State budget unless, on recommendation of the Secretary of Budget and Management, the Treasurer reduces the amount.

In this section the following words have the meanings indicated. “Detention center function” includes: operating and administering a detention center; and supervising personnel who perform a function described in item (i) of this paragraph. “Law enforcement function” includes: conducting patrol; making stops and arrests; investigating criminal offenses; and supervising personnel who perform a function described in items (i) through (iii) of this paragraph. This section applies to any sheriff or deputy sheriff engaged in any activity other than those activities relating to: courthouse security; service of process; the transportation of incarcerated individuals to and from court proceedings; personnel and other administrative activities; activities, including activities relating to performing law enforcement functions, arising under a multijurisdictional agreement under the supervision and direction of the Maryland State Police or other State agency; or any other activities, except activities relating to performing law enforcement functions or detention center functions. A county or Baltimore City may obtain insurance to provide the coverage and defense necessary under the Maryland Tort Claims Act. If a county or Baltimore City does not obtain adequate insurance coverage to satisfy the coverage and defense necessary under the Maryland Tort Claims Act, an assessment for coverage and for payment of any litigation expenses, other than for compensation for the time spent by any State employee working for the Attorney General, shall be set off from: any tax which has been appropriated in the State budget to the county or Baltimore City; or the subdivision’s share of any income tax collected by the State Comptroller. Any amount due under this subsection shall be collected in the manner provided by § 7–222 of this article.