Alabama. State Insurance Fund

Variant names

Dates:

Biographical notes:

The State Insurance Fund was initially established in 1923 (Ala. Acts, 593, p. 769 [1923] and Ala. Code, 8539-8554 [1923]). Its purpose is to insure all state owned buildings, buildings in which the state has a financial interest, and property or equipment in such buildings.

The fund was originally administered by the State Board of Administration as the legal custodian of all physical property belonging to the state. Premiums were paid into the fund by the institutions, departments, and counties concerned. Premiums were set at sixty percent of the current commercial rate.

The fund was a trust fund to be deposited into an account paying the best interest rate available or invested in government bonds. Accruals of interest were put into a sinking fund used to pay claims. When the sinking fund exceeded 500,000 dollars in any year, the surplus was remitted to the insured entities, on a pro rata basis, to be used for building maintenance only.

The law was changed slightly in 1940 (Ala. Code, 28-11-317 to 28-11-328 [1940]). The fund was placed under the jurisdiction of the Department of Finance. The sinking fund surplus was returned to the insured parties by decreasing the next annual premium rather than by remitting cash. Later, the limit on the sinking fund was reduced to 400,000 dollars (Ala. Acts, 675, p. 1045 [1949]).

In 1980, provision was made to transfer funds up to the amount of twenty-five million dollars from the State Insurance Fund to the general fund for Medicaid purposes. The funds may be transferred back to the State Insurance Fund with interest at eight percent per annum at the discretion of the finance director with concurrence from the governor. (Ala. Code, 41-15-10.1, [1975] [Supp. 1982]).

In March of 1988, at the recommendation of the Governor's Management Improvement Program all insurance matters including the State Insurance Fund were put under the authority of a new Risk Manangement Division of the Finance Dept.

As of 1989 the fund had seven billion dollars in coverage. There was thirty million dollars in the fund and the remaining liability was covered by reinsurance.

From the description of Agency history record. (Unknown). WorldCat record id: 145409189