(a) When any city of the first class, city of the second class, incorporated town, county, and its employees are called upon to assist the state and its employees and, as a result, are sued for their actions performed under the supervision of a state official or employee, the Attorney General shall defend the city of the first class, city of the second class, incorporated town, county, and its employees.
(b) Should a judgment be rendered against the city of the first class, city of the second class, incorporated town, county, or its employees, the state shall pay actual, but not punitive, damages adjudged by a state or federal court, or entered by the court as a result of a compromise settlement approved and recommended by the Attorney General, based on an act or omission by the officer or employee while acting without malice and in good faith within the course and scope of his or her employment and in performance of his or her official duties.
(c)
(1) When cities of the first class, cities of the second class, incorporated towns, counties, and their employees are covered by any contract of insurance providing for legal defense, the cities of the first class, cities of the second class, incorporated towns, counties, their employees, and their insurers are not entitled to legal defense by the Attorney General.
(2) Any judgment rendered against the cities of the first class, cities of the second class, incorporated towns, counties, their employees, or their insurers shall be paid by the state only to the extent that the judgment amount exceeds the limits of liability established in the contract of insurance.