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A risk management fund shall be established as a separate account in the state treasury. Amounts remaining in the fund at the end of each fiscal year shall not revert to the general fund. Moneys in the risk management fund shall be invested by the state treasurer pursuant to chapter 4, part 6 of this title, for the sole benefit of that fund.
The board of claims shall recommend annually to the commissioner of finance and administration the total occurrence basis funding required to satisfy the liabilities arising under this chapter, the liabilities arising under title 12, chapter 3, part 9 and the contribution required of each state department, agency and institution, including higher education, needed to achieve the required funding.
The claims commission shall forward to the division of claims and risk management all of its decisions after they become final. The division of claims and risk management shall pay all claims for which the state is liable after the decision becomes final. Claim awards from the commission or the board of claims, as well as settlements, shall be paid only from funds appropriated or reserved for that purpose. There is hereby appropriated a sum sufficient to the risk management fund for the purpose of paying claims; provided, that awards made pursuant to actions founded upon express contract or breach thereof or awards made for the recovery of taxes shall not be paid from the risk management fund, but instead shall be paid from other funds in accordance with procedures established by the board of claims and approved by the commissioner of finance and administration.
Expenses payable from the risk management fund shall include those attributable to: defending state employees pursuant to title 8, chapter 42, part 1; defending the state pursuant to part 3 of this chapter; the division of claims and risk management; the Tennessee claims commission; the department of the treasury's casualty risk program; and expenses and losses arising pursuant to title 12, chapter 3, part 9. The expenses pursuant to this subsection (d) are subject to annual appropriations and chapter 6 of this title. Subsequent to the close of each fiscal year, the attorney general and reporter shall provide to the state board of claims a report describing the manner in which funds received from the risk management fund were used in defending actions brought against the state and its employees.