Title 33

A small business operating in the state may establish an independent liability fund to provide for defense, settlement, or payment of any liability claims against it by a third party.

A small business shall notify the commissioner, on a form supplied by the commissioner, of its intention to establish an independent liability fund. The small business shall fully and clearly designate the money, assets, or investments it is setting aside for its independent liab…

Within the limits provided in 33-27-114, a small business may make such additions to its independent liability fund as it considers appropriate.

The independent liability fund of any small business may not be greater than the larger of the following: (1) the total of all legally required liability insurance; or (2) five times the gross sales of the small business in its most recent fiscal year.

The money, assets, and investments contributed to an independent liability fund must meet the criteria established for investments by an insurance company in chapter 12 and must be valued as those assets and investments would be valued.

Once money, assets, or investments have been contributed to an independent liability fund, they may not be used or removed from the fund except in the manner prescribed by 33-27-117 and 33-27-119.

(1) The actual costs of administering an independent liability fund may be deducted from the fund or from income arising out of the money, assets, and investments in the fund. Such costs include the cost of defending against or negotiating a settlement of any liability claim, as …

The net value of independent liability fund contributions for any given fiscal year is taxed in accordance with 33-2-705(2)(a).

(1) A small business with an independent liability fund may terminate the independent liability fund by: (a) providing a trust to administer any principal remaining in its fund and to pay any outstanding claims for whichever is longer: (i) any legally required period of insurance…