Insurance Procurement and Administration
In accordance with §2-9-201, MCA, the Risk Management and Tort Defense Division administers a comprehensive plan of insurance protection for state agencies, excluding workers' compensation and employee benefits. State agencies should not purchase insurance without first contacting the division.
Agencies seeking new or additional coverage must contact the division 60 days prior to the desired effective date in order to allow enough lead time to secure it. Insurance is purchased on a competitive bid basis and is subject to change. The Risk Management and Tort Defense Division will notify state agencies of important changes in coverage.
The division establishes the rates to be charged to each participant during the biennial budget preparation process. The rates are based on each participant's most recent risk exposure data and any additional requests for scheduled or unscheduled insurable items.
State participants will be promptly billed for their budgeted amounts for all lines of insurance at the beginning of each fiscal year. Participants are requested to pay their allocated insurance bill to the division immediately. The division will follow up with participants to assure payment by September 1 of each fiscal year. Participants may be billed for any newly requested coverage during the fiscal year.
The Risk Management & Tort Defense Division is required by law to allocate the cost of insurance fairly among state agencies that participate in the state property/casualty insurance program. A fair allocation means that an agency pays its fair share of premium commensurate with loss experience and risk exposure.
The division's cost allocation system provides incentives for agencies to reduce claims by reducing hazards and exposures. The division's cost allocation system is designed to produce premiums that are stable, resistant to manipulation, and is easy to understand.
