§ 9-7-123 — Economic development projects; insurance fund

(a) The authority may insure payments required by a loan,
lease or other credit arrangement for any project or economic
development project financed, under terms and conditions
prescribed by the authority. The authority may establish one (1)
or more separate accounts and may require the payment of fees or
premiums, establish application fees and prescribe application,
notification, contract and guaranty forms, rules, regulations
and guidelines.
(b) Insurance acquired by the authority shall:
(i) Be for a project or an economic development
project meeting policies and objectives of this act;
(ii) Be through an applicant approved by the
authority;
(iii) Contain amortization provisions satisfactory to
the authority; and
(iv) Be for a principal amount, in a form and contain
terms for payment of property insurance, repairs, alterations,
taxes, assessments, delinquency charges and default remedies as
the authority determines necessary.
(c) The authority may enter into an insurance contract,
guarantee or other agreement or contract for the insurance fund
and any insured loan, lease or other credit agreement. The
agreement or contract may contain terms necessary for the
insurance program subject to established requirements, including
terms relating to loan documentation, review, approval
procedures, origination and servicing rights and
responsibilities, default obligations and other loan procedures
and obligations.
(d) Any contract for insurance made under this section
shall provide that claims are payable from the insurance fund or
a separate account in the insurance fund. The obligation of the
authority to make payments under any insurance contract is
limited solely to the insurance fund and is not a debt or
liability of the state. Any insurance contract and any rule,
regulation or guideline of the authority implementing the
insurance program may contain other terms, provisions or
conditions the authority considers necessary. Any premium for
insuring a loan payment under this section may be determined on
a basis, payable by a person in an amount and at a time
determined by the authority. The premium amount may differ among
any insured loan, lease or other credit agreement.
(e) The authority shall establish an insurance fund held
by a trustee or other fiduciary designated by the authority. All
insurance fees and premiums shall be deposited into the fund
along with up to two million five hundred thousand dollars
($2,500,000.00) prior to April 1, 1985 and an additional one
million five hundred thousand dollars ($1,500,000.00) thereafter
from other revenues and assets of the authority as the authority
considers necessary to comply with any contract or agreement
entered into under this section.
(f) The insurance fund shall be used to satisfy any claim
resulting from a defaulted loan, lease or other credit
agreement. The fund may also be used for any other purpose
prescribed by the authority pursuant to guaranty contracts with
financial institutions under this section including the
protection of the authority's interest in projects during
periods of delinquency or upon default.
(g) The minimum reserve requirement for the insurance fund
shall be an amount provided by agreement, resolution or
indenture with bond holders. No additional loan, lease or other
credit agreement may be insured if the amount available in the
insurance fund is less than the minimum reserve requirement.