Amends TCA Section 9-8-108.

Present law authorizes the board of claims to establish incentive programs for state departments, agencies and institutions, including public institutions of higher education, for the purpose of reducing liabilities to the risk management fund created pursuant to present law. Such incentive programs may include, but are not limited to, differential premium rates based on participation in loss control programs established by the board, increased or decreased deductibles based on participation in loss control programs established by the board, and the imposition of fines and penalties. Any such premiums, deductibles, fines, or penalties must be paid from the budget of the respective department, agency or institution and deposited into the risk management fund. This bill adds that an incentive program established may include, but need not be limited to, policies and procedures for the effective and efficient administration of claims. Such policies and procedures may establish the timeframe and content for the agency response relative to claims and the imposition of fines and penalties for noncompliance.