33-27-119. Termination of independent liability fund. (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 coverage; or

(ii) 5 years; or

(b) substituting an equivalent liability insurance policy plus five times the amount of the deductible for any legally required period of insurance coverage or 5 years, whichever is longer.

(2) If an equivalent insurance policy as provided for in subsection (1)(b) cannot be procured for the full period required, the small business shall deposit the estimated premium for the required equivalent insurance policy in a suitable trust account. The trust account must be used to purchase liability insurance for the required period of insurance coverage.

(3) The principal of an independent liability fund must remain inviolate, except as it is needed to pay just claims, for the full applicable termination period as provided in subsection (1). However, income from the principal not needed for administrative costs may be paid during the termination period to the person or persons who are designated to ultimately receive the principal of the fund, and the income is taxable to that person or persons.