(1) It shall be the policy of Provo City, as an insurance and risk financing strategy, to achieve the greatest possible efficiency in its insurance program by striving for the best practical coverage in all lines at the least possible premium cost. The City shall, therefore, self insure to the greatest extent practical to achieve long term premium savings and to avoid insurance industry “hard market” cycles which reduce the potential for adequate commercial coverage and create prohibitive premium costs.

(2) To achieve these objectives, a fund to be known as the “Insurance and Claims Fund” is established. Said fund is created for the purpose of underwriting the City’s self insurance program and providing for the payment of claims, judgements and related costs incurred within the limits of the City’s self insured retention. This fund shall be preserved and maintained for insurance purposes only in order to protect the integrity of other City funds from judgements in the event of major self-insured losses.