(a) The various state agencies, departments, boards, or commissions shall determine and report their needs for liability coverage to the Finance Director, the Insurance Commissioner, and the Attorney General. The Finance Director, with the advice of the Insurance Commissioner and Attorney General, shall then determine the type of blanket policy needed to provide basic coverage for deaths, injuries, or damages arising out of the negligent or wrongful acts or omissions committed by state employees or agents of the state, including retired licensed physicians and dentists while they are voluntarily serving at free health care clinics and individuals serving as foster parents licensed or approved by the Department of Human Resources to maintain homes for a child or children under the supervision of the department or serving as adult foster care providers approved by the Department of Human Resources to provide foster care for adults under the supervision of the Department of Human Resources, while in the performance of their official duties in the line and scope of their employment or duties as foster parents or foster care providers. Any policy of insurance or reinsurance shall be selected by the Finance Director on a competitive bid basis for an initial period of three years with a provision for annual review beginning October 1, 1987.

(b) The Finance Director, with the advice of the Insurance Commissioner and the Attorney General, may provide for self-insurance of the entire state or any part of the state under such terms and conditions as the Finance Director shall determine. Any funds appropriated for the purpose of self-insurance and paid into a special trust account under the provisions of this section shall not revert to the State Treasury at the end of a fiscal year, but may be carried over from year to year provided such funds are not used for any other purpose.

(c) In any action brought in the courts of the State of Alabama or United States wherein a plaintiff seeks damages arising out of the negligent or wrongful acts or omissions committed by state employees or agents of the state, including retired licensed physicians, dentists, and those foster parents and foster care providers specified in subsection (a) herein, while in the performance of their official duties in the line and scope of their employment or duties as foster parents or foster care providers, the plaintiff shall cause the Attorney General of the State of Alabama to be served with a copy of the suit against the employee, agent, or servant of the board, agency, commission, or department.

(d) The charges or costs of the liability insurance or self-insurance provided under the provision of this section shall be paid from the funds appropriated for the operation of the several state departments, agencies, boards, or commissions. The Finance Director may apportion the costs or charges to the several state departments, agencies, boards, or commissions in order to cover the risk involved.

(e) The provisions of this section shall not apply to any educational institution or board in this state.

(f) The State Board of Health, by rule, may establish the qualifications and criteria for retired physicians and dentists to be eligible to participate in professional liability coverage administered by the Department of Finance while serving at free health care clinics under this section. The State Board of Health, by regulation, may also establish the maximum number of retired physicians and dentists who may be provided professional liability coverage and may by regulation establish the maximum amount of funds that may be expended by the Alabama Department of Public Health to pay premiums for such coverage pursuant to this section.