With the enactment of the Tennessee Governmental Tort Liability Act, in 1973, absolute immunity was granted to local governmental entities. Statutory exceptions to these immunities were then created, making them liable for certain actions and/or inactions. These exceptions may be found in the Tennessee Code Annotated, Sections 29-20-202; 29-20-203; 29-20-204; and 29-20-205.

The Tennessee Municipal League sponsored a bill, that would allow the creation of a wholly owned and professionally operated, non-profit, risk sharing pool. The purpose of the Pool would be to provide cities throughout the state an alternative source for Tort Liability insurance, geared toward municipal needs. The stability of the program, both from the coverages available and the cost for these coverages, would be accomplished through effectively structured risk management. The bill passed and took effect July 1, 1979.

A special committee was appointed to investigate and decide on major issues such as legal form, State statutory requirements, and administration of the pool. The committee then held discussions with consultants and the Department of Insurance.

The governing body of the TML Pool would be a seven member Board of Directors. The TML Board of Directors would select five of these members. The other two members would be the TML President and the Executive Director, who would serve ex officio.

In October 1979, the TML Risk Management Pool became a legal entity and received official state sanction later in the month. By signing the Interlocal Cooperation Agreement in November 1979, two cities (Athens and Hendersonville) established America's first statewide municipal liability pool. This was considered a significant achievement! Now, for the first time, Tennessee municipalities could, in effect, form and control their own insurance market...in essence a captive mutual insurance company.

In the formative years, diligent efforts had to be given to building credibility, fending off attacks from private sector companies and having great concern for the financial hazards of starting a new Pool. Unlike the commercial carriers, the TML Pool, driven strictly by the needs of its members, continues in the original tradition of involving city officials in all aspects of its operations. Now governed by a ten member Board of Directors, the Pool has grown to provide a broad range of coverages and risk management services to most of Tennessee's cities and towns and local public agencies.

Using recognized industry experts to provide reinsurance, actuarial and audit services, the Pool has achieved recognition as a financially sound, professionally managed organization.

The combination of expertise both in the intimate knowledge of municipal operations and the application of sound risk management principals to those operations is unmatched by any competitor. Add to that the hands on services provided by the Pool's loss control division, today's technology in communications and claims administration, and you have a recognized leader in alternative insurance programs.