(A) Any person who owns an underground storage tank containing petroleum or petroleum products who is unable to demonstrate financial responsibility in the minimum amounts specified in § 44-2-70(A) may establish an insurance pool in order to demonstrate this financial responsibility. The pool may purchase insurance or reinsurance on a group or individual basis, self-insure its members, or form, or join a purchasing group as defined in § 38-87-20(10). Any contract establishing an insurance pool shall provide for:

(1) the election by pool members of a governing authority for the pool, which may be a board of directors, a majority of whom must be elected or appointed officials of pool members;

(2) a financial plan setting forth in general terms:

(a) the insurance coverages to be offered by the insurance pool, applicable deductible levels, and the maximum levels of claims which the pool will self-insure;

(b) the amount of cash reserves to be set aside for the payment of claims;

(c) the amount of insurance to be purchased by the pool to provide coverage over and above the claims which are not to be satisfied directly from the pool’s resources; and

(d) the amount, if any, of aggregate excess insurance coverage to be purchased and maintained in the event that the insurance pool’s resources are exhausted in a given fiscal period;

(3) a plan of management which provides for the following:

(a) the means of establishing the governing authority of the pool;

(b) the responsibility of the governing authority for fixing contributions to the pool, maintaining reserves, levying and collecting assessments for deficiencies, disposing of surpluses, and administration of the pool in the event of termination or insolvency;

(c) the basis upon which new members may be admitted to, and existing members may leave, the pool;

(d) the identification of funds and reserves by exposure areas; and

(e) those other provisions as are necessary or desirable for the operation of the pool.

(B) The formation and operation of an insurance pool under this section is subject to approval by the Director of the Department of Insurance who may, after notice and hearing, establish reasonable requirements by regulation for the approval and monitoring of these pools, including prior approval of pool administrators and provisions for periodic examinations of financial condition.

(C) The Department of Insurance may disapprove an application for the formation of an insurance pool and may suspend or withdraw approval whenever he finds that the applicant or pool:

(1) has refused to submit its books, papers, accounts, or affairs to the reasonable inspection of the Director of the Department of Insurance or his representative;

(2) has refused, or its officers or agents have refused, to furnish satisfactory evidence of its financial and business standing or solvency;

(3) is insolvent or is in such condition that its further transaction of business in this State is hazardous to its members and creditors in this State, and to the public;

(4) has refused or neglected to pay a valid final judgment against it within sixty days after its rendition;

(5) has violated any law of this State or has violated or exceeded the powers granted by its members;

(6) has failed to pay any fees, taxes, or charges imposed in this State within sixty days after they are due and payable, or within sixty days after final disposition or any legal contest with respect to liability therefor; or

(7) has been found insolvent by a court of any other state, or by the insurance commissioner or other proper officer or agency of any other state, and has been prohibited from doing business in that state.