Tennessee Code Title 50. Employer and Employee § 50-6-702

(a) For the purpose of insuring or self-insuring the obligations and liabilities under this chapter, municipal utilities and electric cooperatives are authorized to enter into interlocal agreements to pool their liabilities pursuant to § 29-20-401, as if each electric cooperative were a governmental entity for purposes of § 29-20-401, and as if each cooperative were a public agency for purposes of title 12, chapter 9, and under which the interlocal agreement is administered by an association captive insurance company or any of its affiliates or subsidiaries. An interlocal arrangement that is administered by an association captive insurance company may also provide for the insuring or self-insuring of obligations and liabilities arising under the federal Longshoremen's and Harbor Workers' Compensation Act (33 U.S.C. §§ 901-950), as long as the company has obtained any necessary approvals by the appropriate federal agencies.

(b) The general assembly finds and determines that participation in the interlocal agreements by electric cooperatives and municipal utilities provides a mutual benefit to help reduce the expense of operations of municipal utilities and electric cooperatives and hence reduces the cost of electricity for the citizens of the state, and finds that all contributions of financial and administrative resources and associated costs and expenses made by a municipal utility pursuant to an interlocal agreement, as authorized in this part, are made for a public and governmental purpose, and that the contributions benefit the contributing municipal utilities. To the extent that the interlocal agreements provide for the respective parties to indemnify or hold harmless each other from certain liabilities arising out of participation in the pooling agreement, the provisions are authorized in accordance with the findings of the general assembly.