The Department of Administrative Services may formulate and initiate a plan of self-insurance for the state's properties. The department shall cause:

(1) A complete appraisal to be made of all the state's insurable property as to value;

(2) A complete classification to be made of all the state's insurable property by type of risk; and

(3) A determination and recommendation to be made of the amount and extent of self-insurance which the state can assume, the necessary reserves needed, the minimum claim to be paid on each risk, and the type of additional or excess insurance coverage that may be required.

Upon the formulation of a plan of self-insurance based on the foregoing determinations made and submitted by the Department of Administrative Services, the Governor, by executive order, may establish and effectuate a plan of self-insurance; and the General Assembly from time to time shall provide and maintain by appropriation an insurance reserve fund.