(1) The Board of Trustees of the Nebraska State Colleges may establish, maintain, and administer one or more risk-loss trusts for the purpose of paying losses and expenses incurred by the state colleges from (a) general and professional liability, including, but not limited to, judgments, awards, and settlements of claims and suits arising under state or federal law, including, but not limited to, the State Contract Claims Act, the State Miscellaneous Claims Act, and the State Tort Claims Act, (b) damage, destruction, or loss of real or personal property, and (c) errors and omissions liability. Any such risk-loss trust shall contain provisions relating to defense and settlement of claims and suits covered by the trust. No risk-loss trust established pursuant to this section shall be a member of the Nebraska Property and Liability Insurance Guaranty Association.

(2) Whenever any claim or suit against the state colleges or any of the officers, agents, or employees of the state colleges is covered by a risk-loss trust established pursuant to this section, the provisions of such trust on defense and settlement of claims and suits covered by the trust shall be applicable notwithstanding any inconsistent provisions of the State Tort Claims Act. The Attorney General and State Claims Board shall cooperate with the state colleges in administering the defense and settlement provisions of any such trust.