(1) If a suit is filed or a claim is made against a responsible party who is eligible for payments from the fund for bodily injury or property damage connected with a release of petroleum from a petroleum storage tank, the state risk manager and the state risk manager's legal counsel may participate with the responsible party and the responsible party's legal counsel in:
(a) the defense of any suit;
(b) determination of legal strategy and any other decisions affecting the defense of any suit; and
(c) any settlement negotiations.
(2) The state risk manager shall approve any settlement between the responsible party and a third party before payment of fund money is made.