It is the policy of the state for the management of risks to which it is exposed to apply the following principles consistently in a state program of risk management:
(1) To identify those liability and property risks which may have a significant economic impact on the state;
(2) To evaluate risk in terms of the state's ability to fund potential loss rather than the ability of an individual agency to fund potential loss;
(3) To eliminate or improve conditions and practices which contribute to loss whenever practical;
(4) To assume risks to the maximum extent practical;
(5) To provide flexibility within the state program to meet the unique requirements of any state agency for insurance coverage or service;
(6) To purchase commercial insurance:
(a) When the size and nature of the potential loss make it in the best interest of the state to purchase commercial insurance; or
(b) When the fiduciary of encumbered property insists on commercial insurance; or
(c) When the interest protected is not a state interest and an insurance company is desirable as an intermediary; or
(d) When services provided by an insurance company are considered necessary; or
(e) When services or coverages provided by an insurance company are cost-effective; or
(f) When otherwise required by statute; and
(7) To develop plans for the management and protection of the revenues and assets of the state.