A liability that arises out of an act or omission that takes place before the political subdivision bearing the liability becomes a member of the fund does not qualify for partial payment under this chapter unless the liability:

1. (1) is expressly covered by the provisions of a coverage document that:

   1. (A) is issued to the fund member; and
   2. (B) is in effect when the claim is made; and
2. (2) is also covered by the underlying coverage that is claims made basis coverage.

As added by P.L.272-1987, SEC.7.