US Laws, Codes, Statutes & Cases

                                  TITLE  41
                                  INSURANCE
                                  CHAPTER 28
                    ORGANIZATION AND CORPORATE PROCEDURES
                         OF STOCK AND MUTUAL INSURERS
    41-2837.  PROHIBITED PECUNIARY INTEREST OF OFFICIALS. (1) Any officer or
director, or any member of any committee or an employee of a domestic insurer
who is charged with the duty of investing or handling the insurer's funds
shall not deposit or invest such funds except in the insurer's corporate name;
shall not borrow the funds of such insurer; shall not be pecuniarily
interested in any loan, pledge or deposit, security, investment, sale,
purchase, exchange, reinsurance, or other similar transaction or property of
such insurer except as a stockholder or member; shall not take or receive to
his own use any fee, brokerage, commission, gift, or other consideration for
or on account of any such transaction made by or on behalf of such insurer.
    (2)  No insurer shall guarantee any financial obligation of any of its
officers or directors.
    (3)  This section shall not prohibit such a director or officer, or member
of a committee or employee from becoming a policyholder of the insurer and
enjoying the usual rights so provided for its policyholders, nor shall it
prohibit any such officer, director or member of a committee or employee from
participating as beneficiary in any pension trust, deferred compensation plan,
profit sharing plan or stock option plan authorized by the insurer and to
which he may be eligible, nor shall it prohibit any director or member of a
committee from receiving a reasonable fee for lawful services actually
rendered to such insurer.
    (4)  The director may, by regulations from time to time, define and permit
additional exceptions to the prohibition contained in subsection (1) of this
section solely to enable payment of reasonable compensation to a director who
is not otherwise an officer or employee of the insurer, or to a corporation or
firm in which a director is interested, for necessary services performed or
sales or purchases made to or for the insurer in the ordinary course of the
insurer's business and in the usual private professional or business capacity
of such director or such corporation or firm.