US Laws, Codes, Statutes & Cases

                                  TITLE  41
                                  INSURANCE
                                  CHAPTER 32
                         FRATERNAL BENEFIT SOCIETIES
    41-3208.  NO PERSONAL LIABILITY. (1) The officers and members of the
supreme governing body or any subordinate body of a society shall not be
personally liable for any benefits provided by a society.
    (2)  Any person may be indemnified and reimbursed by any society for
expenses reasonably incurred by, and liabilities imposed upon, such person in
connection with or arising out of any action, suit or proceeding, whether
civil, criminal, administrative or investigative, or threat thereof, in which
the person may be involved by reason of the fact that the person is or was a
director, officer, employee or agent of the society or of any firm,
corporation or organization which he served in any capacity at the request of
the society. A person shall not be so indemnified or reimbursed: (a) in
relation to any matter in such action, suit or proceeding as to which he shall
finally be adjudged to be or have been guilty of breach of a duty as a
director, officer, employee or agent of the society; or (b) in relation to any
matter in such action, suit or proceeding, or threat thereof, which has been
made the subject of a compromise settlement; unless in either such case the
person acted in good faith for a purpose the person reasonably believed to be
in or not opposed to the best interests of the society and, in a criminal
action or proceeding, in addition, had no reasonable cause to believe that his
conduct was unlawful. The determination whether the conduct of such person met
the standard required in order to justify indemnification and reimbursement in
relation to any matter described in subpoints (a) or (b) of the preceding
sentence may only be made by the supreme governing body or board of directors
by a majority vote of a quorum consisting of persons who were not parties to
such action, suit or proceeding or by a court of competent jurisdiction. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction, or upon a plea of no contest, as to such person shall not in
itself create a conclusive presumption that the person did not meet the
standard of conduct required in order to justify indemnification and
reimbursement. The foregoing right of indemnification and reimbursement shall
not be exclusive of other rights to which such person may be entitled as a
matter of law and shall inure to the benefit of his heirs, executors and
administrators.
    (3)  A society shall have power to purchase and maintain insurance on
behalf of any person who is or was a director, officer, employee or agent of
the society, or who is or was serving at the request of the society as a
director, officer, employee or agent of any other firm, corporation, or
organization against any liability asserted against such person and incurred
by him in any such capacity or arising out of his status as such, whether or
not the society would have the power to indemnify the person against such
liability under this section.
    (4)  No director, officer, employee, member or volunteer of a society
serving without compensation, shall be liable, and no cause of action may be
brought, for damages resulting from the exercise of judgment or discretion in
connection with the duties or responsibilities of such person for the society
unless such act or omission involved willful or wanton misconduct.