2006 New York Code - Insurance For Indemnification Of Directors And Officers

 
  § 726. Insurance for indemnification of directors and officers.
    (a)  Subject  to  paragraph  (b),  a  corporation  shall have power to
  purchase and maintain insurance:
    (1) To indemnify the corporation for any obligation which it incurs as
  a result of the indemnification of  directors  and  officers  under  the
  provisions of this article, and
    (2) To indemnify directors and officers in instances in which they may
  be  indemnified by the corporation under the provisions of this article,
  and
    (3) To indemnify directors and officers in instances in which they may
  not otherwise be indemnified by the corporation under the provisions  of
  this  article provided the contract of insurance covering such directors
  and officers provides, in a manner acceptable to the  superintendent  of
  insurance, for a retention amount and for co-insurance.
    (b)  No  insurance  under  paragraph  (a) may provide for any payment,
  other than cost of defense, to or on behalf of any director or officer:
    (1) if a judgment or other final adjudication adverse to  the  insured
  director  or  officer establishes that his acts of active and deliberate
  dishonesty were material to the cause of action so adjudicated, or  that
  he  personally  gained  in fact a financial profit or other advantage to
  which he was not legally entitled, or
    (2) in relation to any risk the insurance of which is prohibited under
  the insurance law of this state.
    (c) Insurance under any or all subparagraphs of paragraph (a)  may  be
  included in a single contract or supplement thereto. Retrospective rated
  contracts are prohibited.
    (d) The corporation shall, within the time and to the persons provided
  in   paragraph   (c)   of   section   725  (Other  provisions  affecting
  indemnification of directors and officers), mail a statement in  respect
  to  any  insurance  it  has  purchased  or  renewed  under this section,
  specifying the insurance carrier, date of  the  contract,  cost  of  the
  insurance,  corporate  positions insured, and a statement explaining all
  sums, not previously reported in a statement to members, paid under  any
  indemnification insurance contract.  Notwithstanding any other provision
  of law, a cemetery corporation or a religious corporation having members
  which  purchases  or  renews  any insurance under this section after the
  effective date of the act which added this sentence to  this  paragraph,
  which  corporation  had  two  hundred  fifty  or  more interments in the
  calendar year  preceding  such  purchase  or  renewal,  shall  mail  the
  statement required by this section to every person to whom a care notice
  or solicitation for services has been sent during such calendar year and
  to  every  person  to  whom a notice of annual meeting was mailed during
  such calendar year, but in no event to less than ten per centum  of  the
  lot  owners  of record during such calendar year. Such corporation shall
  not be required to mail  such  statement  during  any  subsequent  year,
  unless  such corporation elects to mail notices of annual meeting to its
  members in which event the statement shall be enclosed  as  provided  in
  clause  (iii)  of  paragraph  (c)  (3)  of section 725 (Other provisions
  affecting indemnification of directors and  officers).    A  corporation
  having  less  than  two  hundred  fifty  interments in the calendar year
  preceding such purchase or renewal shall not be required  to  mail  such
  statement  unless  such  corporation  elects  to  mail notices of annual
  meeting to its members in which event the statement shall be enclosed as
  provided in clause (iii) of paragraph (c)  (3)  of  section  725  (Other
  provisions affecting indemnification of directors and officers).
    (e) This section is the public policy of this state to spread the risk
  of  corporate  management,  notwithstanding any other general or special
  law of this state or of any other jurisdiction,  including  the  federal
  government.