2012 New York Consolidated Laws
BSC - Business Corporation
Article 7 - (701 - 726) DIRECTORS AND OFFICERS
726 - 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
  financial services, 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 or officers), mail a statement  in  respect
  of  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 shareholders, paid under
  any indemnification insurance contract.
    (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.