N.Y. Banking Law § 9010-a: Insurance for indemnification of directors and officers

§ 9010-a. Insurance for indemnification of directors and officers. 1.

Subject to the provisions of subdivision two of this section, a

corporation shall have power to purchase and maintain insurance:

(a) 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

(b) To indemnify directors and officers in instances in which they may

be indemnified by the corporation under the provisions of this article,

and

(c) 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.

2. No insurance under subdivision one of this section may provide for

any payment, other than cost of defense, to or on behalf of any director

or officer:

(a) 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

(b) In relation to any risk the insurance of which is prohibited under

the insurance law of this state.

3. Insurance under any or all paragraphs of subdivision one of this

section may be included in a single contract or supplement thereto.

Retrospective rated contracts are prohibited.

4. The corporation shall, within the time and to the persons provided

in subdivision three of section nine thousand nine of this article, 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.

5. 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.