N.Y. NPC Law § 726 — New York Code / Act NPC / Article 7 / Section 726
Insurance for indemnification of directors and officers
Status: in_force

§ 726. Insurance for indemnification of directors and officers.\n  (a) Subject to paragraph (b), a corporation shall have power to\npurchase and maintain insurance:\n  (1) To indemnify the corporation for any obligation which it incurs as\na result of the indemnification of directors and officers under the\nprovisions of this article, and\n  (2) To indemnify directors and officers in instances in which they may\nbe indemnified by the corporation under the provisions of this article,\nand\n  (3) To indemnify directors and officers in instances in which they may\nnot otherwise be indemnified by the corporation under the provisions of\nthis article provided the contract of insurance covering such directors\nand officers provides, in a manner acceptable to the superintendent of\nfinancial services, for a retention amount and for co-insurance.\n  (b) No insurance under paragraph (a) may provide for any payment,\nother than cost of defense, to or on behalf of any director or officer:\n  (1) if a judgment or other final adjudication adverse to the insured\ndirector or officer establishes that his acts of active and deliberate\ndishonesty were material to the cause of action so adjudicated, or that\nhe personally gained in fact a financial profit or other advantage to\nwhich he was not legally entitled, or\n  (2) in relation to any risk the insurance of which is prohibited under\nthe insurance law of this state.\n  (c) Insurance under any or all subparagraphs of paragraph (a) may be\nincluded in a single contract or supplement thereto. Retrospective rated\ncontracts are prohibited.\n  (d) The corporation shall, within the time and to the persons provided\nin paragraph (c) of section 725 (Other provisions affecting\nindemnification of directors and officers), mail a statement in respect\nto any insurance it has purchased or renewed under this section,\nspecifying the insurance carrier, date of the contract, cost of the\ninsurance, corporate positions insured, and a statement explaining all\nsums, not previously reported in a statement to members, paid under any\nindemnification insurance contract. Notwithstanding any other provision\nof law, a cemetery corporation or a religious corporation having members\nwhich purchases or renews any insurance under this section after the\neffective date of the act which added this sentence to this paragraph,\nwhich corporation had two hundred fifty or more interments in the\ncalendar year preceding such purchase or renewal, shall mail the\nstatement required by this section to every person to whom a care notice\nor solicitation for services has been sent during such calendar year and\nto every person to whom a notice of annual meeting was mailed during\nsuch calendar year, but in no event to less than ten per centum of the\nlot owners of record during such calendar year. Such corporation shall\nnot be required to mail such statement during any subsequent year,\nunless such corporation elects to mail notices of annual meeting to its\nmembers in which event the statement shall be enclosed as provided in\nclause (iii) of paragraph (c) (3) of section 725 (Other provisions\naffecting indemnification of directors and officers). A corporation\nhaving less than two hundred fifty interments in the calendar year\npreceding such purchase or renewal shall not be required to mail such\nstatement unless such corporation elects to mail notices of annual\nmeeting to its members in which event the statement shall be enclosed as\nprovided in clause (iii) of paragraph (c) (3) of section 725 (Other\nprovisions affecting indemnification of directors and officers).\n  (e) This section is the public policy of this state to spread the risk\nof corporate management, notwithstanding any other general or special\nlaw of this state or of any other jurisdiction, including the federal\ngovernment.\n