CT Gen Stat § 38a-62. (Formerly Sec. 38-27b) (2020)
2020 Connecticut General Statutes|Title 38a - Insurance|Chapter 698 - Insurers|Section 38a-62. (Formerly Sec. 38-27b) - Indemnification of directors, officers and employees of mutual insurance companies.

 (a) Except as otherwise provided in this section, a domestic mutual insurance company shall indemnify any person who was or is a party, or was threatened to be made a party, to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, other than an action by or in the right of the mutual insurance company, by reason of the fact that he, or the person whose legal representative he is, (1) is or was a director, officer or employee of the mutual insurance company, or (2) is or was serving at the request of the mutual insurance company (A) as a director, officer or employee of another corporation, partnership, joint venture, trust or other enterprise or (B) as an agent of such other corporation, partnership, joint venture, trust, or other enterprise other than an employee benefit plan or trust, or (3) is or was a director, officer or employee of the mutual insurance company serving at the request of the mutual insurance company as a fiduciary of an employee benefit plan or trust maintained for the benefit of employees of the mutual insurance company or employees of any such other corporation, partnership, joint venture, trust, or other enterprise, against judgments, fines, penalties, amounts paid in settlement and expenses, including attorneys' fees, actually and reasonably incurred by him and the person whose legal representative he is, in connection with such action, suit or proceeding, or any appeal therein. The mutual insurance company shall not so indemnify any such person unless it shall be concluded as provided in subsection (c) of this section that such person, and the person whose legal representative he is, acted in good faith and in a manner he reasonably believed to be in the best interests of the mutual insurance company or, in the case of a person serving as a fiduciary of an employee benefit plan or trust, either in the best interests of the mutual insurance company or in the best interests of the participants and beneficiaries of such employee benefit plan or trust and consistent with the provisions of such employee benefit plan or trust and, with respect to any criminal action or proceeding, that he had no reasonable cause to believe his conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction or upon a plea of nolo contendere or its equivalent shall not, of itself, create a presumption that the person did not act in good faith or in a manner which he did not reasonably believe to be in the best interests of the mutual insurance company or of the participants and beneficiaries of such employee benefit plan or trust and consistent with the provisions of such employee benefit plan or trust, or, with respect to any criminal action or proceeding, that he had reasonable cause to believe that his conduct was unlawful.(b) Except as otherwise provided in this section, a domestic mutual insurance company shall indemnify any person who was or is a party, or was threatened to be made a party, to any action, suit or proceeding, by or in the right of the mutual insurance company to procure a judgment in its favor by reason of the fact that he, or the person whose legal representative he is, (1) is or was a director, officer or employee of the mutual insurance company, or (2) is or was serving at the request of the mutual insurance company (A) as a director, officer or employee of another corporation, partnership, joint venture, trust or other enterprise or (B) as an agent of such other corporation, partnership, joint venture, trust, or other enterprise other than an employee benefit plan or trust, or (3) is or was a director, officer, or employee of the mutual insurance company serving as a fiduciary of an employee benefit plan or trust maintained for the benefit of employees of the mutual insurance company or employees of any such other corporation, partnership, joint venture, trust or other enterprise, against expenses, including attorneys' fees, actually and reasonably incurred by him in connection with such action, suit or proceeding, or any appeal therein, in relation to matters as to which such person, or the person whose legal representative he is, is finally adjudged not to have breached his duty to the mutual insurance company, or where the court, on application as provided in subsection (d) of this section, shall have determined that in view of all the circumstances such person is fairly and reasonably entitled to be indemnified, and then for such amount as the court shall determine. The mutual insurance company shall not so indemnify any such person for amounts paid to the mutual insurance company, to a plaintiff or to counsel for a plaintiff in settling or otherwise disposing of a threatened action or a pending action, with or without court approval; or for expenses incurred in defending a threatened action or a pending action which is settled or otherwise disposed of without court approval.(c) The conclusion provided for in subsection (a) of this section may be reached by any one of the following: (1) The board of directors of the mutual insurance company by a consent in writing signed by a majority of those directors who were not parties to such action, suit or proceeding; (2) independent legal counsel selected by a consent in writing signed by a majority of those directors who were not parties to such action, suit or proceeding; or (3) the members of the mutual insurance company entitled to vote at annual meetings, by the affirmative vote of at least a majority of such members who were not parties to such action, suit or proceeding, represented at an annual or a special meeting of voting members, duly called with notice of such purpose stated. Such person shall also be entitled to apply to a court for such conclusion, upon application as provided in subsection (d), even though the conclusion reached by any of the foregoing shall have been adverse to him or to the person whose legal representative he is.(d) An application for indemnification or for a conclusion as provided in this section shall be made to the court in which the action is pending or, in the absence thereof, to the superior court for the judicial district where the principal office of the domestic mutual insurance company is located. The application shall be made in such manner and form as may be required by the applicable rules of the court or, in the absence thereof, by direction of the court. The court may also direct that notice be given in such manner as it may require at the expense of the mutual insurance company to the members of the mutual insurance company and to such other persons as the court may designate.(e) Expenses which may be indemnifiable under this section incurred in defending an action, suit or proceeding may be paid by the domestic mutual insurance company in advance of the final disposition of such action, suit or proceeding as authorized by the board of directors upon agreement by or on behalf of the director, officer, employee or agent, or his legal representative, to repay such amount if he is later found not entitled to be indemnified by the mutual insurance company as authorized in this section.(f) A domestic mutual insurance company shall not indemnify any director, officer, employee or agent or any director, officer, or employee serving at the request of the corporation as a fiduciary of an employee benefit plan or trust, against judgments, fines, amounts paid in settlement and expenses, including attorneys' fees, to an extent greater than that authorized by this section, but the mutual insurance company may procure insurance providing greater indemnification and may share the premium cost with any director, officer, employee or agent on such basis as may be agreed upon.(1971, P.A. 293; P.A. 76-299; P.A. 78-204, S. 16, 17; 78-280, S. 2, 127.)History: P.A. 76-299 made provisions applicable to agents of other corporations, partnerships, trusts etc. other than employee benefit plans or trusts and to directors, officers and employees of mutual insurance companies serving as fiduciaries of employee benefit plans or trusts; P.A. 78-204 added “penalties” in Subsec. (a)(3) and, with P.A. 78-280, substituted “judicial district” for “county” in Subsec. (d); Sec. 38-27b transferred to Sec. 38a-62 in 1991.