2023 District of Columbia Code › Title 31 - Insurance and Securities › Chapter 53 - Fraternal Benefit Societies › § 31–5305. Liability of officers and members

§ 31–5305. Liability of officers and members.
(a) The officers and members of the supreme governing body or any subordinate body of a society shall not be personally liable for any benefits provided by a society.
(b) Any person may be indemnified and reimbursed by any society for expenses reasonably incurred by, and liabilities imposed upon, such person in connection with or arising out of any action, lawsuit, or proceeding, whether civil, criminal, administrative, or investigative, or threat thereof, in which the person may be involved by reason of the fact that he or she is or was a director, officer, employee, or agent of the society or of any firm, corporation, or organization which he or she served in any capacity at the request of the society. A person shall not be so indemnified or reimbursed:
(1) In relation to any matter in such action, lawsuit, or proceeding as to which he or she shall finally be adjudged to be, or have been guilty of, breach of a duty as a director, officer, employee or agent of the society; or
(2) In relation to any matter in such action, lawsuit, or proceeding, or threat thereof, which has been made the subject of a compromise settlement.
(c) A society may indemnify or reimburse a person in relation to any matter specified in subsection (b)(1) and (2) of this section if the person acted in good faith for a purpose the person reasonably believed to be in or not opposed to the best interests of the society and, in a criminal action or proceeding, in addition, had no reasonable cause to believe that his or her conduct was unlawful. The determination whether the conduct of the person met the standard required in order to justify indemnification and reimbursement in relation to any matter described in subsection (b)(1) and (2) of this section may only be made by the supreme governing body or board of directors by a majority vote of a quorum consisting of persons who were not parties to the action, lawsuit, or proceeding or by a court of competent jurisdiction. The termination of any action, lawsuit, or proceeding by judgment, order, settlement, conviction, or upon a plea of no contest, as to the person shall not in itself create a conclusive presumption that the person did not meet the standard of conduct required in order to justify indemnification and reimbursement.
(d) The right to indemnification and reimbursement shall not be exclusive of other rights to which such person may be entitled as a matter of law and shall inure to the benefit of his or her heirs, executors, and administrators.
(e) A society shall have power to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee, or agent of the society, or who is or was serving at the request of the society as a director, officer, employee, or agent of any other firm, corporation, or organization against any liability asserted against such person and incurred by him or her in any such capacity or arising out of his or her status as such, whether or not the society would have the power to indemnify the person against such liability under this section.
(f) No director, officer, employee, member, or volunteer of a society serving without compensation, shall be liable, and no cause of action may be brought, for damages resulting from the exercise of judgment or discretion in connection with the duties or responsibilities of such person for the society unless such act or omission involved willful or wanton misconduct.
(Apr. 29, 1998, D.C. Law 12-86, § 1206, 45 DCR 1172.)
Prior Codifications
1981 Ed., § 35-1235.