Texas Insurance Code

§ 885.256 — INDEMNIFICATION OR REIMBURSEMENT IN RELATION TO BREACH OF DUTY PROHIBITED

IN § 885.256Title 6. ORGANIZATION OF INSURERS AND RELATED ENTITIES · Part E. MUTUAL AND FRATERNAL COMPANIES AND RELATED ENTITIES · Ch. 885. FRATERNAL BENEFIT SOCIETIES · Art. F. POWERS AND DUTIES OF FRATERNAL BENEFIT SOCIETY

Statute text

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(a)Except as provided by Subsection (b), a person may not be indemnified or reimbursed under Section 885.255 in relation to:

(1)a matter in a proceeding in which the person is finally adjudged guilty of breach of a duty as a director, officer, employee, or agent of the fraternal benefit society; or

(2)an agreement that settles:

(A)a matter in a proceeding described by Subdivision (1); or

(B)the threat of a proceeding involving the person's alleged breach of a duty as a director, officer, employee, or agent of a fraternal benefit society.

(b)A fraternal benefit society may indemnify or reimburse a person in relation to a matter described by Subsection (a) only if the supreme governing body, the board of directors, or a court determines that:

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Legislative history

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.