District of Columbia § 31-4426 Liability of directors.

District of Columbia Statutes

§ 31-4426 — Liability of directors.

District of Columbia·Title 31 Insurance and Securities.·Ch. 44 Domestic Life Companies.

The directors of any company organized under the laws of the District shall be personally liable when they have participated in or assented to any act which shall cause injury to policyholders, creditors, or stockholders resulting from:

(1)ultra vires acts;

(2)illegal corporate acts done with their connivance, knowledge, or consent;

(3)issuing unpaid or part-paid stock and marking or representing it as paid up in full;

(4)dividend payments declared whether negligently or purposely impairing the capital stock and minimum surplus;

(5)mismanagement;

(6)loaning corporate funds to stockholders or discounting their notes out of corporate moneys;

(7)making false notices or reports that deceive the public; or, (8) transferring property to officers or stockholders to defraud policyholders or

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The directors of any company organized under the laws of the District shall be personally liable when they have participated in or assented to any act which shall cause injury to policyholders, creditors, or stockholders resulting from: (1) ultra vires acts; (2) illegal corporate acts done with their connivance, knowledge, or consent; (3) issuing unpaid or part-paid stock and marking or representing it as paid up in full; (4) dividend payments declared whether negligently or purposely impairing the capital stock and minimum surplus; (5) mismanagement; (6) loaning corporate funds to stockholders or discounting their notes out of corporate moneys; (7) making false notices or reports that deceive the public; or, (8) transferring property to officers or stockholders to defraud policyholders or creditors. If any of the directors shall object to declaring a dividend or the payment of the same, and shall, at any time before the time fixed for the payment thereof, file a certificate of their objections in writing with the secretary of the company and with the Commissioner, they shall be exempt from the liability prescribed in this section for dividends declared or paid impairing the capital stock and minimum surplus.

District of Columbia § 31-4426 (Liability of directors.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

Legislative History

June 19, 1934, 48 Stat. 1150, ch. 672, ch. III, § 26; May 21, 1997, D.C. Law 11-268, § 10, 44 DCR 1730; Mar. 24, 1998, D.C. Law 12-81, § 24(b), 45 DCR 745