§ 26.1-15.1-08 — Officers and members not personally liable for benefit contracts

North Dakota § 26.1-15.1-08

• Jurisdiction: North Dakota
• Title 26.1: Insurance
• Ch. 26.1-15.1: Fraternal Benefit Societies

Text

1. The officers and members of the supreme governing body or any subordinate body of
a society are not personally liable for any benefits provided by the society.
2. Any society may indemnify and reimburse any person for expenses reasonably
incurred by, and liabilities imposed upon, that person in connection with or arising out
of any action or proceeding, whether civil, criminal, administrative, or investigative, or
threat thereof, in which the person may be involved by reason of the fact that the
person is or was a director, officer, employee, or agent of the society or of any firm,
corporation, limited liability company, or organization which that person served in any
capacity at the request of the society. A person may not be so indemnified or
reimbursed in relation to any matter as to which the person is adjudged to be or has
been guilty of breach of a duty as a director, officer, employee, or agent of the society
unless the person acted in good faith for a purpose the person reasonably believed to
be in the best interests of the society and, in a criminal action or proceeding, had no
reasonable cause to believe that the conduct was unlawful. The determination whether
the conduct of such person met the standard required in order to justify indemnification
and reimbursement in relation to any matter 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 matter or by a court of competent jurisdiction. The
termination of any action or proceeding by judgment, order, settlement, conviction, or
upon a plea of no contest, does not in itself create a presumption that the person did
not meet the standard of conduct required in order to justify indemnification and
reimbursement. The foregoing right of indemnification and reimbursement is not
exclusive of other rights to which the person may be entitled as a matter of law and
inures to the benefit of that person's heirs, executors, and administrators.
3. A society may purchase and maintain insurance on behalf of any director, officer,
employee, or agent of the society who is or was serving at the request of the society
as a director, officer, employee, or agent of any other firm, corporation, limited liability
company, or organization against any liability asserted against or incurred by that
person in any such capacity or arising out of that person's status as such, regardless
of whether the society has the power to indemnify the person against such liability
under this section.