§ 26-24-127 — Pecuniary interests of officers or directors prohibited

(a) Any officer or director, or any member of any
committee or an employee of a domestic insurer, who is charged
with the duty of investing or handling the insurer's funds shall
not:
(i) Deposit or invest those funds except in the
insurer's corporate name;
(ii) Borrow the insurer's funds;
(iii) Be pecuniarily interested in any loan, pledge
or deposit, security, investment, sale, purchase, exchange,
reinsurance or other similar transaction or property of the
insurer except as a stockholder or member;
(iv) Take or receive to his own use any fee,
brokerage, commission, gift or other consideration for or on
account of any transaction made by or on behalf of the insurer.
(b) No insurer shall guarantee any financial obligation of
any of its officers or directors.
(c) This section does not prohibit any director or
officer, or member of a committee or employee from:
(i) Becoming a policyholder of the insurer and
enjoying the usual rights provided for its policyholders;
(ii) Participating as beneficiary in any pension
trust, deferred compensation plan, profit sharing plan or stock
option plan authorized by the insurer and to which he may be
eligible; or
(iii) Receiving a reasonable fee for lawful services
actually rendered to the insurer.
(d) The commissioner, by regulation, may define and permit
additional exceptions to the prohibition contained in subsection
(a) of this section solely to enable payment:
(i) Of reasonable compensation to a director who is
not otherwise an insurer's officer or employee; or
(ii) To a corporation or firm in which a director is
interested, for necessary services performed or sales or
purchases made to or for the insurer in the ordinary course of
the insurer's business and in the usual private professional or
business capacity of the director, corporation or firm.