TITLE 27
Insurance

CHAPTER 27-25
Rhode Island Fraternal Code

SECTION 27-25-8


§ 27-25-8 No personal liability.

(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)(1) Any person may be indemnified and reimbursed by any society for expenses reasonably incurred by, and liabilities imposed upon, that person in connection with or arising out of any action, suit, or proceeding, whether civil, criminal, administrative, or investigative, or threat of those actions, 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 (i) in relation to any matter in the action, suit, 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 (ii) in relation to any matter in the action, suit, or proceeding, or threat of an action, suit, or proceeding, which has been made the subject of a compromise settlement; unless in either case the person acted in good faith for a purpose the person reasonably believed to be in or not opposed to the best interest 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;

(2) 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 subdivision (1) of this subsection 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, suit, or proceeding, or by a court of competent jurisdiction. The termination of any action, suit, 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. The right of indemnification and reimbursement described in this subsection shall not be exclusive of other rights to which the person may be entitled as a matter of law and shall inure to the benefit of his or her heirs, executors, and administrators.

(c) A society shall have the 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 the person and incurred by him or her in that capacity or arising out of his or her status as a director, officer, employee or agent of the society, whether or not the society would have the power to indemnify the person against the liability under this section.

History of Section.
(P.L. 1984, ch. 201, § 2.)