Connecticut General Statutes 38a-63 – Limitation of liability of director of mutual insurance company
(a) The personal liability of a director of a mutual insurance company to the company or its members for monetary damages for breach of duty as a director may be limited by the board to an amount that is not less than the compensation received by the director for serving the company during the year of the violation, provided such breach did not (1) involve a knowing and culpable violation of law by the director, (2) enable the director or an associate, as defined solely for the purposes of this section in subdivision (3) of § 33-843, to receive an improper personal economic gain, (3) show a lack of good faith and a conscious disregard for the duty of the director to the company under circumstances in which the director was aware that his conduct or omission created an unjustifiable risk of serious injury to the company, or (4) constitute a sustained and unexcused pattern of inattention that amounted to an abdication of the director’s duty to the company, provided further no director who is a defendant in a lawsuit shall participate in the discussion or vote on such limitation of liability if it will affect his potential liability in such lawsuit. No such limitation shall limit or preclude the liability of a director for any act or omission occurring prior to the effective date of such provision.
Terms Used In Connecticut General Statutes 38a-63
- Damages: Money paid by defendants to successful plaintiffs in civil cases to compensate the plaintiffs for their injuries.
- Defendant: In a civil suit, the person complained against; in a criminal case, the person accused of the crime.
- Insurance: means any agreement to pay a sum of money, provide services or any other thing of value on the happening of a particular event or contingency or to provide indemnity for loss in respect to a specified subject by specified perils in return for a consideration. See Connecticut General Statutes 38a-1
- insurance company: includes any person or combination of persons doing any kind or form of insurance business other than a fraternal benefit society, and shall include a receiver of any insurer when the context reasonably permits. See Connecticut General Statutes 38a-1
- Lawsuit: A legal action started by a plaintiff against a defendant based on a complaint that the defendant failed to perform a legal duty, resulting in harm to the plaintiff.
- Person: means an individual, a corporation, a partnership, a limited liability company, an association, a joint stock company, a business trust, an unincorporated organization or other legal entity. See Connecticut General Statutes 38a-1
(b) Notwithstanding any inconsistent provision in the charter of a domestic mutual insurance company or in the general statutes, the provisions of this section shall become effective on the date it is approved by a majority of the members present and voting, in the manner customary for such company’s meetings, in person or by proxy at an annual or other meeting of such domestic mutual insurance company.