Sec. 38a-63. Limitation of liability of director of mutual insurance company.
Sec. 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 section 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.
(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.
(P.A. 89-322, S. 3; P.A. 96-271, S. 211, 254.)
History: P.A. 96-271 amended Subsec. (a) to replace reference to Sec. 33-374d with Sec. 33-843, effective January
1, 1997.