§ 7023. Insurance for idemnification of directors and officers. (a)
Subject to subdivision (b), a corporation shall have power to purchase
and maintain insurance:

(1) To indemnify the corporation for any obligation which it incurs as
a result of the indemnification of directors and officers under the
provisions of this article, and

(2) To indemnify directors and officers in instances in which they may
be indemnified by the corporation under the provisions of this article,
and

(3) To idemnify directors and officers in instances in which they may
not otherwise be indemnified by the corporation under the provisions of
this article provided the contract of insurance covering such directors
and officers provides, in a manner acceptable to the superintendent of
financial services, for a retention amount and for co-insurance.

(b) No insurance under subdivision (a) may provide for any payment,
other than cost of defense, to or on behalf of any director or officer:

(1) if a judgement or other final adjudication adverse to the insured
director or officer establishes that his acts of active and deliberate
dishonesty were material to the cause of action so adjudicated, or that
he personally gained in fact a financial profit or other advantage to
which he was not legally entitled, or

(2) in relation to any risk the insurance of which is prohibited under
the insurance law of this state.

(c) Insurance under any or all paragraphs of subdivision (a) may be
included in a single contract or supplement thereto. Retrospective rated
contracts are prohibited.

(d) The corporation shall, within the time and to the persons provided
in subdivision three of section seven thousand twenty-two, mail a
statement in respect of any insurance it has purchased or renewed under
this section, specifying the insurance carrier, date of the contract,
cost of the insurance, corporate positions insured, and a statement
explaining all sums, not previously reported in a statement to
shareholders, paid under any indemnification insurance contract.

(e) This section is the public policy of this state to spread the risk
of corporate management, notwithstanding any other general or special
law of this state or of any other jurisdiction including the federal
government.