N.Y. Comp. Codes R. & Regs. tit. 11 § 72.1

Current through Register Vol. 46, No. 45, November 2, 2024

Section 72.1 - Applicability

(a) Section 727 (a)(3) of the Business Corporation Law (B.C.L.), section 727(a)(3) of the Not- for-Profit Corporation Law (N-PCL) and section 7024 (a)(3) of the Banking Law (B.L.) give a corporation the power to obtain insurance for the purpose of indemnifying its directors and officers in instances in which they may not otherwise be indemnified by the corporation under the provisions of B.C.L. article 7, N-PCL article 7 and B.L. title 7, provided that the contract of insurance indemnifying such corporate directors and officers, or "D&O indemnification policy." includes a retention amount (or deductible) and coinsurance, in a manner acceptable to the Superintendent of Insurance.

(b) No retention amount or coinsurance is required where:

(1) directors or officers may be indemnified by the corporation pursuant to those provisions of B.C.L. article 7, N-PCL article 7 or B.L. title 7, other than those specified in subdivision (a) of this section;

(2) an indemnification policy is issued to, and for, the corporation itself; or

(3) an indemnification policy is issued directly to a director or officer of a corporation.

(c) Retention amounts and coinsurance are both required, in accordance with this Part, for D&O indemnification policies issued to corporations formed under the Insurance Law, Religious Corporations Law, Cooperative Corporations Law, Transportation Corporations Law, or any other law of this State, where provisions of such laws make such corporations subject to B.C.L. section 727 or N-PCL section 727.

(d) A D&O indemnification policy issued to a foreign corporation, if exempt under B.C.L. section 1320 or N-PCL section 1321, need not provide for a retention amount or coinsurance.

N.Y. Comp. Codes R. & Regs. Tit. 11 § 72.1