N.Y. BSC Law § 726

§ 726. Insurance for indemnification of directors and officers.\n (a) Subject to paragraph (b), a corporation shall have power to\npurchase and maintain insurance:\n (1) To indemnify the corporation for any obligation which it incurs as\na result of the indemnification of directors and officers under the\nprovisions of this article, and\n (2) To indemnify directors and officers in instances in which they may\nbe indemnified by the corporation under the provisions of this article,\nand\n (3) To indemnify directors and officers in instances in which they may\nnot otherwise be indemnified by the corporation under the provisions of\nthis article provided the contract of insurance covering such directors\nand officers provides, in a manner acceptable to the superintendent of\nfinancial services, for a retention amount and for co-insurance.\n (b) No insurance under paragraph (a) may provide for any payment,\nother than cost of defense, to or on behalf of any director or officer:\n (1) if a judgment or other final adjudication adverse to the insured\ndirector or officer establishes that his acts of active and deliberate\ndishonesty were material to the cause of action so adjudicated, or that\nhe personally gained in fact a financial profit or other advantage to\nwhich he was not legally entitled, or\n (2) in relation to any risk the insurance of which is prohibited under\nthe insurance law of this state.\n (c) Insurance under any or all subparagraphs of paragraph (a) may be\nincluded in a single contract or supplement thereto. Retrospective rated\ncontracts are prohibited.\n (d) The corporation shall, within the time and to the persons provided\nin paragraph (c) of section 725 (Other provisions affecting\nindemnification of directors or officers), mail a statement in respect\nof any insurance it has purchased or renewed under this section,\nspecifying the insurance carrier, date of the contract, cost of the\ninsurance, corporate positions insured, and a statement explaining all\nsums, not previously reported in a statement to shareholders, paid under\nany indemnification insurance contract.\n (e) This section is the public policy of this state to spread the risk\nof corporate management, notwithstanding any other general or special\nlaw of this state or of any other jurisdiction including the federal\ngovernment.\n