N.Y. REL Law § 29

§ 29. Insurance for indemnification of directors and officers. (a)\nSubject to subdivision (b) of this section, a cooperative shall have\npower to purchase and maintain insurance:\n (1) to indemnify the cooperative 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 cooperative 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 cooperative 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 subdivision (a) of this section may provide for\nany payment, other than cost of defense, to or on behalf of any director\nor officer:\n (1) if a judgment or other final adjudication adverse to the insured\ndirector or officer establishes that his or her acts of active and\ndeliberate dishonesty were material to the cause of action so\nadjudicated, or that he or she personally gained in fact a financial\nprofit or other advantage to which he or she was not legally entitled,\nor\n (2) in relation to any risk the insurance of which is prohibited under\nthe insurance law of this state.\n (c) Insurance under paragraphs one, two and three of subdivision (a)\nof this section may be included in a single contract or supplement\nthereto. Retrospective rated contracts are prohibited.\n (d) The corporation shall, within the time and to the persons provided\nin subdivision (c) of section twenty-eight of this article, mail a\nstatement in respect to any insurance it has purchased or renewed under\nthis section, specifying the insurance carrier, date of the contract,\ncost of the insurance, corporate positions insured, and a statement\nexplaining all sums, not previously reported in a statement to members,\npaid under any indemnification insurance contract.\n (e) This section is the public policy of this state to spread the risk\nof cooperative management, notwithstanding any other general or special\nlaw of this state or of any other jurisdiction, including the federal\ngovernment.\n