Tex. Ins. Code Section 885.256
Indemnification or Reimbursement in Relation to Breach of Duty Prohibited

(a)

Except as provided by Subsection (b), a person may not be indemnified or reimbursed under Section 885.255 (Indemnification or Reimbursement) in relation to:

(1)

a matter in a proceeding in which the person is finally adjudged guilty of breach of a duty as a director, officer, employee, or agent of the fraternal benefit society; or

(2)

an agreement that settles:

(A)

a matter in a proceeding described by Subdivision (1); or

(B)

the threat of a proceeding involving the person’s alleged breach of a duty as a director, officer, employee, or agent of a fraternal benefit society.

(b)

A fraternal benefit society may indemnify or reimburse a person in relation to a matter described by Subsection (a) only if the supreme governing body, the board of directors, or a court determines that:

(1)

the person acted in good faith for a purpose the person reasonably believed to be in or not opposed to the best interests of the society; and

(2)

in a criminal proceeding, the person had no reasonable cause to believe that the person’s conduct was unlawful.

(c)

A determination by a supreme governing body or board of directors under Subsection (b) must be made by majority vote of a quorum consisting of persons who were not parties to the proceeding under review.

(d)

The termination of a proceeding by judgment, order, settlement, or conviction or on a plea of no contest does not create a conclusive presumption that a person does not meet the standard of conduct required to justify indemnification and reimbursement.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.

Source: Section 885.256 — Indemnification or Reimbursement in Relation to Breach of Duty Prohibited, https://statutes.capitol.texas.gov/Docs/IN/htm/IN.885.htm#885.256 (accessed Jun. 5, 2024).

885.001
Definitions 885.002
Limited Exemption from Insurance Laws 885.003
Exemption from Taxation 885.004
Inapplicability to Certain Societies 885.005
Fraternal Benefit Societies that Provide Benefits Resulting from Accidents Only 885.006
Treatment of Certain Grand Lodges 885.051
Fraternal Benefit Society Defined 885.052
Control of Fraternal Benefit Society 885.053
Lodge System Defined 885.054
Representative Form of Government Defined 885.055
Assembly as Supreme Governing Body 885.056
Assembly Meetings 885.057
Board as Supreme Governing Body 885.058
Board Members 885.059
Location of Meetings of Supreme Governing Body 885.060
Fraternal Benefit Society’s Laws Binding 885.061
Amendment of Fraternal Benefit Society’s Laws 885.062
Quarterly Lodge Meetings Required 885.063
Merger or Transfer of Membership or Funds 885.101
Qualifications for Fraternal Benefit Society Membership 885.102
Social Members 885.103
Children 885.104
Grievance or Complaint Procedures 885.151
Applicability to Certain Fraternal Benefit Societies Continuously Authorized to Engage in Business 885.152
Eligibility to Provide Benefits 885.153
Filing of Articles of Incorporation or Association 885.154
Name of Fraternal Benefit Society 885.155
Purposes of Fraternal Benefit Society 885.156
Surety Bond 885.157
Issuance of Preliminary Certificate of Authority 885.158
Powers and Duties Under Preliminary Certificate of Authority 885.159
Termination of Authority Under Preliminary Certificate of Authority 885.160
Issuance of Certificate of Authority 885.201
Certificate of Authority Required 885.202
Admission of Foreign Fraternal Benefit Society 885.203
Refusal to Issue Certificate of Authority to Foreign Fraternal Benefit Society 885.204
Notice of Intent to Revoke Foreign Fraternal Benefit Society’s Certificate of Authority 885.205
Revocation of Foreign Fraternal Benefit Society’s Certificate of Authority 885.206
Continuance of Contracts Following Revocation of Certificate of Authority 885.251
General Powers 885.252
Powers of Certain Fraternal Benefit Societies 885.253
Principal Office of Domestic Fraternal Benefit Society 885.254
Immunity 885.255
Indemnification or Reimbursement 885.256
Indemnification or Reimbursement in Relation to Breach of Duty Prohibited 885.257
Insurance for Directors, Officers, Employees, or Agents 885.258
Management and Use of Assets and Funds 885.259
Source of Funds 885.260
Specified Payments 885.261
Control of Fund by Lodge 885.262
Investment of Fraternal Benefit Society Funds 885.263
Treatment of Deferred Claims 885.301
Types of Benefits Permitted 885.302
Issuance of Benefit Contracts on Variable Basis 885.303
Benefits for Children 885.304
Beneficiaries 885.305
Organization as Beneficiary 885.306
Benefit Certificate 885.307
Grace Period 885.308
Assignment of Life Insurance Benefit Contract 885.309
Nonforfeiture Benefits 885.310
Enforcing Payment of Premiums 885.311
Deficiency Payments 885.312
Continuation of Benefit Certificate on Expulsion or Suspension of Member 885.313
Continuation of Benefit Certificate Issued on Child 885.314
Responsibility for Payment of Benefits 885.315
Damages for Failure to Timely Pay Benefits 885.316
Exemption of Benefits 885.351
Agents 885.352
Exception 885.353
Employment of Certain Persons to Solicit Business Prohibited 885.401
Annual Report 885.402
Reports of Certain Grand Lodges 885.403
Valuation of Benefit Certificates 885.404
Mortality Tables 885.405
Valuation of and Separate Fund for Disability Benefits 885.406
Publication of Valuation and Condition 885.407
Solvency 885.408
Reserves for Accident and Health Insurance 885.409
Reporting of Reserves 885.410
Examination of Domestic Fraternal Benefit Societies 885.411
Examination of Foreign Fraternal Benefit Societies 885.412
Adverse Publication Prohibited 885.413
Fees 885.414
Remedies Not Exclusive 885.451
Conversion of Fraternal Benefit Society to Mutual or Stock Company 885.452
Meeting of Lodge Representatives 885.453
Resolution to Convert 885.454
Conversion Documents 885.455
Sale of Stock of Converted Fraternal Benefit Society 885.456
Legal Effect of Conversion to Mutual Life Insurance Company 885.457
Completion and Legal Effect of Conversion to Stock Company 885.458
Continuing Obligations of Converted Fraternal Benefit Society 885.459
Name of Converted Fraternal Benefit Society 885.460
Principal Office of Converted Fraternal Benefit Society 885.461
Social or Charitable Clubs Formed by Members of Converted Fraternal Benefit Society 885.501
Discontinuation of Business by Domestic Fraternal Benefit Society 885.502
Initiation of Proceedings for Termination of Domestic Fraternal Benefit Society 885.503
Issuance of Injunction and Appointment of Receiver 885.701
False Statements 885.702
Soliciting Membership in Unauthorized Fraternal Benefit Society 885.703
Soliciting Membership in Lodge of Unauthorized Fraternal Benefit Society 885.704
Exception to Solicitation Offenses 885.705
General Criminal Penalty 885.706
Other Penalties

Accessed:
Jun. 5, 2024

§ 885.256’s source at texas.gov

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Location: https://texas.public.law/statutes/tex._ins._code_section_885.256

Original Source: Section 885.256 — Indemnification or Reimbursement in Relation to Breach of Duty Prohibited, https://statutes.capitol.texas.gov/Docs/IN/htm/IN.885.htm#885.256 (last accessed Jun. 5, 2024).