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Section: 086.1080 Purchase of insurance policies permitted--indemnification--expenses of court proceedings may be paid, when. RSMO 86.1080


Published: 2015

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Missouri Revised Statutes













Chapter 86

Police Relief and Pension Systems

←86.1070

Section 86.1080.1

86.1090→

August 28, 2015

Purchase of insurance policies permitted--indemnification--expenses of court proceedings may be paid, when.

86.1080. 1. The retirement board may purchase with retirement system

assets from one or more insurers licensed to do business in this state one or

more insurance policies that provide for reimbursement of the retirement

system and any trustee, member of the retirement board, officer, or employee

of the retirement system for liability imposed or damages because of an

alleged act, error, or omission committed in the trustee's, board member's,

officer's, or employee's capacity as a fiduciary, officer, or employee of the

retirement system and for costs and expenses, including attorney fees,

incurred as a trustee, board member, officer, or employee in defense of a

claim for an alleged act, error, or omission, as long as the insurance policy

does not provide for reimbursement of a trustee, board member, officer, or

employee for liability imposed or expenses incurred because of the trustee's,

board member's, officer's, or employee's personal dishonesty, fraud, lack of

good faith, or intentional failure to act prudently.



2. If the insurance coverage described in subsection 1 of this section is

insufficient or is not in effect, the retirement board may indemnify any

person who was or is a party or is threatened to be made a party to any

threatened, pending or completed action, suit, or proceeding, whether civil,

criminal, administrative, or investigative, by reason of the fact that the

person is or was a member of the retirement board, or is or was serving at

the request of the retirement board in the capacity which caused the person's

relationship to such action, suit, or proceeding, against expenses, including

attorneys' fees, judgments, fines, and amounts paid in settlement actually

and reasonably incurred by the person in connection with such action, suit, or

proceeding, if the person acted in good faith and without willful

malfeasance, and, with respect to any criminal action or proceeding, had

reasonable cause to believe the relevant conduct was lawful. The termination

of any action, suit, or proceeding by judgment, order, settlement,

conviction, or upon a plea of nolo contendere or its equivalent shall not, of

itself, create a presumption that the person did not act in good faith, or,

with respect to any criminal action or proceeding, that the person did not

have reasonable cause to believe that the relevant conduct was lawful.



3. To the extent that a member of the retirement board has been

successful on the merits or otherwise in defense of any action, suit, or

proceeding referred to in subsections 1 and 2 of this section, or in defense

of any claim, issue, or matter therein, the person shall be indemnified

against expenses, including attorneys' fees, actually and reasonably incurred

in connection with the action, suit, or proceeding that are not covered by

the insurance described in subsection 1 of this section.



4. Any indemnification under this section, unless ordered by a court,

shall be made by the retirement board only as authorized in each specific

case upon a determination that indemnification of any person potentially

entitled to indemnification hereunder is proper in the circumstances because

the person has met the applicable standard of conduct set forth in this

section. The determination shall be made by the retirement board by a

majority vote of a quorum consisting of members of the retirement board who

are not parties to the action, suit, or proceeding, or if such a quorum is not

obtainable, or even if obtainable and a quorum of disinterested members of

the retirement board so directs, by independent legal counsel in a written

opinion. Such legal counsel may but need not be counsel to the retirement

system.



5. Expenses incurred in defending a civil or criminal action, suit, or

proceeding may be paid by the retirement board in advance of the final

disposition of the action, suit, or proceeding as authorized by the

retirement board in the specific case upon receipt of an undertaking by or on

behalf of the person potentially entitled to indemnification hereunder to

repay such amount unless it shall ultimately be determined that the person is

entitled to be indemnified by the retirement board as authorized in this

section.



(L. 2005 H.B. 323)







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