§ 27-14.3-9 - Immunity and indemnification of the receiver and employees. - Rhode Island Statutes

SECTION 27-14.3-9

   § 27-14.3-9  Immunity and indemnificationof the receiver and employees. – (a) For the purposes of this section, the persons entitled to protection underthis section are:

   (1) All receivers responsible for the conduct of adelinquency proceeding under this chapter including present and formerreceivers; and

   (2) Their employees, meaning all present and former specialdeputies and assistant special deputies appointed by the commissioner, and allpersons whom the commissioner, special deputies, or assistant special deputieshave employed to assist in a delinquency proceeding under this chapter.Attorneys, accountants, auditors, and other professional persons or firms whoare retained by the receiver as independent contractors and their employeesshall not be considered employees of the receiver for the purposes of thissection.

   (b) The receiver and his or her employees shall have officialimmunity and shall be immune from suit and liability, both personally and intheir official capacities, for any claim for damage to or loss of property orpersonal injury or other civil liability caused by or resulting from anyalleged act, error, or omission of the receiver or any employee arising out ofor by reason of their duties or employment; provided, that nothing in thisprovision shall be construed to hold the receiver or any employee immune fromsuit and/or liability for any damage, loss, injury, or liability caused by theintentional or willful and wanton misconduct of the receiver or any employee.

   (c) If any legal action is commenced against the receiver orany employee, whether against him or her personally or in his or her officialcapacity, alleging property damage, property loss, personal injury, or othercivil liability caused by or resulting from any alleged act, error, or omissionof the receiver or any employee arising out of or by reason of their duties oremployment, the receiver and any employee shall be indemnified from the assetsof the insurer for all expenses, attorneys' fees, judgments, settlements,decrees, or amounts due and owing or paid in satisfaction of or incurred in thedefense of the legal action unless it is determined upon a final adjudicationon the merits that the alleged act, error, or omission of the receiver oremployee giving rise to the claim did not arise out of or by reason of his orher duties or employment, or was caused by intentional or willful and wantonmisconduct.

   (2) Attorneys' fees and any and all related expenses incurredin defending a legal action for which immunity or indemnity is available underthis section shall be paid from the assets of the insurer, as they areincurred, in advance of the final disposition of the action upon receipt of anundertaking by or on behalf of the receiver or employee to repay the attorneys'fees and expenses if it shall ultimately be determined upon a finaladjudication on the merits that the receiver or employee is not entitled toimmunity or indemnity under this section;

   (3) Any indemnification for expense payments, judgments,settlements, decrees, attorneys' fees, surety bond premiums, or other amountspaid or to be paid from the insurer's assets pursuant to this section shall bean administrative expense of the insurer;

   (4) In the event of any actual or threatened litigationagainst a receiver or any employee for which immunity or indemnity may beavailable under this section, a reasonable amount of funds which in thejudgment of the commissioner may be needed to provide immunity or indemnityshall be segregated and reserved from the assets of the insurer as security forthe payment of indemnity until that time as all applicable statutes oflimitation shall have run and all actual or threatened actions against thereceiver or any employee have been completely and finally resolved, and allobligations of the insurer and the commissioner under this section shall havebeen satisfied;

   (5) In lieu of segregation and reserving of funds, thecommissioner may, in his or her discretion, obtain a surety bond or make otherarrangements, which will enable the commissioner to fully secure the payment ofall obligations under this section.

   (d) If any legal action against an employee for whichindemnity may be available under this section is settled prior to finaladjudication on the merits, the insurer must pay the settlement amount onbehalf of the employee, or indemnify the employee for the settlement amount,unless the commissioner determines:

   (1) That the claim did not arise out of or by reason of theemployee's duties or employment; or

   (2) That the claim was caused by the intentional or willfuland wanton misconduct of the employee.

   (e) In any legal action in which the receiver is a defendant,that portion of any settlement relating to the alleged act, error, or omissionof the receiver shall be subject to the approval of the court before which thedelinquency proceeding is pending. The court shall not approve that portion ofthe settlement if it determines:

   (1) That the claim did not arise out of or by reason of thereceiver's duties or employment; or

   (2) That the claim was caused by the intentional or willfuland wanton misconduct of the receiver.

   (f) Nothing contained or implied in this section shalloperate, or be construed or applied, to deprive the receiver or any employee ofany immunity, indemnity, benefits of law, rights, or any available defense.

   (g) Subsection (b) of this section shall apply to any suitbased in whole or in part on any alleged act, error, or omission which takesplace on or after July 23, 1993;

   (2) Subsections (c), (d), and (e) of this section shall applyto any suit which is pending on or filed after July 23, 1993 without regard towhen the alleged act, error, or omission took place.