§1189. Bonds of officers and directors

A.(1) Every person appointed or elected to any position requiring the receipt, payment, management, or use of money belonging to a savings bank, or whose duties permit or require access to or custody of any of the savings bank's money or securities, or whose duties permit the regular making of entries in the books or other records of the savings bank, before assuming any duties shall become bonded in some trust or company authorized to issue bonds in this state, or in a fidelity insurance company licensed to do business in this state.

(2) Each such bond shall be on a form and in an amount to be approved by the commissioner of financial institutions, who may at any time require one or more additional bonds or an increase in the existing bond. Each such bond, payable to the savings bank, shall be an indemnity for any loss the savings bank may sustain in money or other property through any dishonest or criminal act or omission by any person required to be bonded, committed either alone or in concert with others. A true copy of every bond, including all riders and endorsements executed subsequent to the effective date of the bond, shall be filed with the commissioner.

(3) Each bond shall provide that a cancellation thereof either by the surety or by the insured shall not become effective until thirty days after written notice shall have been given to the commissioner, unless he shall have approved such cancellation earlier.

B. Nothing contained herein shall preclude the commissioner from proceeding against an association as provided in this Chapter should he believe that it is being conducted in an unsafe and unsound manner in that the form or amount of bonds so fixed and approved by the board of directors is inadequate to give reasonable protection to the savings bank.

Acts 1990, No. 816, §1, eff. Sept. 1, 1990.