33-3-308. Prohibited pecuniary interest of officials. (1) Any officer or director or any member of any committee or an employee of a domestic insurer who is charged with the duty of investing or handling the insurer's funds may not:

(a) deposit or invest the funds except in the insurer's corporate name;

(b) borrow the funds of the insurer;

(c) be pecuniarily interested in any loan, pledge of deposit, security, investment, sale, purchase, exchange, reinsurance, or other similar transaction or property of the insurer except as a stockholder or member;

(d) take or receive to the individual's own use any fee, brokerage, commission, gift, or other consideration for or on account of any transaction made by or on behalf of the insurer.

(2)  An insurer may not guarantee any financial obligation of any of its officers or directors.

(3) This section may not prohibit a director or officer or member of a committee or employee from becoming a policyholder of the insurer and enjoying the usual rights provided for its policyholders.

(4) The commissioner may, by regulations from time to time, define and permit additional exceptions to the prohibition contained in subsection (1) solely to enable payment of reasonable compensation to a director who is not otherwise an officer or employee of the insurer or to a corporation or firm in which a director is interested for necessary services performed or sales or purchases made to or for the insurer in the ordinary course of the insurer's business and in the usual private professional or business capacity of the director or the corporation or firm.

History: En. Sec. 440, Ch. 286, L. 1959; R.C.M. 1947, 40-4723; amd. Sec. 1136, Ch. 56, L. 2009.