26-24-127. Pecuniary interests of officers or directors prohibited.

(a) 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 shall not:

(i) Deposit or invest those funds except in the insurer's corporate name;

(ii) Borrow the insurer's funds;

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

(iv) Take or receive to his 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.

(b) No insurer shall guarantee any financial obligation of any of its officers or directors.

(c) This section does not prohibit any director or officer, or member of a committee or employee from:

(i) Becoming a policyholder of the insurer and enjoying the usual rights provided for its policyholders;

(ii) Participating as beneficiary in any pension trust, deferred compensation plan, profit sharing plan or stock option plan authorized by the insurer and to which he may be eligible; or

(iii) Receiving a reasonable fee for lawful services actually rendered to the insurer.

(d) The commissioner, by regulation, may define and permit additional exceptions to the prohibition contained in subsection (a) of this section solely to enable payment:

(i) Of reasonable compensation to a director who is not otherwise an insurer's officer or employee; or

(ii) 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, corporation or firm.