(a) Persons entitled to protection under this section shall be: (1) All receivers or conservators of trust banks or uninsured banks, including present and former receivers and conservators; and (2) the employees of such receivers or conservators. Attorneys, accountants, auditors and other professional persons or firms who are retained by the receiver or conservator as independent contractors, and their employees, shall not be considered employees of the receiver or conservator for purposes of this section.

(b) The receiver or conservator and the employees of the receiver or conservator shall be immune from suit and liability, both personally and in their official capacities, for any claim for damage to or loss of property, personal injury or other civil liability caused by or resulting from any alleged act, error or omission of the receiver or conservator or any employee arising out of or by reason of their duties or employment, provided nothing in this section shall be construed to hold the receiver or conservator or any employee immune from suit or liability for any damage, loss, injury or liability caused by the intentional or wilful and wanton misconduct of the receiver or conservator or any employee.

(c) (1) If any legal action is commenced against the receiver or conservator or any employee, whether personally or in such person's official capacity, alleging property damage, property loss, personal injury or other civil liability caused by or resulting from any alleged act, error or omission of the receiver or conservator or any employee arising out of or by reason of their duties or employment, the receiver or conservator and any employee shall be indemnified from the assets of the trust bank or uninsured bank for all expenses, attorneys' fees, judgments, settlements, decrees or amounts due and owing or paid in satisfaction of or incurred in the defense of such legal action unless it is determined upon a final adjudication on the merits that the alleged act, error or omission of the receiver or conservator or employee giving rise to the claim did not arise out of or by reason of such person's duties or employment, or was caused by intentional or wilful and wanton misconduct.

(2) Attorneys' fees and any related expenses incurred in defending a legal action for which immunity or indemnity is available under this section shall be paid from the assets of the trust bank or uninsured bank, as they are incurred, in advance of the final disposition of such action upon receipt of an undertaking by or on behalf of the receiver or conservator or employee to repay the attorneys' fees and expenses if it shall ultimately be determined upon a final adjudication on the merits that the receiver or conservator or employee is not entitled to immunity or indemnity under this section.

(3) Any indemnification for expense payments, judgments, settlements, decrees, attorneys' fees, surety bond premiums or other amounts paid or to be paid from the assets of the trust bank or uninsured bank pursuant to this section shall be an administrative expense of the receivership or conservatorship.

(4) In the event of any actual or threatened litigation against a receiver or conservator or any employee for which immunity or indemnity may be available under this section, a reasonable amount of funds, which in the judgment of the receiver or conservator may be needed to provide immunity or indemnity, shall be segregated and reserved from the assets of the trust bank or uninsured bank as security for the payment of indemnity until such time as all applicable statutes of limitation shall have run and all actual or threatened actions against the receiver or conservator or any employee have been completely and finally resolved, and all obligations of the trust bank or uninsured bank and the commissioner under this section shall have been satisfied.

(5) In lieu of segregation and reserving of funds, the receiver or conservator may, in the receiver's or conservator's discretion, obtain a surety bond or make other arrangements that will enable the receiver or conservator to fully secure the payment of all obligations under this section.

(d) If any legal action against an employee for which indemnity may be available under this section is settled prior to final adjudication on the merits, the receiver or conservator shall pay from the assets of the bank the settlement amount on behalf of the employee or indemnify the employee for the settlement amount unless the receiver or conservator determines:

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

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

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

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

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

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

(g) (1) The provisions of subsection (b) of this section shall apply to any suit based in whole or in part on any alleged act, error or omission which takes place on or after May 12, 2004.

(2) No legal action shall lie against the receiver or conservator or any employee based in whole or in part on any alleged act, error or omission which took place prior to May 12, 2004, unless suit is filed and valid service of process is obtained not later than twelve months after May 12, 2004.

(3) Subsections (c) to (e), inclusive, of this section shall apply to any suit which is pending on or filed after May 12, 2004, without regard to when the alleged act, error or omission took place.

(P.A. 04-136, S. 32; P.A. 05-288, S. 203.)

History: P.A. 04-136 effective May 12, 2004; P.A. 05-288 made a technical change in Subsec. (a), effective July 13, 2005.