(a)
Authorized. The County must indemnify every member of the Board who is or may become a party to any action, suit, or proceeding, including administrative and investigative proceedings, because of service as a member of the Board, including any action taken to comply with Section 33-60A, subject to the conditions stated in this section. (b) Standards for indemnification.
(1) The county must indemnify a member of the board:
a. With respect to civil matters, if the member acted in good faith and in a manner that the member reasonably believed to be in the best interest of the retirement system; and
b. With respect to criminal matters, if the member had no reasonable cause to believe that the member's conduct was unlawful.
(2) If the county must indemnify a member of the board under this article, the county must indemnify the member for expenses when the member incurs the expense, including but not limited to:
a. Reasonably attorney fees;
(c) Effect of termination of any suit or proceeding. The termination of any suit or proceeding does not, by itself, create a presumption that a trustee did not act in good faith and in a manner reasonably believed to be in the best interest of the retirement system. The termination of a criminal action or proceeding does not, by itself, create a presumption that a trustee had reasonable cause to believe that the conduct was unlawful.
(d) Exceptions to indemnification. The county must not indemnify any member of the board if:
(1) The member of the board is found by a court or other tribunal to be liable for gross negligence or willful and wanton misconduct in the performance of a duty to the retirement system; or
(2) Liability arises from action that occurred before the date on which all the trustees have accepted the trust in writing.
(e) Recovery of payments. If the county attorney determines that indemnification payments have been made that are outside the scope of indemnification, the county attorney must take appropriate action, on behalf of the county, to recover the payments.
(f) Insurance provided. The county must provide insurance for each member of the board against any liability asserted against or incurred by the member of the board with respect to service on the board. Premiums for any insurance must not be paid with assets of the retirement system. The county may self-insure for this purpose, wholly or partly. If the county does not provide adequate insurance coverage or indemnification under this section, a member of the board need not pay any amount attributable to liability incurred by serving on the board, and the county must pay any amount due.
(g) Defenses. The county may assert the defense of governmental immunity, or any other defense available to the county, in suits or other actions brought against the county.
(1) The county attorney must make the final determination of eligibility of a member of the board for indemnification with respect to a matter, and of the reasonableness of all fees, expenses, and settlements.
(2) Unless the county attorney approves the settlement, a trustee must not use:
b. Funds provided by a self-insurance program of the county; or
c. Funds provided under a policy the county has with an insurance company; to settle a claim against the trustee. (1987 L.M.C., ch. 29, § 11; , § 2.)
Editor’s note—See County Attorney opinion dated regarding the County’s liability for errors in the administration of the pension and retirement funds of employees.
