WILLIAM DONALD SCHAEFER, Governor                               Ch. 6

(2)      WITH RESPECT TO A CIVIL, ADMINISTRATIVE, OR INVESTIGATIVE
ACTION OR PROCEEDING, THE STATE SHALL INDEMNIFY A FIDUCIARY FOR THE
EXPENSES OF THE ACTION OR PROCEEDING IF THE FIDUCIARY ACTED:

(I)       IN GOOD FAITH; AND

(II)     IN A MANNER THE FIDUCIARY REASONABLY BELIEVED TO BE
IN OR NOT OPPOSED TO THE BEST INTEREST OF THE SEVERAL SYSTEMS.

(3)      WITH RESPECT TO A CRIMINAL ACTION OR PROCEEDING, THE
STATE SHALL INDEMNIFY A FIDUCIARY FOR THE EXPENSES OF THE ACTION OR
PROCEEDING IF THE FIDUCIARY:

(I)       ACTED IN GOOD FAITH;

(II)     ACTED IN A MANNER THE FIDUCIARY REASONABLY BELIEVED
TO BE IN OR NOT OPPOSED TO THE BEST INTEREST OF THE SEVERAL SYSTEMS; AND

(III)    DID NOT HAVE REASONABLE CAUSE TO BELIEVE THAT THE
FIDUCIARY'S CONDUCT WAS UNLAWFUL.

(C)     TERMINATION OF ACTION CREATES NO PRESUMPTION.

ANY TERMINATION OF AN ACTION OR PROCEEDING DOES NOT, OF ITSELF,
CREATE A PRESUMPTION THAT THE FIDUCIARY DID NOT MEET THE STANDARDS
FOR INDEMNIFICATION DESCRIBED IN SUBSECTION (B) (2) AND (3) OF THIS SECTION.

(D)     PROHIBITIONS ON INDEMNIFICATION.
THE STATE MAY NOT INDEMNIFY:

(1)      A FIDUCIARY WITH RESPECT TO AN ACTION OR PROCEEDING AS TO
WHICH THE FIDUCIARY WAS HELD LIABLE FOR GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT IN THE PERFORMANCE OF THE FIDUCIARY'S DUTY TO THE SEVERAL
SYSTEMS; OR

(2)      AN INDEPENDENT CONTRACTOR FURNISHING SERVICES TO THE
SEVERAL SYSTEMS.

(E)     INSURANCE.

(1)      THE STATE SHALL PROVIDE INSURANCE FOR A FIDUCIARY
ELIGIBLE FOR INDEMNIFICATION UNDER THIS SECTION.

(2)      FOR THE PURPOSE OF PARAGRAPH (1) OF THIS SUBSECTION, THE
STATE MAY PROVIDE SELF-INSURANCE UNDER TERMS AND CONDITIONS
SATISFACTORY TO THE STATE TREASURER.

(3)      A FIDUCIARY MAY NOT BE REQUIRED TO PAY AMOUNTS
ATTRIBUTABLE TO LIABILITY DESCRIBED IN THIS SECTION BECAUSE THE STATE
DOES NOT PROVIDE ADEQUATE INSURANCE COVERAGE OR OTHERWISE FAILS TO
INDEMNIFY IN ACCORDANCE WITH THIS SECTION.

- 391 -