Honorary Directors Right To Participate In Credit Union's Group Health And Dental Insurance Programs - Q1 2000By the Division of Banks
According to Massachusetts General Laws chapter 171, section 25, "[a] credit union may provide group life insurance, group accident and health insurance or group medical, surgical or hospital insurance or benefits or all or any combination thereof, for its employees, officers and directors." However, section 12 of said chapter 171 contains a provision relative to honorary directors. Said section 12 states, in part, that the by-laws may authorize the continuance as honorary directors, of those persons who shall have served as directors for ten years or more. No such honorary director shall be deemed to be an officer or member of the board of directors of such corporation.
It is the position of the Division that section 25 must be read in conjunction with section 12. Whereas section 25 provides a credit union the authority to provide group life insurance for its "employees, officers, and directors", section 12, although authorizing the establishment of honorary directors, further states that "no such honorary director shall be deemed to be an officer or member of the board of directors of such corporation, nor shall he receive compensation or be required to attend meetings or be authorized to perform any duties."
Accordingly, since the credit union statute clearly establishes that honorary directors are not to be deemed officers or members of the Board, it is the position of the Division that the authority for a state-chartered credit union to provide insurance, to "employees, officers, and directors" does not extend to honorary directors.