(a) No indemnification shall be made under this article to any officer, agent or employee of the city for: any conversion or diversion of public funds; any criminal act as defined by the laws of the United States, any state, municipality or other governmental body; any criminal act which could or does result in civil liability to any third party or the city; any act or omission committed by such officer, agent or employee while the same was insane or mentally incompetent; any amounts in settling or otherwise disposing of a threatened or pending proceeding without approval of the city; any expenses incurred in defending a threatened or pending proceeding which is settled or otherwise disposed of without approval of the city.
(b) Provided however, none of the exclusions contained herein shall be interpreted to inure to the benefit of any liability or other insurance carrier of the city, unless specifically contained in the contract of insurance between the city and such carrier.