(a) Subject to the director's prior written approval, a domestic stock or mutual insurer may borrow money to defray the expenses of its organization or provide it with surplus funds upon a written agreement that the money is required to be repaid only out of the insurer's surplus in excess of that stipulated in the agreement. The agreement may provide for interest not exceeding six percent a year, which interest may or may not constitute a liability of the insurer as to its funds other than the excess of surplus, as stipulated in the agreement. A commission or promotion expense may not be paid in connection with the loan.
(b) Money borrowed, together with the interest, if so stipulated in the agreement, may not form a part of the insurer's legal liabilities except as to its surplus in excess of the amount stipulated in the agreement, or be the basis of any setoff; but until repaid financial statements filed or published by the insurer shall show as a footnote the amount then unpaid together with any interest accrued but unpaid.
(c) The loan to a mutual insurer is subject to the director's approval. The insurer shall, in advance of the loan, file with the director a statement of the purpose of the loan and a copy of the proposed loan agreement. The loan and agreement shall be considered approved unless within 15 days after the date of the filing the insurer is notified of the director's disapproval and the reasons for it. The director shall disapprove a proposed loan or agreement upon a finding that the loan is unnecessary or excessive for the purpose intended, or that the terms of the loan agreement are not fair and equitable to the parties, and other similar lenders, if any, to the insurer, or that the information filed by the insurer is inadequate.
(d) This section does not apply to loans obtained by the insurer in ordinary course of business from banks and other financial institutions, or to loans secured by pledge or mortgage of assets.