Sec. 5. (a) In determining net worth under this chapter, a debt may not be considered fully subordinated unless:
(1) the subordination clause is in a form acceptable to the commissioner; and
(2) any interest obligation relating to the repayment of the subordinated debt is subordinated under a clause that is in a form acceptable to the commissioner.
(b) The interest expense relating to the repayment of any fully subordinated debt is considered a covered expense.
(c) Any debt that:
(1) is incurred through a note that meets the requirements of this chapter; and
(2) is otherwise acceptable to the commissioner;
may not be considered liability and must be recorded as equity.
As added by P.L.26-1994, SEC.25.