(215 ILCS 130/2009) (from Ch. 73, par. 1502-9)
Sec. 2009.
Subordinated indebtedness.
An organization having a
certificate of authority under this Act may borrow or assume a liability
for the repayment of a sum of money upon a written agreement that the loan
or advance with interest thereon not exceeding a reasonable rate shall be
repaid only out of net worth of the organization in excess of such minimum
net worth as is stipulated in and by the agreement. The agreement shall
first be submitted to and approved by the appropriate authoritative body of
the organization and the Director. Repayment of principal or payment of
interest may be made only with the approval of the Director when he is
satisfied that the financial condition of the organization warrants such
action, but such approval may not be withheld if the organization shall
have and submit satisfactory evidence of net worth of not less than the
amount stipulated in the repayment of principal or interest payment clause
of the agreement. No loan or advance made under this Section or interest
accruing thereon shall form a part of the legal liabilities of the
organization until authorized for payment by the Director, but until such
authorization all statements published by the organization or filed with
the Director shall show the amount thereof then remaining unpaid as a
special surplus account. Nothing in this Section shall be construed to
mean that an organization may not otherwise borrow money, but the amount so
borrowed with accrued interest thereon shall be carried by the company as
a liability.
(Source: P.A. 86-600.)
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