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.
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