(215 ILCS 5/123C-22) (from Ch. 73, par. 735C-22)
(Section scheduled to be repealed on January 1, 2027)
Sec. 123C-22.
Subordinated indebtedness.
A captive insurance company
organized under this Article may borrow or assume a liability for the
repayment of a sum of money upon a written agreement for the loan or
advance, with interest at a rate not exceeding the corporate base rate as
reported by the largest bank (measured by assets) with its head office
located in Chicago, Illinois, as in effect on the first business day of the
month, plus 3 percent per annum. Such rate shall be fixed on the execution
of the loan and apply for the term of the loan. Such loan and interest
thereon shall be repaid only out of surplus of the company in excess of such
minimum surplus as is stipulated in and by the agreement. The agreement
shall first be submitted to and approved by (A) not less than a majority of
the Board of Directors of a stock company or a mutual
company, and (B) 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 company warrants such action.
No loan or advance made under this Section or interest accruing thereon
shall form a part of the legal liabilities of the company until authorized
for payment by the Director but, until such authorization, all statements
published by the company or filed with the Director shall show the amount
thereof then remaining unpaid as a special surplus or capital account at
the election of the company. Such account shall be considered in
determining whether initial minimum capital and surplus requirements have
been met. Nothing in this Section shall be construed to mean that a
company 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. 86-632.)
|