Illinois § 123C-22

§ 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(from Ch. 73, par. 735C-22) (Section scheduled to be repealed on January 1, 2027) Sec. 123C-22.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.)