IC 27-13-12-5: Consideration of debts

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.