§ 10-3-239 — Subordinated indebtedness

Domestic insurance companies may
borrow and thereby assume a liability for the repayment of a sum of money upon a
written agreement that the loan or advance with interest 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 the
commissioner. Repayment of principal or payment of interest may be made only
with the approval of the commissioner when he is satisfied that the financial
condition of the company warrants such action, but such approval may not be
withheld if the company has and submits satisfactory evidence of surplus of not
less than the amount stipulated in the repayment of principal or interest clause of
the agreement. No loan or advance made under the provisions of this section or
interest accruing thereon shall form a part of the legal liabilities of the company
until authorized for payment by the commissioner, but, until such authorization, all
statements published by the company or filed with the commissioner shall show the
amount thereof then remaining as a special surplus account. 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.

Legislative History

Source: L. 73: p. 837, � 1. C.R.S. 1963: � 72-1-66.