1. (a) In determining net worth under this chapter, a debt may not be considered fully subordinated unless:

   1. (1) the subordination clause is in a form acceptable to the commissioner; and
   2. (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.
2. (b) The interest expense relating to the repayment of any fully subordinated debt is considered a covered expense.

3. (c) Any debt that:

   1. (1) is incurred through a note that meets the requirements of this chapter; and

   2. (2) is otherwise acceptable to the commissioner;

      may not be considered liability and must be recorded as equity.

As added by P.L.26-1994, SEC.25.