Section 1307. Contingent liability for borrowings

(a) Any domestic stock,
  mutual or co-operative insurance  company  or  reciprocal  insurer  may,
  without pledging any of its assets, receive advances or borrow funds to:
    (1) conduct its business,
    (2)  enable it to comply with any surplus requirement or make good any
  impairment or deficiency or other requirement of this chapter,
    (3) defray the reasonable expenses of its organization,
    (4) provide any fund to be voluntarily contributed to surplus, or
    (5) organize, acquire or invest in any subsidiaries authorized by this
  chapter.
    (b) Such borrowing may only be made upon an agreement that such moneys
  and such interest thereon as may be agreed upon, at a rate not exceeding
  the maximum rate provided in section 5-501 of  the  general  obligations
  law,  in  effect  at the time the agreement is executed, shall be repaid
  only out of free and divisible surplus of such insurer with the approval
  of the superintendent whenever, in his judgment, the financial condition
  of such insurer warrants. In the event of  insolvency  of  a  mutual  or
  co-operative  insurance  company unearned premiums shall be deemed to be
  part of its free and divisible surplus.
    (c) Any sum so advanced or borrowed shall not be  part  of  the  legal
  liabilities  of such insurer and shall not be a basis of any set-off but
  until repaid all statements published by such insurer or filed with  the
  superintendent  shall  show,  as  a  footnote, the amount then remaining
  unpaid.
    (d) No such insurance company or reciprocal insurer shall directly  or
  indirectly  make  any agreement for any advance or borrowing pursuant to
  this section unless such agreement is in writing  and  shall  have  been
  approved  by the superintendent as not unfair, misleading or contrary to
  law.