6-425

6-425. Shares of guaranty capital; authorization
of issuance; minimum amount

A. An association may provide for the issuance of shares of guaranty capital,
either by its original articles of incorporation or by an amendment thereto.

B. The aggregate initial guaranty capital of an association being organized under
this chapter shall be not less than the minimum initial guaranty capital required under
the provisions of section 6-407.

C. In the case of an association which shall at any time be operating and its
original articles of incorporation authorize the issuance of guaranty shares but the
association has issued no guaranty shares, or in the case of an association already in
operation which amends its articles to authorize the issuance of guaranty shares, the
aggregate initial guaranty capital shall be not less than either:

1. The initial guaranty capital required under the provisions of section 6-407.

2. An amount which, together with the amount of surplus and all reserves required
or designated as available for losses, equals in the aggregate not less than the required
capital and reserves necessary to obtain and maintain insurance of accounts by the
insurance corporation, whichever shall be greater.

D. In the case of an association already in operation and having issued and
outstanding guaranty shares, the aggregate guaranty capital shall be an amount not less
than an amount which, together with the amount of surplus, amount of outstanding capital
notes and debentures, and all reserves required or designated for use for losses, equals
in the aggregate not less than the required capital and reserves necessary to obtain and
maintain insurance of accounts by the insurance corporation.

E. Any plan for the issuance of shares of guaranty capital shall be subject to the
approval of the superintendent as being in conformity with the provisions of this
chapter, and the rules and regulations of the superintendent pertaining thereto.