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(a) An SPFC may issue securities, including surplus notes and other forms of financial instruments, subject to and in accordance with applicable law, its approved plan of operation, and its organizational documents.\n(b) An SPFC, in connection with the issuance of securities, may enter into and perform all of its obligations under any required contracts to facilitate the issuance of these securities.\n(c) Subject to the approval of the SAM, an SPFC may lawfully:\n(1) account for the proceeds of surplus notes as surplus and not as debt for purposes of statutory accounting;\n(2) submit for prior approval of the SAM periodic written requests for payments of interest on and repayments of principal of surplus notes.\n(d) The SAM, without otherwise prejudicing the SAM's authority, may approve formulas for an ongoing plan of interest payments or principal repayments, or both, to provide guidance in connection with his ongoing reviews of requests to approve the payments on and principal repayments of the surplus notes.\n(e) The obligation to repay principal or interest, or both, on the securities issued by the SPFC must reflect the risk associated with the obligations of the SPFC to the

yments of the surplus notes.\n(e) The obligation to repay principal or interest, or both, on the securities issued by the SPFC must reflect the risk associated with the obligations of the SPFC to the counterparty under the SPFC contract.