58-1-1. Citation of title.This title shall be known as the Insurance Code. Source: SL 1966, ch 111, 1.
58-1-10. Existing licenses--Renewal, suspension, revocation or termination.Every license of an insurance producer in force immediately prior to July 1, 1966, and existing under any law herein repealed by chapter 111 of the Session Laws of 1966, shall be subject to renewal, suspension, revocation, or termination as though originally issued under this title. Source: SL 1966, ch 111, ch 1, 9; SL 2001, ch 286, 59.
58-1-11. General saving clause.Enactment of this title shall not impair or affect any act done, offense committed or right accruing, accrued, or acquired, or liability, penalty, forfeiture, or punishment incurred prior to July 1, 1966, but the same may be enjoyed, asserted, enforced, prosecuted, or inflicted, as fully and to the same extent as if this enactment had not been passed. Source: SL 1966, ch 111, ch 1, 10.
58-1-13. Severability of provisions.If any provision of this title or the application thereof to any person or circumstance is held invalid for any reason, such invalidity shall not affect the other provisions of this title or any other application which can be given effect without the invalid provision or application, and to this end, all provisions of this title are declared to be severable. Source: SL 1966, ch 111, ch 1, 7.
58-1-14.1. Notice of refusal to renew--Thirty-day delivery requirement--Exception.Notice of refusal to renew an insurance policy as defined in 58-9-31 is not effective unless mailed or delivered by the insurer to the named insured at least thirty days before the effective renewal date. The policy provisions control if the policy provides for a notice of refusal to renew that exceeds thirty days. Source: SL 2003, ch 244, 2.
58-1-14. Notice of nonrenewal of policy must be mailed sixty days prior to renewal date--Exceptions.Notice of refusal to renew an insurance policy as defined in 58-9-5 to 58-9-30, inclusive, 58-9-32 and 58-9-33 is not effective unless mailed or delivered by the insurer to the named insured at least sixty days before the effective renewal date. The policy provisions control if the policy provides for a notice of refusal to renew that exceeds sixty days. This section does not apply to the cancellation and nonrenewal of automobile policies or coverages as defined in 58-11-45 or to a policy of homeowner's insurance. This section also does not apply to any other personal lines policy. A notice of refusal to renew any other personal lines policy is not effective unless mailed or delivered by the insurer to the named insured at least thirty days before the effective renewal date. A notice of nonrenewal is not required if the policyholder is transferred to an insurer that is a member of the same insurance group as the previous insurer and notice of such transfer is given in the form adopted by rule by the Division of Insurance pursuant to chapter 1-26. Source: SL 1983, ch 372, 1; SL 1985, ch 384; SL 1986, ch 414, 1, 2; SL 2001, ch 264, 1; SL 2002, ch 228, 1; SL 2003, ch 244, 1.
58-1-15. Homeowner's insurance policy defined--Notice of nonrenewal to policyholder required--Timing of notice--Exception.Notice of refusal to renew, as provided in 58-1-14, does not apply to a homeowner's insurance policy which shall for the purposes of 58-1-14 mean a policy normally written by the insurer as a standard homeowner's package policy or as a standard residential renter's package policy or homeowner's multiple peril policy. However, notice of refusal to renew a homeowner's insurance policy is not effective unless mailed or delivered by the insurer to the named insured at least thirty days before the effective renewal date. A notice of nonrenewal is not required if the policyholder is transferred to an insurer that is a member of the same insurance group as the previous insurer and notice of such transfer is given in the form adopted by rule by the Division of Insurance pursuant to chapter 1-26. Source: SL 1986, ch 414, 4; SL 2001, ch 264, 2.
58-1-16.1. Applicability of 58-1-16.The provisions of 58-1-16 do not apply to any qualified organization that met the requirements of 58-1-16 and issued any charitable gift annuity prior to July 1, 2001. Source: SL 2001, ch 265, 2.
58-1-16. Exemption of charitable gift annuity from insurance regulation--Qualified organization.No provision of Title 58 applies to any qualified organization which issues a charitable gift annuity within this state if the qualified organization has operated for a period of ten years and has a minimum of five hundred thousand dollars in unrestricted cash, cash equivalents, or publicly traded securities, exclusive of the assets funding the annuity agreement as of the date of the annuity agreement. For the purposes of this section, a charitable gift annuity means a giving plan or method by which a gift of cash or other property is made to a qualified organization in exchange for its agreement to pay an annuity. For the purposes of this section, a qualified organization means an organization which is either domiciled in South Dakota and has its principal place of business in South Dakota or is qualified to do business in South Dakota as a foreign corporation, and which is exempt from taxation under Section 501(c)(3) of the Internal Revenue Code as a charitable organization and regularly files a copy of Federal Form 990 in the Office of the Attorney General or is exempt from taxation under Section 501(c)(3) of the Internal Revenue Code as a religious organization or is exempt as a publicly owned or nonprofit, privately endowed educational institution approved, accredited, or licensed by the South Dakota Board of Education Standards, the north central association of colleges and schools, or an equivalent public authority of the jurisdiction where the institution is located. Source: SL 1994, ch 370, 1; SL 2001, ch 265, 1; SL 2017, ch 81, 57.
58-1-17. Disclosure statement for issuance of charitable gift annuity.Any qualified organization which issues a charitable gift annuity shall include on its promotional literature and the charitable gift annuity the following disclosure statement in ten point bold type or larger: "Charitable gift annuities are not regulated by and are not under the jurisdiction of the South Dakota Division of Insurance." Source: SL 1994, ch 370, 2.
58-1-19. Health benefit plans to issue uniform prescription drug information card--Exception--Director to prescribe format and contents.Any health benefit plan that provides coverage for prescription drugs or devices on an outpatient basis, or administers such a plan, including third-party administrators for self-insured plans and state-administered plans, shall issue to its primary insured a card or other technology containing uniform prescription drug information. The director of the Division of Insurance shall prescribe the format and elements of information for the uniform prescription drug information card or technology and shall consider the format and elements of information approved by the National Council for Prescription Drug Programs (NCPDP) and the required and conditional or situational fields and the most recent pharmacy identification card or technology implementation guide produced by NCPDP. A health benefit plan is not required to issue a pharmacy identification card separate from another identification card issued to an insured under the health benefit plan if the identification card contains the elements of information required by the Division of Insurance. Source: SL 2001, ch 266, 1.
58-1-2. Definition of terms.Terms used in this title mean:(1)"Alien insurer," one formed under the laws of any country or jurisdiction other than the United States of America, its states, districts, territories, and commonwealths;(2)"Authorized insurer," one authorized, by a subsisting certificate of authority issued by the director, to engage in the insurance business in this state;(3)"Certificate of authority," permission granted to an insurer to issue policies or make contracts of insurance in this state;(4)"Director," the director of the Division of Insurance;(5)"Division," the Division of Insurance of the Department of Labor and Regulation;(6)"Domestic insurer," one formed under the laws of this state;(7)"Foreign insurer," one formed under the laws of any jurisdiction other than this state; except where distinguished by context, foreign insurer includes an alien insurer;(8)"Insurance," a contract whereby one undertakes to indemnify another or to pay or provide a specified or determinable amount or benefit upon determinable contingencies;(9)"Insurance business," includes the transaction of all matters pertaining to a contract of insurance, both before and after the effectuation of that contract, and all matters arising out of that contract or any claim thereunder;(10)"Insurer," every person engaged as indemnitor, surety, or contractor in the business of entering into contracts of insurance;(11)"License," permission granted to an agent or broker to engage in those activities permitted by such persons under this title;(12)Repealed by SL 2001, ch 263, 1.(13)"Mechanical breakdown insurance," any contract or agreement, issued by an authorized insurer, to perform or indemnify for a specific duration the repair, replacement, or maintenance of property for operational or structural failure due to a defect in materials, workmanship, or normal wear and tear;(14)"Person," an individual, insurer, company, association, organization, Lloyds, society, reciprocal or inter-insurance exchange, partnership, syndicate, business trust, corporation, and any other legal entity;(15)"Principal office" or "principal place of business," the office or regional home office from which the business affairs of the insurer are directed and managed;(16)"Producer," any person required to be licensed under the laws of this state to sell, solicit, or negotiate insurance. The terms also means an insurance agent;(17)"State," when used in context signifying a jurisdiction other than the State of South Dakota, a state, the District of Columbia, a territory, commonwealth, or possession of the United States of America, or a province of the Dominion of Canada; and(18)"Unauthorized insurer," one which does not hold a subsisting certificate of authority issued by the director to engage in the insurance business in this state.(19)"Vehicle theft protection product," a device or system installed on or applied to a motor vehicle that is designed to prevent loss or damage to a motor vehicle from theft. Source: SL 1966, ch 111, ch 1, 2; SL 1982, ch 350; SL 1988, ch 387, 1; SL 2000, ch 233, 2; SL 2001, ch 263, 1, 2, ch 286, 56; SL 2003, ch 272 (Ex. Ord. 03-1), 27; SL 2004, ch 295, 1; SL 2011, ch 1 (Ex. Ord. 11-1), 162, eff. Apr. 12, 2011; SL 2022, ch 180, 1.
58-1-20. Prescription drug information card to be issued upon enrollment--Reissuance.A health benefit plan shall issue a card or other technology required by 58-1-19 upon enrollment. The card or technology shall be reissued upon any change in the insured's coverage that impacts data contained on the card or upon any change in the format adopted by the director of the Division of Insurance. However, the health benefit plan is not required to issue a new card or technology more often than once each calendar year. Newly issued cards or technology shall be updated with the latest coverage information and the director of the Division of Insurance shall consider the NCPDP standards then in effect and the implementation guide then in use. Source: SL 2001, ch 266, 2.
58-1-21. Health benefit plan defined for purposes of 58-1-19 to 58-1-23.As used in 58-1-19 to 58-1-23, inclusive, the term, health benefit plan, means an accident and health insurance policy or certificate; a nonprofit hospital or medical service corporation contract; a health maintenance organization subscriber contract; a plan provided by a multiple employer welfare arrangement; or a plan provided by another benefit arrangement, to the extent permitted by the Employee Retirement Income Security Act of 1974, as amended to January 1, 2001, or by any waiver of or other exception to that act provided under federal law or regulation. The term does not apply to any plan, policy, or contract that provides coverage only for:(1)Accident;(2)Credit;(3)Disability income;(4)Specified disease;(5)Dental;(6)Vision;(7)Coverage issued as a supplement to liability insurance;(8)Medical payments under automobile or homeowners;(9)Insurance under which benefits are payable with or without regard to fault and that is statutorily required to be contained in any liability policy or equivalent self-insurance;(10)Hospital income or indemnity;(11)Long-term care; and(12)Medicare supplement. Source: SL 2001, ch 266, 3.
58-1-22. Applicability of 58-1-19 to 58-1-23.Sections 58-1-19 to 58-1-23, inclusive, applies to health benefit plans that are delivered, issued for delivery, or renewed on and after July 1, 2002. For purposes of 58-1-19 to 58-1-23, inclusive, renewal of a health benefit policy, contract, or plan is presumed to occur on each anniversary of the date on which coverage was first effective on the person or persons covered by the health benefit plan. Source: SL 2001, ch 266, 4.
58-1-23. Director to enforce provisions--Promulgation of rules.The director of insurance shall enforce the provisions of 58-1-19 to 58-1-23, inclusive. The director of insurance may promulgate rules pursuant to chapter 1-26 to establish the format and elements of information for the uniform information card or technology to be used in the state following the standards established in 58-1-19 and 58-1-20. Source: SL 2001, ch 266, 5.
58-1-24. Definitions related to genetic testing. Terms used in 58-1-25, 58-1-25.1, and 58-18-87 mean:(1)"Genetic information," hereditary information obtained from an individual's genetic test or a genetic test of a family member. The term includes hereditary information obtained from genetic services and participation in genetic research, including any request for or receipt of genetic services or participation by an individual or family member in clinical research that includes genetic services. The term does not include information about an individual's sex or age;(2)"Genetic test," an analysis of human DNA, RNA, chromosomes, proteins, or metabolites that detects genotypes, mutations, or chromosomal changes. Genetic test does not mean a routine physical measurement; a chemical, blood, or urine analysis; a test for drugs or HIV infection; or any test performed due to the presence of signs, symptoms, or other manifestations of a disease, illness, impairment, or other disorder;(3)"Health carrier," any person who provides health insurance in this state. The term includes a licensed insurance company, a prepaid hospital or medical service plan, a health maintenance organization, a multiple employer welfare arrangement, a fraternal benefit contract, or any person providing a plan of health insurance subject to state insurance regulation;(4)"Health insurance," insurance provided pursuant to chapters 58-17 (except disability income insurance), 58-17F, 58-17G, 58-17H, 58-17I, 58-18 (except disability income insurance), 58-18B, 58-38, 58-40, and 58-41;(5)"Individual," an applicant for coverage or a person already covered by a health carrier;(6)"Life insurer," an entity subject to regulation under chapter 58-15 or otherwise issuing contracts of life insurance and annuities under chapter 58-15;(7)"Long-term care insurer," an insurer that issues long-term care insurance policies pursuant to chapter 58-17B. Source: SL 2001, ch 267, 1; SL 2011, ch 219, 95; SL 2021, ch 209,  1, eff. Jan. 1, 2022.
58-1-25.1. Sharing of genetic information prohibited--Health carrier, life insurer, long-term care insurer. Any company providing genetic testing directly to a consumer is prohibited from sharing any genetic test, genetic information, or other personally identifiable information of a consumer with any health carrier, life insurer, or long-term care insurer without written consent from the consumer. Nothing in this section prohibits a company that provides genetic testing from communicating with a health carrier for the purposes of payment, coordination of medical treatment, or patient care so long as such communication is compliant with the Health Insurance Portability and Accountability Act and only used for the purposes permitted in this section. Source: SL 2021, ch 209,  3, eff. Jan. 1, 2022.
58-1-25. Use of genetic tests in offer, sale, or renewal of insurance prohibited. No health carrier, life insurer, or long-term care insurer, in determining eligibility for coverage, establishing premiums, limiting coverage, renewing coverage, or any other underwriting decision, may, in connection with the offer, sale, or renewal of insurance:(1)Require or request an individual or a blood relative of the individual to take a genetic test; or(2)Take into consideration the fact that a genetic test was refused by an individual or a blood relative of the individual. Source: SL 2001, ch 267, 2; SL 2021, ch 209,  2, eff. Jan. 1, 2022.
58-1-26. Retention of records.Any insurer, nonprofit, surgical, dental or hospital plan, a health maintenance organization, or any other person required to be licensed or registered under this title shall retain all books and records that are subject to examination pursuant to chapter 58-3 for a period of not less than five years. Source: SL 2002, ch 241, 2.
58-1-27. Definitions regarding transmission of electronic documents.Terms used in 58-1-27 to 58-1-39, inclusive, mean:(1)"Delivered by electronic means,":(a)Delivery to an electronic mail address at which a party has consented to receive notices or documents; or(b)Posting on an electronic network or site accessible via the internet, mobile application, computer, mobile device, tablet, or any other electronic device, together with separate notice to a party directed to the electronic mail address at which the party consents to receive notice of the posting;(2)"Party," any recipient of any notice or document required as part of an insurance transaction, including an applicant, an insured, a policyholder, or an annuity contract holder. Source: SL 2014, ch 230, 1.
58-1-28. Transmission and storage of electronic documents permitted.Subject to 58-1-30, any notice to a party or any other document required under applicable law in an insurance transaction or that is to serve as evidence of insurance coverage may be delivered, stored, and presented by electronic means if it meets the requirements of chapter 53-10. Source: SL 2014, ch 230, 2.
58-1-29. Delivery by electronic transmission equivalent to other delivery methods.Delivery of a notice or document in accordance with the provisions of 58-1-27 to 58-1-39, inclusive, is equivalent to any delivery method required under applicable law. Source: SL 2014, ch 230, 3.
58-1-3.1. Application to business including medical, surgical, or hospital care benefits.Notwithstanding any other provision of law, any person, trust, or other entity transacting the business of insurance within this state shall comply with the applicable provisions of the Insurance Code, unless specifically exempted by 58-1-3, when the business transacted includes benefits for medical, surgical, or hospital care, whether the coverage is by direct payment, reimbursement, or otherwise. Source: SL 1983, ch 370, 2.
58-1-3.2. Direct response and mass marketing as insurance transaction.The Division of Insurance may regulate a person, trust, or other entity using direct response or mass market advertising within this state regardless of the source of the direct response or mass marketing advertisement if the advertisement is intended to place insurance within the state. Source: SL 1983, ch 370, 3; SL 2001, ch 286, 57.
58-1-3.3. Health care sharing ministries exempt from title.A health care sharing ministry may not be considered to be engaging in the business of insurance under Title 58.For purposes of this section, a health care sharing ministry is a faith-based, nonprofit organization that is tax exempt under the Internal Revenue Code and:(1)Limits its participants to those who are of a similar faith;(2)Acts as a facilitator among participants who have financial or medical needs and matches those participants with other participants with the present ability to assist those with financial or medical needs in accordance with criteria established by the health care sharing ministry;(3)Provides for the financial or medical needs of a participant through contributions from one participant to another;(4)Provides amounts that participants may contribute with no assumption of risk or promise to pay among the participants and no assumption of risk or promise to pay by the health care sharing ministry to the participants;(5)Provides a written monthly statement to all participants that lists the total dollar amount of qualified needs submitted to the health care sharing ministry, as well as the amount actually published or assigned to participants for their contribution; and(6)Provides a written disclaimer on or accompanying all applications and guideline materials distributed by or on behalf of the organization that reads, in substance:"Notice: The organization facilitating the sharing of medical expenses is not an insurance company, and neither its guidelines nor plan of operation is an insurance policy. Whether anyone chooses to assist you with your medical bills will be totally voluntary because no other participant will be compelled by law to contribute toward your medical bills. As such, participation in the organization or a subscription to any of its documents should never be considered to be insurance. Regardless of whether you receive any payments for medical expenses or whether this organization continues to operate, you are always personally responsible for the payment of your own medical bills." Source: SL 2012, ch 240, 1, 2.
58-1-3.4. Health benefit plan--Agricultural organization--Exemption. A health benefit plan is not insurance and is not subject to this title, if:(1)The plan provides health benefits under a self-funded arrangement, administered by an entity licensed as a third-party administrator in accordance with chapter 58-29D; and(2)The plan is sponsored by a nonprofit agricultural organization that:(a)Is domiciled in this state;(b)Was created primarily to promote programs for the development of rural communities and the economic stability and sustainability of farmers in this state, as shown by its articles of incorporation;(c)Has been in existence for at least twenty-five continuous years, prior to the issuance of health benefits to members of the organization;(d)Provides membership opportunities for eligible persons in each county;(e)Collects annual dues from the members;(f)Holds regular meetings to further the purposes of the members;(g)Provides the members with representation on the governing board and committees; and(h)Contracts with the third-party administrator, referenced in this section, for administration of the health benefit plan.A health benefit plan described in this section may be sold or solicited only by an insurance producer who is both appointed by an organization meeting the requirements of this section and licensed as an insurance provider to sell or solicit health insurance in accordance with chapter 58-30.Before providing health benefits under a self-funded plan, as authorized by this section, an organization shall file a certification with the Division of Insurance, at the time and in the manner directed by the division, verifying that the organization meets the requirements of this section.The risk assumed by a health benefit plan under such health care benefit coverage must be reinsured by a company authorized to do business in this state. The company providing reinsurance coverage to the plan shall annually file, at the time and in the manner directed by the division, any risk distribution arrangements entered into between the plan and the reinsurance carrier and a signed, certified actuarial statement of plan reserves and the existence of reinsurance coverage.Any health benefit plan application for coverage and any contract provided to a member must prominently state that the health benefit plan is not insurance, that the plan is not provided by an insurance company, that the plan is not subject to the laws and rules governing insurance, and that the plan is not subject to the jurisdiction of the division. Source: SL 2021, ch 208,  1.
58-1-3. Exemption from title of certain entities and transactions.No provision of this title applies with respect to:(1)Fraternal benefit societies, except as stated in chapter 58-37A;(2)Bail bondsmen, other than corporate sureties and their agents, except as stated in chapter 58-22;(3)Motor vehicle service contracts or agreements to perform or indemnify for a specific duration the repair, replacement, or maintenance of motor vehicles for operational or structural failure due to a defect in materials, workmanship, or normal wear and tear, with or without additional provisions for incidental payment of indemnity under limited circumstances, including towing, rental, and emergency road service. Consideration for a motor vehicle service contract must be stated separately from the price of the motor vehicle. A motor vehicle service contract may also provide for:(a)The repair or replacement of motor vehicle windshields, tires, or wheels that are damaged as a result of contact with road hazards;(b)The removal of dents, dings, or creases on a motor vehicle that can be repaired using the process of paintless dent removal without affecting the existing paint finish and without replacing vehicle body panels, sanding, bonding, or painting;(c)The replacement of a motor vehicle key or key-fob in the event that the key or key-fob becomes inoperable, lost, or stolen; or(d)The use, repair, replacement, or maintenance of property; indemnification for repair, replacement, or maintenance, due to excess wear; and the use, damage, or excess mileage that result in a lease-end charge, or any other charge for damage that is deemed as excess wear and use by a lessor under a motor vehicle lease; provided any such payment does not exceed the purchase price of the vehicle;(4)Service agreements or extended warranty plans for which the primary purpose is to provide service, repair, or replacement on consumer goods or products, or for indemnification for repair, replacement, or maintenance; for operational or structural failure due to a defect in materials or workmanship, normal wear and tear, power surge; or accidental damage from handling of a consumer good or product, including appliances, merchandise, or equipment, or mechanical/electrical systems in single or multiple-family dwellings. Incidental indemnity payments under such plans where service, repair, or replacement is not feasible or economical does not void this exemption;(5)Vehicle theft protection product warranties that provide the warrantor is required to pay to or on behalf of the warranty holder, specified incidental costs as a result of the failure of the vehicle theft protection product to perform pursuant to the terms of the warranty;(6)Any person, trust, or other entity proven to be under the exclusive regulatory authority of the federal government or another state agency;(7)Any agreement to provide liability protection entered into pursuant to chapter 1-24 is exempt from the regulatory requirements of Title 58, except to forms of insurance coverage provided by an insurer otherwise subject to the insurance laws of this state;(8)Any church plan, as defined in section 414(e) of the Internal Revenue Code of 1986, as amended through December 31, 1999, and section (3)(33)(C)(i) of the Employee Retirement Income Security Act of 1974 (29 U.S. C. 1002(33)(C)(i)); or any church benefits board, as described in section 414(e)(3)(A) of the Internal Revenue Code of 1986, as amended through December 31, 1999, and section (3)(33)(C)(i) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1002(33)(C)(i));(9)Any debt cancellation contract or debt suspension contract as defined by subdivisions 51A-1-2(10) and 51A-1-2(11) and 54-4-73 and 54-4-74; or(10)Any damage guarantee program for renters administered by a nonprofit corporation that is recognized as an exempt organization under 501(c)(3) of the Internal Revenue Code and whose mission is to increase the availability of affordable housing to low and moderate income tenants. Source: SL 1966, ch 111, ch 1, 3; SL 1980, ch 348, 2; SL 1983, ch 370, 1; SL 1987, ch 75, 4; SL 1998, ch 286, 1; SL 2000, ch 232, 1; SL 2000, ch 233, 1; SL 2001, ch 263, 3; SL 2004, ch 290, 3; SL 2004, ch 296, 1; SL 2006, ch 249, 1; SL 2012, ch 235, 5; SL 2022, ch 180, 2.
58-1-30. Conditions for transmission of electronic documents.An insurer may only deliver a notice or document to a party by electronic means pursuant to 58-1-27 to 58-1-39, inclusive, if:(1)The party affirmatively consents to the electronic delivery and has not withdrawn the consent;(2)The insurer provides the party with a clear and conspicuous statement, prior to obtaining the party's consent, informing the party of:(a)Any right or option of the party to have the notice or document provided or made available in paper or another nonelectronic form;(b)The right of the party to withdraw consent to have a notice or document delivered by electronic means and any fees, conditions, or consequences that may be imposed in the event consent is withdrawn;(c)Whether the party's consent applies:(i)Only to the particular transaction as to which the notice or document must be given; or(ii)To an identified category of notices or documents that may be delivered by electronic means during the course of the parties' relationship;(d)The means by which a party may obtain a paper copy of a notice or document delivered by electronic means, after the party consents to electronic delivery; and(e)The procedure a party must follow to withdraw consent to have a notice or document delivered by electronic means and to update information needed to contact the party electronically;(3)The insurer ensures that the party:(a)Is provided with a statement of the hardware and software requirements for access to and retention of a notice or document delivered by electronic means before the party consents to electronic delivery; and(b)Consents electronically, or confirms consent electronically, in a manner that reasonably demonstrates the party can access information in the electronic form that will be used for notices or documents delivered by electronic means; and(4)The insurer, in the event a change in the hardware or software requirements needed to access or retain a notice or document delivered by electronic means creates a material risk that the party will not be able to access or retain a subsequent notice or document, provides the consenting party with a statement of:(a)The revised hardware and software requirements for access to and retention of a notice or document delivered by electronic means; and(b)The right of the party to withdraw consent without the imposition of any fee, condition, or consequence that was not disclosed under subsection (2)(b) of this section. Source: SL 2014, ch 230, 4.
58-1-31. Content and timing requirements unaffected.Nothing in 58-1-27 to 58-1-39, inclusive, affects any requirement related to content or timing of any notice or document otherwise required pursuant to applicable law. Source: SL 2014, ch 230, 5.
58-1-32. Verification or acknowledgment of receipt.If a provision of applicable law requiring a notice or document to be provided to a party expressly requires verification or acknowledgment of receipt of the notice or document, the notice or document may only be delivered by electronic means if the method used provides for verification or acknowledgment of receipt. Source: SL 2014, ch 230, 6.
58-1-33. Effect of failure to obtain electronic consent or confirmation.The legal effectiveness, validity, or enforceability of any contract or policy of insurance executed by a party may not be denied solely because of the failure to obtain electronic consent or confirmation of consent of the party in accordance with subsection 58-1-30(3)(b). Source: SL 2014, ch 230, 7.
58-1-34. Withdrawal of consent.A withdrawal of consent by a party does not affect the legal effectiveness, validity, or enforceability of a notice or document delivered by electronic means to the party before the withdrawal of consent is effective. A withdrawal of consent by a party is effective within a reasonable period of time after receipt of the withdrawal by the insurer. If an insurer fails to comply with 58-1-30, the party may treat the failure as a withdrawal of consent for purposes of 58-1-27 to 58-1-39, inclusive. Source: SL 2014, ch 230, 8.
58-1-35. Documents delivered electronically before July 1, 2014.The provisions of 58-1-27 to 58-1-39, inclusive, do not apply to a notice or document delivered by an insurer in an electronic form before July 1, 2014 to a party who, before that date, consented to receive notice or document in an electronic form otherwise allowed by law. Source: SL 2014, ch 230, 9.
58-1-36. Notice to parties consenting to electronic transmission before July 1, 2014.If the consent of a party to receive certain notices or documents in an electronic form is on file with an insurer before July 1, 2014, and pursuant to 58-1-27 to 58-1-39, inclusive, an insurer intends to deliver additional notices or documents to such party in an electronic form, then prior to delivering such additional notices or documents electronically, the insurer shall notify the party of:(1)The notices or documents that may be delivered by electronic means pursuant to 58-1-27 to 58-1-39, inclusive, that were not previously delivered electronically; and(2)The party's right to withdraw consent to have notices or documents delivered by electronic means. Source: SL 2014, ch 230, 10.
58-1-37. Oral communications and recordings--Electronic signatures.Except as otherwise provided by law, if an oral communication or a recording of an oral communication from a party is reliably stored and reproduced by an insurer, the oral communication or recording qualifies as a notice or document delivered by electronic means for purposes of 58-1-27 to 58-1-39, inclusive. If a provision of applicable law requires a signature, notice, or document to be notarized, acknowledged, verified, or made under oath, the requirement is satisfied if the electronic signature of the person authorized to perform those acts, together with all other information required to be included by the provision, is attached to or logically associated with the signature, notice, or document. Source: SL 2014, ch 230, 11.
58-1-38. Conditions for posting property and casualty policy or endorsement on insurer's website.Notwithstanding any other provision of 58-1-27 to 58-1-39, inclusive, if a standard property and casualty insurance policy or endorsement does not contain personally identifiable information, an insurer may mail, deliver, or post the policy or endorsement on the insurer's website. If the insurer elects to post an insurance policy or endorsement on the insurer's website in lieu of mailing or delivering the document to the insured, the insurer must comply with the following conditions:(1)The policy and endorsement must be accessible as long as the policy or endorsement is in force;(2)After the policy expires, the insurer must maintain and archive the policy and endorsement for five years after the expiration of the policy and shall make the documents available to the party on request;(3)The insurer must post the policy and endorsement in a manner that allows the insured to print and save the policy and endorsement using a program or application that is widely available on the internet and free to use;(4)The insurer provides the following information in, or simultaneous with each declarations page provided at the time of issuance of the initial policy and any renewals of that policy;(a)A description of the exact policy and endorsement form purchased by the insured;(b)A method by which the insured may obtain, upon request and without charge, a paper copy of the policy; and(c)The internet address where the insured's policy and endorsement is posted; and(5)The insurer provides notice, in the format preferred by the insured, of any changes to the form or endorsement, the insured's right to obtain, upon request and without charge, a paper copy of a form, and the internet address where the form and endorsement is posted. Source: SL 2014, ch 230, 12.
58-1-39. Products and documents to which 58-1-27 to 58-1-39 apply.The provisions of 58-1-27 to 58-1-39, inclusive, apply to the insurance products and documents, including insurance policies, insurance riders, insurance endorsements, and annuity contracts filed with and regulated by the director pursuant to this title. Source: SL 2014, ch 230, 13.
58-1-4. Particular provisions prevail.Provisions of this title relative to a particular kind of insurance or a particular type of insurer or to a particular matter shall prevail over provisions relating to insurance in general or insurers in general or to such matter in general. Source: SL 1966, ch 111, ch 1, 5.
58-1-40. English version of policy controls--Transactions in another language permitted.The controlling version of any insurance policy offered in South Dakota shall be the English version. An authorized insurer, as defined in subdivision 58-1-2(2), may conduct transactions in a language other than English through an employee or agent acting as interpreter or through an interpreter provided by the customer. Source: SL 2018, ch 277, 1.
58-1-41. Policies and advertising in language other than English permitted.An authorized insurer, as defined in subdivision 58-1-2(2), may provide insurance policies, endorsements, riders, and any explanatory or advertising materials in a language other than English. If there is a dispute or complaint regarding the insurance or advertising material, the English language version of the insurance coverage shall control the resolution of the dispute or complaint. Source: SL 2018, ch 277, 2.
58-1-42. Statement attesting that policy in language other than English is translation of policy approved by division.An authorized insurer, as defined in subdivision 58-1-2(2), providing a policy as authorized in 58-1-41 may only offer that policy after the insurer has first filed a statement with the Division of Insurance attesting that the policy in a language other than English is the translation of a policy form already filed and approved by the division. Source: SL 2018, ch 277, 3.
58-1-43. Policy statement that dispute resolved by English version.A policy offered in a language other than English must clearly state in the language of that policy being marketed, that if a dispute or complaint occurs regarding the meaning of the policy, the dispute shall be resolved by the English version interpretation. Source: SL 2018, ch 277, 4.
58-1-44. Unfair trade provisions not abrogated.Nothing contained in 58-1-40 to 58-1-43, inclusive, shall abrogate or supersede the provisions set forth in chapter 58-33 relating to unfair trade practices. Source: SL 2018, ch 277, 5.
58-1-5. Compliance required.No person shall engage in or transact an insurance business in South Dakota, or act relative to a subject of insurance resident, located or to be performed in South Dakota, without complying with the applicable provisions of this title. Source: SL 1966, ch 111, ch 1, 1.
58-1-7. Local licenses and taxes prohibited.No county or first or second class municipality of this state may require that any insurer, or any insurance producer obtain a certificate of authority or license to transact an insurance business in such county or municipality; and no county or municipality may levy any occupational tax or fee for transacting any such business. This section does not preempt or prevent the taxation and regulation of persons engaged in the bail bond business other than corporate sureties and their agents who are required to qualify and be licensed by the provisions of this title. Source: SL 1966, ch 111, ch 1, 4; SL 1992, ch 60, 2; SL 2001, ch 286, 58.
58-1-9. Existing certificates of authority--Renewal, suspension, revocation, or termination.Every certificate of authority of an insurer in force immediately prior to July 1, 1966, and existing under any law repealed by chapter 111 of the Session Laws of 1966, shall be subject to renewal, suspension, revocation, or termination as though originally issued under this title. Source: SL 1966, ch 111, ch 1, 8.
58-2-1.1. Division within Department of Labor and Regulation--Direction and supervision by department--Independent functions retained by division.The Division of Insurance shall be administered under the direction and supervision of the Department of Labor and Regulation (hereinafter referred to as "department") and the secretary of labor and regulation (hereinafter referred to as "secretary"), but shall retain the quasi-judicial, quasi-legislative, advisory, and other nonadministrative functions (as defined in 1-32-1) otherwise vested in it and shall exercise those functions independently of the secretary. Source: SL 1973, ch 2 (Ex. Ord. 73-1), 48; SL 1974, ch 3, 12; SL 2003, ch 272 (Ex. Ord. 03-1), 119, eff. Apr. 17, 2003; SL 2011, ch 1 (Ex. Ord. 11-1), 162, eff. Apr. 12, 2011.
58-2-10. Actuaries--Employment by department--Duties.The Department of Labor and Regulation may employ competent insurance actuaries to perform actuarial duties of the division, to take charge of or assist in the examination of insurers, and to perform other duties assigned to them. Source: SL 1966, ch 111, ch 2, 4 (3); SL 2003, ch 272 (Ex. Ord. 03-1), 20; SL 2011, ch 1 (Ex. Ord. 11-1), 162, eff. Apr. 12, 2011.
58-2-11. Examiners for examination of insurers and others--Employment by department.The Department of Labor and Regulation may appoint or employ examiners to conduct or assist in examinations of insurers and others provided for under this title. Source: SL 1966, ch 111, ch 2, 4 (4); SL 2003, ch 272 (Ex. Ord. 03-1), 20; SL 2011, ch 1 (Ex. Ord. 11-1), 162, eff. Apr. 12, 2011.
58-2-12. Oath of office and bond of director--Bonds of insurance examiners, actuaries, and attorney for division--Bond premiums paid from state insurance fund.The director shall, before entering upon the duties of his office, take and subscribe the constitutional oath of office and shall give the state a bond in the sum of one hundred thousand dollars, and each insurance examiner, the actuary and the attorney shall each give bond to the state in the sum of fifty thousand dollars, all such bonds to be conditioned for the faithful and impartial discharge of the duties imposed upon such director and employees by this title, and all such bonds to be approved by the attorney general, and recorded and filed as provided by law.The premium of such bonds shall be paid by the state treasurer out of the insurance fund of this state upon warrants drawn on such fund by the state auditor. Source: SL 1966, ch 111, ch 2, 6.
58-2-13. Chief clerk and employees--Appointment.The Department of Labor and Regulation may appoint a chief clerk and such other employees as may be necessary, subject to the approval of the Bureau of Human Resources. Source: SL 1966, ch 111, ch 2, 4 (6); SL 2003, ch 272 (Ex. Ord.), 20; SL 2011, ch 1 (Ex. Ord. 11-1), 162, eff. Apr. 12, 2011; SL 2012, ch 23, 101.
58-2-14. Division personnel--Termination of employment by department.The Department of Labor and Regulation may at any time terminate the employment of any person in the division. Source: SL 1966, ch 111, ch 2, 4 (7); SL 2003, ch 272 (Ex. Ord. 03-1), 20; SL 2011, ch 1 (Ex. Ord. 11-1), 162, eff. Apr. 12, 2011.
58-2-15. Actuarial, technical, or other professional services--Department authorized to contract for on a fee or part-time basis.The Department of Labor and Regulation may contract, on a fee or a part-time basis, for such actuarial, technical, or other professional services as the division may require for the discharge of its duties. Source: SL 1966, ch 111, ch 2, 4 (8); SL 2003, ch 272 (Ex. Ord. 03-1), 20; SL 2011, ch 1 (Ex. Ord. 11-1), 162, eff. Apr. 12, 2011.
58-2-16. Technical or professional personnel--Bond required, amount, approval and filing, payment of premium.Any technical or professional personnel hired by the Department of Labor and Regulation upon a part-time or fee basis may be required to furnish a bond in such amount as the department may determine, such bond to be approved and filed and the premium therefor paid in the same manner as provided in 58-2-12. Source: SL 1966, ch 111, ch 2, 6; SL 2003, ch 272 (Ex. Ord. 03-1), 20; SL 2011, ch 1 (Ex. Ord. 11-1), 162, eff. Apr. 12, 2011.
58-2-17. Compensation of personnel.The compensation of all such personnel employed or contracted for by the Department of Labor and Regulation shall be fixed by the department subject to the approval of the Bureau of Human Resources. Source: SL 1966, ch 111, ch 2, 4 (9); revised pursuant to SL 1973, ch 23, 6; SL 2003, ch 272 (Ex. Ord. 03-1), 20; SL 2011, ch 1 (Ex. Ord. 11-1), 162, eff. Apr. 12, 2011; SL 2012, ch 23, 102.
58-2-18. Additional compensation for services rendered by personnel prohibited--Misdemeanor.The director or any examiner or employee of the division shall not be given nor receive any fee, compensation, loan, gift, or other thing of value except the compensation and expense allowance provided by law, for any service rendered or to be rendered as such examiner or employee or in connection therewith. Violation of this section is a Class 2 misdemeanor. Source: SL 1966, ch 111, ch 2, 8; SL 1978, ch 359, 2.
58-2-19. Interests of personnel in insurance transactions prohibited--Misdemeanor.The director or any examiner, assistant, or employee of the division shall not be financially interested, directly or indirectly, in any insurer, insurance agency, or insurance transaction except as a policyholder or claimant under a policy; except, that as to such matters wherein a conflict of interests does not exist on the part of any such individual, the Department of Labor and Regulation may employ or retain from time to time insurance actuaries, attorneys, or other technicians who are independently practicing their professions even though similarly employed or retained by insurers or others. Violation of this section is a Class 2 misdemeanor. Source: SL 1966, ch 111, ch 2, 8; SL 1978, ch 359, 2; SL 2003, ch 272, 20; SL 2011, ch 1 (Ex. Ord. 11-1), 162, eff. Apr. 12, 2011.
58-2-2.1. Appointment of director--Removal.The director of the Division of Insurance shall be appointed by the secretary and may be removed at the pleasure of the secretary. Source: SL 1973, ch 2, 49; SL 1980, ch 370, 21; SL 1995, ch 2, 6; SL 2003, ch 272, 120.
58-2-20. Procurement of loan secured by mortgage on real estate permitted to division personnel.Sections 58-2-18 and 58-2-19 shall not be construed to prohibit the director or any employee from procuring a loan secured by a mortgage on real estate which mortgage and loan would be a proper investment under the provisions of this title. Source: SL 1966, ch 111, ch 2, 8.
58-2-21. Enforcement of provisions of this title.The director shall enforce the provisions of this title, under the direction and supervision of the Department of Labor and Regulation, and shall execute the duties imposed upon him by this title. Source: SL 1966, ch 111, ch 2, 7; SL 2003, ch 272 (Ex. Ord. 03-1), 20; SL 2011, ch 1 (Ex. Ord. 11-1), 162, eff. Apr. 12, 2011.
58-2-22. Power and authority of director--Examinations and investigations.The director shall have the powers and the authority expressly conferred upon him by or reasonably implied from the provisions of this title. The director may conduct such examinations and investigations of insurance matters, in addition to examinations and investigations expressly authorized by this title, as he may deem proper to determine whether any person has violated any provision of this title or to secure information useful in the lawful administration of any such provision. The cost of such additional examinations and investigations shall be borne by the state. Source: SL 1966, ch 111, ch 2, 7.
58-2-23. Additional powers and duties of director provided by other laws.The director shall have such additional powers and duties as may be provided by other laws of this state. Source: SL 1966, ch 111, ch 2, 7.
58-2-24. Delegation of powers by director.The director may delegate to the actuary, attorney, examiners, or employees of the division, the exercise or discharge in the director's name of any power, duty, or function, whether ministerial, discretionary, or of whatever character, vested in or imposed upon the director under this title.The official act of any such person so acting in the director's name and by his authority shall be deemed to be an official act of the director. Source: SL 1966, ch 111, ch 2, 5.
58-2-26. Records--Keeping by director--Public inspection.The director shall keep permanent records of his official transactions, examinations, investigations, and proceedings. Such records and insurance filings in his office shall be open to public inspection, except as otherwise provided in this title with respect to particular records or filings. Source: SL 1966, ch 111, ch 2, 10.
58-2-27. Director's certificate of authority--Evidence.The director shall furnish, when requested, his sworn certificate as to the authority of any person to transact insurance business, and such certificate shall be evidence of the facts set forth therein. Source: SL 1966, ch 111, ch 2, 11 (2); SL 1978, ch 359, 11.
58-2-28. Certified copies of records in office of director as evidence.Copies of records or documents in his office certified to by the director shall be received in evidence in all courts as if they were the originals. Source: SL 1966, ch 111, ch 2, 11 (1).
58-2-29. Fees, licenses, and charges--Collection by director in advance.The director of the Division of Insurance shall collect in advance, and persons so served shall pay to the director in advance, fees, licenses, and miscellaneous charges as follows:(1)Certificate of authority of insurer:(a)Application for original certificate of authority:For filing application for certificate of authority, articles of incorporation, and other charter documents, bylaws, financial statements, examination reports, power of attorney to the director, and all other documents and filings required in connection with such application: ..... $500.00(b)Issuance of original certificate of authority ..... 25.00(c)Annual renewal of certificate of authority ..... 25.00(d)Reinstatement of certificate of authority ..... 25.00(e)Amendment or reissuance of certificate of authority ..... 25.00(f)Annual audit ..... 500.00This fee to be reduced by the total dollar amount of premium taxes remitted in each calendar year. The fee is waived for all licensed insurers remitting five hundred dollars or more in premium taxes in a calendar year.(2)Filing amendment of articles of incorporation, domestic and foreign insurers, exclusive of fees required to be paid to the secretary of state by a domestic corporation ..... 10.00(3)Filing bylaws or amendments thereto ..... 5.00(4)Filing annual statement of insurer, other than as part of application for original certificate of authority ..... 25.00(5)Insurance producers and solicitors:(a)Insurance producer's license, including also disability insurance when written by property, casualty, or surety insurer otherwise represented by the insurance producer:(i)Filing application for original license, and including issuance of license, if issued ..... 25.00(ii)Original appointment of insurance producer, each insurer ..... 10.00(iii)Annual renewal of appointment, each insurer:Domestic insurer ..... 10.00Foreign insurer ..... 10.00(iv)Temporary license ..... 10.00(b)Insurance producer's license, life or health insurance, including both life and disability insurance when so licensed as to the same insurer:(i)Application for original license, including issuance of license, if issued, each insurer ..... 25.00(ii)Original appointment of insurance producer, each insurer ..... 10.00(iii)Annual renewal of appointment, each insurer:Domestic insurer ..... 10.00Foreign insurer ..... 10.00(iv)Temporary license ..... 10.00(c)Limited license as insurance producer:(i)Motor vehicle physical damage ... Same as for insurance producer's license(ii)Accident ticket policies, each insurer each year ..... 10.00(iii)Baggage ticket policies, each insurer each year ..... 10.00(iv)Credit insurance ..... Same as for insurance producer license(d)Examination for license, each examination and each time taken ..... 10.00(e)Nonresident insurance producer license:(i)Original license ..... 30.00 (ii)Biennial renewal of license ..... 50.00(iii)Appointments, each insurer ..... 20.00(iv)Annual renewal of appointments, each insurer ..... 20.00(f)Resident insurance producer, original license ..... 25.00(i)Biennial continuing education fee, license renewal ..... 20.00(g)Corporation or partnership license:(i)Original license ..... 25.00(ii)Appointment, each insurer ..... 10.00(iii)Annual renewal of appointment, each insurer ..... 10.00(h)Nonresident corporation or partnership license:(i)Original license ..... 30.00(ii)Appointment, each insurer ..... 20.00(iii)Annual renewal of appointment, each insurer ..... 20.00(i)Portable electronics license ..... Same as for insurance producer license(6)Insurance vending machine license, each machine, each year ..... 20.00(7)Surplus line broker's license, application for original license including issuance of license, if issued ..... 50.00(a)Biennial renewal of license ..... 100.00(8)Rating bureau, original license ..... 25.00(a)Annual renewal of license ..... 35.00(9)Examination of rating bureau... Same fees as provided in this chapter for examination of foreign insurance companies.(10)Farm mutuals:(a)Application for original certificate of authority: For filing application for certificate of authority, articles of incorporation, and all other documents and filings required in connection with such application, and for issuance of an original certificate of authority, if issued ..... 25.00(b)Annual renewal of certificate of authority ..... 10.00(c)Filing annual statement ..... 5.00(11)Broker's license as attorney in fact of a reciprocal or interinsurance exchange ..... 20.00(12)Miscellaneous services:(a)For a copy of any paper filed in the insurance division, for which another price is not set by statute, each page ..... 75(b)Director's sworn certificate, except when on certificates of authority or licenses ..... 10.00(c)For receiving and forwarding copy of summons or other process served upon the director, as process agent of an insurer or nonresident insurance producer ..... 10.00(13)Application for continuing education course approval ..... 25.00(14)Annual renewal of certificate of authority for domestic insurer issuing court appearance bonds .... 6,000 Source: SL 1966, ch 111, ch 2, 27; SL 1975, ch 305, 1, 2; SL 1978, ch 359, 12; SL 1978, ch 365, 1; SL 1980, ch 349; SL 1983, ch 27, 7; SL 1984, ch 29, 9; SL 1986, ch 415, 1; SL 1987, ch 370, 1 to 3; SL 2001, ch 286, 60; SL 2002, ch 229, 1; SL 2010, ch 233, 1; SL 2011, ch 55, 2; SL 2012, ch 251, 15.
58-2-3. Qualifications of director.The director must have had at least five years of practical experience in one or more of the types of insurance business subject to regulation by the director, or have had other professional and business experience reasonably adequate in character and scope to equip him to discharge the duties and fulfill the responsibilities of the office of director. Source: SL 1966, ch 111, ch 2, 3.
58-2-30. Disposition of money received by director.All fees received by the director from any source whatever, except as provided in 58-3-15 not later than the fifth day of the succeeding month, shall be paid into the state treasury and by the state treasurer deposited in the insurance operating fund according to 4-4-4.3. All other money received by the director from any source whatever, except as provided in 58-3-15 not later than the fifth day of the succeeding month, shall be paid into the state treasury and by the state treasurer deposited in the general fund. Source: SL 1966, ch 111, ch 2, 28; SL 1989, ch 48, 4.
58-2-39. Promulgation of rules regarding definitions, enrollment, disclosure, notice, claims, and records. The Division of Insurance may promulgate rules pursuant to chapter 1-26 in the following areas:(1)Definition of terms used in 58-17-30.2, 58-17-30.4, 58-18-32, 58-18-34, and 58-33-85 to 58-33-88, inclusive;(2)Insurer enrollment procedures;(3)Disclosure and notice requirements;(4)Claim processing procedures; and(5)Record-keeping requirements for insurers and producers. Source: SL 1994, ch 387, 19; SL 2014, ch 231, 1; SL 2021, ch 210,  1.
58-2-40. Promulgation of rules to protect privacy of medical records.The director of insurance shall promulgate rules pursuant to chapter 1-26, to protect the privacy of personally identifiable health care and medical information, data, and records. The rules shall cover health care and medical information, data, and records collected, used, or disclosed by any person licensed or registered under Title 58 or any person with whom such licensees or registrants contract, and shall include all health care and medical information, data, and records received by or in the possession of the Division of Insurance. The rules may include the following:(1)Definition of terms;(2)Standards for the protection of the privacy and confidentiality of personally identifiable health care information and medical records;(3)Rules for the collection, use, storage, security, disclosure, release, and disposal of health care and medical information, data, and records in all forms, including printed material, plastic media, audio, video, computerized and electronic transmissions;(4)Rules regarding the sale and exchange of health care and medical information, data, and records;(5)Rules to define the responsibilities and limitations of those needing or requiring access to health care and medical information, data, and records;(6)Rules for procedures and documents required for the release or transfer of health care and medical information, data, and records, including the identity of who may release such information and records and under what conditions and provisions of the law, as needed to protect the privacy of personally identifiable health care and medical information, data, and records;(7)Rules for the collection, use, storage, security, disclosure, distribution, release, and disposal of health care information and medical records obtained, used, or held in connection with the operation, maintenance, or review of insurance certificates, contracts, policies, and plans, and health maintenance organizations, subject to the jurisdiction of the director of insurance. Source: SL 2000, ch 234, 1.
58-2-41. Promulgation of rules to protect privacy of personal nonpublic financial information--Applicability--Construction.The director shall promulgate rules pursuant to chapter 1-26 relating to the privacy of personal nonpublic financial information. The rules must be designed to provide privacy to the public of the personal nonpublic financial information that is shared or obtained in connection with insurance transactions. The director shall design the rules to protect the public's personal nonpublic financial information but also consider the impact of any rules on the cost and availability of insurance in this state. In promulgating the rules required by this section the director shall give substantial consideration to the privacy standards contained in the NAIC Privacy of Consumer Financial and Health Information Regulation as in effect as of January 1, 2001, and otherwise design the rules to achieve uniformity, to the degree reasonably possible, in the standards for personal nonpublic financial information. The rules may include the following as they relate to financial privacy:(1)Definition of terms;(2)Permitting the disclosure and use of personal nonpublic financial information between affiliates;(3)Opt out procedures for the disclosure and use of personal nonpublic financial information with nonaffiliates;(4)Notice and disclosure requirements and formats;(5)Limits on disclosure of personal nonpublic financial information;(6)Limits on redisclosure and reuse of personal nonpublic financial information;(7)Limits on sharing account number information for marketing purposes;(8)Exceptions for opt out and notice requirements; and(9)Nondiscrimination requirements as they relate to persons who opt out or who do not grant an authorization.Nothing in this section applies to any rules that may be promulgated pursuant to 58-2-40. Nothing in this section may be construed to impair or conflict with the Fair Credit Reporting Act. Source: SL 2001, ch 268, 1.
58-2-9. Legal adviser to division--Employment--Duties.The Department of Labor and Regulation shall appoint and employ an attorney to act as legal adviser to the division and to make investigations of violations or claimed violations of this title and to perform such other duties as directed by the department. Source: SL 1966, ch 111, ch 2, 4 (5); SL 2003, ch 272 (Ex. Ord. 03-1), 20; SL 2011, ch 1 (Ex. Ord. 11-1), 162, eff. Apr. 12, 2011.
58-3-1.1. Company defined.As used in this chapter, the term, company, means any person engaging in or proposing or attempting to engage in any insurance business and any person or group of persons who may otherwise be subject to the administrative, regulatory, or taxing authority of the director. Source: SL 1992, ch 338, 1.
58-3-1. Examination of insurers--Scope.The director of the Division of Insurance shall examine the affairs, transactions, accounts, records, and assets of each company, authorized insurer, management company, an owned or controlled subsidiary of the insurer, and each rating organization, as often as he deems advisable. He shall examine each domestic insurer not less frequently than every five years. During an examination, the director may also examine any person or the business of any person that the director considers is necessary, material or affects the business of the insurer. Source: SL 1966, ch 111, ch 2, 16 (1); SL 1992, ch 338, 2.
58-3-10. Examination reports required.The director or his examiner shall make a full and true report of each examination. Source: SL 1966, ch 111, ch 2, 20 (1).
58-3-11. Contents of examination reports.The report shall be comprised only of facts appearing from the books, papers, records, or documents of the person being examined, or ascertained from the statements of individuals concerning its affairs and the examiner's conclusions and recommendations based on procedures and guidelines adopted by the National Association of Insurance Commissioners or state statutes or rules. The director shall adopt the procedures and guidelines and their effective date by rule promulgated pursuant to chapter 1-26. Source: SL 1966, ch 111, ch 2, 20 (2); SL 1992, ch 338, 8; SL 1993, ch 357, 2; SL 1994, ch 375, 4; SL 1997, ch 283, 4.
58-3-12.1. Examinations other than financial examinations--Examination report--Optional or mandatory.Notwithstanding 58-3-10 and 58-3-12, for examinations, other than financial examinations, subject to the provisions of this chapter, the director or the examiner may issue an examination report. If an examination report is issued pursuant to this section, the applicable provisions of this chapter apply. If the person being examined makes a written request for an examination report within thirty days of receipt of written notice by the director of the completion of the examination, the director or examiner shall issue the examination report within sixty days of the date of the receipt of the request or the completion of the examination, whichever is later. Source: SL 2005, ch 262, 1. 
58-3-12.2. Market conduct examination--Draft examination report.Prior to the completion of a market conduct examination, the director may request that the examiner in charge provide a draft examination report that is not to be filed under oath. The draft examination report does not constitute the conclusion of the examination and does not trigger the provisions of 58-3-12 until filed with the division under oath. Once the division has received the draft examination report, the director may share the draft examination report with the company examined to facilitate the resolution of the examination. The examiner in charge shall submit the examination report under oath and trigger the provisions of 58-3-12 within one hundred eighty days of the director sharing the draft examination report pursuant to this section, unless the secretary provides a longer timeframe to allow additional consideration of the draft examination report by the company being examined. Nothing in this section applies to financial examinations. Source: SL 2014, ch 232, 1.
58-3-12.3. Draft examination report not governed by 58-3-10 to 58-3-18.The provisions of 58-3-10 to 58-3-18, inclusive, do not apply to the draft examination report. Source: SL 2014, ch 232, 2.
58-3-12.4. Confidentiality of draft examination report.Each draft examination report described in 58-3-12.2 is confidential. No draft examination report may be released except pursuant to a court order. Source: SL 2014, ch 232, 3.
58-3-12. Examination reports--Copy of proposal to company examined, time for furnishing--Review by director--Hearing on proposed report.No later than sixty days following completion of the examination, the examiner in charge shall file with the division a written report of examination under oath. Upon receipt of the report, the division shall transmit the report to the company examined. The company may make a written submission or rebuttal with respect to any matters contained in the examination report within thirty days of transmittal of the report.Within thirty days of the end of the period allowed for the receipt of written submissions or rebuttals, the director shall fully consider and review the report, together with any written submissions or rebuttals and any relevant portions of the examiner's work papers and enter an order:(1)Adopting the examination report as filed or with modification or corrections. If the examination report reveals that the company is operating in violation of any law, regulation or prior order of the director, the director may order the company to take any action the director considers necessary and appropriate to cure the violation;(2)Rejecting the examination report with directions to the examiners to reopen the examination for purposes of obtaining additional data, documentation or information, and refiling pursuant to the procedures in subdivision (1) for the initial report; or(3)Calling for an investigatory hearing with no less than twenty days notice to the company for purposes of obtaining additional documentation, data, information and testimony. Source: SL 1966, ch 111, ch 2, 20 (3); SL 1992, ch 338, 9.
58-3-13. Filed examination report admissible in evidence.The report when so filed shall be admissible in evidence, in any action or proceeding brought by the director against the person examined, or against its officers, representatives, or insurance producers, of the facts stated therein. The director and the director's examiners may at any time testify and offer other proper evidence as to information secured during the course of an examination, whether or not a written report of the examination has at that time been either made, served, or filed in the director's office.  Source: SL 1966, ch 111, ch 2, 20 (4); SL 2001, ch 286, 64.
58-3-14. Withholding of report from public inspection.Upon the adoption of the examination report under subdivision 58-3-12(1), the director shall continue to hold the content of the examination report as confidential information for a period of thirty days except to the extent provided in 58-3-20, 58-3-21, and 58-3-22. Thereafter, the director may open the report for public inspection so long as no court of competent jurisdiction has stayed its publication. Source: SL 1966, ch 111, ch 2, 20 (5); SL 1992, ch 338, 21.
58-3-15. Expenses of examination paid by person examined.Each person so examined, other than as to examinations pursuant to 58-3-5, shall pay the travel expenses, a reasonable living expense allowance, and a per diem as compensation of examiners, as necessarily incurred on account of the examination, all at reasonable rates customary therefor and as established or adopted by the director, upon presentation of a detailed account of charges and expenses. The account may be so presented periodically during the course of the examination or at the termination of the examination.The division may retain at the insurer's expense, consultants, attorneys, actuaries, accountants, and other experts not otherwise a part of the director's staff as shall be reasonably necessary to assist in the conduct of the examination. Any person so retained shall be under the direction and control of the director and shall act in a purely advisory capacity. Each insurer producing records, books, and papers for examination pursuant to this chapter is liable for and shall pay the expense of the examination. Source: SL 1966, ch 111, ch 2, 19; SL 1977, ch 404, 2; SL 1995, ch 273, 1.
58-3-17. Order adopting examination report as final decision--Service--Affidavit of receipt.Each order entered pursuant to subdivision 58-3-12(1) shall be in accordance with chapter 1-26. The order shall be accompanied by findings of fact and conclusions of law and constitutes a final decision. The order shall be served upon the company by certified mail, together with a copy of the adopted examination reports. The order shall include the provisions of this section. The company shall then serve its directors. Within thirty days of the issuance of the adopted report, the company shall file affidavits executed by each of its directors stating that it has received a copy of the adopted report and related orders. Source: SL 1992, ch 338, 10; SL 2010, ch 234, 1.
58-3-18. Confidential investigative hearing--Inconsistencies in examination report.Subject to 58-3-11, any investigative hearing conducted under subdivision 58-3-12(3) shall be a confidential, investigatory proceeding for the resolution of any inconsistencies, discrepancies, or disputed issues apparent upon the face of the filed examination report or raised by or as a result of the director's review of relevant work papers or by the written submission or rebuttal of the company. Source: SL 1992, ch 338, 11.
58-3-19. Conducting hearing--Discovery.The director may not appoint an examiner to conduct the hearing in 58-3-18. Discovery by the company is limited to the evidence, materials, and examiner's work papers specifically relating to the company being examined and which tend to substantiate or rebut any assertions set forth in any written submission. The documents produced shall be included in the record and testimony taken shall be under oath and preserved for the record.Nothing contained in this section requires the division to disclose any information or records which would indicate or show the existence or content of any investigation or activity of a criminal justice agency. Source: SL 1992, ch 338, 12.
58-3-2. Examination of alien insurer--Limited extent.Examination of an alien insurer may be limited to its insurance transactions and affairs in the United States. Examination of a reciprocal insurer may also include examination of its attorney in fact in so far as the transactions of the attorney in fact relate to the insurer. Source: SL 1966, ch 111, ch 2, 16 (1).
58-3-20. Use of information discovered during examination for legal or regulatory action.The director may use and make public any final or preliminary examination report, any examiner or company work papers or other documents, or any other information discovered or developed during the course of any examination in the furtherance of any legal or regulatory action. Source: SL 1992, ch 338, 13.
58-3-21. Disclosure of contents of examination report to insurance department or law enforcement agencies--Confidentiality.The director is not prohibited from disclosing the contents of an examination report, preliminary examination report or results, or any matter or documentation relating thereto, to the insurance department of this or any other state or country, or to law enforcement officials of this or any other state or agency of the federal government at any time, if the agency or office receiving the report or matters relating thereto agrees in writing to hold it confidential and in a manner consistent with this chapter. Any examination report, preliminary examiners report or results or any material or documentation relating thereto received by the director from another jurisdiction is confidential unless otherwise indicated by that jurisdiction. Source: SL 1992, ch 338, 14.
58-3-22. Confidentiality of disclosed information--Exceptions--Access by National Association of Insurance Commissioners.All working papers, recorded information, documents, and copies thereof produced by, obtained by, or disclosed to the director or any other person in the course of an examination made under this chapter are confidential and may not be made public by the director or any other person, except to the extent provided in 58-3-14, 58-3-20, and 58-3-21 and in any administrative or court proceeding between the company and the division.Access may also be granted to the National Association of Insurance Commissioners. The parties shall agree in writing prior to receiving the information to hold it confidential unless the prior written consent of the company to which it pertains has been obtained. Source: SL 1992, ch 338, 15.
58-3-23. Preclusion of examiner--Grounds.No examiner may be appointed by the director if the examiner, either directly or indirectly, has a conflict of interest or is affiliated with the management of or owns a pecuniary interest in any person subject to examination under this chapter. This section may not be construed to automatically preclude an examiner from being:(1)A policyholder or claimant under an insurance policy;(2)A grantor of a mortgage or similar instrument on the examiner's residence to a regulated entity if done under customary terms and in the ordinary course of business;(3)An investment owner in shares of regulated diversified investment companies; or(4)A settlor or beneficiary of a "blind trust" into which any otherwise impermissible holdings have been placed. Source: SL 1992, ch 338, 16.
58-3-24. Liability of director or examiner--Liability for communicating or delivering information--Intent.No cause of action may arise nor may any liability be imposed against the director, the director's authorized representatives, or any examiner appointed by the director for any statements made or conduct performed in good faith while carrying out the provisions of this chapter. This section does not abrogate or modify in any way any common law or statutory privilege or immunity enjoyed by any person identified.No cause of action may arise, nor may any liability be imposed against any person for the act of communicating or delivering information or data to the director or the director's authorized representative or examiner pursuant to an examination, if the act of communication or delivery was performed in good faith and without fraudulent intent or the intent to deceive. Source: SL 1992, ch 338, 17.
58-3-25. Implementation of examination report's recommendations.When the examination is adopted and all rights to appeal have passed, the company shall implement the recommendations set forth in the final examination report within a time set by the director. The recommendations are those which are made pursuant to 58-3-11. The director may extend the time for implementation of the recommendation upon the written request of the company and if the company shows good cause for the extension. If the company does not implement the recommendations within the set time frame, the director may fine the company for each recommendation not implemented not more than twenty-five thousand dollars or revoke or suspend the certificate of authority or both. Source: SL 1992, ch 338, 19.
58-3-26. Promulgation of rules for examination.The director may promulgate rules pursuant to chapter 1-26 concerning examinations, forms and procedures for reporting, examiners and their qualifications, investigations and hearing procedures. Source: SL 1992, ch 338, 20.
58-3-27. Application of chapter.This chapter applies to all persons doing insurance business notwithstanding any provision exempting them from the insurance laws of this title. Source: SL 1992, ch 338, 22.
58-3-3.1. Examination assessment fee--Insurance examination fund established for proceeds.Any insurer subject to chapter 58-3 shall pay to the Division of Insurance an annual examination assessment fee of three hundred dollars by March first of each year. There is established within the state treasury the insurance examination fund, into which shall be deposited the proceeds from the examination assessment fees. If the director determines that additional fees are needed to meet the anticipated needs of the examination fund, the director may increase the annual examination assessment fee or levy additional examination assessment fees of up to one hundred fifty dollars per insurer whenever the insurance examination fund falls below fifty thousand dollars. However, the director may not increase the annual examination fee to an amount exceeding one thousand dollars. Source: SL 1997, ch 283, 1; SL 2011, ch 213, 1.
58-3-3.2. Payments from insurance examination fund.All money in the insurance examination fund is continuously appropriated for the purposes specified in this chapter. All costs of examinations, including travel expenses, living expense allowances, and per diem as compensation of examiners shall be paid from the fund. The fund shall also pay the costs of consultants, attorneys, actuaries, accountants, and other experts as shall be determined at the director's discretion to be reasonably necessary to assist in the conduct of the examination or analyses of the financial affairs of insurance companies. Any person so retained shall be under the direction and control of the director and shall act in a purely advisory capacity. Source: SL 1997, ch 283, 2.
58-3-3.3. Reimbursement to agents involved with insurance examinations--Insurer reimbursements.The director may require persons who are not employees of the division who have been retained by the director to conduct or participate in examinations to bill and receive payments directly from the insurance company being examined. An insurer paying the costs of its examination pursuant to 58-3-15 may receive reimbursements from the insurance examination fund upon completion of the examination. Source: SL 1997, ch 283, 3.
58-3-3.4. Application of examination fund to farm mutual insurers and captive insurance companies.The provisions of 58-3-3.1 to 58-3-3.3, inclusive, 58-3-7.4, and 58-3-11 do not apply to farm mutual insurers subject to chapter 58-35 and captive insurance companies subject to chapter 58-46 unless the farm mutual or captive insurance company wrote premiums in excess of one million dollars in the prior calendar year. Source: SL 1997, ch 283, 6; SL 2004, ch 297, 1; SL 2013, ch 257, 29.
58-3-3. Applicant for initial certificate of authority to do insurance business in state--Examination by director.The director shall examine each insurer or rating organization receiving an initial certificate of authority to do business in this state within one year from the date of the licensure except those qualifying under 58-3-4 and 58-6-13. Source: SL 1966, ch 111, ch 2, 16 (2); SL 1992, ch 338, 3.
58-3-4. Examination of foreign or alien insurer or rating organization by insurance supervisory official of another state--Examination by director unnecessary--Accreditation of examiner.In lieu of making his own examination, the director may, in his discretion, accept a full report of the last recent examination of a foreign or alien insurer, or rating organization, certified to by the insurance supervisory official of another state, territory, commonwealth, or district of the United States.Beginning January 1, 1994, these examinations may only be accepted if the state insurance agency was at the time of the examination accredited under the National Association of Insurance Commissioners' Financial Regulation Standards and Accreditation Program or the examination is performed under the supervision of an accredited state insurance agency or with the participation of one or more examiners who are employed by an accredited state insurance agency and who, after a review of the examination work papers and report, state under oath that the examination was performed in a manner consistent with the standards and procedures required by their own state insurance agency. Source: SL 1966, ch 111, ch 2, 16 (3); SL 1992, ch 338, 4.
58-3-5. Examination of agents, managers, and promoters.For the purpose of ascertaining compliance with this title, the director may as often as the director deems advisable examine the accounts, records, documents, and transactions, pertaining to or affecting its insurance affairs or proposed insurance affairs, of:(1)Any insurance producer, surplus line broker, or general agent;(2)Any person having a contract under which the person enjoys in fact the exclusive or dominant right to manage or control an insurer;(3)Any person holding the shares of voting stock or policyholder proxies of a domestic insurer, for the purpose of controlling the management thereof, as voting trustee or otherwise;(4)Any person engaged in or proposing to be engaged in or assisting in the promotion or formation of a domestic insurer or insurance holding corporation, or corporation to finance a domestic insurer or the production of its business. Source: SL 1966, ch 111, ch 2, 17; SL 2001, ch 286, 61.
58-3-6. Place where examination conducted.The director shall conduct any such examination at the home office, if a domestic or foreign insurer, or United States branch office, if an alien insurer, of the insurer, or in any of its branch or agency offices; or with respect to persons other than insurers, at the office or other place of business of such person or at any place where his records are kept. Source: SL 1966, ch 111, ch 2, 18 (1).
58-3-7.1. Observance of guidelines and procedures by examiner.The examiner shall observe those guidelines and procedures set forth in the Examiners Handbook adopted by the National Association of Insurance Commissioners as adopted by rule by the director pursuant to chapter 1-26. The director may also establish additional guidelines or procedures the director considers appropriate. Source: SL 1992, ch 338, 5; SL 1993, ch 357, 1; SL 1995, ch 273, 2.
58-3-7.2. Penalty upon refusal to submit to examination--Suspension, refusal of, or nonrenewal of, license.The refusal of any company, by its officers, directors, employees, or insurance producers, to submit to examination or to comply with any reasonable written request of the examiners constitutes grounds for suspension or refusal of, or nonrenewal of any license or authority held by the insurer or person to engage in an insurance or other business subject to the director's jurisdiction. Source: SL 1992, ch 338, 6; SL 2001, ch 286, 63.
58-3-7.3. Examination under oath--Authority of director or examiner.The director or any examiner authorized by the director may issue subpoenas, administer oaths, and examine under oath any person as to any matter pertinent to the examination. Subpoenas may be enforced pursuant to chapters 1-26, 15-6, and 21-34. Source: SL 1992, ch 338, 7.
58-3-7.4. Insurer's claim files subject to examination--File maintenance requirements.Each insurer's claim files for policies or certificates are subject to examination pursuant to chapter 58-3 by the director of insurance. To aid in the examination:(1)The insurer shall maintain claim data that is accessible and retrievable for examination. An insurer shall be able to provide the claim number, line of coverage, date of loss, and date of payment of the claim, date of denial, or date closed without payment. This claim data shall be available for all open and closed files for five years;(2)Detailed documentation shall be contained in each claim file in order to permit reconstruction of the insurer's activities relative to each claim;(3)Each relevant document within the claim file shall be noted as to date received, date processed, or date mailed. Dated correspondence is sufficient to document the date mailed for the purposes of this subdivision;(4)For those insurers that do not maintain hard copy files, claim files shall be accessible from a computer, microfilm, Cathode Ray Tube (CRT), micrographics, or other similar electronic means and be capable of duplication to hard copy; and(5)Claim information obtained in a telephone conversation or personal interview with any source which is used in the claim determination shall be documented in the claim file. Source: SL 1997, ch 283, 5; SL 2009, ch 257, 1.
58-3-7. Information to be available--Cooperation of persons being examined.Every person being examined, its officers, employees, insurance producers, and representatives shall produce and make freely available to the director or the director's examiners the accounts, records, documents, files, assets, and other relevant information in their possession or control relating to the subject of the examination, and shall otherwise facilitate and aid the examination as far as reasonably possible. Source: SL 1966, ch 111, ch 2, 18 (2); SL 2001, ch 286, 62; SL 2012, ch 241, 1.
58-3-8. Examination disclosing inadequate records--Correction of accounts.If the director finds accounts to be inadequate, or inadequately kept or posted, he may employ experts to rewrite, post, or balance them at the expense of the person being examined if such person has failed to complete or correct such accounting after the director has given him notice and a reasonable opportunity to do so. Source: SL 1966, ch 111, ch 2, 18 (3).
58-3-9. Valuation of real estate involved in examination--Appraisers, appointment, prompt appraisal, report--Expense of appraisal, liability of person examined.If the director deems it necessary to value any real estate involved in any such examination, he may make written request of the person being examined to appoint one or more competent appraisers approved by the director, for the purpose of appraising such property. If no such appointment is made within ten days after such request is delivered to such person, the Department of Labor and Regulation may appoint the appraiser or appraisers. Any such appraisal shall be made promptly, and a copy of the report thereof shall be furnished to the director. The reasonable expense of the appraisal shall be borne by the person being examined. Source: SL 1966, ch 111, ch 2, 18 (4); SL 2003, ch 272 (Ex. Ord. 03-1), 20; SL 2011, ch 1 (Ex. Ord. 11-1), 162, eff. Apr. 12, 2011.
58-4-15. Orders and notices of director required to be in writing--Signature.Orders and notices of the director shall not be effective unless in writing signed by him or by his authority. Source: SL 1966, ch 111, ch 2, 15 (1).
58-4-16. Order of director--Effective date--Contents.Every such order shall state its effective date and shall concisely state:(1)Its intent or purpose;(2)The grounds on which based; and(3)The provisions of this title pursuant to which action is so taken or proposed to be taken, but failure to so designate a particular provision shall not deprive the director of the right to rely thereon. Source: SL 1966, ch 111, ch 2, 15 (2).
58-4-17. Service of orders and notices of director.An order or notice may be given by delivery to the person to be ordered or notified or by mailing it, postage prepaid, addressed to him at his principal place of business as last of record in the director's office. Source: SL 1966, ch 111, ch 2, 15 (3).
58-4-18. Prosecution of action for enforcement of director's order.The director shall prosecute an action in any court of proper venue to enforce any order made by him pursuant to the provisions of this title. Source: SL 1966, ch 111, ch 2, 12 (2).
58-4-25. Formal rules of pleading or evidence not observed at director's hearing.Formal rules of pleading or evidence need not be observed at any hearing. Source: SL 1966, ch 111, ch 2, 24 (3).
58-4-28.1. Money penalty in lieu of license suspension or other action--Hearing.In any case in which the director has the power to deny an application or registration, or to revoke, refuse to renew, or suspend the license of any insurance producer, administrator, licensee, or entity required to be registered under this title, or the certificate of authority of any insurance company or health maintenance organization, the director may impose a specified money penalty to be paid within a specified time in lieu of a license suspension or other permitted action. No penalty may be imposed under this section prior to a hearing conducted pursuant to chapter 1-26 unless the applicant, licensee, or registrant agrees to the penalty in writing.The money penalty may not exceed five thousand dollars for an insurance producer or twenty-five thousand dollars for an insurer, administrator, health maintenance organization, licensee, or registrant for each offense. Source: SL 1971, ch 273; SL 1974, ch 308; SL 2000, ch 235, 1; SL 2001, ch 286, 66; SL 2014, ch 233, 1.
58-4-39. Standards for determining hazardous financial condition.The director shall promulgate rules, pursuant to chapter 1-26, setting forth standards for determining the hazardous financial condition of an insurer under this title. Source: SL 1992, ch 339, 1.
58-4-40. Authority of director in determining insurer's financial condition.In making a determination of an insurer's financial condition, the director may:(1)Disregard any credit or amount receivable resulting from transactions with a reinsurer which is insolvent, impaired, or subject to a delinquency proceeding;(2)Make appropriate adjustments to asset values attributable to investments in or transactions with parents, subsidiaries, or affiliates;(3)Refuse to recognize the stated value of accounts receivable if the ability to collect receivables is highly speculative in view of the age of the account or the financial condition of the debtor;(4)Increase the insurer's liability in an amount equal to any contingent liability, pledge, or guarantee not otherwise included if there is a substantial risk that the insurer will be called upon to meet the obligation undertaken within the next twelve-month period; or(5)Consider the harm to policyholders, creditors, the public, and the company itself. Source: SL 1992, ch 339, 2.
58-4-41. Director's order to hazardous insurer.If the director determines that the continued operation of an insurer licensed to transact business in this state may be hazardous to the policyholders, the creditors, or the general public, then the director may issue an order stating the reasons for the determination and requiring the insurer to:(1)Reduce the total amount of present and potential liability for policy benefits by reinsurance;(2)Reduce, suspend, or limit the volume of business being accepted or renewed;(3)Reduce general insurance and commission expenses by specified methods;(4)Increase the insurer's capital and surplus;(5)Suspend or limit the declaration and payment of dividend by an insurer to its stockholders or to its policyholders;(6)File reports in a form acceptable to the director concerning the market value of an insurer's assets;(7)Limit or withdraw from certain investments or discontinue certain investment practices to the extent the director deems necessary;(8)Document the adequacy of premium rates in relation to the risks insured;(9)File, in addition to regular annual statements, interim financial reports on the form adopted by the national association of insurance commissioners or in a format as promulgated by the director;(10)Correct corporate governance practice deficiencies, and adopt and utilize governance practices acceptable to the director;(11)Provide a business plan to the director in order to continue to transact business in the state; or(12)Notwithstanding any other provision of law limiting the frequency or amount of premium rate adjustments, adjust rates for any nonlife insurance product written by the insurer that the director determines necessary to improve the financial condition of the insurer.If the insurer is a foreign insurer, the director's order may be limited to the extent provided by statute. Source: SL 1992, ch 339, 3; SL 2013, ch 244, 1.
58-4-42. Hearings on director's orders.Any insurer subject to an order under 58-4-41 may request a hearing to review that order. The request shall be in writing and shall be made within ten days of the date of receipt of the order. The notice of hearing shall be served upon the insurer. Unless mutually agreed between the director and the insurer, the hearing shall occur not less than ten days nor more than thirty days after notice is served and shall be in Hughes County. The director shall hold all hearings under this section privately, unless the insurer requests a public hearing in which case the hearing shall be public. Source: SL 1992, ch 339, 4.
58-4-43. Application of hazardous insurer provisions.Sections 58-4-39 to 58-4-42, inclusive, apply to all insurers or persons doing insurance business notwithstanding any provision which exempts them from the insurance laws of this title. Source: SL 1992, ch 339, 5.
58-4-44. Investigation of insurance business--Withholding report from public inspection--Timely completion--Notice of closing investigation or final action.The director may investigate any person doing insurance business. The director may withhold from public inspection any examination or investigation report for so long as the director deems such withholding to be necessary for the protection of the person examined or investigated against unwarranted injury or to be in the public interest. The director shall complete any investigation in a timely manner. Any investigation not completed within twenty-four months shall be presented to the secretary of labor and regulation. If, after sixty days, the secretary has not completed the investigation, the secretary shall forward the matter to the attorney general who shall review the file and make recommendations to the secretary for the purpose of ensuring final action is taken concerning the investigation. If the Division of Insurance has given notice of a pending investigation to any person or legal entity, the division shall notify any such person or legal entity that the investigation is closed or final action has been taken. Source: SL 1992, ch 340, 1; SL 2006, ch 250, 1; SL 2011, ch 1 (Ex. Ord. 11-1), 162, eff. Apr. 12, 2011.
58-4-45. Confidentiality of certain documents.Internal memoranda and telephone notes or logs of division personnel are confidential. Medical records are confidential. Source: SL 1992, ch 340, 2.
58-4-46. Liability for release of information.Any person or corporation governed by this title providing information to the Division of Insurance is not liable for the release or subsequent use of such information. Source: SL 1992, ch 340, 3.
58-4-47. Sharing and use of confidential information with other regulatory officials--Cooperation with National Association of Insurance Commissioners.The division shall allow for the sharing of otherwise confidential information, administrative or judicial orders, or other action with other state, federal, and international regulatory officials if those officials are statutorily required to maintain its confidentiality. The division shall cooperate and share all information with respect to domestic companies with other state, federal, and international regulators including committees established by the National Association of Insurance Commissioners which may be reviewing and coordinating regulatory oversight and activities. The division shall also cooperate and share information with respect to domestic companies subject to delinquency proceedings. The division may receive documents, materials, or information, including otherwise confidential and privileged documents, materials, or information from the National Association of Insurance Commissioners, its affiliates, or subsidiaries and from regulatory and law enforcement officials of other foreign or domestic jurisdictions. The division shall maintain as confidential or privileged any document, material, or information received with notice or the understanding that it is confidential or privileged under the laws of the jurisdiction that is the source of the document, material, or information. The director may use the documents, materials, or other information in the furtherance of any regulatory function or legal action brought as a part of the director's duties. Source: SL 1995, ch 274; SL 2007, ch 294, 5.
58-4-48. Minimum levels of risk-based capital required--Administrative rules.Any life and health and property and casualty insurer, and any insurer subject to chapters 58-37A, 58-38, 58-39, 58-40, and 58-41, domiciled in this state shall maintain minimum levels of risk-based capital to transact the business of insurance in this state. Each life and health and property and casualty domestic insurer, and any insurer subject to chapters 58-37A, 58-38, 58-39, 58-40, and 58-41, shall file with the director, on or before March first of each year, a report disclosing the insurer's level of risk-based capital. Any foreign life and health and property and casualty insurer, and any insurer subject to chapters 58-37A, 58-38, 58-39, 58-40, and 58-41, shall file a similar report upon the request of the director. The director of the Division of Insurance may promulgate rules, pursuant to chapter 1-26, regarding the filing of risk-based capital reports, the establishment of various minimum levels of risk-based capital requirements, the criteria and standards for which an insurer shall be required to submit a risk-based capital plan, the director's authority to revise or adopt the insurer's risk-based capital report or plan, the opportunity for hearing regarding the director's decision to revise an insurer's risk-based capital report or plan, the director's authority to require corrective actions, the confidentiality of risk-based capital reports and plans, and the exemption of certain insurers from the requirements of this section. The director may promulgate rules, pursuant to chapter 1-26, concerning the filing of risk-based capital reports to assist the director in the evaluation of the hazardous financial condition of an insurer pursuant to 58-4-39. Source: SL 1996, ch 289; SL 2001, ch 269, 1.
58-4-49. Disclosure of status, existence, or outcome of investigation or examination.The status, existence, or outcome of any ongoing or completed investigation or examination performed pursuant to this title may be disclosed by the director to any person who has filed a complaint or report to the director pertaining to the specific investigation or examination. The director may disclose the following information to any person identified by this section:(1)Any remedial actions agreed to by a licensee being investigated or examined;(2)Any remedial actions ordered by the director as a result of an examination or investigation; or(3)Any other such information as the parties to the remedial action may agree to release in writing.The director may also disclose the above information to any policyholder who contacts the director and who is directly affected by any action listed above. Confidential information shared with the director may not be disclosed. However, nothing in this section prevents the director from providing a copy of licensee responses or other materials submitted by a licensee to complaints or inquiries if the response or materials are not specifically marked confidential. Sections 58-4-49 to 58-4-54, inclusive, do not apply to investigations conducted pursuant to chapter 58-4A. Source: SL 2012, ch 242, 1; SL 2014, ch 234, 1.
58-4-5. Enforcement proceedings instituted by director.The director shall institute such suits or other legal proceedings as may be required for the enforcement of any provisions of this title. Source: SL 1966, ch 111, ch 2, 12 (1).
58-4-50. Definitions.Terms used in 58-4-50 to 58-4-54, inclusive, mean:(1)"Return information," any information collected, prepared or received by the division which relates to a return, including the nature or amount of a taxpayer's income, receipts, deductions, net worth, tax liability, or deficiencies, or any part of any written determination or background file documents relating to such information. The term does not include data in a form which cannot be associated with or otherwise identify, directly or indirectly, a particular taxpayer;(2)"Returns," all tax returns, tax reports or claims for refund which are filed with the division. Source: SL 2012, ch 242, 2.
58-4-51. Confidentiality of list of premium taxpayers--Violation as misdemeanor.Each list of premium taxpayers compiled by the division is confidential. It is a Class 2 misdemeanor to disclose any list except to the extent necessary to carry out the official duties of the division. Source: SL 2012, ch 242, 3.
58-4-52. Confidentiality of premium tax return and return information--Violation as misdemeanor.A premium tax return and premium tax return information is confidential. It is a Class 1 misdemeanor to disclose this information except pursuant to 58-4-50 to 58-4-54, inclusive. Source: SL 2012, ch 242, 4.
58-4-53. Disclosure of premium tax return and information to taxpayer.A premium tax return and premium tax return information may be disclosed to the following:(1)The taxpayer who is required to submit the information to the division, or his designee appointed in writing; or(2)As otherwise authorized by Title 58. Source: SL 2012, ch 242, 5.
58-4-54. Disclosure of premium tax return and return information in judicial or administrative proceeding.A premium tax return and premium tax return information may be disclosed in a judicial or administrative proceeding:(1)If the information is directly related to the resolution of an issue in the proceeding; or(2)To the extent required by a judicial or administrative order. Source: SL 2012, ch 242, 6.
58-4-6. Proceedings instituted by director--Legal representation.The director shall be represented by the attorney general, his assistants, or by such other attorney at law as may be designated by the attorney general. Source: SL 1966, ch 111, ch 2, 12 (3).
58-4-7. Cease and desist order to prevent violations of title--Injunction.If the director of the Division of Insurance believes, from substantial evidence, that any person is violating or about to violate any provision of this title or any order or requirement of the director issued or promulgated pursuant to authority expressly granted by law, the director may issue a temporary cease and desist order pending a hearing pursuant to chapter 1-26. The order shall set the time and place for hearing not less than ten days nor more than twenty days from the date of the order. The director may also bring an action in the name of the state against such person to enjoin that person from continuing the violation or engaging therein, or doing any act in furtherance thereof. In such action an order or judgment may be entered awarding such temporary or permanent injunction as is proper. Source: SL 1966, ch 111, ch 32, 6; SL 1978, ch 155, 25; SL 1985, ch 385, 1.
58-4-9. Hearings by director--Purpose.The director may hold hearings for any purpose within the scope of this title deemed by him to be necessary. Source: SL 1966, ch 111, ch 2, 21 (1).
58-4A-1. Definition of terms.Terms used in 58-4A-1 to 58-4A-17, inclusive, mean:(1)"Insurer," in addition to those persons defined under subdivision 58-1-2(12), any person or entity transacting insurance with or without a certificate of authority issued by the director of insurance. The term also means health maintenance organizations, legal service insurance corporations, prepaid limited health service organizations, dental and other similar health service plans, and, notwithstanding subdivision 58-1-3(1), fraternal benefit societies;(2)"Statement," includes any application for insurance, notice, statement, proof of loss, denial, bill of lading, receipt for payment, invoice, account, estimate of property damages, bill for services, diagnosis, prescription, hospital or medical records, X-rays, test results, or other evidence of loss, injury, or expense, whether oral, written, or computer-generated; and(3)"Designee," the Department of Labor and Regulation, the attorney general, any state's attorney, any duly constituted criminal investigative department or agency of the State of South Dakota or of the United States, any county or municipal law enforcement agency having investigative jurisdiction, and any other person whose services are contracted for by the insurance fraud prevention unit. Source: SL 1999, ch 241, 1; SL 2003, ch 272 (Ex. Ord. 03-1), 20; SL 2011, ch 1 (Ex. Ord. 11-1), 162, eff. Apr. 12, 2011.
58-4A-10. Consent agreement not prohibited.Notwithstanding any other section of this chapter, the unit or its designees, and a person alleged to have committed a fraudulent insurance act as set forth in 58-4A-2, are not prohibited from entering into a written agreement upon commencement of a civil action in which the person alleged to have committed a fraudulent insurance act does not admit or deny the charges but consents to payment of the civil penalty. Source: SL 1999, ch 241, 10.
58-4A-11. Unit governed by chapter.For purposes of investigating and prosecuting insurance fraud, the insurance fraud prevention unit is subject to the provisions of this chapter and the procedures set forth in Title 15 or Title 23A if applicable and if not in conflict with this chapter. Source: SL 1999, ch 241, 11.
58-4A-12. Records and files confidential--Investigator not subject to subpoena in civil matter--Exceptions.All investigative records and files of the insurance fraud prevention unit are confidential. The investigative records of the insurance fraud prevention unit may not be released except pursuant to a court order. An investigator is not subject to subpoena in civil actions concerning any matter of which the investigator has knowledge regarding a pending insurance fraud investigation by the division, unless so ordered by the court. Source: SL 1999, ch 241, 12.
58-4A-13. Immunity for persons furnishing information in good faith--Costs assessed against person acting not in good faith--Other privileges and immunities not abrogated.Any person acting in good faith is immune from civil liability for filing a report with or for furnishing any information relating to suspected, anticipated, or completed fraudulent insurance acts to:(1)The Department of Labor and Regulation and the director of insurance;(2)Any governmental agency established to detect and prevent fraud;(3)Law enforcement officials;(4)Deleted by SL 2011, ch 1 (Ex. Ord. 11-1), 162;(5)Any insurer or insurance producer;(6)The National Association of Insurance Commissioners; and(7)Any nonprofit organization established to detect and prevent insurance fraud, if the organization is approved by the director pursuant to rules promulgated by the director under chapter 1-26 setting forth the standards, criteria, and procedures necessary to obtain approval.If a civil action is commenced against a person for damages related to the filing of a report or the furnishing of information under this section and the court determines that the person acted in good faith in filing the report or furnishing the information, the person filing the report or furnishing the information may recover costs or disbursements under chapter 15-17, including reasonable attorney's fees.If the trier of fact concludes that the person filing the report or furnishing the information was not acting in good faith, the person filing a civil action may recover costs or disbursements under chapter 15-17, including reasonable attorney's fees.This section does not abrogate or modify in any way any common law or statutory privilege or immunity. Source: SL 1999, ch 241, 13; SL 2001, ch 286, 68; SL 2003, ch 272 (Ex. Ord. 03-1), 20; SL 2011, ch 1 (Ex. Ord. 11-1), 162, eff. Apr. 12, 2011.
58-4A-14. Insurance fraud prevention unit fund--Assessment of insurers--Conditions--Failure to pay as grounds for administrative action.The Division of Insurance shall assess each insurer holding a certificate of authority to transact the business of insurance in this state a fee of two hundred fifty dollars to be remitted and payable to the Division of Insurance to be deposited in a separate account, entitled the insurance fraud prevention unit fund. The Division of Insurance may not make an assessment until the fund falls below one hundred thousand dollars. If the fund falls below one hundred thousand dollars, the Division of Insurance shall notify each insurer of its payment obligation. Upon receipt of the notice of assessment from the Division of Insurance each insurer shall immediately make a two hundred fifty dollar payment to the fund. Failure of an insurer to submit full payment of the assessment to the division within twenty days of receipt of the notice of assessment, unless good cause is shown, may be grounds for administrative action to be taken by the division against an insurer. Source: SL 1999, ch 241, 14.
58-4A-15. Limitations of chapter.The provisions of this chapter do not:(1)Preempt the authority or relieve the duty of any other law enforcement agency to investigate, examine, and prosecute suspected violations of law;(2)Prevent or prohibit a person from voluntarily disclosing any information concerning insurance fraud to any law enforcement agency;(3)Limit any of the powers granted elsewhere by the laws of this state to the director of insurance or the Division of Insurance to investigate and examine possible violations of law and to take appropriate action; or(4)Limit any of the powers granted elsewhere by the laws of this state to any state agency to investigate and examine possible violations of law and to take appropriate action. Source: SL 1999, ch 241, 15.
58-4A-16. Annual report to Legislature--Contents.The Division of Insurance shall annually report to the Legislature concerning the activities of the insurance fraud prevention unit including the number, type, and outcome of cases investigated, the number and type of cases that have been pending without final action for more than twelve months, and the costs and expenditures incurred during such investigations. Source: SL 1999, ch 241, 16; SL 2006, ch 250, 2.
58-4A-17. Insurer to reevaluate rates for possible reduction in light of impact of fraud prevention.Each authorized insurer shall, every three years after July 1, 1999, reevaluate its rates based upon the impact that fraud prevention has had upon its rates, considering the impact of 58-4A-1 to 58-4A-17, inclusive, and the impact of any fraud prevention units of the insurer or other fraud prevention organization and appropriate accumulated data and, if justified by the insurer's actuary, reduce its rates. Source: SL 1999, ch 241, 17.
58-4A-2. Fraudulent insurance acts--Certain violations as misdemeanor--Certain violations as felony.For purposes of this chapter, a person commits a fraudulent insurance act if the person:(1)Knowingly and with intent to defraud or deceive issues or possesses fake or counterfeit insurance policies, certificates of insurance, insurance identification cards, or insurance binders;(2)Is engaged in the business of insurance, whether authorized or unauthorized, receives money for the purpose of purchasing insurance and converts the money to the person's own benefit or for a purpose not intended or authorized by an insured or prospective insured;(3)Willfully embezzles, abstracts, steals, misappropriates, or converts money, funds, premiums, credits, or other property of an insurer or person engaged in the business of insurance or of an insured or prospective insured;(4)Knowingly and with intent to defraud or deceive makes any false entry of a material fact in or pertaining to any document or statement filed with or required by the Division of Insurance;(5)Knowingly and with intent to defraud or deceive removes, conceals, alters, diverts, or destroys assets or records of an insurer or other person engaged in the business of insurance or attempts to remove, conceal, alter, divert, or destroy assets or records of an insurer or other person engaged in the business of insurance;(6)Knowingly and with intent to defraud or deceive presents, causes to be presented, or prepares with knowledge or belief that it will be presented to or by an insurer, or any insurance producer of an insurer, any statement as part of a claim, in support of a claim, or in denial of a claim for payment or other benefit pursuant to an insurance policy knowing that the statement contains any false, incomplete, or misleading information concerning any fact or thing material to a claim;(7)Assists, abets, solicits, or conspires with another to prepare or make any statement that is intended to be presented to or by an insurer or person in connection with or in support of any claim for payment or other benefit, or denial, pursuant to an insurance policy knowing that the statement contains any false, incomplete, or misleading information concerning any fact or thing material to the claim; or(8)Makes any false or fraudulent representations as to the death or disability of a policy or certificate holder in any statement or certificate for the purpose of fraudulently obtaining money or benefit from an insurer.Any violation of this section for an amount of four hundred dollars or less is a Class 2 misdemeanor. Any violation of this section for an amount in excess of four hundred dollars and less than one thousand dollars is a Class 1 misdemeanor. Any violation of this section for an amount of one thousand dollars and greater is a Class 4 felony. Any other violation of this section is a Class 1 misdemeanor. Source: SL 1999, ch 241, 2; SL 2001, ch 286, 67; SL 2006, ch 130, 20.
58-4A-3. Powers of insurance fraud prevention unit.The insurance fraud prevention unit through its investigator or attorney may do the following:(1)The investigator or attorney may initiate and conduct independent investigations if the unit has cause to believe that a fraudulent insurance act has been or may be committed;(2)The investigator or attorney may review reports or complaints of alleged fraudulent insurance acts to determine whether such reports require further investigation and to conduct such investigation;(3)The investigator or attorney may undertake independent studies to determine the extent of fraudulent insurance acts;(4)The investigator or attorney may promote awareness of insurance fraud through educational seminars and other education programs for the insurance industry and the general public;(5)The attorney, subject to applicable criminal or civil law and procedure, may prosecute fraudulent insurance acts on behalf of the state through criminal and civil proceedings; and(6)The investigator or attorney may cooperate with federal, state, and local law enforcement, prosecuting attorneys, and the attorney general in the investigation and prosecution of fraudulent insurance acts. Source: SL 1999, ch 241, 3.
58-4A-4. Insurance fraud prevention unit--Purpose--Composition.In order to investigate and prosecute activities involving fraudulent insurance acts, the attorney general shall employ a sufficient staff to be known as the insurance fraud prevention unit which shall include a minimum of one clerical employee, one investigator, and one attorney. Source: SL 1999, ch 241, 4; SL 2013, ch 245, 1.
58-4A-5. Criminal and civil prosecutions--Unit attorney appointed assistant attorney general--Costs of prosecution.The insurance fraud prevention unit may prosecute fraudulent insurance acts through criminal or civil proceedings. The attorney general may appoint the insurance fraud prevention unit attorney as an assistant attorney general for purposes of prosecuting cases of fraudulent insurance acts. The unit attorney may have all the powers attributed to the insurance fraud prevention unit in 58-4A-3. The unit attorney may refer or request assistance from other persons delineated in subdivision 58-4A-1(3) for the prosecution of fraudulent acts, including access to records. All costs associated with the prosecution of fraudulent insurance acts, including those incurred by designees assisting or acting on behalf of the insurance fraud prevention unit, may be paid by the insurance fraud prevention unit fund. Source: SL 1999, ch 241, 5; SL 2013, ch 245, 2.
58-4A-6. Unit investigators--Qualifications--Powers--Costs of investigation.The insurance fraud prevention unit investigators may investigate violations of this chapter. The unit investigators shall be qualified pursuant to the requirements of 23-3-41, 23-3-42, and 23-3-44 and have all the powers and authority of law enforcement officers while performing duties pursuant to this chapter. The insurance fraud prevention unit may refer or request assistance from persons delineated in subdivision 58-4A-1(3) for the investigation of fraudulent insurance acts, including access to records. All costs associated with the investigation of fraudulent insurance acts, including those incurred by designees assisting or acting on behalf of the insurance fraud prevention unit, may be paid by the insurance fraud prevention unit fund. Source: SL 1999, ch 241, 6; SL 2013, ch 245, 3.
58-4A-7. Civil penalties--Disposition of penalties collected--Civil action in lieu of criminal prosecution.If the insurance fraud prevention unit or its designees initiate civil action against any person and that person is found by a court of competent jurisdiction to have committed a fraudulent insurance act as set forth in 58-4A-2, that person is subject to a civil penalty not to exceed five thousand dollars for the first violation, ten thousand dollars for the second violation, and fifteen thousand dollars for each subsequent violation. Civil penalties paid under this section shall be deposited in the insurance fraud prevention unit fund. An action under this section may be in lieu of criminal prosecution under the laws of this state. Source: SL 1999, ch 241, 7; SL 2013, ch 245, 4.
58-4A-8. Operational costs of unit.Any costs associated with the administration and operation of the insurance fraud prevention unit, including salaries and the costs set forth in 58-4A-5 and 58-4A-6, shall be paid from the insurance fraud prevention unit fund. All disbursements from the insurance fraud prevention unit fund shall be continuously appropriated. Source: SL 1999, ch 241, 8.
58-4A-9. Expenses recoverable--Disposition of recovered costs--Compensation to person in interest.Costs and expenses incurred in any investigation or other action arising out of a violation under this chapter may be sought in any judgment or court decree. Any recovered costs, except civil or criminal penalties, shall be deposited by the unit or its designees in the insurance fraud prevention unit fund. The court may make such additional orders or judgments as may be necessary to restore to any person in interest any compensation which may have been acquired by means of any act prohibited in 58-4A-2. Source: SL 1999, ch 241, 9.
58-5-1. Scope of chapter.This chapter shall apply only to domestic stock insurers and domestic mutual insurers transacting or proposing to transact insurance on the cash premium or legal reserve plan, except that 58-5-27, 58-5-28, 58-5-37, and 58-5-38 shall also apply to foreign and alien insurers. Source: SL 1966, ch 111, ch 16, 1.
58-5-10. Disapproval of articles by attorney general--Statement of reasons--Returned to incorporators.If the attorney general does not approve such articles, he shall return the same to the director with a written statement of his reasons for disapproval. The director shall return all sets of the articles with such written statement to the incorporators. Source: SL 1966, ch 111, ch 16, 7 (3).
58-5-100. Solicitation by domestic insurer in reciprocating state in which it has no license prohibited.No domestic insurer or insurance producer thereof may knowingly solicit insurance business in any reciprocating state in which it is not then licensed as an authorized insurer. Source: SL 1966, ch 111, ch 16, 28 (1); SL 2001, ch 286, 70.
58-5-101. Advertising through publications and broadcasts originating outside reciprocating state not prohibited.Section 58-5-100 shall not prohibit advertising through publication and radio, television, and other broadcasts originating outside such reciprocating state, provided such advertising is not specifically directed to residents of such reciprocating state. Source: SL 1966, ch 111, ch 16, 28 (2).
58-5-102. Insurance in reciprocating state under contracts issued in state in which licensed not prohibited--Policies issued as an unauthorized insurer permitted under laws of reciprocating state not prohibited.Section 58-5-100 shall not prohibit insurance covering persons or risks located in a reciprocating state under contracts solicited and issued in states in which the insurer is then licensed, nor shall it prohibit insurance policies issued by the insurer as an unauthorized insurer if permitted in accordance with the laws of the reciprocating state. Source: SL 1966, ch 111, ch 16, 28 (3).
58-5-103. Suspension or revocation of certificate of authority for violation by domestic insurer.The director of the Division of Insurance shall, after a hearing, suspend or revoke the certificate of authority of a domestic insurer found by him to have violated 58-5-100. Source: SL 1966, ch 111, ch 16, 28 (5).
58-5-104. Participating policies--Issuance authorized by articles of domestic insurer--Nondiscrimination between policyholders.If provided in its articles of incorporation, a domestic insurer may issue and classify policies with or without participation in profits, savings, or unabsorbed portions of premiums and determine the right to participate and the extent of participation of any class or classes of policies. Any such classification or determination shall be reasonable, and shall not discriminate between policyholders within the same classification. A life insurer may issue both participating and nonparticipating policies only if the right or absence of right to participate is reasonably related to the premium charged. Source: SL 1966, ch 111, ch 16, 32 (1).
58-5-105. Continued issuance of participating policies without authorization in articles.Any domestic insurer which, prior to July 1, 1966, had been issuing all or part of its policies on a participating basis without authorization in its articles of incorporation, may continue to issue such policies. Source: SL 1966, ch 111, ch 16, 32 (1).
58-5-106. Dividends on participating policies not contingent on renewal premiums.After the third policy year, no dividend otherwise earned shall be made contingent upon the payment of a renewal premium on any participating policy. Source: SL 1966, ch 111, ch 16, 32 (2).
58-5-107. Participating policyholder as member.Wherever, in any statutory provision, there is use of the word "member" as applying to a mutual and stock insurance company, the same shall be construed as meaning a participating policyholder of such company and shall have no connotation of membership in such company as when used with reference to mutual insurers. Source: SL 1966, ch 111, ch 16, 19.
58-5-108. Borrowed surplus of domestic stock or mutual insurer--Agreement to repay, interest.A domestic stock or mutual insurer may borrow money to defray the expenses of its organization, provide it with surplus funds, or for any purpose of its business, upon a written agreement that such money shall be repaid only out of the insurer's surplus in excess of that stipulated in such agreement. The agreement may provide for the interest rate to be negotiated between the borrower and the lender, which interest shall or shall not constitute a liability of the insurer as to its funds other than such excess of surplus, as stipulated in the agreement. No commission or promotion expense shall be paid in connection with any such loan. Source: SL 1966, ch 111, ch 16, 34 (1); SL 1980, ch 351.
58-5-109. Approval of loan and agreement by director--Disapproval of proposed loan or agreement, grounds.Any loan pursuant to 58-5-108 shall be subject to the approval of the director of the Division of Insurance. The insurer shall, in advance of the loan, file with the director a statement of the purpose of the loan and a copy of the proposed loan agreement. The loan and agreement shall be deemed approved unless within fifteen days after date of such filing the insurer is notified of the director's disapproval and the reasons therefor. The director shall disapprove any proposed loan or agreement if he finds the loan is unnecessary or excessive for the purpose intended, or that the terms of the loan agreement are not fair and equitable or that the information so filed by the insurer is inadequate. Source: SL 1966, ch 111, ch 16, 34 (3).
58-5-11. Amendment of articles of incorporation--Submission and filing.Amendments to the articles of incorporation shall be submitted and filed in the same manner as articles of incorporation in 58-5-8 to 58-5-10, inclusive, and shall be in compliance with the provisions of this title, the bylaws of such corporation and the laws of this state. Source: SL 1966, ch 111, ch 16, 8 (1).
58-5-110. Legal liabilities of insurer on borrowed funds--Disclosure in financial statement.Money borrowed pursuant to 58-5-108, together with the interest thereon if so stipulated in the agreement, shall not form a part of the insurer's legal liabilities except as to its surplus in excess of the amount thereof stipulated in the agreement, or be the basis of any setoff; but until repaid, financial statements filed or published by the insurer shall show as a footnote thereto the amount thereof then unpaid together with any interest thereon accrued but unpaid. Source: SL 1966, ch 111, ch 16, 34 (2).
58-5-111. Repayment of loan by domestic insurer.Any loan pursuant to 58-5-108 or substantial portion thereof shall be repaid by the insurer, upon the director's prior approval, when no longer reasonably necessary for the purpose originally intended. Source: SL 1966, ch 111, ch 16, 34 (4).
58-5-112. Provisions as to borrowed surplus inapplicable to loans in ordinary course of business or secured by pledge or mortgage.Sections 58-5-108 to 58-5-111, inclusive, shall not apply to loans obtained by an insurer in the ordinary course of business from banks and other financial institutions, nor to loans secured by pledge or mortgage of assets. Source: SL 1966, ch 111, ch 16, 34 (5).
58-5-113. Illegal dividends--Revocation or suspension of certificate of authority.The director may revoke or suspend the certificate of authority of an insurer which has declared or paid a dividend contrary to the general corporation laws of this state. Source: SL 1966, ch 111, ch 16, 33.
58-5-114. Impairment of capital or surplus of domestic stock or mutual insurer--Determination of amount of deficiency by director--Notice to insurer.If a domestic stock insurer's basic paid-in capital as required by 58-6-23 to 58-6-26, inclusive, or the minimum basic surplus of a domestic mutual insurer as required by 58-5-21 and 58-5-22 becomes impaired, the director of the Division of Insurance shall at once determine the amount of deficiency and serve notice upon the insurer to cure the deficiency and file proof thereof with him within the period specified in the notice, which period shall be not less than thirty nor more than ninety days from the date of the notice. Source: SL 1966, ch 111, ch 16, 35 (1).
58-5-115. Curing impairment of capital or surplus.The deficiency may be cured by cash or assets eligible under chapter 58-27; or by amendment of the insurer's certificate of authority to cover only such kind or kinds of insurance thereafter for which such insurer has sufficient basic paid-in capital or minimum basic surplus under this title. Source: SL 1966, ch 111, ch 16, 35 (2).
58-5-116. Assessment of stockholders to cure impairment of capital or surplus--Enforcement.A stock insurer, upon receiving the director's notice of deficiency as set forth in 58-5-114, by resolution of its board of directors and subject to any limitations upon assessment contained in its articles of incorporation, may assess its stockholders for amounts necessary to cure the deficiency and provide for a reasonable amount of surplus. If a stockholder fails to pay such assessment after notice, the insurer may require the return of the original certificate of stock, deduct such assessment, and issue a new certificate for such stockholder's remaining interest. The insurer may pay for or reissue fractional shares under this section. Source: SL 1966, ch 111, ch 16, 36 (1).
58-5-117. Levy of assessment by mutual insurer to cure deficiency.A mutual insurer, upon receiving the director's notice of deficiency as set forth in 58-5-114, shall levy such an assessment upon members as is provided for in 58-5-32 to 58-5-36, inclusive. Source: SL 1966, ch 111, ch 16, 36 (2).
58-5-118. Officers and directors permitting new business during impairment of capital or surplus--Liability for losses.The officers and each director of an insurer who, after knowing that the insurer's capital is impaired, if a stock insurer, or surplus, if a mutual insurer, as provided in 58-5-114, permits or assents in the writing of new business by the insurer in this state after the expiration of the period allowed by the director under 58-5-114 within which to cure the deficiency, shall, together with their respective estates, be severally and jointly liable for the amount of losses which may be incurred by the insured under any such new insurance. Source: SL 1966, ch 111, ch 16, 37.
58-5-119. Failure to cure deficiency, insurer deemed insolvent--Delinquency proceedings.If the deficiency is not cured as required by 58-5-114, the insurer shall be deemed insolvent and the director shall institute delinquency proceedings as provided in this title. Source: SL 1966, ch 111, ch 16, 35 (3).
58-5-12. Bond required of mutual insurer before soliciting applications for insurance--Filing by incorporators--Amount, conditions.Before soliciting any applications for insurance as permitted under 58-5-21, the incorporators of the proposed insurer shall file with the director a continuing corporate surety bond in the penal sum of twenty-five thousand dollars, to be approved by the director, in favor of the state. The bond shall be conditioned as follows:(1)For payment of costs incurred by the state in event of any legal proceedings for liquidation or dissolution of the corporation in the event the corporation fails to complete its organization and secure a certificate of authority within one year from the date of its certificate of incorporation; and(2)For the prompt return to applicant members of all premiums collected in advance. Source: SL 1966, ch 111, ch 16, 10 (1).
58-5-120. Bulk reinsurance by domestic stock insurer--Agreement, filing with and approval by director.A domestic stock insurer may reinsure all or substantially all of its insurance in force, or of a major class thereof, with another insurer by an agreement of bulk reinsurance; provided however no such agreement shall become effective unless filed with the director of the Division of Insurance and approved by him in writing after a hearing thereon. Source: SL 1966, ch 111, ch 16, 40 (1).
58-5-121. Approval by director of bulk reinsurance agreement--Disapproval.The director shall approve such agreement within a reasonable time after such filing unless he finds that it is inequitable to the stockholders or would substantially reduce the protection or service to the policyholders of such domestic insurer. If the director does not approve, he shall so notify the insurer in writing specifying his reasons therefor. Source: SL 1966, ch 111, ch 16, 40 (2).
58-5-122. Compensation for promoting bulk reinsurance prohibited.No director, officer, insurance producer, or employee of any insurer party to such reinsurance, nor any other person, may receive any fee, commission, or other valuable consideration whatsoever for in any manner aiding, promoting, or assisting therein except as set forth in the reinsurance agreement. Source: SL 1966, ch 111, ch 16, 40 (3); SL 2001, ch 286, 71.
58-5-123. Bulk reinsurance by mutual insurer--Agreement, filing with and approval by director.A domestic mutual insurer may reinsure all or substantially all of its insurance in force, or a major class thereof, with another insurer, by an agreement of bulk reinsurance, provided however no such agreement shall become effective unless filed with the director of the Division of Insurance and approved by him in writing after a hearing thereon. Source: SL 1966, ch 111, ch 16, 41 (1).
58-5-124. Members of domestic mutual insurer voting on bulk insurance, requirement by director--Calling of meeting, notice--Limited rights of members of life insurer to vote.The director may require that plan and agreement for reinsurance be approved by a vote of not less than two-thirds of each domestic mutual insurer's members voting thereon at meetings of members called for the purpose, pursuant to such reasonable notice and procedure as the director may determine. If a life insurer, right to vote may be limited to members whose policies are other than term or group policies, and have been in effect for more than one year. Source: SL 1966, ch 111, ch 16, 41 (3).
58-5-125. Bulk reinsurance by domestic mutual insurer in stock insurer--Payments to members.If for reinsurance in a stock insurer of all or substantially all of the insurance in force of a mutual insurer, the agreement must provide for payment in cash to each member of the insurer entitled thereto of his equity, if any, in the business reinsured as determined under a fair formula approved by the director, as based upon the reserves, assets (whether or not "admitted" assets) and surplus, if any, of the mutual insurer to be taken over by the stock insurer. Source: SL 1966, ch 111, ch 16, 41 (4).
58-5-126. Approval by director of bulk reinsurance by mutual insurer--Disapproval--Notice.The director of the Division of Insurance shall approve any agreement pursuant to 58-5-123 within a reasonable time after filing if he finds it to be fair and equitable to each domestic insurer involved, and that such reinsurance would not substantially reduce the protection or service to its policyholders. If the director does not approve, he shall notify each insurer involved in writing specifying his reasons therefor. Source: SL 1966, ch 111, ch 16, 41 (2).
58-5-127. Compensation for promoting bulk reinsurance by mutual insurer.No director, officer, insurance producer, or employee of any insurer party to such reinsurance, nor any other person, may receive any fee, commission, or other valuable consideration whatsoever for in any manner aiding, promoting, or assisting therein except as set forth in the reinsurance agreement. Source: SL 1966, ch 111, ch 16, 41 (5); SL 2001, ch 286, 72.
58-5-128. Merger or consolidation of stock insurers.A domestic stock insurer may merge or consolidate with other domestic or foreign insurers authorized to transact insurance in this state, by complying with the applicable statutes of this state that govern the merger or consolidation of corporations formed for profit but subject to the provisions of 58-5-129 to 58-5-133, inclusive. Source: SL 1966, ch 111, ch 16, 38 (1); SL 1982, ch 352, 1; SL 1983, ch 371, 1.
58-5-129. Stock acquisition plan deemed merger--Approval required.Any plan by which a stock insurer proposes to acquire a substantial or controlling stock interest in another stock insurer through an exchange of stock is deemed to be a plan of merger which requires the approval of the director of the Division of Insurance in accordance with provisions of 58-5-131 to 58-5-133, inclusive. Source: SL 1966, ch 111, ch 16, 38 (6).
58-5-13. Deposit by incorporators of mutual insurer in lieu of bond--Amount.In lieu of such bond, such incorporators may deposit with the director twenty-five thousand dollars or United States government bonds, negotiable and payable to the bearer, with a market value at all times of not less than twenty-five thousand dollars, to be held in trust upon the same conditions as required for such bond. Source: SL 1966, ch 111, ch 16, 10 (2).
58-5-130. Compensation for promoting merger or consolidation of stock insurers.No director, officer, insurance producer, or employee of any insurer party to such merger or consolidation may receive any fee, commission, compensation, or other valuable consideration whatsoever for aiding, promoting, or assisting therein except as set forth in such plan and agreement. Source: SL 1966, ch 111, ch 16, 38 (3); SL 2001, ch 286, 73.
58-5-131. Filing and hearing on consolidation or merger plan--Grounds for disapproval.No such merger or consolidation shall go into effect until the plan and agreement therefor is filed with the director and approved by him after a hearing thereon. Such plan and agreement shall be approved by the director within a reasonable time unless he finds such plan or agreement:(1)Is contrary to law; or(2)Is inequitable to the policyholders of any domestic insurer involved; or(3)Would substantially reduce the security of and service to be rendered to policyholders of the domestic insurer. Source: SL 1966, ch 111, ch 16, 38 (2).
58-5-132. Participation by other states in hearing on merger or consolidation.If any domestic insurer involved in the proposed merger or consolidation is authorized to transact insurance in other states, the director may request the insurance supervisory officials of such other states to participate in the hearing provided for under 58-5-131. Source: SL 1966, ch 111, ch 16, 38 (5).
58-5-133. Disapproval of merger or consolidation--Notice to insurer.If the director does not approve any such plan and agreement, he shall notify the insurer in writing, specifying his reasons therefor. Source: SL 1966, ch 111, ch 16, 38 (4).
58-5-134. Merger or consolidation of mutual insurers--Procedure.A domestic mutual insurer may merge or consolidate with another insurer under the applicable procedures prescribed by the statutes of this state applying to corporations formed for profit, subject to the provisions of 58-5-135 and 58-5-136. Source: SL 1966, ch 111, ch 16, 39 (2); SL 1982, ch 352, 2; SL 1983, ch 371, 2.
58-5-135. Members of mutual insurer voting on merger or consolidation--Procedure--Limited right of members of life insurer.The plan and agreement for merger or consolidation shall be submitted to and approved by at least two-thirds of the members of each mutual insurer involved voting thereon at meetings called for the purpose pursuant to such reasonable notice and procedure as has been approved by the director of the Division of Insurance. If a life insurer, right to vote may be limited to members whose policies are other than term and group policies, and have been in effect for more than one year. Source: SL 1966, ch 111, ch 16, 39 (3).
58-5-136. Provisions applicable to mutual mergers and consolidations.Sections 58-5-130 to 58-5-133, inclusive, shall also apply to mergers and consolidations of mutuals. Source: SL 1966, ch 111, ch 16, 39 (4).
58-5-138.1. Compensation of officer, insurance producer, or employee of converting mutual insurer prohibited.No director, officer, insurance producer, or employee of any mutual insurer party to a reorganization or conversion to a corporation with capital stock may receive any fee, commission, compensation, or other valuable consideration for that participation except as set forth in the reorganization or conversion plan. Source: SL 1984, ch 325, 2; SL 2001, ch 286, 74.
58-5-138. Conversion of mutual to stock insurer restricted.No domestic mutual insurer in this state may reorganize or convert into a corporation with capital stock unless the reorganization or conversion plan provides each member of the mutual insurer with cash or other valuable consideration for the fair value of the member's equity in the company as determined under a formula approved by the director of the Division of Insurance and the secretary of labor and regulation. Source: SL 1966, ch 111, ch 16, 4; SL 1984, ch 325, 1; SL 2018, ch 278, 1.
58-5-139. Liquidation of domestic mutual insurer--Distribution of remaining assets to members.Upon any liquidation of a domestic mutual insurer, its assets remaining after liquidation of its indebtedness, policy obligations, repayment of contributed or borrowed surplus, if any, and expenses of administration, shall be distributed to existing persons who were its members at any time within thirty-six months next preceding the date such liquidation was authorized or ordered, or date of last termination of the insurer's certificate of authority, whichever date is the earlier. Source: SL 1966, ch 111, ch 16, 42 (1).
58-5-14. Duration of bond or deposit by mutual insurer.Any such bond filed or deposit made shall remain in effect until released by the director upon compliance with 58-5-12 and 58-5-13 or otherwise terminated by law. Source: SL 1966, ch 111, ch 16, 10 (3).
58-5-140. Distributive share of each member on liquidation of mutual insurer--Classification of policies.The distributive share of each such member shall be in the proportion that the aggregate premiums earned by the insurer on the policies of the member during the combined periods of his membership bear to the aggregate of all premiums so earned on the policies of all such members. The insurer may, and if a life insurer shall, make a reasonable classification of its policies so held by such member and a formula based upon such classification, for determining the equitable distributive share of each such member. Such classification and formula shall be subject to the approval of the director of the Division of Insurance. Source: SL 1966, ch 111, ch 16, 42 (2).
58-5-143. Disclosure of certain material transactions required--Filing a report.Every insurer domiciled in this state shall file a report with the director disclosing material acquisitions and dispositions of assets or material nonrenewals, cancellations, or revisions of ceded reinsurance programs unless the acquisitions and dispositions of assets or material nonrenewals, cancellations, or revisions of ceded reinsurance programs have been submitted to the director for review, approval, or information purposes pursuant to other provisions of the insurance code, laws, regulations, or other requirements. The report is due within fifteen days after the end of the calendar month in which any of the foregoing transactions occur. One complete copy of the report, including any exhibits or other attachments filed as part thereof, shall be filed with:(1)The insurance regulatory agency of the insurer's state of domicile; and(2)The National Association of Insurance Commissioners. Source: SL 1995, ch 275, 1.
58-5-144. Confidentiality of disclosure report.Any report obtained by or disclosed to the director pursuant to 58-5-143 to 58-5-153, inclusive, shall be given confidential treatment and may not be subject to subpoena and may not be made public by the director, the National Association of Insurance Commissioners, or any other person, except to insurance departments of other states, without the prior written consent of the insurer to which it pertains unless the director, after giving the insurer who would be affected thereby, notice and an opportunity to be heard, determines that the interest of policyholders, shareholders, or the public will be served by the publication of the report, in which event the director may publish all or any part of the report in such manner as the director considers appropriate. Source: SL 1995, ch 275, 1A.
58-5-145. Exception from disclosure requirement--"Material acquisition" defined.No acquisitions or dispositions of assets need be reported pursuant to 58-5-143 if the acquisitions or dispositions are not material. For purposes of this chapter, a material acquisition, or the aggregate of any series of acquisitions during any thirty-day period, or disposition, or the aggregate of any series of dispositions during any thirty-day period, is any acquisition or disposition that is nonrecurring and not in the ordinary course of business and involves more than five percent of the reporting insurer's total admitted assets as reported in its most recent statutory statement filed with the insurance regulatory agency of the insurer's state of domicile. Source: SL 1995, ch 275, 2; SL 2000, ch 236, 1.
58-5-146. Types of asset acquisitions subject to chapter.Asset acquisitions subject to this chapter include every purchase, lease, exchange, merger, consolidation, succession, or other acquisition other than the construction or development of real property by or for the reporting insurer or the acquisition of materials related thereto. Source: SL 1995, ch 275, 3.
58-5-147. Types of asset dispositions subject to chapter.Asset dispositions subject to this chapter include every sale, lease, exchange, merger, consolidation, mortgage, hypothecation, assignment, whether for the benefit of creditors or otherwise, abandonment, destruction, or other disposition. Source: SL 1995, ch 275, 4.
58-5-148. Information required in report of material acquisition or disposition of assets.The following information shall be disclosed in any report of a material acquisition or disposition of assets:(1)Date of the transaction;(2)Manner of acquisition or disposition;(3)Description of the assets involved;(4)Nature and amount of the consideration given or received;(5)Purpose of, or reason for, the transaction;(6)Manner by which the amount of consideration was determined;(7)Gain or loss recognized or realized as a result of the transaction; and(8)Name of any person from whom the assets were acquired or to whom the assets were disposed. Source: SL 1995, ch 275, 5.
58-5-149. Determining whether to report acquisitions on a nonconsolidated or consolidated basis.Insurers shall report acquisitions and dispositions on a nonconsolidated basis unless the insurer is part of a consolidated group of insurers which utilizes an intercompany pooling agreement or arrangement or a one hundred percent reinsurance agreement whereunder the ceding company has ceded substantially one hundred percent of its direct and assumed business to a pool. An insurer is deemed to have ceded "substantially one hundred percent" of its direct and assumed business to a pool if the insurer has less than one million dollars of total direct plus assumed written premiums during a calendar year that are not subject to the pooling agreement or arrangement and the net income of the business not subject to the pooling agreement or arrangement represents less than five percent of the insurer's capital and surplus. If a group of insurers reports on a consolidated basis, the report shall identify the individual insurers that are members of the group. Source: SL 1995, ch 275, 6.
58-5-15. Commencement of solicitation by mutual insurer.Upon receipt of the director's approval of the bond or deposit as provided in 58-5-12 to 58-5-14, inclusive, the directors and officers of the proposed domestic mutual insurer may commence solicitation of applications for insurance. Source: SL 1966, ch 111, ch 16, 11 (1).
58-5-150. Materiality of nonrenewals, cancellations or revisions.No nonrenewals, cancellations, or revisions of ceded reinsurance programs need to be reported pursuant to 58-5-143 if the nonrenewals, cancellations, or revisions are not material. For purposes of the chapter, a material nonrenewal, cancellation, or revision is one that affects the property and casualty business, including accident and health business, by more than fifty percent of an insurer's ceded written premium, or for life, annuity, and accident and health business, more than fifty percent of the total reserve credit taken for business ceded, on an annualized basis as indicated in the insurer's most recently filed statutory statement. However, no filing is required if the insurer's ceded written premium or the total reserve credit taken for business ceded represents, on an annualized basis, less than ten percent of direct plus assumed written premium or ten percent of the statutory reserve requirement prior to any cession, respectively. Source: SL 1995, ch 275, 7.
58-5-151. Reporting material nonrenewal, cancellation or revision.Subject to the criteria provided in 58-5-150, a report shall be filed without regard to which party has initiated the nonrenewal, cancellation or revision of ceded reinsurance whenever one or more of the following conditions exist:(1)The entire cession has been cancelled, nonrenewed, or revised and ceded indemnity and loss adjustment expense reserves after any nonrenewal, cancellation, or revision represent less than fifty percent of the comparable reserves that would have been ceded had the nonrenewal, cancellation, or revision not occurred;(2)An authorized or accredited reinsurer has been replaced on an existing cession by an unauthorized reinsurer; or(3)Collateral requirements previously established for unauthorized reinsurers have been reduced.Subject to the materiality criteria, for purposes of subdivisions (2) and (3), a report shall be filed if the result of the revision affects more than ten percent of the cession. Source: SL 1995, ch 275, 8.
58-5-152. Required information in reporting material nonrenewal, cancellation, or revision.The following information shall be disclosed in any report of a material nonrenewal, cancellation, or revision of ceded reinsurance agreements:(1)Effective date of the nonrenewal, cancellation, or revision;(2)The description of the transaction with an identification of the initiator thereof;(3)Purpose of, or reason for, the transaction; and(4)If applicable, the identity of the replacement reinsurers. Source: SL 1995, ch 275, 9.
58-5-153. Determining whether to report material nonrenewals, cancellations, or revisions on a nonconsolidated or consolidated basis.Insurers shall report all material nonrenewals, cancellations, or revisions of ceded reinsurance agreements on a nonconsolidated basis unless the insurer is part of a consolidated group of insurers which utilizes a pooling arrangement or one hundred percent reinsurance agreement that affects the solvency and integrity of the insurer's reserves and the insurer ceded substantially all of its direct and assumed business to the pool. An insurer is deemed to have ceded substantially all of its direct and assumed business to a pool if the insurer has less than one million dollars of total direct plus assumed written premiums during a calendar year that are not subject to a pooling arrangement and the net income of the business not subject to the pooling arrangement represents less than five percent of the insurer's capital and surplus. Source: SL 1995, ch 275, 10.
58-5-154. Qualified education loan insurer defined.The term, qualified education loan insurer, means a domestic stock insurer formed under chapter 58-5 for the principal purposes of transacting surety insurance, in this state only, in the education loan market and principally or beneficially owning or through a wholly-owned subsidiary investing in education loans, including loans originated in accordance with the terms of the Higher Education Act of 1965, as amended. Source: SL 1998, ch 287, 1.
58-5-155. Qualified education loan insurer subject to Title 58--Exceptions. Any qualified education loan insurer is subject to the provisions of Title 58 except as otherwise specifically provided in 58-5-154 to 58-5-160, inclusive. Notwithstanding any other provision of Title 58, a qualified education loan insurer is not subject to the following provisions of Title 58 and any rules promulgated to implement any such provisions:(1)Sections 58-4-48 and 58-5-85;(2)Subdivision 58-5-7(5) to the extent that this subdivision permits only one class of authorized voting common stock or otherwise restricts the authorization of preferred stock, with or without voting rights; and(3)Chapter 58-5A. Source: SL 1998, ch 287, 2; SL 2021, ch 210,  2.
58-5-156. Investment of funds by qualified education loan insurer--Limitations--Permitted rating categories.Notwithstanding any other provision of Title 58 and in addition to any investment permitted pursuant to chapter 58-27, a qualified education loan insurer may invest funds in the following, and any such investment made by a qualified education loan insurer is not subject to any aggregate amount limitations or other investment limitations except as specifically provided below:(1)A loan originated under the terms of the Higher Education Act of 1965, as amended;(2)An education loan not originated under the Higher Education Act of 1965, as amended, the principal and interest of which may be insured or uninsured;(3)A direct obligation of the United States of America or an obligation with respect to which the full and timely payment of principal and interest is unconditionally guaranteed by the United States of America;(4)An interest bearing time or demand deposit, certificate of deposit, or a similar banking arrangement with any bank, trust company, national banking association, or other depository institution, provided that, at the time of deposit or purchase, if the investment is for a period exceeding one year, the depository institution shall have long-term unsecured debt rated by at least one nationally recognized statistical rating organization in a permitted rating category or, if the investment is for a period of less than one year, shall have short-term unsecured debt rated by at least one nationally recognized statistical rating organization in a permitted rating category;(5)An obligation issued or guaranteed as to the principal and interest by any of the following:(a)The Government National Mortgage Association;(b)The Federal National Mortgage Association; or(c)A Federal Farm Credit Bank, a Federal Intermediate Credit Bank, the Export-Import Bank of the United States, a Federal Land Bank, the Student Loan Marketing Association, the Federal Financing Bank, a Federal Home Loan Bank, the Federal Home Loan Mortgage Corporation, the Rural and Community Development Administration, or the Federal Farm Mortgage Acceptance Corporation, provided that any obligation described in this subdivision shall be rated by at least one nationally recognized statistical rating organization in a permitted rating category;(6)A repurchase agreement or reverse repurchase agreement with any bank which is a member of the Federal Deposit Insurance Corporation or with any government bond dealer insured by the Securities Investor Protection Corporation, which agreement with a bank or government bond dealer is secured by any government obligation described in subdivision (3) of this section at a level sufficient to obtain a rating by at least one nationally recognized statistical rating organization in a permitted rating category, or with any broker or dealer the unsecured long-term debt of which is rated by at least one nationally recognized statistical rating organization in a permitted rating category;(7)Any money market fund, including a qualified regulated investment company described in the Internal Revenue Service Notice 87-22, rated by at least one nationally recognized statistical rating organization in a permitted rating category;(8)Any debt instrument, provided that the debt instrument is rated by at least one nationally recognized statistical rating organization in a permitted rating category; and(9)Any investment agreement constituting a general obligation of an entity whose debt, unsecured securities, deposits, or claims paying ability is rated by at least one nationally recognized statistical rating organization in a permitted rating category.For the purposes of this section, a permitted rating category is one of the four highest rating categories assigned long-term debt or an equivalent short-term category within either of which there may be subcategories or gradations indicating relative standing. Source: SL 1998, ch 287, 3.
58-5-157. Investment of funds in securities.In addition to any investment permitted pursuant to 58-5-156, a qualified education loan insurer may also invest any amount in common stock, preferred stock, debt obligations, and other securities, including without limitation, membership in a limited liability company, of any subsidiary engaged or organized to engage in any of the following:(1)The principal or beneficial ownership and management of assets authorized as investments for the qualified education loan insurer under 58-5-156; or(2)The origination, administration, and servicing of education loans, the provision of services to any school, lender, student, and borrower and otherwise providing services for any educational purposes. Source: SL 1998, ch 287, 4.
58-5-158. Subsidiary investment to be counted as admitted asset.Notwithstanding 58-4-43 or any other provision of Title 58, a qualified education loan insurer's subsidiary investment permitted under 58-5-157 shall be counted fully as an admitted asset on the qualified education loan insurer's balance sheet and may not be disregarded as an admitted asset by the director of the Division of Insurance in enforcing the provisions of 58-4-39 to 58-4-43, inclusive, and chapter 58-29B, and any rule promulgated to implement such provisions. Source: SL 1998, ch 287, 5.
58-5-159. Applicability of federal Bankruptcy Code.Notwithstanding the other provisions of chapter 58-29B, for the purposes of determining:(1)If a qualified education loan insurer has, in any transaction involving the transfer of any education loans or other assets, sold such education loans or other assets or pledged such education loans or other assets to secure indebtedness of the qualified education loan insurer; and(2)If a wholly owned subsidiary of a qualified education loan insurer shall be treated as a separate entity, distinct from the qualified education loan insurer, or the subsidiary's assets and liabilities shall be consolidated with the assets and liabilities of the qualified education loan insurer;chapter 58-29B shall be construed as referring to available and analogous case law under the federal Bankruptcy Code for making determinations in any receivership, rehabilitation, or liquidation of the qualified education loan insurer. Source: SL 1998, ch 287, 6.
58-5-16. Temporary insurance producer's licenses for solicitation of applications for mutual insurance--Issuance by director.The director shall, upon the corporation's application therefor, issue temporary insurance producer's licenses for a period not exceeding six months for the solicitation of such applications to individuals qualifying for a resident insurance producer license except as to the taking or passing of an examination. The director may suspend or revoke any such license for any of the causes and pursuant to the same procedures as are applicable to suspension or revocation of licenses of insurance producers in general. Source: SL 1966, ch 111, ch 16, 11 (4); SL 2001, ch 286, 69.
58-5-160. Additional exemptions or exemption authority.The director of the Division of Insurance may promulgate rules, pursuant to chapter 1-26, to provide any qualified education loan insurer with additional exemptions from the provisions of Title 58 or to provide additional investment authority. Source: SL 1998, ch 287, 7.
  58-5-161  .  Definitions for   58-5-161   through   58-5-171  .   Terms used in 58-5-161 through 58-5-171 mean:   (1) "Corporate Governance Annual Disclosure," a confidential report filed by an insurer or insurance group in accordance with   58-5-163  ;   (2) "Insurance group," those insurers and affiliates included within an insurance holding company system as defined in chapter   58-5A  .     Source:  SL 2020, ch 212,  1. 
  58-5-162  .  Corporate governance disclosure--Requirements and limitations.   Nothing in   58-5-161   to   58-5-171  , inclusive, may be construed to prescribe or impose corporate governance standards and internal procedures beyond that which is required under applicable state corporate law.   Nothing in   58-5-161   to   58-5-171  , inclusive, may be construed to limit the directors authority, or the rights or obligations of third parties, under chapter   58-3  . The requirements in   58-5-161   to   58-5-171  , inclusive, apply to all insurers domiciled in this state.     Source:  SL 2020, ch 212,  2. 
  58-5-163  .  Submission of disclosure--Requirement.   An insurer, or the insurance group of which the insurer is a member, shall submit a corporate governance annual disclosure containing the information described in   58-5-161   to 58-5-171, inclusive, to the director no later than June first of each calendar year. If the insurer is a member of an insurance group, the insurer shall submit the report   required by this section to the director, commissioner, superintendent, or other official who is the lead state for the insurance group in accordance with the laws of the lead state. The disclosure must be signed by the insurer or insurance group's chief executive officer or corporate secretary attesting to the best of that individual's belief and knowledge that the insurer has implemented the corporate governance practices and that a copy of the disclosure has been provided to the insurer's board of directors or the appropriate committee thereof.   Notwithstanding the foregoing, the director may request any insurer to submit the disclosure.     Source:  SL 2020, ch 212,  3. 
  58-5-164  .  Information provided with disclosure--Appropriate corporate level.   For purposes of completing the corporate governance annual disclosure, the insurer or insurance group may provide information regarding corporate governance at the ultimate controlling parent level, an intermediate holding company level, the individual legal entity level, or any combination of the levels depending upon how the insurer or insurance group has structured its system of corporate governance.   An insurer or insurance group shall make the disclosures at the level where the insurer's or insurance group's:   (1) Risk appetite is determined;   (2) Earnings, capital, liquidity, operations, and reputation of the insurer are collectively overseen and the supervision of those factors is coordinated and exercised; or   (3) Legal liability for failure of general corporate governance duties is placed.   When an insurer or insurance group determines the level of reporting based on the criteria under this section, the insurer or insurance group shall indicate which of the criteria under this section was used to determine the level of reporting and explain any subsequent change in the level of reporting. Any additional request for information by the director shall be made through the lead state.     Source:  SL 2020, ch 212,  4. 
  58-5-165  .  Duplicate information not required--Documentation.   An insurer who provides information substantially similar to the information required in   58-5-161   to 58-5-171, inclusive, in other documents provided to the   director is not required to duplicate information in the corporate governance annual disclosure if the insurer reports where the information is included.     Source:  SL 2020, ch 212,  5. 
  58-5-166  .  Content and maintenance--Promulgation of Rules.   The insurer or insurance group has discretion over the responses to the corporate governance annual disclosure inquiries if the disclosure contains the material information necessary to permit the director to gain an understanding of the insurer's or group's corporate governance structure, policies, and practices. The director may request additional information the director determines is material and necessary to provide a clear understanding of the corporate governance policies and the reporting or information system or controls implementing those policies. Documentation and supporting information must be maintained and made available upon examination by the division or upon a request of the director.   The corporate governance annual disclosure must be prepared consistent with applicable administrative rules which may be promulgated by the division pursuant to chapter   1-26   regarding the contents and filing of the disclosure.     Source:  SL 2020, ch 212,  6. 
  58-5-167  .  Disclosure documents and other information--Confidential and privileged--Exempt from public record--Permitted uses.   Any document, materials, or other information, including the corporate governance annual disclosure, in the possession or control of the division that is obtained by, created by, or disclosed to the director or any other person under the provisions of   58-5-161   to 58-5-171, inclusive, is recognized by this state as being proprietary and to contain trade secrets. The document, materials, or other information is confidential and privileged, is not a record open to public inspection under chapter   1-27  , is not subject to subpoena, and is not discoverable or admissible in evidence in any private civil action.    The director may use corporate governance annual disclosure documents, materials, or other information in the furtherance of any regulatory or legal action brought as a part of the director's official duties. The director may not otherwise make the document, materials, or other information public without the prior written consent of the insurer.   Nothing in this section may be construed to require written consent of the insurer before the director may share or receive any confidential document, materials, or other   related information pursuant to 58-5-169 to assist in the performance of the director's regular duties.     Source:  SL 2020, ch 212,  7. 
  58-5-168  .  Disclosure documents and other materials--Testimony prohibited.   No person, including the director, who received a document, materials, or other information related to the corporate governance annual disclosure, through examination or otherwise, while acting under the authority of the director, or with whom the document, materials, or other information is shared pursuant to the provisions of   58-5-161   to 58-5-171, inclusive, may be permitted or required to testify in any private civil action concerning any confidential document, materials, or information subject to the provisions of   58-5-161   to 58-5-171, inclusive.     Source:  SL 2020, ch 212,  8. 
  58-5-169  .  Disclosure documents and other materials--Information sharing and receiving.   In order to assist in the performance of the director's regulatory duties, the director may:   (1) Share any document, materials, or other information related to the corporate governance annual disclosure, including any confidential and privileged document, materials, or information, including any proprietary and trade secret document and materials, with other state, federal, and international financial regulatory agencies, including members of any supervisory college as defined in chapter   58-5A  , with the National Association of Insurance Commissioners, and with third party consultants pursuant to   58-5-161   to 58-5-171, inclusive, provided that the recipient agrees in writing to maintain the confidentiality and privileged status of the document, materials, or other information related to the disclosure and verifies in writing the legal authority to maintain confidentiality; and   (2) Receive any document, materials, or other information related to the corporate governance annual disclosure, including any otherwise confidential and privileged document, materials, or information, including proprietary and trade-secret information or documents from regulatory officials of other state, federal, and international financial regulatory agencies, including members of any supervisory college as defined in chapter   58-5A  , and from the National Association of Insurance Commissioners. The director shall maintain as confidential or privileged any   document, materials, or information received with notice or the understanding that it is confidential or privileged under the laws of the jurisdiction that is the source of the document, materials, or information.   No waiver of any applicable privilege or claim of confidentiality in any document, proprietary and trade-secret materials, or other information related to the corporate governance annual disclosure may occur as a result of disclosure of any information or documents related to the disclosure to the director under this section or as a result of sharing under this section by the director.     Source:  SL 2020, ch 212,  9. 
58-5-17. Applications for mutual insurance--Signature by applicant, coverage.All applications for insurance received pursuant to 58-5-15 shall be signed by the applicant and shall only cover subjects of insurance resident, located or to be performed in this state. Source: SL 1966, ch 111, ch 16, 11 (2).
  58-5-170  .  Disclosure review--Expert assistance.   The director may retain, at the insurer's expense, any third-party consultant, including attorneys, actuaries, accountants, and other experts not otherwise a part of the director's staff as may be reasonably necessary to assist the director in reviewing the corporate governance annual disclosure and related information or the insurer's compliance with the provisions of   58-5-161   to 58-5-171, inclusive. Any person retained shall be under the direction and control of the director and shall act in an advisory capacity. The National Association of Insurance Commissioners and third-party consultants is subject to the same confidentiality standards and requirements as the director. As part of the retention process, a third-party consultant shall verify to the director, with notice to the insurer, that the third-party consultant is free of a conflict of interest and that the consultant has internal procedures in place to monitor compliance with a conflict and to comply with the confidentiality standards and requirements of   58-5-161   to 58-5-171, inclusive.     Source:  SL 2020, ch 212,  10. 
  58-5-171  .  Disclosure information--Access by National Association of Insurance Commissioners--Requirements.   The director may enter a written agreement with the National Association of Insurance Commissioners, a third-party consultant, or both, governing the sharing and use of information provided pursuant to   58-5-161   to 58-5-171, inclusive, that expressly requires the written consent of the insurer prior to making any information related to the corporate governance annual disclosure available and contains the following:   (1) A provision specifying procedures and protocols for maintaining the confidentiality and security of information related to the disclosure that is shared with the National Association of Insurance Commissioners or a third-party consultant;   (2) A provision delineating procedures and protocols for sharing by the National Association of Insurance Commissioners with other state regulators from only those states in which the insurance group has domiciled insurers. The agreement must provide that the recipient agrees, in writing, to maintain the confidentiality and privileged status of the documents, materials or other information related to the disclosure and has verified in writing the legal authority to maintain confidentiality;   (3) A provision specifying that ownership of the information related to the disclosure that is shared with the National Association of Insurance Commissioners or a third-party consultant remains with the division and use by the National Association of Insurance Commissioners or a third-party consultant is subject to the direction of the director;   (4) A provision prohibiting the National Association of Insurance Commissioners or a third-party consultant from storing shared information related to the disclosure in a permanent database after the underlying analysis is completed;   (5) A requirement that the National Association of Insurance Commissioners or third-party consultant provide prompt notice to the director and to the insurer or insurance group regarding any subpoena, request for disclosure, or request for production of the insurer's information related to the disclosure; and   (6) A requirement that the National Association of Insurance Commissioners or a third-party consultant consent to intervention by an insurer in any judicial or administrative action in which the National Association of Insurance Commissioners or a third-party consultant may be required to disclose confidential information about the insurer shared with the National Association of Insurance Commissioners or a third-party consultant pursuant to the provisions of   58-5-161   to   58-5-171  , inclusive.     Source:  SL 2020, ch 212,  11. 
58-5-18. Applications for mutual insurance--Contents.All such applications shall provide that:(1)Issuance of the policy is contingent upon the insurer qualifying for and receiving a certificate of authority;(2)No insurance is in effect until the certificate of authority has been issued; and(3)The prepaid premium and any deposit, membership or policy fee shall be refunded in full to the applicant if the certificate of authority is not issued within one year from the date of the certificate of incorporation. Source: SL 1966, ch 111, ch 16, 11 (3).
58-5-19. Trust deposit of premiums or fees collected by mutual insurer on qualifying applications.All sums collected by a proposed mutual insurer as premiums or fees on qualifying applications for insurance shall be deposited in trust in a bank or trust company in this state under a trust agreement consistent with 58-5-25 and with subdivision 58-5-18(3). The corporation shall file an executed copy of such agreement with the director of insurance. Source: SL 1966, ch 111, ch 16, 12 (1).
58-5-2. Stock insurer defined.A "stock" insurer is an incorporated insurer with capital divided into shares and owned by its stockholders. Source: SL 1966, ch 111, ch 16, 2.
58-5-20. Transaction of business without certificate of authority as misdemeanor.The corporation shall not transact business here as an insurer until it has received a certificate of authority as provided in this title. Violation of this section is a Class 2 misdemeanor. Source: SL 1966, ch 111, ch 16, 7 (4); SL 1978, ch 359, 2.
58-5-21. Insurance applications and surplus required for original certificate of authority to domestic mutual insurer.Upon application for an original certificate of authority, the insurer must be otherwise qualified therefor under this title, and must have received and accepted bona fide applications as to substantial insurable subjects for insurance coverage of the kind of insurance proposed to be transacted, must have collected in cash the full premium therefor at a rate not less than that usually charged by other insurers for comparable coverages, must have surplus funds deposited as of the date such insurance coverages are to become effective, or, in lieu of such applications, premiums and surplus, deposit and thereafter maintain surplus, all in accordance with that part of the following schedule which applies to the kind of insurance the insurer proposes to transact and subject to the provisions of 58-6-19 to 58-6-22, inclusive:  SCHEDULE(a)(b)(c)(d)(e)(f)(g)(h)Kind of InsuranceMinimum No. of applicants acceptedMinimum No.of subjectscoveredMinimumpremiumcollectedMinimumamount ofinsuranceeach subjectMaximumamount ofinsuranceeach subjectMinimumsurplus fundsdepositedDeposit ofsurplus inlieu of (b)through (g)Life 500500annual$1,000$ 2,500$150,000$200,000Health 500500quarterly1025150,000200,000(weekly indem.)(weekly indem.)Life and Health 750750same as individual lines above300,000400,000Property 100250annual1,0003,000150,000200,000Casualty 250500annual1,00010,000150,000200,000Casualty withWorkmen's Compensation 2501,500quarterly1,00010,000200,000300,000Marine and Transportation 100250annual1,00010,000150,000200,000Surety 250250annual1,00010,000150,000200,000Multiple Lines 250500same as individual lines above300,000400,000Source: SL 1966, ch 111, ch 16, 9
58-5-22. Expendable surplus funds required of domestic mutual insurer.In addition to surplus deposited and thereafter to be maintained as shown in columns (g) and (h) of the schedule in 58-5-21, the insurer when first authorized must have on hand surplus funds, which it can thereafter expend in the conduct of its business, in amount not less than fifty percent of the deposited and maintained surplus required of it under the said schedule. Source: SL 1966, ch 111, ch 16, 9.
58-5-23. Determination by director as to weight to be given to insurance plans.The director shall by regulation determine what weight, if any, shall be given group plans, blanket plans, family plans, term insurance, owner's interest in real property, maximum and minimum bodily injury and property damage limits, and reinsurance in the light of national and state industry experience and protection of the public welfare in interpreting the schedule in 58-5-21. Source: SL 1966, ch 111, ch 16, 9.
58-5-24. Cessation of corporate powers upon failure of mutual insurer to secure certificate of authority--Return of trust deposit.If the proposed domestic insurer fails to secure its certificate of authority within one year from the date of its certificate of incorporation, its corporate powers shall cease, and the director shall cause to be returned to the persons entitled thereto all sums held in trust under 58-5-19. Source: SL 1966, ch 111, ch 16, 13.
58-5-25. Issuance of certificate of authority to domestic mutual insurer--Funds in trust deposit become funds of insurer--Delivery of policies--Effective date of policies.Upon issuance of a certificate of authority for the kind of insurance for which such applications were solicited, all funds held in trust under 58-5-19 shall become the funds of the insurer, and the insurer shall deliver its policies for which premiums had been paid. The insurance shall be effective as of the date of the certificate of authority or thereafter as provided by the respective policies. Source: SL 1966, ch 111, ch 16, 12 (2).
58-5-26. Authorization of domestic mutual insurer to transact additional kinds of insurance.A domestic mutual insurer, after being authorized to transact one or more kinds of insurance, may be authorized to transact such additional kinds of insurance as are permitted under 58-5-21, while in compliance with this title and while maintaining unimpaired surplus funds in conformity with the requirements of 58-5-21 and 58-5-22. Source: SL 1966, ch 111, ch 16, 14.
58-5-27. Membership of policyholders in domestic mutual insurer--Reinsurance contract excepted.Each policyholder of a domestic mutual insurer, other than of a reinsurance contract, is a member of the insurer with all rights and obligations of such membership, and the policy shall so specify. Source: SL 1966, ch 111, ch 16, 15 (1).
58-5-28. Eligibility to membership in domestic, foreign, or alien mutual insurer.Any person, government or governmental agency, state or political subdivision thereof, public or private corporation, board, association, firm, estate, trustee, or fiduciary may be a member of a domestic, foreign, or alien mutual insurer. Any officer, stockholder, trustee, or legal representative of any such corporation, board, association, or estate may be recognized as acting on its behalf for the purpose of such membership, and shall not be personally liable upon any contract of insurance for acting in such representative capacity. Source: SL 1966, ch 111, ch 16, 15 (2).
58-5-29. Contingent liability of members of mutual insurer--Exception.Every member of a domestic mutual insurer shall, except as otherwise provided with respect to nonassessable policies, have only a prorata contingent liability for the discharge of its obligations, which contingent liability shall be expressed in the policy and be in such maximum amount as is specified in the insurer's articles of incorporation. Source: SL 1966, ch 111, ch 16, 29 (1).
58-5-3. Mutual insurer defined.A "mutual" insurer is an insurance corporation without capital stock, owned by its policyholders collectively, who have the right to vote in the election of its directors. Source: SL 1966, ch 111, ch 16, 3.
58-5-30. Contingent liability of member of mutual insurer not terminated by termination of policy.Termination of the policy of any member of a domestic mutual insurer shall not relieve him of contingent liability for his prorata share, if any, of the obligations of the insurer which accrued while the policy was in force. Source: SL 1966, ch 111, ch 16, 29 (2).
58-5-31. Unrealized contingent liability of members of mutual not an asset of insurer.Any unrealized contingent liability of members shall not constitute an asset of the insurer in any determination of its financial condition. Source: SL 1966, ch 111, ch 16, 29 (3).
58-5-32. Levy of assessment by mutual insurer for contingent liability.If at any time the minimum basic surplus required of a domestic mutual insurer by 58-5-21 and 58-5-22 becomes impaired and the deficiency is not cured from other sources, its directors shall forthwith levy an assessment upon only its members who held policies providing for contingent liability at any time within the twelve months preceding the date that notice of such assessment was mailed to the members' last known post office addresses, and such members shall be liable thereafter to the insurer for the amount so assessed. Source: SL 1966, ch 111, ch 16, 30 (1).
58-5-33. Amount of assessment by mutual insurer.The assessment under 58-5-32 shall be in an amount to cure such deficiency and to provide a reasonable amount of working funds which shall not exceed five percent of the insurer's liabilities as of the date such deficiency was determined. Source: SL 1966, ch 111, ch 16, 30 (2).
58-5-34. Computation of assessment levied by mutual insurer.In levying such assessment, the computation shall be upon the basis of the premiums earned on such policy during the period to which the assessment relates. Source: SL 1966, ch 111, ch 16, 30 (3).
58-5-35. Offsets not allowed against assessment by mutual insurer.No member of a domestic mutual insurer shall have an offset against any assessment for which he is liable, on account of any claim for unearned premium or loss payable. Source: SL 1966, ch 111, ch 16, 30 (4).
58-5-36. Lien of mutual insurer for levy of assessment for contingent liability.If approved by the director of insurance as being in the best interests of the insurer and its members an assessment pursuant to 58-5-32 after notice under that section may be secured by placing a lien upon the cash surrender value and accumulated dividends of any life insurance policy held by the insurer to the credit of such member. Source: SL 1966, ch 111, ch 16, 30 (5).
58-5-37. Extinguishment of contingent liability--Issuance of nonassessable policies--Revocation of authority.After a domestic mutual insurer has established the surplus prescribed in 58-5-21 and 58-5-22, and has authority to issue nonassessable policies, it may, with the director's approval, extinguish the contingent liability resulting from assessment of its members and thereafter issue nonassessable policies; provided that the director shall revoke the authority of a domestic mutual insurer to issue policies without contingent liability if at any time the insurer's assets are less than the sum of its liabilities and the surplus required for such authority, or if the insurer, by resolution of its board of directors approved by a majority of its members, requests that the authority be revoked. During the absence of such authority the insurer shall not issue any policy without providing therein for the contingent liability of the policyholder, nor renew any policy which is renewable at the option of the insurer without endorsing the same to provide for such contingent liability. Source: SL 1966, ch 111, ch 16, 31 (1).
58-5-38. Extinguishment of contingent liability must apply to all members and policies.The director shall not approve the extinguishment of contingent liability pursuant to 58-5-37 unless it applies to all members and all policies of insurance of such insurer. Source: SL 1966, ch 111, ch 16, 31 (2).
58-5-39. Bylaws of domestic mutual insurer--Adoption, modification, and revocation.The initial board of directors of a domestic mutual insurer shall adopt bylaws, subject to the approval of the insurer's members at the next succeeding meeting by a two-thirds vote of those present in person or by proxy. The members shall have power by a two-thirds vote of those present in person or by proxy to make, modify, and revoke bylaws. Source: SL 1966, ch 111, ch 16, 16 (1).
58-5-4. Applicability of corporation laws.The applicable laws of this state as to domestic corporations formed for profit shall apply as to both stock and mutual insurers, except where in conflict with the express provisions of this title and the reasonable implications of such provisions. Source: SL 1966, ch 111, ch 16, 5.
58-5-40. Meetings of members of domestic mutual insurer--Time, notice, quorum, and conduct.The bylaws of a domestic mutual insurer shall provide the time, notice, quorum, and conduct of annual and special meetings of members. In no event shall a quorum at any meeting of members be less than five percent of the total membership. Source: SL 1966, ch 111, ch 16, 16 (2) (c), (3); SL 1968, ch 135; SL 1973, ch 297.
58-5-41. Voting rights of members of domestic mutual insurer.The bylaws of a domestic mutual insurer shall provide that each member is entitled to one vote upon each matter coming to a vote at meetings of members and that a member shall have the right to vote in person or by his written proxy. Such proxy shall be for a reasonable specified period of time subject to revocation by a member at any time by written notice to the secretary of the company. Source: SL 1966, ch 111, ch 16, 16 (2) (a).
58-5-42. Directors of domestic mutual insurer--Number, qualifications, election, terms of office, and powers.The bylaws of a domestic mutual insurer shall provide for election of directors by the members, and the number, qualifications, terms of office, and powers of directors. Source: SL 1966, ch 111, ch 16, 16 (2) (b).
58-5-43. Officers of domestic mutual insurer--Number, designation, election, and terms of office--Powers and duties.The bylaws of a domestic mutual insurer shall provide the number, designation, election, terms, and powers and duties of the respective corporate officers. Source: SL 1966, ch 111, ch 16, 16 (2) (d).
58-5-44. Funds of domestic mutual insurer--Deposit, custody, disbursement, and accounting.The bylaws of a domestic mutual insurer shall provide for deposit, custody, disbursement, and accounting of corporate funds. Source: SL 1966, ch 111, ch 16, 16 (2) (e).
58-5-45. Management of domestic mutual insurer.The bylaws of a domestic mutual insurer shall include other provisions necessary for the management of its affairs. Source: SL 1966, ch 111, ch 16, 16 (2) (f).
58-5-46. Certified copy of bylaws and amendments of domestic mutual insurer filed with director--Disapproval by director, grounds.A domestic mutual insurer shall promptly file with the director of the Division of Insurance a certified copy of its bylaws and all amendments thereto. The director at the time of filing or within thirty days thereafter shall disapprove any bylaw provision deemed by him to be unlawful, unreasonable, inadequate, unfair, or detrimental to the proper interests or protection of the insurer's members or any class thereof. Source: SL 1966, ch 111, ch 16, 16 (4).
58-5-47. Bylaws of domestic stock insurer--Adoption, modification, and revocation.Before commencing business, the initial board of directors of a domestic stock insurer shall adopt bylaws which shall be subject to the approval by a two-thirds vote of the stockholders present in person or by proxy at the next succeeding stockholders' meeting. Stockholders shall have the power to make, modify, or revoke bylaws by a two-thirds vote of those stockholders present in person or by proxy at a stockholders' meeting. Source: SL 1966, ch 111, ch 16, 17 (1).
58-5-48. Bylaws of domestic stock insurer subject to approval of director.The bylaws of a domestic stock insurer shall be subject to the approval of the director as provided in 58-5-46. Source: SL 1966, ch 111, ch 16, 17 (2).
58-5-49. Equity securities of domestic stock insurer--Rules and regulations as to solicitation of proxies, consents, and authorities--Adoption and promulgation.The director shall have authority to make rules and regulations as to solicitation by mail, or otherwise, of proxies, consents, or authorizations, in respect of any equity securities of a domestic stock insurer, with requirements designed to assure timely, accurate, and reasonably adequate information to those solicited as to the identity of those for whom the solicitation is made, purposes for which the proxies, consents, or authorizations may be used, pertinent information as to the fiscal situation of such insurer, and generally, such factual material as is conducive to helpful and informed participation in corporate affairs on the part of those solicited, and which will tend to eliminate or curtail any abuses in the use of such proxies, consents, or authorizations and such rules and regulations to be so adopted and promulgated by the director with due regard to statutes, rules and regulations in force in other jurisdictions of the United States relative to such solicitation, this to the end of reasonable uniformity to the extent feasible in regulation of the insurance industry in this respect. Source: SL 1966, ch 111, ch 16, 20.
58-5-5. Incorporation of stock and mutual insurers.Sections 58-5-6 and 58-5-7 apply to both stock and mutual insurers incorporated in this state after June 30, 1966. Source: SL 1966, ch 111, ch 16, 6 (1).
58-5-50. Annual meetings of stockholders or members--Election of directors--Reports of officers of insurer as to affairs--Transaction of other business--Notice of meeting.Each insurer shall hold an annual meeting of its stockholders or members, to fill vacancies existing or occurring in the board of directors, receive and consider reports of the insurer's officers as to its affairs, and transact such other business as may properly be brought before it. Notice shall be given of such meeting in the manner provided in the bylaws. Source: SL 1966, ch 111, ch 16, 18 (3).
58-5-51. Special meetings of stockholders or members--Calling by board of directors--Notice.Except as otherwise provided in 58-5-56, special meetings of the stockholders or members may be called at any time for any purpose by the board of directors, upon not less than ten days' notice or as provided in the bylaws. The notice shall state the purpose of the meeting, and no business shall be transacted at such meeting other than that given in the notice. Source: SL 1966, ch 111, ch 16, 18 (4).
58-5-52. Special meetings of stockholders or members called by secretary on request of directors, stockholders, or members--Failure of secretary to issue call.At any time, upon written request of not less than one-third of the directors, or of any stockholders or members holding in the aggregate one-fifth of the voting power of all stockholders or members, it shall be the duty of the secretary to call a special meeting of stockholders or members to be held at such time as the secretary may fix, not less than ten nor more than sixty days after the receipt of the request. If the secretary fails to issue such call, the directors, stockholders, or members making the request may do so. Source: SL 1966, ch 111, ch 16, 18 (5).
58-5-53. Stockholder or member compelling board of directors to call annual meeting.If more than fifteen months elapse without an annual stockholders' or members' meeting, any stockholder or member may compel the board of directors to call such a meeting. Source: SL 1966, ch 111, ch 16, 18 (5).
58-5-54. Place for holding meetings of stockholders or members--Waiver.Meetings of stockholders or members of a domestic insurer shall be held in the municipality of its home office or principal office or place of business in this state. However, the director may waive the provisions of this section if a wholly owned subsidiary or a company is located in a small municipality without sufficient facilities to accommodate such a meeting and such subsidiary or company can demonstrate, to the director's satisfaction, a need for such waiver. The director may also waive the provisions of this section if one percent or less of the outstanding shares of stock entitled to vote are owned by South Dakota residents. Source: SL 1966, ch 111, ch 16, 18(1); SL 1988, ch 388; SL 1990, ch 391.
58-5-55. Meetings of stockholders or members--Organization for transaction of business, quorum required.A stockholders' or members' meeting duly held can be organized for the transaction of business whenever a quorum is present. Unless otherwise provided in the bylaws or articles of incorporation:(1)The presence, in person or by proxy, of the holders of not less than ten percent of the voting power of all stockholders or of all members shall constitute a quorum;(2)The stockholders or members present at a duly organized meeting can continue to do business until adjournment, notwithstanding the withdrawal of enough stockholders or members to leave less than a quorum;(3)If any necessary officer fails to attend such meeting, any stockholder or member present may be elected to act temporarily in lieu of any such absent officer;(4)In the absence of a quorum, those present may adjourn the meeting to such time as they may determine; and(5)An annual or special meeting of stockholders or members may be adjourned to another date without a new notice being given. Source: SL 1966, ch 111, ch 16, 18 (6).
58-5-56. Amendment of articles of incorporation at meeting of stockholders or members--Notice of meeting.No meeting of stockholders or members shall amend the insurer's articles of incorporation unless such amendment to the articles of incorporation is included in the notice of such meeting, which notice must be given by mail at least thirty days prior to such meeting, to those entitled to vote, at their respective addresses appearing upon the corporate records. Source: SL 1966, ch 111, ch 16, 18 (2).
58-5-57. Reduction of capital of stock insurer--Disapproval by director, grounds.If an amendment of articles of incorporation would reduce the authorized capital stock of a stock insurer below the amount thereof then outstanding, the director shall not approve the amendment if he has reason to believe that the interests of policyholders or creditors of the insurer would be materially prejudiced by such reduction. Source: SL 1966, ch 111, ch 16, 8 (2).
58-5-58. Directors of domestic insurer--Number--Management of affairs of insurer.The affairs of every domestic insurer shall be managed by the number of directors fixed in the insurer's bylaws, which shall not be less than five nor more than twenty-one directors. Source: SL 1966, ch 111, ch 16, 21 (1).
58-5-59. Election of directors of domestic insurer--Qualifications.Each director shall be elected from and by the members or stockholders of a domestic insurer. However, directors of a domestic insurer, which is wholly owned by one or more other corporations or other legal entities, need not be stockholders. A majority of the board of directors of a domestic insurer shall be citizens and actual bona fide residents of this state, but this requirement does not apply if the insurer is a member of an insurance holding company system and is controlled by a person who is not a resident of this state or whose principal place of business is outside this state. The provisions of this section do not apply to any insurer if in excess of one thousand persons are entitled to vote in its election of directors and a majority thereof reside outside of this state or if less than one percent of its shares outstanding are owned by residents of this state. Source: SL 1966, ch 111, ch 16, 21 (2); SL 1984, ch 324; SL 1985, ch 386; SL 2001, ch 270, 1.
58-5-6.1. Domestication of foreign company--Requirements and procedure.Any company organized under the laws of any other state or country, which might have been originally qualified and incorporated under the laws of this state, and which has been admitted to do business in this state may become a domestic corporation, and be entitled to certificates of its corporate existence and license to transact business in this state, and be subject in all respects to the authority and jurisdiction thereof upon completion with the following requirements:(1)Execution, filing, and recording of original certificates;(2)Payment of incorporation fees; and(3)Designation of its principal place of business in this state. Source: SL 1976, ch 310; SL 1987, ch 371.
58-5-6. Incorporators--Number and qualifications.Five or more individuals may incorporate as a stock insurer; ten or more individuals may incorporate as a mutual insurer. The incorporators shall be citizens of the United States, at least twenty-one years of age, and a majority of the incorporators shall be residents of this state. Source: SL 1966, ch 111, ch 16, 6 (2).
58-5-60. Directors of domestic insurer--Terms of office.The term of a director shall extend until his successor has been elected and has qualified. Source: SL 1966, ch 111, ch 16, 21 (3).
58-5-61. Pecuniary interest of officer, director, committee member, or employee of domestic insurer in transactions with insurer prohibited--Misdemeanor.Any officer or director, or any member of any committee or an employee of a domestic insurer who is charged with the duty of investing or handling the insurer's funds:(1)Shall not deposit or invest such funds except in the insurer's corporate name;(2)Shall not borrow the funds of such insurer;(3)Shall not be pecuniarily interested in any loan, pledge of deposit, security, investments, sale, purchase, exchange, reinsurance, or other similar transaction or property of such insurer except as a stockholder or member;(4)Shall not take or receive to his own use any fee, brokerage, commission, gift, or other consideration for or on account of any such transaction made by or on behalf of such insurer.Violation of this section is a Class 2 misdemeanor. Source: SL 1966, ch 111, ch 16, 22 (1); SL 1978, ch 359, 2.
58-5-62. Guarantee by insurer of any financial obligation of its officers, directors, stockholders, or members prohibited.No insurer shall guarantee any financial obligation of any of its officers, directors, stockholders, or members. Source: SL 1966, ch 111, ch 16, 22 (2).
58-5-63. Policy holding not a prohibited pecuniary interest.Sections 58-5-61 and 58-5-62 shall not prohibit such a director, officer, stockholder, or member of a committee or employee from becoming a policyholder of the insurer and enjoying the usual rights given to other policyholders. Source: SL 1966, ch 111, ch 16, 22 (3).
58-5-64. Stock ownership not a prohibited pecuniary interest.Any of the persons referred to in 58-5-61 to 58-5-63, inclusive, shall not be deemed pecuniarily interested in any transaction with another corporation in which such person has no pecuniary interest other than ownership of stock or other securities issued by such corporation and representing a relatively trivial interest therein. Source: SL 1966, ch 111, ch 16, 22 (4).
58-5-65. Other permitted pecuniary interest of director, officer, or employee of insurer.The director of the Division of Insurance may, by regulations, define and permit additional exceptions to the prohibition contained in 58-5-61 solely to enable payment of reasonable compensation to a director, officer, or employee of the insurer, or to a corporation or firm in which a director, officer, or employee is interested, for necessary services performed or sales or purchases made to or for the insurer in the ordinary course of the insurer's business and in the usual private professional or business capacity of such director, officer, employee, or such corporation or firm. Source: SL 1966, ch 111, ch 16, 22 (5); SL 1974, ch 309.
58-5-66. Compensation of officers and employees of domestic insurer.No officer or employee of a domestic insurer shall be compensated unreasonably and the compensation of any director or officer of such insurer shall not be calculated, directly or indirectly, as a percentage of profits, premiums collected, or insurance written by the insurer without the approval of the director of the Division of Insurance. Source: SL 1966, ch 111, ch 16, 23 (3).
58-5-67. Pensions to officers and directors of domestic insurers.No domestic insurer shall grant any pension to any officer or director thereof, or to any member of his family after his death, except that such insurer may in pursuance of the terms of a retirement plan adopted by the board of directors of such insurer and approved by the director of the Division of Insurance provide for any person who is or has been a salaried officer or employee of such insurer, a pension payable at the time of his retirement by reason of age or disability, and also life insurance benefits payable at his death. Source: SL 1966, ch 111, ch 16, 23 (3).
58-5-68. Equity security defined.The term "equity security" when used in 58-5-69 to 58-5-78, inclusive, means any stock or similar security; or any security convertible, with or without consideration, into such a security, or carrying any warrant or right to subscribe to or purchase such a security; or any such warrant or right; or any other security which the director of the Division of Insurance shall deem to be of similar nature and consider necessary or appropriate, by such rules and regulations as he may prescribe in the public interest or for the protection of investors, to treat as an equity security. Source: SL 1966, ch 111, ch 16, 27 (6).
58-5-69. Statement of ownership of insurance company filed with director--Change of ownership, time for statement.Every person who is directly or indirectly the beneficial owner of more than ten percent of any class of any equity security of a domestic stock insurance company, or who is a director or an officer of such company, shall file in the office of the director of the Division of Insurance within ten days after he becomes such beneficial owner, director, or officer, a statement, in such form as the director may prescribe, of the amount of all equity securities of such company of which he is the beneficial owner. If there has been a change in ownership during any month, such person shall file within ten days after the end of such month in the office of the director a statement, in such form as the director may prescribe, indicating his ownership at the close of the calendar month and such changes in his ownership as have occurred during such calendar month. Source: SL 1966, ch 111, ch 16, 27 (1).
58-5-7. Articles of incorporation--Execution and acknowledgment--Contents.The incorporators shall execute and acknowledge articles of incorporation in triplicate. The articles of incorporation must state:(1)The name of the corporation; if a mutual, the word "mutual" must be a part of the name. An alternative name or names may be specified for use in other jurisdictions;(2)The purpose for which the corporation was formed;(3)The duration of its existence, which may be perpetual;(4)The kinds of insurance, as defined in this title, which the corporation is formed to transact;(5)If a stock corporation, its authorized capital, the number of shares of common stock and the par value of each share, which shall be at least one dollar. Only one class of voting common stock shall be authorized;(6)If a mutual corporation, the maximum contingent liability of its members, other than as to nonassessable policies, shall be stated in the articles of incorporation, but shall not be less than one nor more than six times the premium for the member's policy at the annual premium rate for a term of one year;(7)The number of directors, which shall be not less than five nor more than twenty-one, the names and addresses of the members of the initial board of directors, who shall serve until the first meeting of stockholders or until their successors are elected and qualify;(8)The post office address of its principal place of business in this state; and(9)The name and residence address of each incorporator. Source: SL 1966, ch 111, ch 16, 6 (3).
58-5-70. Short sales by insider as misdemeanor--Delivery of securities sold, when required.It shall be a Class 2 misdemeanor for any such beneficial owner, director, or officer, directly or indirectly, to sell any equity security of such company if the person selling the security or his principal:(1)Does not own the security sold; or(2)If owning the security, does not deliver it against such sale within twenty days thereafter, or does not within five days after such sale deposit it in the mails or other usual channels of transportation;but no person shall be deemed to have violated this section if he proves that notwithstanding the exercise of good faith he was unable to make such delivery or deposit within such time, or that to do so would cause undue inconvenience or expense. Source: SL 1966, ch 111, ch 16, 27 (3); SL 1978, ch 359, 2.
58-5-71. Profits from insider security transactions accruing to company.For the purpose of preventing the unfair use of information which may have been obtained by such beneficial owner, director, or officer by reason of his relationship to such company, any profit realized by him from any purchase and sale, or any sale and purchase, of any equity security of such company within any period of less than six months, unless such security was acquired in good faith in connection with a debt previously contracted, shall inure to and be recoverable by the company, irrespective of any intention on the part of such beneficial owner, director, or officer in entering into such transaction of holding the security purchased or of not repurchasing the security sold for a period exceeding six months. Source: SL 1966, ch 111, ch 16, 27 (2).
58-5-72. Suit to recover insider profits accruing to company.Suit to recover such profit may be instituted at law or in equity in any court of competent jurisdiction by the company, or by the owner of any security of the company in the name and in behalf of the company if the company shall fail or refuse to bring such suit within sixty days after request or shall fail diligently to prosecute the same thereafter; but no such suit shall be brought more than two years after the date such profit was realized. Source: SL 1966, ch 111, ch 16, 27 (2).
58-5-73. Exemption from insider trading restrictions.Sections 58-5-68 to 58-5-78, inclusive, shall not be construed to cover any transaction where such beneficial owner was not such both at the time of the purchase and sale, or the sale and purchase, of the security involved, or any transaction which the director of the Division of Insurance by rules and regulations may exempt as not comprehended within the purpose of said sections. Source: SL 1966, ch 111, ch 16, 27 (2).
58-5-74. Registered and closely held securities exempt from insider trading restrictions.The provisions of 58-5-69 to 58-5-73, inclusive, shall not apply to equity securities of a domestic stock insurance company if:(1)Such securities shall be registered, or shall be required to be registered, pursuant to section 12 of the Securities Exchange Act of 1934, as amended, or if(2)Such domestic stock insurance company shall not have any class of its equity securities held of record by one hundred or more persons on the last business day of the year next preceding the year in which equity securities of the company would be subject to the provisions of 58-5-69 to 58-5-73, inclusive, except for the provisions of this subdivision (2). Source: SL 1966, ch 111, ch 16, 27 (7).
58-5-75. Brokers and market specialists exempt from insider trading restrictions.The provisions of 58-5-71 to 58-5-73, inclusive, shall not apply to any purchase and sale, or sale and purchase, and the provisions of 58-5-70 shall not apply to any sale of an equity security of a domestic stock insurance company not then or theretofore held by him in an investment account, by a dealer in the ordinary course of his business and incident to the establishment or maintenance by him of a primary or secondary market, otherwise than on an exchange as defined in the Securities Exchange Act of 1934, for such security. The director of the Division of Insurance may, by such rules and regulations as he deems necessary or appropriate in the public interest, define and prescribe terms and conditions with respect to securities held in an investment account and transactions made in the ordinary course of business and incident to the establishment or maintenance of a primary or secondary market. Source: SL 1966, ch 111, ch 16, 27 (4).
58-5-76. Arbitrage transactions exempt from insider trading restrictions.The provisions of 58-5-69 to 58-5-73, inclusive, shall not apply to foreign or domestic arbitrage transactions unless contrary to such rules and regulations as the insurance director may adopt in order to carry out the purpose of 58-5-68 to 58-5-78, inclusive. Source: SL 1966, ch 111, ch 16, 27 (5).
58-5-77. Rules and regulations on insider trading.The director of the Division of Insurance shall have the power to make such rules and regulations as may be necessary for the execution of the functions vested in him by 58-5-68 to 58-5-76, inclusive, and may for such purpose classify domestic stock insurance companies, securities, and other persons or matters within his jurisdiction. Source: SL 1966, ch 111, ch 16, 27 (8).
58-5-78. Nonliability for insider trading acts in good faith in conformity with rule or regulation.No provision of 58-5-69 to 58-5-73, inclusive, imposing any liability shall apply to any act done or omitted in good faith in conformity with any rule or regulation of the insurance director, notwithstanding that such rule or regulation may, after such act or omission, be amended or rescinded or determined by judicial or other authority to be invalid for any reason. Source: SL 1966, ch 111, ch 16, 27 (8).
58-5-79. Management of domestic insurers during national emergency--Continuity, means for facilitating.The specific purpose of 58-5-80 to 58-5-84, inclusive, is to facilitate the continued operation of all domestic insurers in the event a national emergency makes it impossible or impracticable for an insurer to conduct its business in strict accord with applicable provisions of law, its bylaws, or its charter. Source: SL 1966, ch 111, ch 16, 43 (1).
58-5-8. Articles of incorporation delivered to director with filing fees--Examination and approval by attorney general, return to director.The incorporators of a proposed domestic insurer shall deliver the original and two executed copies of the articles of incorporation to the director of the Division of Insurance together with the filing fees therefor specified in 58-2-29. The director shall submit the same to the attorney general for examination. If the attorney general finds that the articles comply with this title and the Constitution and laws of the United States and of this state, he shall endorse his approval thereon and return such articles to the director. Source: SL 1966, ch 111, ch 16, 7 (1).
58-5-80. Bylaws to cover management during national emergency.The board of directors of any domestic insurer may at any time adopt emergency bylaws, subject to repeal or change by action of those having power to adopt regular bylaws for the insurer, which shall be operative during such a national emergency and which may, notwithstanding any different provisions of the regular bylaws, or of the applicable statutes, or of the insurer's charter, make any provision that may be reasonably necessary for the operation of the insurer during the period of such emergency. Source: SL 1966, ch 111, ch 16, 43 (2).
58-5-81. Quorum of directors during national emergency--Filling vacancies in board.In the event that the board of directors of a domestic insurer has not adopted emergency bylaws, the following provisions shall become effective upon the occurrence of such a national emergency:(1)Three directors shall constitute a quorum for the transaction of business at all meetings of the board; and(2)Any vacancy in the board may be filled by a majority of the remaining directors, though less than a quorum, or by a sole remaining director. Source: SL 1966, ch 111, ch 16, 43 (3).
58-5-82. Vice-presidents acting as directors during national emergency--Insufficient number of vice-presidents, appointment of directors by insurance director.If there are no surviving directors, but at least three vice-presidents of the insurer survive, the three vice-presidents with the longest term of service shall be the directors and shall possess all of the powers of the previous board of directors and such powers as are granted herein or by subsequently enacted legislation. By majority vote such emergency board of directors may elect other directors. If there are not at least three surviving vice-presidents, the director of the Division of Insurance or duly designated person exercising the powers of the director shall appoint three persons as directors who shall possess all of the powers of the previous board of directors and such powers as are granted herein or by subsequently enacted legislation, and these persons by majority vote may elect other directors. Source: SL 1966, ch 111, ch 16, 43 (4).
58-5-83. Succession to office during national emergency.At any time the board of directors of a domestic insurer may, by resolution, provide that in the event of such a national emergency and in the event of the death or incapacity of the president, the secretary or the treasurer of the insurer, such officers, or any of them, shall be succeeded in the office by the person named or described in a succession list adopted by the board of directors. Such list may be on the basis of named persons or position titles, shall establish the order of priority, and may prescribe the conditions under which the powers of the office shall be exercised. Source: SL 1966, ch 111, ch 16, 43 (5).
58-5-84. Principal place of business during national emergency.At any time the board of directors of a domestic insurer may, by resolution, provide that in the event of such national emergency the home office or principal place of business of the insurer shall be at such location as is named or described in the resolution. Such resolution may provide for alternate locations and establish an order of preference. Source: SL 1966, ch 111, ch 16, 43 (6).
58-5-85. Domestic insurers--Management and exclusive agency contracts, filing with and approval by director--Violation as misdemeanor.No domestic insurer shall make or participate in any contract whereby any person is granted or is to enjoy in fact the management of the insurer to the substantial exclusion of its board of directors, or to have the controlling or preemptive right to produce substantially all insurance business for the insurer, unless the contract is filed with and approved by the director of the Division of Insurance. Violation of this section is a Class 2 misdemeanor. Source: SL 1966, ch 111, ch 16, 23 (1); SL 1978, ch 359, 2.
58-5-86. Domestic insurer--Management and exclusive agency contracts, disapproval by director, grounds.The director shall disapprove any such contract if he finds that it:(1)Subjects the insurer to excessive charges; or(2)Is to extend for an unreasonable length of time; or(3)Does not contain fair and adequate standards of performance; or(4)Contains any provision which the director deems detrimental to the best interests of stockholders or members of the insurer. Source: SL 1966, ch 111, ch 16, 23 (2).
58-5-87. Domestic insurer--Management and exclusive agency contracts, time for disapproval by director--Disapproval in writing, statement of grounds.The contract shall be deemed approved unless disapproved by the director within twenty days after date of filing, subject to such reasonable extension of time as the director may require by notice given within such twenty days. Any disapproval shall be delivered to the insurer in writing, stating the grounds therefor. Source: SL 1966, ch 111, ch 16, 23 (1).
58-5-9. Distribution of copies of approved articles.Upon such approval, the director shall retain one copy of such articles and return the original and remaining copy thereof to the incorporators, who shall file the original with the secretary of state. Source: SL 1966, ch 111, ch 16, 7 (2).
58-5-93. Location of home office and principal place of business of domestic insurers--Records maintained.Every domestic insurer shall have and maintain its principal place of business and home office in this state and shall keep therein complete records of its assets, transactions, and affairs in accordance with such methods and systems as are customary or suitable as to the kinds of insurance transacted. The provisions of this section requiring that a domestic insurer maintain its principal place of business and home office in this state do not apply to the sale of a wholly owned subsidiary of a domestic insurer whose net worth does not represent more than seven percent of its parent company's assets. Source: SL 1966, ch 111, ch 16, 24 (1); SL 1985, ch 387.
58-5-94. Assets of domestic insurer to be maintained in state--Exceptions.Every domestic insurer shall have and maintain its assets in this state, except as to:(1)Real property and personal property appurtenant thereto lawfully owned by the insurer and located outside this state; and(2)Such property of the insurer as may be customary, necessary, and convenient to enable and facilitate the operation of its branch offices and "regional home offices" located outside this state as referred to in 58-5-97. Source: SL 1966, ch 111, ch 16, 24 (2).
58-5-95. Director's consent required for removal of records or assets from state--Unauthorized removal or concealment as felony.Removal of all or a material part of the records or assets of a domestic insurer from this state except pursuant to a plan of merger or consolidation approved by the director under this title, or for such reasonable purposes and periods of time as may be approved by the director in writing in advance of such removal, or concealment of such records or assets or material part thereof from the director, is prohibited. Any person who removes or attempts to remove such records or assets or such material part thereof from the home office or other place of business or of safekeeping of the insurer in this state with the intent to remove the same from this state, or who conceals or attempts to conceal the same from the director, in violation of this section, is guilty of a Class 5 felony. Source: SL 1966, ch 111, ch 16, 24 (3); SL 1978, ch 359, 4.
58-5-96. Delinquency proceedings by director for removal or attempted removal of records or assets of domestic insurer.Upon any removal or attempted removal of such records or assets or upon retention of such records or assets or material part thereof outside this state, beyond the period therefor specified in the director's consent under which the records were so removed thereat, or upon concealment of or attempt to conceal records or assets in violation of 58-5-95, the director may institute delinquency proceedings against the insurer pursuant to the provisions of chapter 58-29B. Source: SL 1966, ch 111, ch 16, 24 (3).
58-5-97. Branch offices established by domestic insurer--Transmission of funds outside state--Deposits under custodial arrangements.Sections 58-5-93 to 58-5-96, inclusive, shall not be deemed to prohibit or prevent an insurer from:(1)Establishing and maintaining branch offices or "regional home offices" in other states where necessary or convenient to the transaction of its business and keeping therein the detailed records and assets customary and necessary for the servicing of its insurance in the territory served by such an office, as long as such records and assets are made available for examination by the director of the Division of Insurance at his request;(2)Having, depositing, or transmitting funds and assets of the insurer in or to jurisdictions outside of this state as reasonably and customarily required in the regular course of its business; and(3)Making deposits under custodial arrangements as provided by 58-7-18 to 58-7-25, inclusive. Source: SL 1966, ch 111, ch 16, 24 (4).
58-5-98. Prior maintenance by domestic insurer of branch or regional place of business or home office outside state not invalidated.Nothing in 58-5-93 to 58-5-96, inclusive, shall invalidate continued maintenance by any domestic insurer of branch or regional places of business or home offices established outside this state prior to July 1, 1959, or business practices in connection therewith established prior to July 1, 1959. Source: SL 1966, ch 111, ch 16, 24 (5); SL 1967, ch 134; SL 1982, ch 110, 5.
58-5-99. Reciprocating state defined.A "reciprocating" state, as used in 58-5-100 to 58-5-103, inclusive, is one under the laws of which limitations similar to those contained in said sections are imposed upon and enforced against insurers domiciled in that state. Source: SL 1966, ch 111, ch 16, 28 (4).
58-5A-1. Definitions.Terms used in this chapter mean:(1)"Affiliate of, or a person affiliated with, a specific person," any person who directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, the person specified;(2)"Control," including "controlling," "controlled by," and "under common control with," the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract other than a commercial contract for goods or nonmanagement services, or otherwise, unless the power is solely the result of an official position with or a corporate office held by the person. Control is presumed to exist if any person, directly or indirectly, owns, controls, holds with the power to vote, or holds proxies representing, ten percent or more of the voting securities of any other person. This presumption may be rebutted by a showing made in the manner provided by 58-5A-29 that control does not exist in fact;(3)"Enterprise risk," any activity, circumstance, event, or series of events involving one or more affiliates of an insurer that, if not remedied promptly, is likely to have a material adverse effect upon the financial condition or liquidity of the insurer or its insurance holding company system as a whole, including anything that may cause the insurer's risk-based capital to fall into company action level or may cause the insurer to be in hazardous financial condition pursuant to chapter 58-4;(4)"Group-wide supervisor," the regulatory official authorized to engage in conducting and coordinating group-wide supervision activities who is determined or acknowledged by the director under the provisions of 58-5A-80.1 to 58-5A-80.8, inclusive, to have sufficient significant contacts with the internationally active insurance group;(5)"Insurance group," for the purposes of conducting an ORSA, those insurers and affiliates included within an insurance holding company system;(6)"Insurance holding company system," any two or more affiliated persons, one or more of which is an insurer;(7)"Insurer," a company qualified and licensed by the director of the Division of Insurance to transact the business of insurance in this state. For ORSA purposes, the term, insurer, does not include agencies, authorities or instrumentalities of the United States, its possessions or territories, the Commonwealth of Puerto Rico, the District of Columbia, or a state or political subdivision of a state;(8)"Internationally active insurance group," an insurance holding company system that includes an insurer registered under chapter 58-5A and that:(a)Writes premiums in at least three countries;(b)Writes at least ten percent of its total gross premium outside the United States; and(c)Based on a three-year rolling average, has total assets in the insurance holding company system of at least fifty billion dollars or the total gross written premiums of the insurance holding company system are at least ten billion dollars;(9)"NAIC," the National Association of Insurance Commissioners;(10)"ORSA guidance manual," the version of the NAIC own risk and solvency assessment guidance manual as adopted by the director for use in South Dakota by administrative rule;(11)"ORSA summary report," a confidential high-level summary of an insurer or insurance group's ORSA;(12)"Own risk and solvency assessment" or "ORSA," a confidential internal assessment, appropriate to the nature, scale, and complexity of an insurer or insurance group, conducted by that insurer or insurance group of the material and relevant risks associated with the insurer or insurance group's current business plan and the sufficiency of capital resources to support those risks;(13)"Security holder" of a specified person is one who owns any security of the person, including common stock, preferred stock, debt obligations, and any other security convertible into or evidencing the right to acquire any of the foregoing;(14)"Subsidiary of a specified person," any affiliate controlled by a person directly, or indirectly, through one or more intermediaries;(15)"Voting security," any security convertible into or evidencing a right to acquire a voting security. Source: SL 1972, ch 267, 1; SL 1992, ch 341, 1; SL 2015, ch 246, 1; SL 2017, ch 210, 1; SL 2020, ch 213,  1.
58-5A-10.1. Request for public hearing on consolidated basis.If a proposed acquisition of control requires the approval of more than one director or commissioner, the public hearing referred to in 58-5A-10 may be held on a consolidated basis upon request of the person filing the statement referred to in 58-5A-2, 58-5A-3, or 58-5A-3.1. The statement shall be filed with the NAIC within five days of making the request for public hearing. A director or commissioner may opt out of a consolidated hearing, and shall provide notice to the applicant within ten days of the receipt of the statement. A hearing conducted on a consolidated basis shall be public and shall be held within the United States before the directors or commissioners of the states in which the insurers are domiciled. The directors or commissioners shall hear and receive evidence. A director or commissioner may attend the hearing, in person or by telecommunication. Source: SL 2015, ch 246, 22.
58-5A-10. Time of hearing--Notice.The public hearing required by 58-5A-9 shall be held within thirty days after the statement required by 58-5A-3 is filed, and at least twenty days' notice thereof shall be given by the director to the person filing the statement. Not less than seven days' notice of such public hearing shall be given by the person filing the statement to the insurer and to such other persons as may be designated by the director. The insurer shall give such notice to its security holders. Source: SL 1972, ch 267, 9.
58-5A-11.1. Cost of hearing officer--Retention of various experts at acquiring person's expense.If the director appoints a hearing officer to preside at the hearing pursuant to 58-5A-9, the cost of employing the hearing officer shall be borne entirely by the entity making the filing of the information statement required by 58-5A-4.The director may retain at the acquiring person's expense any attorneys, actuaries, accountants, and other experts not otherwise a part of the director's staff as may be reasonably necessary to assist the director in reviewing the proposed acquisition of control. Source: SL 1985, ch 388; SL 1992, ch 341, 6.
58-5A-11. Procedure at hearing--Evidence admissible.At the public hearing required by 58-5A-9, the person filing the statement, the insurer, any person to whom notice of hearing was sent, and any other person whose interests may be affected thereby shall have the right to present evidence, examine and cross-examine witnesses, and offer oral and written arguments and in connection therewith shall be entitled to conduct discovery proceedings in the same manner as is presently allowed in the circuit court of this state. All discovery proceedings shall be concluded not later than three days prior to the commencement of the public hearing. Source: SL 1972, ch 267, 9.
58-5A-12. Time for director's determination after hearing.The director shall make a determination within thirty days after the conclusion of the public hearing required by 58-5A-9. Source: SL 1972, ch 267, 9.
58-5A-13. Statements and notices mailed to shareholders--Expenses of mailing--Security required.All statements, amendments, or other material filed pursuant to 58-5A-3 to 58-5A-7, inclusive, and all notices of public hearings held pursuant to 58-5A-9 to 58-5A-12, inclusive, shall be mailed by the insurer to its shareholders within five business days after the insurer has received such statements, amendments, other material, or notices. The expenses of mailing shall be borne by the person making the filing. As security for the payment of such expenses, such person shall file with the director an acceptable bond or other deposit in an amount to be determined by the director. Source: SL 1972, ch 267, 10.
58-5A-15. Mergers and consolidations exempt from information and approval requirements.The provisions of 58-5A-3 to 58-5A-13, inclusive, shall not apply to any transaction which is subject to the provisions of chapter 58-5 and dealing with the merger or consolidation of two or more insurers. Source: SL 1972, ch 267, 11 (2).
58-5A-16. Acquisitions exempt from information and approval requirements by order of director.The provisions of 58-5A-3 to 58-5A-13, inclusive, shall not apply to any offer, request, invitation, agreement, or acquisition which the director by order shall exempt therefrom as not having been made or entered into for the purpose and not having the effect of changing or influencing the control of a domestic insurer, or as otherwise not comprehended within the purposes of this chapter. Source: SL 1972, ch 267, 11 (3).
58-5A-18. Acquisition, divestiture, or merger without approval as misdemeanor.No person may effectuate or attempt to effectuate an acquisition of control of, divestiture of, or merger with, a domestic insurer unless it has been approved by the director. A violation of this section is a Class 2 misdemeanor. Source: SL 1972, ch 267, 12 (2), 36; SDCL Supp, 58-5A-42; SL 1978, ch 359, 2; SL 2015, ch 246, 6.
58-5A-19. Jurisdiction of court in Hughes County--Director as attorney for service of process.The court in Hughes County has jurisdiction over every person not resident, domiciled or authorized to do business in this state that is required to file a statement with the director under 58-5A-3 to 58-5A-7, inclusive, and over all actions involving such person arising out of violations of this chapter. Each person shall appoint the director to be his true and lawful attorney for all lawful process in any action, suit or proceeding arising out of violations of this chapter. Copies of all lawful process shall be served on the director and forthwith transmitted by registered or certified mail by the director to such person at his last known address. Source: SL 1972, ch 267, 13; SL 1992, ch 341, 7.
58-5A-2. Domestic insurer defined.For purposes of 58-5A-3 to 58-5A-18, inclusive, a domestic insurer shall include any other person controlling a domestic insurer unless such other person is either directly or through its affiliates primarily engaged in business other than the business of insurance. Source: SL 1972, ch 267, 3.
58-5A-20. Registration of subsidiary insurer--Time for registration--Statement required of foreign insurer.Every insurer which is authorized to do business in this state and which is a member of an insurance holding company system shall register with the director. However, this requirement does not apply to a foreign insurer domiciled in a jurisdiction which has adopted by statute or regulation disclosure requirements and standards substantially similar to those contained herein. Any insurer which is subject to registration under the provisions of this section shall register within fifteen days after it becomes subject to registration and annually thereafter by July first of each year for the previous calendar year, unless the director, for good cause shown, extends the time for registration, and then within the extended time. Nothing in this section prohibits the director from requesting any authorized insurer, which is a member of a holding company system, which is not subject to registration under the provisions of this section for a copy of the registration statement or other information filed by such insurance company with the insurance regulatory authority of its state of domicile. Source: SL 1972, ch 267, 14; SL 1992, ch 341, 43.
58-5A-21. Form and contents of registration statement.Each insurer subject to registration pursuant to 58-5A-20 shall file a registration statement with the director on a form and in the format provided by the division, which contains current information about:(1)The capital structure, general financial condition, ownership, and management of the insurer and any person controlling the insurer;(2)The following agreements in force and transactions currently outstanding between the insurer and its affiliates:(a)Loans, or other investments, or purchases, sales or exchanges of securities of the affiliate by the insurer or of the insurer by its affiliates;(b)Purchases, sales, or exchanges of assets;(c)Transactions not in the ordinary course of business;(d)Guarantees or undertakings for the benefit of an affiliate which result in an actual contingent exposure of the insurer's assets to liability, other than insurance contracts entered into in the ordinary course of the insurer's business;(e)All management and service contracts and all cost sharing arrangements;(f)Dividends and other distributions to shareholders; and(g)Consolidated tax allocation agreements;(3)Other matters concerning transactions between a registered insurer and any affiliate as may be required by the director;(4)The identity and relationship of each member of the insurance holding company system; (5)Any pledge of the insurer's stock, including stock of any subsidiary of or controlling affiliate, for a loan made to any member of the insurance holding company system;(6)The financial statement of or within an insurance holding company system, including each affiliate. The financial statement may include the annual audited financial statement filed with the U.S. Securities and Exchange Commission (SEC) pursuant to the Securities Act of 1933, as of January 1, 2015, or the Securities Exchange Act of 1934, as of January 1, 2015. An insurer required to file a financial statement pursuant to this section shall satisfy the requirements by providing the director with the most recently filed parent corporation financial statements that have been filed with the SEC;(7)A statement that the insurer's board of directors oversees corporate governance and internal controls and that the insurer's officers or senior management have approved, implemented, and continue to maintain and monitor corporate governance and internal control procedures; and(8)Any other information required by the director pursuant to law or rule.All registration statements shall contain a summary outlining all items in the current registration statement representing changes from the prior registration statement. Source: SL 1972, ch 267, 15; SL 1992, ch 341, 16; SL 2015, ch 246, 7.
58-5A-22. Initial and annual registration fees.The initial fee for registration required under the provisions of this chapter shall be fifty dollars and an additional fee of fifty dollars shall be payable on July first of each calendar year thereafter so long as such registration continues. Source: SL 1972, ch 267, 16.
58-5A-23. Disclosure of immaterial information not required.No information need be disclosed on the registration statement filed pursuant to the provisions of 58-5A-20 if such information is not material for the purposes of this chapter. Unless the director by rule, regulation, or order provides otherwise, sales, purchases, exchanges, loans, or extensions of credit, or investments, involving one percent or less of an insurer's admitted assets as of December thirty-first immediately preceding shall not be deemed material for purposes of this section. Source: SL 1972, ch 267, 17.
58-5A-24. Report of changes required of registered insurer.Each registered insurer shall keep current the information required to be disclosed in its registration statement by reporting all material changes or additions on forms provided by the division on or before the fifteenth day of the following month in which it learns of each such change or addition. Source: SL 1972, ch 267, 18.
58-5A-25. Termination of registration.The director shall terminate the registration of any insurer which demonstrates that it no longer is a member of an insurance holding company system. Source: SL 1972, ch 267, 19.
58-5A-26. Consolidated registration statement or report by affiliated insurers.Two or more affiliated insurers subject to registration hereunder may file a consolidated registration statement or consolidated reports amending their respective consolidated statements or their individual registration statements so long as such consolidated filings correctly reflect the condition of and transactions between such persons. Source: SL 1972, ch 267, 20.
58-5A-27. Registration by insurer on behalf of affiliated insurer.The director may allow any insurer which is authorized to do business in this state and which is part of an insurance holding company system to register on behalf of any affiliated insurer which is required to register under 58-5A-20, and to file all information and material required to be filed under the provisions hereof. Source: SL 1972, ch 267, 21.
58-5A-28. Insurer exempt from registration requirements on order of director.The provisions of 58-5A-20 to 58-5A-34, inclusive, shall not apply to any insurer, information or transaction if and to the extent that the director by rule, regulation, or order shall exempt the same from the provisions hereof as not comprehended within the purposes thereof. Source: SL 1972, ch 267, 22.
58-5A-29.1. Annual enterprise risk report.The ultimate controlling person of each insurer subject to registration shall also file an annual enterprise risk report. The report shall, to the best of the ultimate controlling person's knowledge and belief, identify the material risks within the insurance holding company system that could pose enterprise risk to the insurer. The report shall be filed with the lead state director of the insurance holding company system as determined by rules promulgated, pursuant to chapter 1-26, by the director. Source: SL 2015, ch 246, 9.
58-5A-29. Disclaimer of affiliation--Contents--Procedure on disallowance.Any person may file with the director a disclaimer of affiliation with any authorized insurer or the disclaimer may be filed by the insurer or any member of an insurance holding company system. The disclaimer shall fully disclose all material relationships and basis for affiliation between the person and insurer as well as the basis for disclaiming the affiliation. A disclaimer of affiliation is deemed to have been granted unless the director, within thirty days following receipt of a complete disclaimer, notifies the filing party the disclaimer is disallowed. If disallowed, the disclaiming party may request an administrative hearing pursuant to chapter 1-26 within thirty days of the director's disallowance. A notice of hearing shall be issued within thirty days of a written request by the disclaiming party. The disclaiming party is relieved of the duty to register pursuant to this section if the director approves the disclaimer, or if the disclaimer is deemed to have been approved. Source: SL 1972, ch 267, 23; SL 2015, ch 246, 8.
58-5A-3.1. Divestiture of controlling interest in domestic insurer--Notice to director and insurer.For purposes of this chapter, any controlling person of a domestic insurer seeking to divest the controlling interest in the domestic insurer, in any manner, shall file with the director, with a copy to the insurer, confidential notice of its proposed divestiture at least thirty days prior to the cessation of control. The director shall determine any instance in which a party seeking to divest or to acquire a controlling interest in an insurer is required to file for and obtain approval of the transaction.The information shall remain confidential until the conclusion of the transaction unless the director determines that confidential treatment interferes with enforcement of this section. If the statement referred to in 58-5A-3 is otherwise filed, the provisions of this section do not apply. Source: SL 2015, ch 246, 2.
58-5A-3. Acquisition of control of or merger with domestic insurer--Information statement required--Approval by director required--Violation as misdemeanor.No person other than the issuer may make a tender offer for or a request or invitation for tenders of, or enter into any agreement to exchange securities for, seek to acquire, or acquire, in the open market or otherwise, any voting security of a domestic insurer if, after the consummation thereof, such person would, directly or indirectly (or by conversion or by exercise of any right to acquire) be in control of such insurer, and no person may enter into an agreement to merge with or otherwise to acquire control of a domestic insurer unless, at the time any such offer, request, or invitation is made or any such agreement is entered into, or prior to the acquisition of such securities if no offer or agreement is involved, such person has filed with the director and has sent to such insurer, and such insurer has sent to its shareholders, a statement containing the information required by 58-5A-4 and such offer, request, invitation, agreement, or acquisition has been approved by the director in the manner hereinafter prescribed.A violation of this section is a Class 2 misdemeanor. Source: SL 1972, ch 267, 2; SL 1990, ch 158, 20.
58-5A-30. Failure to file registration statement or enterprise risk report--Penalty--Waiver.Failure to file a registration statement, enterprise risk report, or keep the registration statement current within the time specified in this chapter is a violation of this title. Any insurer failing, without just cause, to file any registration statement or amendment as required in this chapter shall pay a penalty of not less than one hundred dollars for each day's delay, but not to exceed twenty-five thousand dollars. The director may reduce or waive the penalty if the insurer demonstrates to the director that the imposition of the penalty constitutes a financial hardship to the insurer. Source: SL 1972, ch 267, 24, 36; SDCL Supp, 58-5A-42; SL 1978, ch 359, 2; SL 1992, ch 341, 19; SL 2015, ch 246, 10.
58-5A-31. Registration requirements satisfied by duplicate copies of federal filings.The provisions for filings required under the provisions of 58-5A-20 to 58-5A-29, inclusive, except for subsection 58-5A-21(2)(e), shall be satisfied by the simultaneous filing with the director of duplicate copies of all filings of an insurer or person in control of an insurer which are required by the Securities Act of 1933, the Securities Exchange Act of 1934, or the Investment Company Act of 1940, unless the director finds in any such case that the information relating to the insurer and any person controlling the insurer necessary to fairly disclose the relationship between them is not provided by such duplicate filings in which case he may by order after notice and hearing require additional filings. Source: SL 1972, ch 267, 25.
58-5A-32. Standards for material transactions by registered insurers with affiliates--Nonconformity.Any material transaction by a registered insurer with an affiliate is subject to the following standards:(1)The terms shall be fair and reasonable;(2)The books, accounts, and records of each party shall be maintained to clearly and accurately disclose the precise nature and details of the transaction including information necessary to support the reasonableness of the charges or fees to the respective parties;(3)The insurer's surplus to policyholders following any dividends or distributions to shareholders or affiliates shall be reasonable in relation to the insurer's outstanding liabilities and adequate to its financial needs;(4)Charges or fees for services performed shall be reasonable; (5)Expenses incurred and payment received shall be allocated to the insurer in conformity with customary insurance accounting practices consistently applied; and(6)Any agreement for cost sharing services and management shall include provisions as required by law or rule.Any transaction which is not in conformity with this section is subject to the provisions of 58-5A-64, 58-5A-65, and 58-5A-67. Source: SL 1972, ch 267, 26; SL 1990, ch 158, 25; SL 1992, ch 341, 20; SL 2015, ch 246, 11.
58-5A-34. Adequacy of insurer's surplus--Factors considered.For purposes of this chapter in determining whether an insurer's surplus to policyholders is reasonable in relation to the insurer's outstanding liabilities and adequate to its financial needs, the following factors, among others, shall be considered:(1)The size of the insurer as measured by its assets, capital and surplus, reserves, premium writings, insurance in force, and other appropriate criteria;(2)The extent to which the insurer's business is diversified among the several lines of insurance;(3)The number and size of risks insured in each line of business;(4)The extent of the geographical dispersion of the insurer's insured risks;(5)The nature and extent of the insurer's reinsurance program;(6)The quality, diversification, and liquidity of the insurer's investment portfolio;(7)The recent past and projected future trend in the size of the insurer's surplus to policyholders;(8)The surplus to policyholders maintained by other comparable insurers;(9)The adequacy of the insurer's reserves;(10)The quality and liquidity of investments in affiliates made pursuant to this chapter and chapters 58-26 and 58-27. The director may treat any investment under this subdivision as a disallowed asset; and(11)The quality of the company's earnings and the extent to which the reported earnings include extraordinary items. Source: SL 1972, ch 267, 28; SL 1992, ch 341, 26; SL 1993, ch 359, 4.
58-5A-35. Notice to director of extraordinary distribution--Approval by director.No insurer subject to this chapter may pay any extraordinary dividend or make any other extraordinary distribution to its stockholders until thirty days after the director has received notice of the declaration thereof and has approved or has not disapproved the payment within the thirty-day period. For purposes of this section, an extraordinary dividend or distribution is any dividend or distribution which, together with other dividends or distributions made within the preceding twelve months, exceeds, as of December thirty-first of the year immediately preceding, the greater of ten percent of the insurer's surplus to policyholders, or the net gain from operations of the insurer if the insurer is a life insurer, or the net income if the insurer is not a life insurer but does not include pro rata distribution of any class of the insurer's own securities. For the purpose of this section, net gain from operations and net income includes net realized capital gains in an amount not to exceed twenty percent of net unrealized capital gains. An insurer may declare an extraordinary dividend or distribution which is conditional upon the director's approval thereof, and the declaration shall confer no rights upon stockholders until the director has approved or has not disapproved the payment within the thirty-day period. Source: SL 1972, ch 267, 29; SL 1993, ch 359, 1.
58-5A-36. Application for approval of extraordinary distribution--Contents.Requests for approval of extraordinary dividends or any other extraordinary distribution to security holders shall include the following:(1)The date established for payment of the dividend;(2)A statement as to whether the dividend is to be in cash or other property and, if in property, a description thereof, its cost, and its fair market value together with an explanation of the basis for valuation;(3)The amounts and dates of all dividends, including regular dividends, paid within the period of twelve consecutive months ending on the date fixed for payment of the proposed dividend for which approval is sought and commencing on the day after the same day of the same month in the last preceding year;(4)A balance sheet and statement of income for the period intervening from the last annual statement filed with the director and the end of the month preceding the month in which the request for dividend approval is submitted;(5)A brief statement as to the effect of the proposed dividend upon the insurer's surplus and the reasonableness of surplus in relation to the insurer's outstanding liabilities and the adequacy of surplus relative to the insurer's financial needs. Source: SL 1972, ch 267, 30.
58-5A-37. Examination of insurers and affiliates.Subject to the limitations contained in this section and 58-5A-38 to 58-5A-40, inclusive, and in addition to the powers which the director has under the provision of this title relating to the examination of insurers, the director may examine any registered insurer and the insurer's affiliates to ascertain the financial condition of the insurer, including enterprise risk to the insurer by the ultimate controlling party, or by any entity or combination of entities within the insurance holding company system, or by the insurance holding company on a consolidated basis. Source: SL 1972, ch 267, 31; SL 2015, ch 246, 12.
58-5A-38.1. Production of records, books, and other information.The director may order any registered insurer to produce records, books, or other information papers in the possession of the insurer or the insurer's affiliates as are reasonably necessary to determine compliance with the provisions of this chapter. The director may order any registered insurer to produce information not in the possession of the insurer if the insurer is able to obtain access to the information pursuant to contractual relationships, statutory obligations, or other method. If the insurer is unable to obtain the information requested by the director, the insurer shall provide the director a detailed explanation of the reason the insurer is unable to obtain the information and the identity of the holder of the information. If an insurer's detailed explanation is found to be without merit, it is grounds for the revocation of the insurer's license at a hearing held pursuant to chapter 1-26. Source: SL 2015, ch 246, 13.
58-5A-38.2. Examination of registered insurer's affiliates to obtain information.If the insurer fails to comply with an order made pursuant to 58-5A-38.1, the director may examine the registered insurer's affiliates to obtain the information. The director may issue subpoenas, administer oaths, and examine under oath any person for purposes of determining compliance with the provisions of 58-5A-37 to 58-5A-40, inclusive. Each person is obliged to attend as a witness at the place specified in the subpoena, if the witness is subpoenaed within this state. The witness is entitled to the same fees and mileage, if claimed, as a witness in appearing in any state court and the fees shall be itemized and paid by the insurer being examined. Source: SL 2015, ch 246, 14.
58-5A-38. Grounds for director's examination.The director shall exercise his power under 58-5A-37 only if the examination of the insurer under the provisions of this title is inadequate or the interests of the policyholders of such insurer may be adversely affected. Source: SL 1972, ch 267, 32.
58-5A-39. Personnel employed by department for conduct of examination.The department may retain at the registered insurer's expense such attorneys, actuaries, accountants, and other experts not otherwise a part of the director's staff as shall be reasonably necessary to assist in the conduct of the examination under 58-5A-37. Any person so retained shall be under the direction and control of the director and shall act in a purely advisory capacity. Source: SL 1972, ch 267, 33.
58-5A-4. Contents of information statement--Violation as misdemeanor.The statement to be filed with the director as required pursuant to 58-5A-3 shall be made under oath or affirmation and shall contain the following information:(1)The name and address of each person by whom or on whose behalf the merger or other acquisition of control referred to in 58-5A-3 is to be effected (hereinafter called acquiring party); and(a)If the person is an individual, the person's principal occupation and all offices and positions held during the past five years, and any conviction of crimes other than minor traffic violations during the past ten years;(b)If the person is not an individual, a report of the nature of its business operations during the past five years or for a lesser period as the person and any predecessors thereof shall have been in existence; an informative description of the business intended to be done by the person and the person's subsidiaries; and a list of all individuals who are or who have been selected to become directors or executive officers of the person, or who perform or will perform functions appropriate to such positions. The list shall include for each such individual the information required by subsection (a) of this subdivision;(2)The source, nature, and amount of the consideration used or to be used in effecting the merger or other acquisition of control, a description of any transaction wherein funds were or are to be obtained for any such purpose, and the identity of persons furnishing the consideration. However, where a source of the consideration is a loan made in the lender's ordinary course of business, the identity of the lender is confidential, if the person filing the statement so requests;(3)Fully audited financial information as to the earnings and financial condition of each acquiring party for the preceding five fiscal years of each acquiring party (or for a lesser period as the acquiring party and any predecessors thereof have been in existence), and similar unaudited information as of a date not earlier than ninety days prior to the filing of the statement;(4)Any plans or proposals which each acquiring party may have to liquidate the insurer, to sell the insurer's assets or merge or consolidate the insurer with any person, or to make any other material change in the insurer's business or corporate structure or management;(5)The number of shares of any security referred to in 58-5A-3 which each acquiring party proposes to acquire, and the terms of the offer, request, invitation, agreement, or acquisition referred to in 58-5A-3, and a statement as to the method by which the fairness of the proposal was arrived at;(6)The amount of each class of any security referred to in 58-5A-3 which is beneficially owned or concerning which there is a right to acquire beneficial ownership by each acquiring party;(7)A full description of any contract, arrangement, or understanding with respect to any security referred to in 58-5A-3 in which any acquiring party is involved, including transfer of any of the securities, joint ventures, loan or option arrangements, puts or calls, guarantees of loans, guarantees against loss or guarantees of profits, division of losses or profits, or the giving or withholding of proxies. The description shall identify each person with whom the contract, arrangement, or understanding has been entered into;(8)A description of the purchase of any security referred to in 58-5A-3 during the twelve calendar months preceding the filing of the statement, by any acquiring party, including the dates of purchase, names of the purchasers, and consideration paid or agreed to be paid therefor; (9)A description of any recommendations to purchase any security referred to in 58-5A-3 made during the twelve calendar months preceding the filing of the statement, by any acquiring party, or by anyone based upon interviews or at the suggestion of the acquiring party;(10)A copy of all tender offers for, requests or invitations for tenders of exchange offers for, and agreements to acquire or exchange any securities referred to in 58-5A-3, and, if distributed, of additional soliciting material related thereto;(11)The terms of any agreement, contract or understanding made with any broker-dealer as to solicitation of securities referred to in 58-5A-3 for tender, and the amount of any fees, commissions or other compensation to be paid to broker-dealers with regard thereto;(12)An agreement by the person required to file the statement specified in 58-5A-3 that the person shall provide the annual report specified in 58-5A-29.1 if control exists;(13)An acknowledgment by the person required to file the statement referred to in 58-5A-3 and 58-5A-3.1 that the person and all subsidiaries within the person's control in the insurance holding company system shall provide information to the director upon request as necessary to evaluate enterprise risk to the insurer; and(14)Such additional information as the director may require by rule as necessary or appropriate for the protection of policyholders and security holders of the insurer or in the public interest.A violation of this section is a Class 2 misdemeanor. Source: SL 1972, ch 267, 4; SL 1990, ch 158, 21; SL 2015, ch 246, 3.
58-5A-40. Insurer to pay expense of examination.Each registered insurer producing for examination records, books, and papers pursuant to 58-5A-37 shall be liable for and shall pay the expense of such examination. Source: SL 1972, ch 267, 34.
58-5A-41.1. Testimony in private civil action concerning confidential information prohibited.Neither the director nor any person who receives documents, materials, or other information while acting under the authority of the director or with whom the documents, materials, or other information are shared pursuant to the provisions of 58-5A-41 is permitted or required to testify in any private civil action concerning any confidential documents, materials, or information subject to the provisions of 58-5A-41. Source: SL 2015, ch 246, 15.
58-5A-41.2. Certain sharing of confidential information permitted.To assist in the performance of the duties assigned to the director pursuant to the provisions of this chapter:(1)The director may, upon request, share documents, materials, or other information, including the confidential and privileged documents, materials, or information disclosed pursuant to this chapter with a state, federal, and international regulatory agency, the NAIC and its affiliates and subsidiaries, and a state, federal, and international law enforcement authority, including a member of any supervisory college described in 58-5A-78 to 58-5A-80, inclusive, if the recipient agrees in writing to maintain the confidentiality and privileged status of the document, material, or other information, and verifies in writing the legal authority to maintain confidentiality;(2)Notwithstanding the provisions of subdivision (1), the director may only share confidential and privileged documents, or information reported pursuant to 58-5A-29.1, with a director of a state that has laws substantially similar to the provisions of 58-5A-41, and who agrees in writing not to disclose such information; and(3)May receive documents, materials, or information, including otherwise confidential and privileged documents, materials, or information from the NAIC and its affiliates and subsidiaries and from regulatory and law enforcement officials of other foreign or domestic jurisdictions, and shall maintain as confidential or privileged any document, material, or information received with notice or the understanding that it is confidential or privileged under the laws of the jurisdiction that is the source of the document, material, or information.The sharing of information by the director pursuant to this chapter does not constitute a delegation of regulatory authority or rule-making authority, and the director is solely responsible for the administration, execution, and enforcement of the provisions of this chapter. Source: SL 2015, ch 246, 16.
58-5A-41.3. Agreements regarding sharing of confidential information.The director shall enter into written agreements with the NAIC governing the sharing and use of information provided pursuant to this chapter that:(1)Specify procedures and protocols regarding the confidentiality and security of information shared with the NAIC and its affiliates and subsidiaries pursuant to this chapter, including procedures and protocols for sharing by the NAIC with any other state, federal, or international regulator;(2)Specify that ownership of information shared with the NAIC and its affiliates and subsidiaries pursuant to this chapter remains with the director and that the NAIC use of the information is subject to the direction of the director;(3)Require prompt notice to be given to an insurer whose confidential information is in the possession of the NAIC pursuant to this chapter and is subject to a request or subpoena issued to the NAIC for disclosure or production; and(4)Require the NAIC and its affiliates and subsidiaries to consent to intervention by an insurer in any judicial or administrative action in which the NAIC and its affiliates and subsidiaries may be required to disclose confidential information about the insurer shared with the NAIC and its affiliates and subsidiaries pursuant to this chapter. Source: SL 2015, ch 246, 17.
58-5A-41.4. Information in possession or control of NAIC confidential.Any document, material, or other information in the possession or control of the NAIC, shared pursuant to this chapter, is confidential by law and privileged, is not subject to subpoena, open records laws, and is not subject to discovery or admissible as evidence in any private civil action. Source: SL 2015, ch 246, 25.
58-5A-41.5. Confidentiality not waived by disclosure of information.No waiver of any applicable privilege or claim of confidentiality in the documents, materials, or information may occur as a result of disclosure to the director pursuant to this chapter or as a result of sharing as authorized pursuant to this chapter. Source: SL 2015, ch 246, 28.
58-5A-41. Confidentiality of information in possession or control of Division--Use in regulatory or legal action--Grounds for publication by director.Documents, materials, or other information including filings in the possession or control of the Division of Insurance that are obtained by or disclosed to the director or any other person in the course of an examination or investigation made pursuant to this chapter and all information reported pursuant to this chapter shall be confidential by law and privileged, are not subject to open records, freedom of information, sunshine, or other related laws, are not subject to subpoena, and are not subject to discovery or admissible in evidence in any private civil action. However, the director is authorized to use the documents, materials, or other information in the furtherance of any regulatory or legal action brought as a part of the director's official duties. The director may not otherwise make the documents, materials, or other information public without the prior written consent of the insurer to which it pertains unless the director, after giving the insurer and its affiliates who would be affected thereby notice and opportunity to be heard, determines that the interest of policyholders, shareholders, or the public will be served by the publication thereof, in which event the director may publish all or any part in such manner as may be deemed appropriate. Source: SL 1972, ch 267, 35; SL 2015, ch 246, 27.
58-5A-43. Acquisition of subsidiaries--Limitations.Any domestic insurer, either by itself or in cooperation with one or more persons, may organize or acquire one or more subsidiaries with the approval of the director and within those acquisitions allowed by this title as long as the aggregate investment by the insurer and its subsidiaries acquired or organized do not exceed the limitations applicable to the investment. Source: SL 1992, ch 341, 2.
58-5A-44. Disposition of investment in subsidiary upon cessation of control--Waiver.If an insurer ceases to control a subsidiary, it shall dispose of the investment in the subsidiary within three years from the time of the cessation of control or within further time as the director may prescribe upon written request by the insurer. If the investment qualifies for investment under any other section of this chapter, and the insurer has notified the director in writing of that qualification, the disposition requirement may be waived by the director. Source: SL 1992, ch 341, 3.
58-5A-45. Pre-acquisition notification--Person defined.Any person acquiring assets pursuant to 58-5A-3 shall file a pre-acquisition notification with the director containing the information set forth in 58-5A-48 thirty days prior to the proposed effective date of the acquisition. Any person failing to file is subject to 58-5A-53. For the purposes of this section, "person" does not include any securities broker holding, in the usual and customary brokers function, less than twenty percent of the voting securities of an insurance company or of any person which controls an insurance company. Source: SL 1992, ch 341, 4.
58-5A-46. Acquisition and involved insurer defined.The following definitions shall only apply to 58-5A-47 to 58-5A-53, inclusive:(1)"Acquisition," any agreement, arrangement, or activity the consummation of which results in a person acquiring directly or indirectly the control of another person, and includes the acquisition of voting securities, assets, bulk reinsurance, and mergers; and(2)"Involved insurer," an insurer which either acquires or is acquired, is affiliated with an acquirer or acquired or is the result of a merger. Source: SL 1992, ch 341, 8.
58-5A-47. Application of 58-5A-46 to 58-5A-53--Exceptions.The provisions of 58-5A-46 to 58-5A-53, inclusive, apply to any acquisition in which there is a change in control of an insurer authorized to do business in this state except the following:(1)A purchase of securities solely for investment purposes as long as the securities are not used by voting or otherwise to lessen the competition in any insurance market in this state to the detriment of policyholders or consumers. If a purchase of securities results in a presumption of control pursuant to subdivision 58-5A-1(2), it is not solely for investment purposes unless the director or commissioner of the insurer's state of domicile accepts a disclaimer of control or affirmatively finds that control does not exist and the disclaimer or affirmative finding is communicated by the domiciliary director or commissioner to the director of this state;(2)The acquisition of any person by another person if both persons are neither directly nor through affiliates primarily engaged in the business of insurance, if pre-acquisition notification is filed with the director in accordance with the provisions of 58-5A-48 thirty days prior to the proposed effective date of the acquisition. Pre-acquisition notification is not required for exclusion from this subdivision if the acquisition would otherwise be excluded from this subdivision by any other subdivision of this section;(3)The acquisition of already affiliated persons;(4)An acquisition if, as an immediate result of the acquisition,(a)In no market would the combined market share of the involved insurers exceed five percent of the total market;(b)There would be no increase in any market share; or(c)In no market would the combined market share of the involved insurers exceed twelve percent of the total market, and the market share increase by more than two percent of the total market.For the purpose of this subdivision, a market means direct written insurance premium in this state for a line of business as contained in the annual statement required to be filed by insurers licensed to do business in this state;(5)An acquisition for which a pre-acquisition notification would be required pursuant to this section due solely to the resulting effect on the ocean marine insurance line of business; and(6)An acquisition of an insurer whose domiciliary director or commissioner affirmatively finds that the insurer is in failing condition; there is a lack of feasible alternatives to improving the condition; the public benefits of improving the insurer's condition through the acquisition exceed the public benefits that would arise from not lessening competition; and the findings are communicated by the domiciliary director or commissioner to the director of this state. Source: SL 1992, ch 341, 9; SL 2015, ch 246, 23.
58-5A-48. Pre-acquisition notification--Contents--Waiting period.An acquisition covered pursuant to the provisions of 58-5A-47 may be subject to an order pursuant to 58-5A-69 unless the acquiring or acquired person files a pre-acquisition notification and the waiting period has expired. The director shall give confidential treatment to information submitted under this section in the same manner as provided in 58-5A-41.The notification shall be as follows:(1)The pre-acquisition notification of this chapter shall be in a form and contain information as prescribed by the National Association of Insurance Commissioners relating to those markets which, under subdivision 58-5A-47(4), cause the acquisition not to be exempted from the provisions of this section. The director may require additional material and information to determine whether the proposed acquisition, if consummated, would violate the competitive standard of 58-5A-49 and 58-5A-50. The required information may include an opinion of an economist as to the competitive impact of the acquisition in this state accompanied by a summary of the education and experience of the person indicating his ability to render an informed opinion;(2)The waiting period required shall begin on the date of receipt of the director of a pre-acquisition notification and shall end on the earlier of the thirtieth day after the date of the receipt, or termination of the waiting period by the director. Prior to the end of the waiting period, the director on a one-time basis may require the submission of additional needed information relevant to the proposed acquisition, in which event the waiting period shall end on the earlier of the thirtieth day after receipt of the additional information by the director or termination of the waiting period by the director. Source: SL 1992, ch 341, 10; SL 2015, ch 246, 24.
58-5A-49. Action by director when acquisition lessens competition--Promulgation of rules establishing competitive standards.The director may enter an order under 58-5A-67 or 58-5A-69 with respect to an acquisition if there is substantial evidence that the effect of the acquisition lessens competition in any line of insurance in this state to the detriment of consumers or tends to create a monopoly or if the insurer fails to file adequate information in compliance with 58-5A-48. The director may promulgate rules pursuant to chapter 1-26 to establish criteria and factors for competitive standards. The director may disapprove the acquisition or act to prevent the acquisition by invoking the laws of this state. Source: SL 1992, ch 341, 11.
58-5A-5. Information statement required of partners or members of syndicate or group--Violation as misdemeanor.If the person required to file the statement referred to in 58-5A-3 is a partnership, limited partnership, syndicate or other group, the director may require that the information called for by subdivisions 58-5A-4(1) to (14), inclusive, shall be given with respect to each partner of the partnership or limited partnership, each member of the syndicate or group, and each person who controls a partner or member.A violation of this section is a Class 2 misdemeanor. Source: SL 1972, ch 267, 5; SL 1990, ch 158, 22; SL 2015, ch 246, 4.
58-5A-50. Acquisitions subject to order under 58-5A-69.An order may not be entered under 58-5A-69 if:(1)The acquisition will yield substantial economies of scale or economies in resource utilization that cannot be feasibly achieved in any other way, and the public benefits which would arise from the economies would exceed the public benefits which would arise from not lessening competition; or(2)The acquisition will substantially increase the availability of insurance, and the public benefits of the increase would exceed the public benefits which would arise from not lessening competition. Source: SL 1992, ch 341, 12.
58-5A-51. Plan for limiting anticompetitive impact of acquisition--Time limit.An order entered pursuant to 58-5A-49, 58-5A-50, and 58-5A-69 may not become final earlier than thirty days after it is issued, during which time the insurer may submit a plan or notification of submission of a plan to remedy the anticompetitive impact of the acquisition. The director may allow the insurer up to ninety days to complete the submission of the plan. Based upon the plan or other information, the director shall specify the conditions, if any, under the time period during which the aspects of the acquisition causing a violation of the standards of this section would be remedied and the order vacated or modified.An order pursuant to this section does not apply if the acquisition is not consummated. Source: SL 1992, ch 341, 13.
58-5A-52. Fine, suspension, or revocation for violation of cease and desist order.Any person who violates a cease and desist order of the director may, after notice and hearing, be subject to one or more of the following:(1)An administrative fine of not more than ten thousand dollars for every day of violation; and(2)Suspension or revocation of the person's license. Source: SL 1992, ch 341, 14.
58-5A-53. Failure to comply with filing requirements--Fine.Any insurer or other person that fails to make any filing required by 58-5A-46 to 58-5A-52, inclusive, and that fails to demonstrate a good faith effort to comply with any filing requirement is subject to an administrative fine of not less than two thousand five hundred dollars and not more than fifty thousand dollars. Source: SL 1992, ch 341, 15.
58-5A-54. Report of dividends and distributions to shareholders--Time limit.In addition to the filing requirements of 58-5A-23 and 58-5A-35, each registered insurer shall file with the director a report of all dividends and other distributions to shareholders within fifteen business days following the declaration thereof. However, payment may not be made until ten days after the division receives the report. However, payment of an ordinary dividend may be made on the day that it is declared if an intention to declare the dividend is received by the division ten days before the date of payment. The division shall hold the notice of intention to declare a dividend confidential until the dividend has been declared. Source: SL 1992, ch 341, 17; SL 1993, ch 359, 2; SL 1994, ch 373.
58-5A-55. Persons subject to registration to provide complete and accurate information to insurer.Any person within an insurance holding company system subject to registration shall be required to provide to an insurer complete and accurate information reasonably necessary to enable the insurer to comply with the provisions of this chapter. Source: SL 1992, ch 341, 18.
58-5A-56. Notification to director of certain transactions required.A domestic insurer and any person in its insurance holding company system may not enter into transactions, including any amendment or modification of an affiliate agreement previously filed pursuant to this chapter, that is subject to any materiality standard provided in this section, unless the director has received a written notification from the insurer of the transaction at least thirty days prior to its effective date. The director has thirty days from receipt to approve or disapprove the transaction. If the director takes no action within the thirty days, the transaction is deemed approved. The director may allow less than thirty days notification if the insurer can show cause why a lesser time is necessary. Transactions of which the insurer needs to notify the director are:(1)Sales, purchases, exchanges, loans, or extensions of credit, guarantees, or investments provided the transactions are equal to or exceed as of December thirty-first next preceding:(a)With respect to nonlife insurers, the lesser of three percent of the insurer's admitted assets or twenty-five percent of surplus as regards policyholders; or(b)With respect to life insurers, three percent of the insurer's admitted assets;(2)Loans or extensions of credit by the insurer to any person that is not an affiliate, with the agreement or that the proceeds of the transactions, in whole or in substantial part, are to be used to make loans or extensions of credit to, to purchase assets of, or to make investments in any affiliate of the insurer provided the transactions are equal to or exceed as of December thirty-first next preceding:(a)With respect to nonlife insurers, the lesser of three percent of the insurer's admitted assets or twenty-five percent of surplus as regards policyholders; or(b)With respect to life insurers, three percent of the insurer's admitted assets;(3)Reinsurance agreements or modifications to the agreements, including:(a)Any reinsurance pooling agreement; and(b)Any agreement in which the reinsurance premium or a change in the insurer's liabilities, or the projected reinsurance premium or a change in the insurer's liabilities in any of the next three years, equal or exceeds five percent of the insurer's surplus as regards policyholders as of December thirty-first next preceding, including any agreement that requires as consideration the transfer of assets from an insurer to a nonaffiliate, if an agreement or understanding exists between the insurer and nonaffiliate that any portion of the assets will be transferred to one or more affiliates of the insurer;(4)All management agreements, service contracts, tax allocation agreements, and all cost-sharing arrangements; and(5)Any transactions which the director determines may adversely affect the interests of the insurer's policyholders. Source: SL 1992, ch 341, 21; SL 2015, ch 246, 18.
58-5A-57. Transactions entered into to avoid director's review prohibited.A domestic insurer may not enter into transactions which are part of a plan or series of like transactions with persons within the holding company system if the purpose of those separate transactions is to avoid the statutory amounts in 58-5A-56 and thus the review. If the director determines that transactions were entered into over any twelve-month period to avoid 58-5A-56, the director may exercise his authority under 58-5A-62 to 58-5A-67, inclusive. Source: SL 1992, ch 341, 22.
58-5A-58. Considerations in decision to approve or disapprove transactions.The director in making the decision to approve or disapprove the transactions in 58-5A-56 and 58-5A-57 shall consider whether the transactions comply with the standards set forth in 58-5A-32 and whether they may adversely affect the interests of policyholders or of the insurer. Source: SL 1992, ch 341, 23.
58-5A-59. Notification to director of certain investments into one corporation.The director shall be notified within thirty days of any investment of the domestic insurer in any one corporation if the total investment in the corporation by the insurance holding company system exceeds ten percent of the corporation's voting securities. Source: SL 1992, ch 341, 24.
58-5A-6. Information required of corporations, officers, directors and certain owners of voting securities--Violation as misdemeanor.If any partner, member, or person is a corporation or the person required to file the statement referred to in 58-5A-3 is a corporation, the director may require that the information called for by subdivisions 58-5A-4(1) to (14), inclusive, shall be given with respect to a corporation, each officer and director of the corporation, and each person who is directly or indirectly the beneficial owner of more than ten percent of the outstanding voting securities of the corporation.A violation of this section is a Class 2 misdemeanor. Source: SL 1972, ch 267, 5; SL 1990, ch 158, 23; SL 2015, ch 246, 5.
58-5A-60. Certain securities not to be voted at shareholder's meeting--Application for injunction.No security, which is the subject of any acquisition, agreement, or arrangement, or which is acquired or to be acquired, in contravention of the provisions of this chapter or order issued by the director, may be voted at any shareholder's meeting, or may be counted for quorum purposes. Any action of shareholders requiring the affirmative vote of a percentage of shares may be taken as though those securities were not issued and outstanding; but no action taken at any meeting may be invalidated by the voting of those securities, unless the action would materially affect control of the insurer or unless the circuit court of Hughes County has so ordered. If an insurer or the director has reason to believe that any security of the insurer has been or is about to be acquired in contravention of the provisions of this chapter, an order issued by the director, the insurer or the director may apply to the circuit court in Hughes County to enjoin any offer, request, invitation, agreement, or acquisition made in contravention of this chapter or order issued by the director, to enjoin the voting of any security so acquired, or to void any vote of a security already cast at any meeting of shareholders. Source: SL 1992, ch 341, 27.
58-5A-61. Petition to seize or sequester voting securities acquired in violation of chapter.An insurer or the director may petition the court in Hughes County for an order to seize or sequester any voting securities of the insurer owned directly or indirectly by a person if that person has acquired or is proposed to acquire any voting securities in violation of this chapter. Source: SL 1992, ch 341, 28.
58-5A-62. Violations by officers subject to fine--Determining amount of fine.Every director or officer of an insurance holding company system who knowingly violates, participates in, or assents to, or who knowingly permits any of the officers or agents of the insurer to engage in transactions or make investments which have not been properly reported or submitted pursuant to this chapter shall pay, in their individual capacity, an administrative fine of not more than five thousand dollars per violation. In determining the amount of the fine, the director shall take into account the gravity of the violation, previous violations, and other matters. Source: SL 1992, ch 341, 29.
58-5A-63. Transactions or contracts entered into without approval--Cease and desist order by director.If any insurer subject to this chapter or any director, officer, employee, or agent has engaged in any transaction or entered into a contract which is subject to 58-5A-32, 58-5A-34, 58-5A-35, 58-5A-56, 58-5A-58, and 58-5A-59 and which would not have been approved had approval been requested, the director may order the insurer to cease and desist immediately any further activity under that transaction or contract. After notice and hearing, the director may also order the insurer to void any contracts and restore the status quo if the action is in the best interest of the policyholders, creditors, or the public. Source: SL 1992, ch 341, 30.
58-5A-64. Criminal proceedings for violation committed knowingly--Fine.If it appears to the director that any insurer or any director, officer, employee, or agent thereof has knowingly committed a violation of this chapter, the director may request of the attorney general that criminal proceedings be instituted in the circuit court of Hughes County.Any insurer which knowingly violates this chapter may be fined not more than twenty-five thousand dollars per violation. Any individual who knowingly violates this chapter may be fined in his individual capacity not more than two thousand dollars per violation. Source: SL 1992, ch 341, 31.
58-5A-65. False statements, reports, or filings as felony.Any officer, director, or employee of an insurance holding company system who knowingly subscribes to or makes or causes to be made any false statements or false reports or false filings with the director is guilty of a Class 6 felony. Source: SL 1992, ch 341, 32.
58-5A-66. Order for conservation, liquidation, or rehabilitation--Distribution and recovery--Liability.If an order for conservation, liquidation, or rehabilitation of a domestic insurer has been entered, the receiver may recover on behalf of the insurer:(1)From any parent corporation or holding company or person or affiliate who otherwise controlled the insurer, the amount of distributions (other than distributions of shares of the same class of stock) paid by the insurer on its capital stock; or(2)Any payment in the form of a bonus, termination settlement, or extraordinary lump sum salary adjustment made by the insurer or its subsidiary to a director, officer, or employee;where the distribution or payment pursuant to subdivision (1) or (2) of this section is made at any time during the one year preceding the petition for liquidation, conservation or rehabilitation subject to the limitations of this section.No such distribution is recoverable if the parent or affiliate shows that when paid the distribution was lawful and reasonable and that the insurer did not know and could not reasonably have known that the distribution might adversely affect the ability of the insurer to fulfill its contractual obligations.Any person that was a parent corporation or holding company or any person that otherwise controlled the insurer or affiliate at the time distributions were paid is liable up to the amount of distributions or payments the person received. Any person that otherwise controlled the insurer at the time the distributions were declared is liable up to the amount of distributions he would have received if they had been paid immediately. If two or more persons are liable with respect to the same distributions, they are jointly and severally liable.The maximum amount recoverable shall be the amount needed in excess of all other available assets of the impaired or insolvent insurer to pay the contractual obligations of the impaired or insolvent insurer and to reimburse any guaranty funds.To the extent that any person liable under this section is insolvent or otherwise fails to pay claims due from it, its parent corporation or holding company or person that otherwise controlled it at the time the distribution was paid is jointly and severally liable for any resulting deficiency in the amount recovered from the parent corporation or holding company or person that otherwise controlled it. Source: SL 1992, ch 341, 33.
58-5A-67. Suspension, revocation, or refusal to renew license for violation.If any person has committed a violation of this chapter which makes the continued operation of an insurer contrary to the interests of policyholders or the public, the director may, suspend, revoke, or refuse to renew the insurer's license or authority to do business in this state. Source: SL 1992, ch 341, 34.
58-5A-68. Stay of director's action upon appeal to circuit court.The filing of an appeal to the circuit court for any administrative act shall stay the application of any rule, order, or other action of the director to the appealing party unless the court, after giving the party notice and an opportunity to be heard, determines that a stay would be detrimental to the interest of policyholders, shareholders, creditors, or the public. Source: SL 1992, ch 341, 35.
58-5A-69. Order by director upon violation of standards--Cease and desist--Denial of license.If an acquisition violates the standards of this chapter, the director may enter an order:(1)Requiring an involved insurer to cease and desist from doing business in this state with respect to the line or lines of insurance involved in the violation; or(2)Denying the application of an acquired or acquiring insurer for a license to do business in this state. Source: SL 1992, ch 341, 36.
58-5A-7. Amendment of information statement--Violation as misdemeanor.If any material change occurs in the facts set forth in the statement filed with the director and sent to such insurer pursuant to 58-5A-3, an amendment setting forth such change, together with copies of all documents and other material relevant to such change, shall be filed with the director and sent to such insurer within two business days after the person learns of such change. Such insurer shall send such amendment to its shareholders.A violation of this section is a Class 2 misdemeanor. Source: SL 1972, ch 267, 6; SL 1990, ch 158, 24.
58-5A-70. Promulgation of rules by director.The director may promulgate rules pursuant to chapter 1-26 covering requirements, standards, criteria, and limitations on acquisitions, mergers, and divestitures; notification of acquisitions or divestitures and the format for notification; competitive impact and the plans to remedy anticompetitive impact; the registration statement, information needed for compliance with the chapter, and material transactions; loans, extensions of credit; reinsurance agreements; extraordinary dividends; admittance or disallowance of assets and transactions of which the director needs notification; and standards and criteria for determining transactions which may adversely affect policyholders or the insurer. Source: SL 1992, ch 341, 37.
58-5A-71. Application of 58-5A-60 and 58-5A-61.Sections 58-5A-60 and 58-5A-61 do not apply to 58-5A-47. Source: SL 1992, ch 341, 38.
58-5A-72. Ownership situs of voting securities.For the purposes of this chapter, the situs of the ownership of the voting securities of a domestic insurer in a holding company system shall be construed to be in this state. Source: SL 1992, ch 341, 39.
58-5A-73. Additional investments by domestic insurer.In addition to investments in common stock, preferred stock, debt obligations, and other securities permitted, a domestic insurer under this chapter may also:(1)Invest, in common stock, preferred stock, debt obligations, and other securities of one or more subsidiaries, amounts which do not exceed the lesser of ten percent of the insurer's assets or fifty percent of the insurer's surplus as regards policyholders, provided that after investing, the insurer's surplus as regards policyholders will be reasonable in relation to the insurer's outstanding liabilities and adequate to its financial needs. In calculating the amount of the investments, investments in domestic or foreign insurance subsidiaries shall be excluded, and there shall be included:(a)Total net moneys or other consideration expended and obligations assumed in the acquisition or formation of a subsidiary, including all organizational expenses and contributions to capital and surplus of the subsidiary whether or not represented by the purchase of capital stock or issuance of other securities; and(b)All amounts expended in acquiring additional common stock, preferred stock, debt obligations, and other securities and all contributions to the capital or surplus, of a subsidiary subsequent to its acquisition or formation;(2)Invest any amount in common stock, preferred stock, debt obligations, and other securities of one or more subsidiaries engaged or organized to engage exclusively in the ownership and management of assets authorized as investments for the insurer provided that each subsidiary agrees to limit its investments in any asset so that the investments will not cause the amount of the total investment of the insurer to exceed any of the investment limitations specified. For the purpose of this clause, the term, the total investment of the insurer, includes:(a)Any direct investment by the insurer in an asset; and(b)The insurer's proportionate share of any investment in an asset by any subsidiary of the insurer, which shall be calculated by multiplying the amount of the subsidiary's investment by the percentage of the ownership of the subsidiary;(3)With the approval of the director, invest any greater amount in common stock, preferred stock, debt obligations, or other securities of one or more subsidiaries, provided that after the investment the insurer's surplus as regards policyholders will be reasonable in relation to the insurer's outstanding liabilities and adequate to its financial needs. Source: SL 1992, ch 341, 40.
58-5A-74. Determining whether investments meet applicable requirements.Whether any investment pursuant to 58-5A-73 meets the applicable requirements of that section is to be determined before the investment is made, by calculating the applicable investment limitations as though the investment had already been made, taking into account the then outstanding principal balance on all previous investments in debt obligations, and the value of all previous investments in equity securities as of the day they were made, net of any return of capital invested, not including dividends. Source: SL 1992, ch 341, 25.
58-5A-75. Investments subject to chapter 58-27.Investments in common stock, preferred stock, debt obligations, or other securities of subsidiaries made pursuant to 58-5A-73 are subject to chapter 58-27. Source: SL 1992, ch 341, 41.
58-5A-76. Application to insurer not a member of same holding company.Nothing contained in this chapter authorizes or permits any transactions which, in the case of an insurer not a member of the same holding company system, would be otherwise contrary to law. Source: SL 1992, ch 341, 44.
58-5A-77. Dividends paid from earned surplus--Exclusions--Promulgation of rules for ordinary dividends.Insurers subject to this chapter may only pay dividends from earned surplus excluding surplus arising from unrealized capital gains or revaluation of assets. The director may promulgate rules pursuant to chapter 1-26 covering requirements for ordinary dividends including those for approval or disapproval of ordinary dividends. Source: SL 1993, ch 359, 3.
58-5A-78. Director's participation in supervisory college to determine insurer compliance.Pursuant to the provisions of 58-5A-78 to 58-5A-80, inclusive, the director may participate in a supervisory college for any domestic insurer registered pursuant to this chapter that is part of an insurance holding company system with international operations to determine compliance by the insurer with this chapter. The director, with respect to a supervisory college, may perform any of the following activities:(1)Initiate the establishment of a supervisory college;(2)Clarify the membership and participation of any other supervisor in the supervisory college;(3)Clarify the functions of the supervisory college and the role of any other regulator, including the establishment of a group-wide supervisor;(4)Coordinate the ongoing activities of the supervisory college, including planning meetings, supervisory activities, and processes for information sharing; and(5)Establish a crisis management plan. Source: SL 2015, ch 246, 19.
58-5A-79. Expenses of director's participation in supervisory college.Each registered insurer subject to 58-5A-78 to 58-5A-80, inclusive, is liable for and shall pay the reasonable expenses of the director's participation in a supervisory college, including reasonable travel expenses. A supervisory college may be convened as either a temporary or permanent forum for communication and cooperation between the regulators charged with the supervision of the insurer or its affiliates, and the director may establish a regular assessment to the insurer for the payment of these expenses. Source: SL 2015, ch 246, 20.
58-5A-8. Federal or state registration statements utilized in furnishing information.If any offer, request, invitation, agreement, or acquisition referred to in 58-5A-3 is proposed to be made by means of a registration statement under the Securities Act of 1933 or in circumstances requiring the disclosure of similar information under the Securities Exchange Act of 1934, or under a state law requiring similar registration or disclosure, the person required to file the statement referred to in 58-5A-3 may utilize such documents in furnishing the information called for by that statement. Source: SL 1972, ch 267, 7.
  58-5A-80.1  .  Internationally active insurance group--Supervision.   The director may act as the group-wide supervisor for any internationally active insurance group in accordance with the provisions of this section. The director may also acknowledge another regulatory official as the group-wide supervisor if the internationally active insurance group:   (1) Does not have substantial insurance operations in the United States;   (2) Has substantial insurance operations in the United States, but not in this state; or   (3) Has substantial insurance operations in the United States and this state, but the director has determined pursuant to the factors set forth in 58-5A-80.2 that another regulatory official is the appropriate group-wide supervisor.   An insurance holding company system that does not qualify as an internationally active insurance group may request that the director make a determination or acknowledgment as to a group-wide supervisor pursuant to 58-5A-80.2 and 58-5A-80.6.     Source:  SL 2020, ch 213,  2. 
  58-5A-80.2  .  International active insurance group--Group-wide supervisor determination.   In cooperation with other state, federal, and international regulatory agencies, the director shall identify a single group-wide supervisor for an internationally active insurance group. The director may determine that the director is the appropriate group-wide supervisor for an internationally active insurance group that conducts substantial insurance operations concentrated in this state. The director may acknowledge that an insurance regulatory official from another jurisdiction is the appropriate group-wide supervisor for the internationally active insurance group. When making a determination or acknowledgment under this section, the director shall consider the following factors:   (1) The place of domicile of the insurers within the internationally active insurance group that hold the largest share of the groups written premiums, assets, or liabilities;   (2) The place of domicile of the top-tiered insurer or insurers in the insurance holding company system of the internationally active insurance group;   (3) The location of the executive offices or largest operational offices of the internationally active insurance group;   (4) Whether another regulatory official is acting or is seeking to act as the group-wide supervisor under a regulatory system that the director determines is:   (a) Substantially similar to the system of regulation provided under the laws of this state; or   (b) Otherwise sufficient in terms of providing for group-wide supervision, enterprise risk analysis, and cooperation with other regulatory officials; and   (5) Whether another regulatory official acting or seeking to act as the group-wide supervisor provides the director with reasonably reciprocal recognition and cooperation.   The insurance regulatory official identified under this section as the group-wide supervisor may determine that it is appropriate to acknowledge another supervisor to serve as the group-wide supervisor. The acknowledgment of the group-wide supervisor shall be made after consideration of the factors listed above and made in cooperation with and subject to the acknowledgment of other regulatory officials involved with supervision of members of the internationally active insurance group, and in consultation with the internationally active insurance group.     Source:  SL 2020, ch 213,  3. 
  58-5A-80.3  .  Internationally active insurance group--Group-wide supervisor acknowledgment.   Notwithstanding any other provision in   58-5A-80.1   to 58-5A-80.9, inclusive, if another regulatory official is acting as the group-wide supervisor of an internationally active insurance group, the director shall acknowledge that regulatory official as the group-wide supervisor. The director shall make a determination or acknowledgment as to the appropriate group-wide supervisor pursuant to   58-5A-80.2   if a material change in the internationally active insurance group results in any of the following:   (1) The internationally active insurance group's insurers domiciled in this state hold the largest share of the group's premiums, assets or liabilities; or   (2) This state becomes the place of domicile of the top-tiered insurer or insurers in the insurance holding company system of the internationally active insurance group.     Source:  SL 2020, ch 213,  4. 
  58-5A-80.4  .  Group-wide supervisor--Information for determination.   The director, as provided in   58-5A-37  , may collect any information necessary to determine if the director may act as the group-wide supervisor of an internationally active insurance group or if the director may acknowledge another regulatory official to act as the group-wide supervisor. Prior to issuing a determination that an internationally active insurance group is subject to group-wide supervision by the director, the director shall notify the insurer registered under this chapter and the ultimate controlling person within the internationally active insurance group. The internationally active insurance group shall have at least thirty days to provide the director with additional information pertinent to the pending determination. The director shall publish the identity of any internationally active insurance group that the director has determined is subject to group-wide supervision by the director on the division's website.     Source:  SL 2020, ch 213,  5. 
  58-5A-80.5  .  Group-wide supervisor--Director supervision--Permitted activities.   If the director is the group-wide supervisor for an internationally active insurance group, the director may engage in any of the following group-wide supervision activities:   (1) Assess the enterprise risks within the internationally active insurance group to ensure that:   (a) The material financial condition and liquidity risks to the members of the internationally active insurance group that are engaged in the business of insurance are identified by management; and   (b) Reasonable and effective mitigation measures are in place;   (2) Request, from any member of an internationally active insurance group subject to the director's supervision, information necessary and appropriate to assess enterprise risk, including information about the members of the internationally active insurance group regarding:   (a) Governance, risk assessment and management;   (b) Capital adequacy; and   (c) Material intercompany transactions;   (3) Coordinate and, through the authority of the regulatory officials of the jurisdictions where members of the internationally active insurance group are domiciled, compel development and implementation of reasonable measures designed to ensure that the internationally active insurance group is able to timely recognize and mitigate enterprise risks to members of the internationally active insurance group that are engaged in the business of insurance;   (4) Communicate with other state, federal, and international regulatory agencies for members within the internationally active insurance group and share relevant information subject to the confidentiality provisions of   58-5A-41  , through supervisory colleges as set forth in   58-5A-78  ;   (5) Enter into an agreement with or obtain documentation from any insurer registered under this chapter, any member of the internationally active insurance group, and any other state, federal and international regulatory agency for members of the internationally active insurance group, providing the basis for or otherwise clarifying the director's role as group-wide supervisor, including provisions for resolving disputes with other regulatory officials. The agreement or documentation may not serve as evidence in any proceeding that any insurer or person within an insurance holding company system not domiciled or incorporated in this state is doing business in this state or is otherwise subject to jurisdiction in this state; and   (6) Other group-wide supervision activities, consistent with the authorities and purposes enumerated above, as considered necessary by the director.     Source:  SL 2020, ch 213,  6. 
  58-5A-80.6  .  Group-wide supervisor--Director cooperation.   If the director acknowledges that another regulatory official from a jurisdiction that is not accredited by the NAIC is the group-wide supervisor, the director may reasonably cooperate, through supervisory colleges, with group-wide supervision undertaken by the group-wide supervisor, if:   (1) The director's cooperation is in compliance with the laws of this state; and   (2) The regulatory official acknowledged as the group-wide supervisor also recognizes and cooperates with the director's activities as a group-wide supervisor for other internationally active insurance groups, where applicable. If the recognition and cooperation is not reasonably reciprocal, the director may refuse recognition and cooperation.     Source:  SL 2020, ch 213,  7. 
  58-5A-80.7  .  Information sharing.   The director may enter into any agreement with or obtain documentation from any insurer registered under this chapter, any affiliate of the insurer, and any other state, federal, and international regulatory agency for members of the internationally active insurance group, that provide the basis for or otherwise clarify a regulatory official's role as group-wide supervisor.     Source:  SL 2020, ch 213,  8. 
  58-5A-80.8  .  Promulgation of rules.   The director may promulgate rules, pursuant to chapter   1-26  , establishing requirements, standards, criteria, and limitations for group-wide supervisors.     Source:  SL 2020, ch 213,  9. 
  58-5A-80.9  .  Reasonable expenses.   A registered insurer subject to the provisions of   58-5A-80.1   to   58-5A-80.8  , inclusive, is liable for and shall pay the reasonable expenses of the director's participation in the administration of   58-5A-80.1   to   58-5A-80.8  , inclusive, including the engagement of attorneys, actuaries, and any other professionals and all reasonable travel expenses.     Source:  SL 2020, ch 213,  10. 
58-5A-80. Director's participation in supervisory college with other regulators.The director may participate in a supervisory college with other regulators charged with supervision of the insurer or its affiliates, including any state, federal, and international regulatory agency to assess the business strategy, financial position, legal and regulatory position, risk exposure, risk management, and governance processes of individual insurers. The director may enter into agreements pursuant to 58-5A-41.2 and 58-5A-41.3 providing for the basis for cooperation between the director and any other regulatory agency, and the activities of the supervisory college. Nothing in this section delegates to the supervisory college the authority of the director to regulate or supervise the insurer or its affiliates within its jurisdiction. Source: SL 2015, ch 246, 21.
58-5A-81. Maintenance of risk management framework.An insurer shall maintain a risk management framework to assist the insurer with identifying, assessing, monitoring, managing, and reporting on its material and relevant risks. This requirement may be satisfied if the insurance group, of which the insurer is a member, maintains a risk management framework applicable to the operations of the insurer. Source: SL 2017, ch 210, 2.
58-5A-82. Regular conduct of ORSA.Subject to the provisions of 58-5A-85 to 58-5A-88, inclusive, an insurer, or the insurance group of which the insurer is a member, shall regularly conduct an ORSA consistent with a process comparable to the ORSA guidance manual. The ORSA shall be conducted at least annually but also at any time when there are significant changes to the risk profile of the insurer or the insurance group of which the insurer is a member. Source: SL 2017, ch 210, 3.
58-5A-83. Submission of ORSA summary report or comparable reports to division.The ORSA summary report, or any combination of reports that together contain the information described in the ORSA guidance manual, shall be submitted to the division upon the director's request. The director may request the ORSA summary report no more than annually. If the insurer is a member of an insurance group, then the insurer shall submit the report or reports required by 58-5A-81 to 58-5A-93, inclusive, if the director is the lead state director of the insurance group.An insurer may comply with this section by providing the most recent and substantially similar reports provided by the insurer or another member of an insurance group of which the insurer is a member to the commissioner of another state or to a supervisor or regulator of a foreign jurisdiction, if that report provides information that is comparable to the information described in the ORSA guidance manual. Any such report in a language other than English must be accompanied by a translation of that report into the English language. Source: SL 2017, ch 210, 4.
58-5A-84. ORSA summary report requirements.ORSA summary reports shall:(1)Include a signature of the insurer or insurance group's chief risk officer or other executive having responsibility for the oversight of the insurer's enterprise risk management process attesting to the best of their belief and knowledge that the insurer applies the enterprise risk management process described in the ORSA summary report and that a copy of the report has been provided to the insurer's board of directors or the appropriate committee thereof;(2)Be prepared consistent with the ORSA guidance manual. Documentation and supporting information shall be maintained and made available upon examination or upon request of the director; and(3)Be reviewed by the division, and any additional requests for information shall be made using similar procedures currently used in the analysis and examination of multi-state or global insurers and insurance groups. Source: SL 2017, ch 210, 5.
58-5A-85. Exemption from requirements.An insurer shall be exempt from the requirements of 58-5A-81 to 58-5A-93, inclusive, if:(1)The insurer has annual direct written and unaffiliated assumed premium, including international direct and assumed premium but excluding premiums reinsured with the Federal Crop Insurance Corporation and National Flood Insurance Program, less than five hundred million dollars; and(2)The insurance group of which the insurer is a member has annual direct written and unaffiliated assumed premium, including international direct and assumed premium, but excluding premiums reinsured with the Federal Crop Insurance Corporation and National Flood Insurance Program, less than one billion dollars. Source: SL 2017, ch 210, 6.
58-5A-86. Requirements where insurer or insurer's group does not qualify for exemption.If an insurer qualifies for exemption pursuant to subdivision 58-5A-85(1), but the insurance group of which the insurer is a member does not qualify for exemption pursuant to subdivision 58-5A-85(2), the ORSA summary report that may be required shall include every insurer within the insurance group. This requirement may be satisfied by the submission of more than one ORSA summary report for any combination of insurers provided any combination of reports includes every insurer within the insurance group.If an insurer does not qualify for exemption pursuant to subdivision 58-5A-85(1), but the insurance group of which it is a member qualifies for exemption pursuant to subdivision 58-5A-85(2), the only ORSA summary report that may be required shall be the report applicable to that insurer. Source: SL 2017, ch 210, 7.
58-5A-87. Insurer's application for waiver.An insurer that does not qualify for exemption may apply to the director for a waiver from the requirements of 58-5A-81 to 58-5A-93, inclusive, based upon unique circumstances. In deciding whether to grant the insurer's request for waiver, the director may consider the type and volume of business written, ownership and organizational structure, and any other factor the director considers relevant to the insurer or insurance group of which the insurer is a member. If the insurer is part of an insurance group with insurers domiciled in more than one state, the director shall coordinate with the lead state commissioner and with the other domiciliary commissioners in considering whether to grant the insurer's request for a waiver. Source: SL 2017, ch 210, 8.
58-5A-88. One year period to comply with requirements following loss of qualification for exemption.If an insurer that qualifies for an exemption subsequently no longer qualifies for that exemption due to changes in premium as reflected in the insurer's most recent annual statement or in the most recent annual statements of the insurers within the insurance group of which the insurer is a member, the insurer shall have one year following the year the threshold is exceeded to comply with the requirements of 58-5A-81 to 58-5A-93, inclusive. Source: SL 2017, ch 210, 9.
58-5A-89. Conditions under which director may require maintenance of risk management framework, conduct of ORSA, and filing of ORSA summary report.Notwithstanding the exemptions from the requirements of 58-5A-81 to 58-5A-93, inclusive, the director may require that an insurer maintain a risk management framework, conduct an ORSA, and file an ORSA summary report:(1)Based on unique circumstances including the type and volume of business written, ownership and organizational structure, federal agency requests, and international supervisor requests; or(2)If the insurer has risk-based capital levels requiring company action, meets one or more of the standards of an insurer deemed to be in hazardous financial condition, or otherwise exhibits qualities of a troubled insurer as determined by the director. Source: SL 2017, ch 210, 10.
58-5A-9.1. Disapproval of dividends or distributions for violation--Order of supervision.If the director determines that any person fails to comply with the provisions of 58-5A-3, 58-5A-3.1, 58-5A-4, 58-5A-8, 58-5A-9, or 58-5A-45 preventing the full understanding of the enterprise risk to the insurer by the affiliates or by the insurance holding company system, the violation may serve as an independent basis for disapproving dividends or distributions. The director may place the insurer under an order of supervision pursuant to the provisions of chapter 58-29B. Source: SL 2015, ch 246, 26.
58-5A-9. Approval by director of acquisition or merger--Grounds for disapproval.The director shall approve any merger or other acquisition of control referred to in 58-5A-3 and 58-5A-45 unless, after a public hearing he finds that:(1)After the change of control the domestic insurer would not be able to satisfy the requirements for the issuance of a license to write the line or lines of insurance for which it is presently licensed;(2)The effect of the merger or other acquisition of control would be substantially to lessen competition in insurance in this state or tend to create a monopoly. In applying the competitive standard in this subdivision:(a)The informational requirements of 58-5A-48 and the standards of 58-5A-50 shall apply;(b)The merger or other acquisition shall not be disapproved if the director finds that any of the situations meeting the criteria provided by 58-5A-50 exist; and(c)The director may condition the approval of the merger or other acquisition on the removal of the basis of disapproval within a specified period of time;(3)The financial condition of any acquiring party is such as might jeopardize the financial stability of the insurer, or prejudice the interest of its policyholders;(4)The plans or proposals which the acquiring party has to liquidate the insurer, sell its assets or consolidate or merge it with any person, or to make any other material change in its business or corporate structure or management, are unfair and unreasonable to policyholders of the insurer and not in the public interest;(5)The competence, experience, and integrity of those persons who would control the operation of the insurer are such that it would not be in the interest of policyholders of the insurer and of the public to permit the merger or other acquisition of control; or(6)The acquisition is likely to be hazardous or prejudicial to the insurance buying public. Source: SL 1972, ch 267, 8; SL 1986, ch 416; SL 1992, ch 341, 5.
58-5A-90. Confidentiality of information submitted to division.Documents, materials, or other information, including the ORSA summary report, in the possession of or control of the division that are obtained by, created by, or disclosed to the director or any other person under 58-5A-81 to 58-5A-93, inclusive, are recognized by this state as being proprietary and containing trade secrets. All such documents, materials, or other information are confidential by law and privileged, are not subject to chapter 1-27, are not subject to subpoena, and are not subject to discovery or admissible in evidence in any private civil action. However, the director is authorized to use the documents, materials, or other information in the furtherance of any regulatory or legal action brought as a part of the director's official duties. The director may not make the documents, materials, or other information public without the prior written consent of the insurer.Neither the director nor any person who received documents, materials, or other ORSA-related information, through examination or otherwise, while acting under the authority of the director or with whom such documents, materials, or other information are shared pursuant to 58-5A-81 to 58-5A-93, inclusive, may be permitted or required to testify in any private civil action concerning any confidential documents, materials, or information except in regulatory or legal actions brought as a part of the director's official duties. Source: SL 2017, ch 210, 11.
58-5A-91. Powers and duties of director regarding ORSA.In order to assist in the performance of the director's regulatory duties regarding ORSA, the director:(1)May, upon request, share documents, materials, or other ORSA-related information, including the confidential and privileged documents, materials, or information subject to 58-5A-90, including proprietary and trade secret documents and other materials with state, federal, and international financial regulatory agencies, including members of any supervisory college, with the NAIC or any third-party consultants designated by the director, if the recipient agrees in writing to maintain the confidentiality and privileged status of the ORSA-related documents, materials, or other information and has verified in writing the legal authority to maintain confidentiality;(2)May receive documents, materials, or other ORSA-related information, including otherwise confidential and privileged documents, materials, or information, including proprietary and trade secret information or documents, from regulatory officials of other foreign or domestic jurisdictions, including members of any supervisory college, or from the NAIC and shall maintain as confidential or privileged any documents, materials, or information received with notice or the understanding that it is confidential or privileged under the laws of the jurisdiction that is the source of the document, material, or information; and(3)Shall enter into a written agreement with the NAIC or a third-party consultant governing sharing and use of information provided pursuant to 58-5A-81 to 58-5A-93, inclusive, consistent with this subdivision that shall:(a)Specify procedures and protocols regarding the confidentiality and security of information shared with the NAIC or a third-party consultant pursuant to 58-5A-81 to 58-5A-93, inclusive, including procedures and protocols for sharing by the NAIC with other state regulators from states in which the insurance group has domiciled insurers. The agreement shall provide that the recipient agrees in writing to maintain the confidentiality and privileged status of the ORSA-related documents, materials, or other information and has verified in writing the legal authority to maintain confidentiality;(b)Specify that ownership of information shared with the NAIC or a third-party consultant pursuant to 58-5A-81 to 58-5A-93, inclusive, remains with the director and the use of the information by the NAIC or a third-party consultant is subject to the direction of the director;(c)Prohibit the NAIC or third-party consultant from storing the information shared pursuant to 58-5A-81 to 58-5A-93, inclusive, in a permanent database after the underlying analysis is completed;(d)Require prompt notice to be given to an insurer whose confidential information in the possession of the NAIC or a third-party consultant pursuant to 58-5A-81 to 58-5A-93, inclusive, when subject to a request or subpoena to the NAIC or a third-party consultant for disclosure or production;(e)Require the NAIC or a third-party consultant to consent to intervention by an insurer in any judicial or administrative action in which the NAIC or a third-party consultant may be required to disclose confidential information about the insurer shared with the NAIC or a third-party consultant pursuant to 58-5A-81 to 58-5A-93, inclusive; and(f)In the case of an agreement involving a third-party consultant, provide for the insurer's written consent. Source: SL 2017, ch 210, 12.
58-5A-92. Sharing of information and documents by director--Confidentiality.The sharing of information and documents by the director pursuant to 58-5A-81 to 58-5A-93, inclusive, does not constitute a delegation of regulatory authority or rule making. The director is solely responsible for the administration, execution, and enforcement of the provisions of 58-5A-81 to 58-5A-93, inclusive. No waiver of any applicable privilege or claim of confidentiality in the documents, proprietary and trade-secret materials, or other ORSA-related information may occur as a result of disclosure of such ORSA-related information or documents to the director under this section or as a result of sharing as authorized in 58-5A-81 to 58-5A-93, inclusive. Documents, materials, or other information in the possession or control of the NAIC or a third-party consultant pursuant to 58-5A-81 to 58-5A-93, inclusive, are confidential by law and privileged, are not subject to chapter 1-27, are not subject to subpoena, and are not subject to discovery or admissible in evidence in any private civil action. Source: SL 2017, ch 210, 13.
58-5A-93. Promulgation of rules regarding ORSA.The director shall promulgate rules, pursuant to chapter 1-26, to carry out ORSA including:(1)Adoption of the NAIC ORSA guidance manual;(2)Definition of terms;(3)Fees; and(4)Timing, form, and content of reports. Source: SL 2017, ch 210, 14.
58-5B-1. Definition of terms.Terms as used in this chapter, unless the context otherwise requires, mean:(1)"Director," the director of insurance or a designee;(2)"Licensed health care provider," includes a physician and surgeon, osteopath, osteopathic physician and surgeon, or nurse licensed pursuant to the laws of a state, and a hospital licensed pursuant to the laws of a state;(3)"Medical malpractice insurance," insurance coverage against the legal liability of the insured and against loss, damage, or expense incident to a claim arising out of the death or injury of any person as the result of negligence or malpractice in rendering professional service by any licensed health care provider;(4)"State" or "states," any or all of the states of Montana, Nebraska, North Dakota, South Dakota, and Wyoming. Source: SL 1976, ch 315, 1.
58-5B-2. Malpractice insurance contracts among health care providers.Any number of physicians and surgeons, osteopaths, osteopathic physicians and surgeons, and graduate nurses, licensed to practice their profession in any of the states, and hospitals licensed under the laws of any of the states, may enter into contracts with each other for the purpose of protecting themselves by insurance against loss by reason of actions at law on account of their alleged error, mistake, negligence, or carelessness in the treatment and care of patients, including the performance of surgical operations, or in the prescribing and dispensing of drugs and medicines, or for loss by reason of damages in other respects, and to reimburse any member in case of such loss. Source: SL 1976, ch 315, 2.
58-5B-3. Incorporation of mutual malpractice insurers--Conflict of laws.All domestic corporations, organized for the purpose of transacting such insurance business under the provisions of this chapter, shall incorporate under the provisions of chapter 58-5, and be regulated as mutual insurers; provided, the provisions of this chapter shall govern where in conflict with other laws or parts of laws. Source: SL 1976, ch 315, 3.
58-5B-4. Number of insurance applications required before certificate issued to mutual insurer.No original certificate of authority shall be issued by the director of insurance until two hundred fifty applications have been received from health care providers other than hospitals, or in the case of hospitals, applications from hospitals representing fifty percent of the beds in the state or states to be affected, and until the director of insurance has satisfied himself that such mutual insurer has bona fide applications representing the number of applicants required. Source: SL 1976, ch 315, 4.
58-5B-5. Admission of foreign insurer to solicit applications and do business in state--Reports--Taxation--Supervision.Any mutual insurer organized under laws substantially similar to this chapter of another state, for the purpose of transacting the kind of business described in this chapter may upon application and without prior operating experience or examination, be admitted to solicit applications, and if the necessary number is obtained, do business in this state if the director finds such admission is in the public interest; and shall thereafter make all reports and be subject to taxation, examination, and supervision by the director of insurance to the same extent and in the same manner as are other foreign insurers. Source: SL 1976, ch 315, 5.
58-5C-1. Definition of terms.Terms as used in this chapter, unless the context otherwise requires, mean:(1)"Director," the director of insurance;(2)"Legal malpractice insurance," insurance coverage against the legal liability of the insured and against loss, damage, or expense incident to a claim arising out of an error, omission, negligence, or malpractice in the rendering of professional service by any licensed attorney, his agents, or employees. Source: SL 1977, ch 405, 1.
58-5C-2. Malpractice insurance contracts among attorneys.Any number of attorneys licensed to practice their profession in any of the states, may enter into contracts with each other for the purpose of protecting themselves by insurance against loss by reason of actions at law on account of their alleged error, mistake, negligence, or omission or malpractice in the performance of their profession, or for loss by reason of damages in other respects, and to reimburse any member in case of such loss. Source: SL 1977, ch 405, 2.
58-5C-3. Incorporation of mutual malpractice insurers--Conflict of laws.All domestic corporations, organized for the purpose of transacting such insurance business under the provisions of this chapter, shall incorporate under the provisions of chapter 58-5, and be regulated as mutual insurers; provided, the provisions of this chapter shall govern where in conflict with other laws or parts of laws. Source: SL 1977, ch 405, 3.
58-5C-4. Number of insurance applications required before certificate issued to mutual insurer.No original certificate of authority may be issued by the director of the Division of Insurance until one hundred applications have been received from licensed attorneys to be affected, and until the director has satisfied himself that such a mutual insurer has bona fide applications representing the number of applicants required. Source: SL 1977, ch 405, 4; SL 1979, ch 342.
58-5C-5. Admission of foreign insurer to solicit applications and do business in state--Reports--Taxation--Supervision.Any mutual insurer organized under laws substantially similar to this chapter in another state, for the purpose of transacting the kind of business described in this chapter may upon application and without prior operating experience or examination be admitted to solicit applications, and if the necessary number is obtained, do business in the state if the director finds such admission is in the public interest; and shall thereafter make all reports and be subject to taxation, examination, and supervision by the director of insurance to the same extent and in the same manner as are other foreign insurers. Source: SL 1977, ch 405, 5.
58-6-1. Certificate of authority required for transaction of insurance business--Exceptions--Violation as misdemeanor.No person may act as an insurer and no insurer or its insurance producers, attorneys, subscribers, or representatives may directly transact insurance in this state except as authorized by a subsisting certificate of authority issued to the insurer by the director, except as to such transactions as are expressly otherwise provided for in this title. Any violation of this section is a Class 2 misdemeanor. Source: SL 1966, ch 111, ch 3, 1 (1); SL 1978, ch 359, 2; SL 2001, ch 286, 75.
58-6-10. Governmentally owned insurers prohibited--Exceptions.Except for instrumentalities of the United States government, no insurer, the voting control or ownership of which is held in whole or substantial part by any government or governmental agency, or which is operated for or by any such government or agency, may transact insurance in this state, unless, upon verified application by the insurer, the director finds that:(1)The insurer is not subject to any form of subsidy that would enable it to compete unfairly with domestic insurers;(2)The insurer is not subject to governmental practices that discriminate on the basis of race, color, creed, or national origin;(3)The ownership or financial control does not create the presence of any sovereign immunity in the insurer;(4)The insurer has agreed to waive sovereign immunity as a defense should it exist for any action by or against the director pursuant to the director's regulatory authority under Title 58;(5)The insurer has agreed that it will exhaust all administrative remedies and will neither commence in, nor remove to, federal court any action by or against the director pursuant to the director's regulatory authority under Title 58;(6)Appropriate measures and controls exist to avoid security problems resulting from an insurer's access to confidential information and data of its insured; and(7)The ownership or financial control does not result in substantial or undue influence being asserted over the insurer.Membership in a mutual insurer, or subscribership in a reciprocal insurer, or ownership of stock of an insurer by the alien property custodian or similar official of the United States, or supervision of an insurer by public insurance supervisory authority does not constitute ownership, control, or operation of the insurer for the purposes of this section. Nothing contained in this section prohibits or affects self insurance by school districts as provided in 13-10-3, or by municipalities as provided in 9-14-30. The failure of any applicant under this section to submit all information requested by the director pursuant to this section and the director's regulatory authority under Title 58 relevant to any finding to be made under this section is sufficient to deny the application. Source: SL 1966, ch 111, ch 3, 5; SL 1978, ch 49, 5; SL 1997, ch 284, 1.
58-6-11. Readmission to state as an authorized insurer--Requirements--Payment of back premium taxes.In addition to other applicable requirements therefor, no insurer, formerly authorized in this state and again seeking admission to this state as an authorized insurer, shall be so authorized unless the insurer, as part of its application for such authority, includes a written statement, duly sworn to by at least two of its executive officers, of all premiums received by the insurer with respect to insurance on subjects of insurance resident, located or to be performed in this state, subsequent to its previous withdrawal for any cause from this state, and pays to the state a premium tax thereon at the same rate and in the same amount as the insurer would have paid on such premiums had it continued to be an authorized insurer in this state during the period between its withdrawal and its reapplication for authority. Source: SL 1966, ch 111, ch 3, 6 (1).
58-6-12. Unauthorized insurers--Application of insurer violating insurance laws for authority to transact insurance in state--Payment of back premium taxes.Any insurer, not before authorized in this state, which, within three years prior to its application for authority to transact insurance in South Dakota, transacted insurance in violation of the laws of South Dakota, may not be granted authority unless it is otherwise fully qualified. In addition, it shall file with the director of the Division of Insurance a written statement, sworn to by two of its executive officers, of all premiums received by it during the three years with respect to insurance on subjects resident, located or to be performed in South Dakota, and shall pay to the director, as an additional fee for the filing of its application for a certificate of authority, an amount of money equal to the premium tax which it would have paid if it had been an authorized insurer in this state throughout that period, plus interest thereon at the Category D rate of interest as established in 54-3-16. Source: SL 1966, ch 111, ch 3, 6 (2); SL 1983, ch 28, 66; SL 1984, ch 319, 32.
58-6-13. Foreign insurance companies--Compliance with requirements for admission to do business in state--Waiver.No foreign insurance company may be admitted to do business in the State of South Dakota until it has fully complied with the following requirements, in addition to such other requirements as may be specifically provided:(1)Such company shall have had two continuous calendar years of operating experience as of the date of application to do business in this state; and(2)Shall have been examined within the thirty-six months next preceding the date of application to do business in this state; and(3)Shall fully satisfy any retaliatory requirements imposed by the laws and regulations which the applying company's state of incorporation imposes upon South Dakota insurance companies seeking admission to such state.Subdivisions (1) and (2) do not apply to a company which is a wholly owned subsidiary, or which is the successor in interest, through merger or consolidation, of an insurer which is an authorized insurer in this state or to a company which satisfies the director that it is in fact a continuation of an older organization. The director may waive the provisions of subdivisions (1) and (2) if a special need or circumstance, as determined by the director, can be demonstrated. Source: SL 1966, ch 111, ch 3, 7; SL 1988, ch 389.
58-6-14. Use of deceptively similar name prohibited.No insurer shall be formed or authorized to transact insurance in this state which has or uses a name or principal identifying name factor which is the same as or deceptively similar to that of another insurer earlier so authorized. Source: SL 1966, ch 111, ch 3, 8 (1).
58-6-15. Use of deceptively similar name by life insurer prohibited for ten years.No life insurer shall be authorized to transact insurance in this state which has or uses a name deceptively similar to that of another insurer authorized to transact insurance in this state within the preceding ten years if life insurance policies originally issued by such other insurer are still outstanding in this state. Source: SL 1966, ch 111, ch 3, 8 (2).
58-6-16. Use of name deceptively similar to name of foreign insurer prohibited.No insurer shall hereafter be formed or newly authorized to transact insurance in this state which has or uses a name the same as or deceptively similar to the name of any foreign insurer doing business elsewhere than in this state if such foreign insurer has within the last preceding twelve months signified its intention to secure incorporation in this state under such name, or do business as a foreign insurer in this state under such name by filing notice of such intention with the director unless the written consent to the use of such name or deceptively similar name has been given by such foreign insurer. Source: SL 1966, ch 111, ch 3, 8 (3).
58-6-17. Name tending to deceive or mislead as to type of organization of insurer prohibited.No insurer shall be authorized to transact insurance in this state which has or uses a name which tends to deceive or mislead as to the type of organization of the insurer. Source: SL 1966, ch 111, ch 3, 8 (4).
58-6-18. Prevention of confusing similarity of names by director.In case of conflict of names hereafter between two insurers, or a conflict otherwise prohibited under 58-6-14 to 58-6-17, inclusive, the director may require, as a condition to the issuance of an original certificate of authority to an applicant insurer, the insurer to use in this state such supplementation or modification of its name or such business name as may reasonably be necessary to avoid the conflict. No such name, supplementation, or modification shall contain the principal identifying factor of the name of any other insurer already authorized to transact insurance in this state. Source: SL 1966, ch 111, ch 3, 8 (5).
58-6-19. Combination of insuring power of one insurer--Exception.An insurer which otherwise qualifies therefor may be authorized to transact any one kind or combination of kinds of insurance as defined in this title except as provided by 58-6-20 to 58-6-22, inclusive. Source: SL 1966, ch 111, ch 3, 9.
58-6-2. Solicitation of insurance or transacting business in another state by insurer in this state without certificate of authority prohibited--Misdemeanor.No insurer shall from offices or by personnel or facilities located in this state solicit insurance applications or otherwise transact insurance in another state or country unless it holds a subsisting certificate of authority issued to it by the director authorizing it to transact the same kinds of insurance in this state. Violation of this section is a Class 2 misdemeanor. Source: SL 1966, ch 111, ch 3, 1 (2); SL 1978, ch 359, 2.
58-6-20. Life insurer--Kinds of business authorized, exception.An insurer authorized to engage in the business of life insurance may also grant annuities, but shall not be authorized to engage in any other kind of insurance business except health; except, that the director shall, if the insurer otherwise qualifies therefor, continue so to authorize any life insurer which immediately prior to July 1, 1966, was lawfully authorized to transact in this state a kind or kinds of insurance in addition to life and health insurance and annuity business. Source: SL 1966, ch 111, ch 3, 9 (1).
58-6-21. Reciprocal insurer--Transaction of life or title insurance prohibited.A reciprocal insurer may not transact life or title insurance. Source: SL 1966, ch 111, ch 3, 9 (2); SL 1996, ch 290.
58-6-22. Title insurer--Transaction of other insurance prohibited.A title insurer shall not transact any other kind of insurance. Source: SL 1966, ch 111, ch 3, 9 (3).
58-6-23. Paid-in capital and surplus requirements for certificate of authority.To qualify for authority to transact any one kind of insurance or combination of kinds of insurance as shown below, a foreign insurer, or a domestic stock insurer applying for its original certificate of authority in this state, or any insurer reapplying for a certificate of authority in this state after having withdrawn from this state for any cause, shall possess and thereafter maintain unimpaired basic paid-in capital stock, if a stock insurer, or unimpaired basic surplus, if a foreign mutual insurer or foreign reciprocal insurer, and shall possess when first so authorized additional funds in surplus as follows:  Kind or Kinds ofInsuranceBasic Capitalor Basic SurplusAdditionalSurplusLife   Domestic stock insurers $200,000$300,000 Foreign insurers 300,000350,000Health   Domestic stock insurers 200,000300,000 Foreign insurers 300,000350,000Life and Health   Domestic stock insurers 400,000400,000 Foreign insurers 400,000525,000Property 200,000300,000Casualty   Without Workers' Compensation 200,000300,000 With Workers' Compensation 300,000350,000Marine and Transportation 200,000300,000Surety 200,000300,000Title 200,000300,000Multiple lines 400,000400,000 Source: SL 1966, ch 111, ch 3, 10 (1); SL 1967, ch 129, 1.
58-6-24. Determination of capital and surplus requirements for certificate of authority.Capital and surplus requirements of 58-6-23 are based upon all kinds of insurance transacted by the insurer in any and all areas in which it operates or proposes to operate, whether or not only a portion of such kinds are to be transacted in this state. Source: SL 1966, ch 111, ch 3, 10 (2).
58-6-25. Additional types of insurance--Request for authority to transact within three years after issuance of initial certificate--Basic surplus or additional surplus required.If within three years after date of its initial certificate of authority in this state such an insurer requests authority to transact an additional kind or kinds of insurance, it shall not be so authorized unless it then possesses basic surplus or additional surplus in such an amount as would be required under 58-6-23 for an original certificate of authority covering all the kinds of insurance the insurer then proposes to transact. Source: SL 1966, ch 111, ch 3, 10 (3).
58-6-26. Surplus to qualify to transact one or more kinds of insurance by domestic mutual and reciprocal insurers--Laws governing.As to surplus required for qualification to transact one or more kinds of insurance and thereafter to be maintained, domestic mutual insurers formed after June 30, 1966, are governed by chapters 58-5 and 58-35 and domestic reciprocal insurers formed after June 30, 1966, are governed by chapter 58-34. Source: SL 1966, ch 111, ch 3, 10 (4).
58-6-27. Continuation of authority of insurer holding prior certificate--Maintenance of capital stock or surplus requirements.A domestic or foreign insurer holding a valid certificate of authority to transact insurance in this state immediately prior to July 1, 1966, may continue to transact the same kinds of insurance as permitted by such certificate of authority by maintaining thereafter unimpaired not less than the same amount of paid-in capital stock, if a stock insurer, or not less than the same amount of surplus, if a mutual or reciprocal insurer, as required under the laws of this state for such authority in force immediately prior to July 1, 1966, and as if such laws had continued in force. Once a stock company has accumulated the capital and surplus to exceed the minimum capital and surplus for the line authorized pursuant to 58-6-23, then 58-6-23 shall apply. Once a mutual company has accumulated the capital and surplus to exceed the minimum capital and surplus for the line authorized pursuant to 58-5-21, then 58-5-21 shall apply. Source: SL 1966, ch 111, ch 3, 11(1); SL 1988, ch 390.
58-6-28. Additional kinds of insurance authorized for insurer holding prior certificate--Capital and surplus requirements.An insurer described by 58-6-27 shall not hereafter be granted authority to transact any other or additional kind of insurance unless it then fully complies with the requirements as to capital and surplus, as applied to all the kinds of insurance it then proposes to transact, as provided under 58-6-23 to 58-6-26, inclusive, as to new domestic insurers. Source: SL 1966, ch 111, ch 3, 11 (2).
58-6-29. Annuities--Granting by life insurer without additional capital or surplus.A life insurer may also grant annuities without additional capital or additional surplus. Source: SL 1966, ch 111, ch 3, 12 (1).
58-6-3. Preemption of field of insurance regulation by state--Licensing by political subdivisions prohibited.The state hereby preempts the field of regulating insurers and their insurance producers and solicitors; and all political subdivisions of the state are prohibited from requiring of any insurer, insurance producer, or solicitor regulated under this title any authorization, permit, or registration of any kind for conducting transactions lawful under the authority granted by the state under this title. Source: SL 1966, ch 111, ch 3, 1 (3); SL 2001, ch 286, 76.
58-6-30. Health insurer issuing insurance against congenital defects without additional capital or surplus.A health insurer may also issue insurance against congenital defects without additional capital or additional surplus. Source: SL 1966, ch 111, ch 3, 12 (2).
58-6-31. Casualty insurer transacting health insurance without additional capital or surplus.A casualty insurer may also be authorized to transact health insurance without additional capital or additional surplus. Source: SL 1966, ch 111, ch 3, 12 (3).
58-6-32. Property insurer including additional kinds of insurance without additional capital or surplus.A property insurer may without additional capital or additional surplus include such amount and kind of insurance against legal liability for injury, damage, or loss to the person or property of others, and for medical, hospital, and surgical expense related to such injury, as the director deems to be reasonably incidental to insurance of real property against fire and other perils under policies covering farm properties, or residential properties designed for occupancy by not more than four families, with or without incidental office, professional, private school, or studio occupancy by an insured, whether or not the premium or rate charged for certain perils so covered is specified in the policy. No insurer authorized as to property insurance only may pursuant to this section retain risk as to any one subject of insurance as to hazards, other than property insurance hazards, in an amount exceeding ten percent of its surplus to policyholders. Source: SL 1966, ch 111, ch 3, 12 (4); SL 2018, ch 278, 2.
58-6-33. Deposit by all insurers--Exceptions.Sections 58-6-34 and 58-6-35 shall apply as to all insurers other than title insurers, existing mutual casualty insurers writing a single line of insurance, and mutual assessment life insurance. Source: SL 1966, ch 111, ch 3, 13 (1).
58-6-34. Deposits through director--Purpose--Amounts required--Deposits in other states in lieu of deposit with director.The director may not authorize any insurer to transact insurance in this state unless it makes and thereafter maintains in trust through the director for the protection of all its policyholders in the United States, a deposit of cash or securities eligible for deposit under the provisions of this title relating to deposits and administration of deposits in an amount of two hundred thousand dollars or more, except that:(1)As to foreign insurers, in lieu of the deposit, the director shall accept the certificate in proper form of the public official having supervision over insurers in any other state to the effect that a like deposit or part thereof by the insurer is being maintained in public custody or control pursuant to law in the state in trust for the protection of the insurer's policyholders in the United States.(2)As to alien insurers, in lieu of the deposit, the director may accept evidence that the insurer maintains within the United States by way of trust deposits with public depositories, or in trust institutions approved by the director, assets available for discharge of its United States insurance obligations. The assets shall be an amount not less than the outstanding liabilities of the insurer arising out of its insurance transactions in the United States together with a surplus equal to the greater of the following sums, the deposit required by this title to be made by a foreign insurer transacting like kinds of insurance, or three hundred thousand dollars. Source: SL 1966, ch 111, ch 3, 13 (2); SL 1994, ch 374.
58-6-35. Deposits of foreign or alien insurers in another state--Quality of cash or securities.Deposits of foreign insurers or deposits of alien insurers under subdivision 58-6-34(2) in another state shall be in cash or securities of a quality comparable to those eligible for deposit in this state by domestic insurers. Source: SL 1966, ch 111, ch 3, 13 (3).
58-6-36. Deposit of title insurer--Amount required.No title insurer shall be authorized to transact business in this state unless it deposits and maintains on deposit in this state through the director, cash or securities eligible for deposit as set forth in the chapter hereof relating to deposits and administration of deposits, in the amount of one hundred thousand dollars; except, that the deposit of a domestic title insurer which was lawfully transacting such business in this state under laws in force immediately prior to July 1, 1966, shall be in an amount determined as follows:(1)Twenty-five thousand dollars, plus(2)Twenty-five hundred dollars for each five thousand or terminal fraction thereof of population in excess of one hundred thousand of aggregate population of those counties of South Dakota in which the insurer transacts business, if the insurer transacts business in more than one county of South Dakota;but in no event shall a deposit in excess of one hundred thousand dollars be so required. For the purpose of this provision, population shall be based upon the most recent official federal census. Source: SL 1966, ch 111, ch 3, 14 (1).
58-6-37. Deposit of title insurer as guaranty fund--Purpose.The deposit shall be known as a "guaranty fund," and shall be held as security for the faithful performance by the insurer of all its undertakings and liabilities under its title policies or other guarantees of title to property, but shall not be subject to any other liabilities of the insurer. Source: SL 1966, ch 111, ch 3, 14 (2).
58-6-38. Application for initial certificate of authority--Documents accompanying.Every insurer applying for an initial certificate of authority shall file the following documents with the director:(1)A certified copy of its articles of incorporation with all amendments;(2)A certified copy of its bylaws with all amendments;(3)A copy of its annual statement as of December thirty-first last preceding;(4)A copy of report of last examination, if any, made of the insurer, certified by the insurance supervisory official of the state of domicile of a foreign insurer or the state of entry into the United States of an alien insurer;(5)If a foreign or alien insurer, a certificate of the public official having supervision of insurance in the state or country of domicile, or state of entry into the United States, of such insurer, showing that it is authorized to transact the kinds of insurance proposed to be transacted in South Dakota;(6)If an alien insurer, a copy of the appointment and authority of its United States manager;(7)A certificate of deposit pursuant to 58-6-34 and 58-6-35; and(8)Such other information and documents as the director deems necessary for the protection of policyholders or to assure compliance with this title. Source: SL 1966, ch 111, ch 3, 15.
58-6-39. Service of process through director.Each insurer applying for authority to engage in the insurance business in this state shall appoint the director, and his successors in office, as its attorney to receive service of legal process issued against it in South Dakota. The appointment shall be made on a form designated and furnished by the director. The appointment shall be irrevocable, shall bind the insurer and any successor in interest to the assets or liabilities of the insurer, and shall remain in effect as long as there is in force in South Dakota any contract made by the insurer or obligations arising therefrom. Source: SL 1966, ch 111, ch 3, 26.
58-6-4. Activities excepted from certificate of authority requirements.A certificate of authority shall not be required of an insurer with respect to the following:(1)Investigation, settlement, or litigation of claims under its policies lawfully written in this state, or liquidation of assets and liabilities of the insurer, other than collection of new premiums, all as resulting from its former authorized operations in this state;(2)Transactions thereunder subsequent to issuance of a policy covering only subjects of insurance not resident, located or expressly to be performed in this state at time of issuance, and lawfully solicited, written and delivered outside this state;(3)Transactions pursuant to surplus lines coverages lawfully written under the chapter of this title relating to surplus lines;(4)Reinsurance, when transacted by an insurer duly authorized by its state of domicile to transact the kind of insurance involved;(5)The continuation and servicing of life insurance or health insurance policies or annuity contracts remaining in force as to residents of this state if the insurer has withdrawn from the state and is not transacting new insurance therein. Source: SL 1966, ch 111, ch 3, 2.
58-6-40. Time for approval or disapproval of original certificate--Extension--Failure to disapprove deemed approval.Upon the filing and completion of an application for an original certificate of authority, the director shall have sixty days in which to approve the application by issuing an appropriate certificate of authority or to disapprove the application by issuing an order setting forth the grounds for such disapproval. The director may extend such sixty-day period for an additional sixty days by notifying the applicant in writing of such extension. If the application is not approved or disapproved within the time period as set forth above, but in no event to exceed one hundred twenty days, the application shall be deemed to be approved and the director shall thereupon issue the appropriate certificate of authority. The waiting period shall commence as of the date all information and documents required by the director are received. Source: SL 1966, ch 111, ch 3, 16 (1).
58-6-41. Kinds of insurance specified in certificate--Limitations within class.The certificate, if issued, shall specify the kinds of insurance the insurer is authorized to transact in South Dakota. At the insurer's request, the director may issue a certificate of authority limited to particular types of insurance or insurance coverages within the scope of a kind of insurance as defined in this title. Source: SL 1966, ch 111, ch 3, 16 (2).
58-6-42. Annual reissuance of certificate not required--Annual renewal fee--Expiration of certificate.The certificate of authority issued by the director to an insurer shall not require annual reissuance but shall remain in force as long as the insurer pays the annual renewal fee provided in 58-2-29 on or before the thirtieth day of April of each year and as long as the insurer continues to meet the other requirements of this title, unless the license is otherwise revoked, suspended, or withdrawn. Source: SL 1966, ch 111, ch 3, 17; SL 1967, ch 129, 2.
58-6-43. Foreign insurer exempt from foreign corporation laws.A foreign insurer authorized to transact insurance in this state and fully complying with this title shall be exempt from complying with other provisions of the South Dakota Code concerning foreign corporations. Source: SL 1966, ch 111, ch 3, 24.
58-6-44. Refusal to renew or suspension or revocation of certificate, grounds.The director shall refuse to renew, or shall suspend or revoke, an insurer's certificate of authority:(1)If such action is required by any provision of this title; or(2)If a foreign insurer, it no longer meets the requirements for the authority, on account of deficiency of assets or otherwise; or if a domestic insurer, it has failed to cure an impairment of capital or surplus within the time allowed therefor by the director under this title; or(3)If the insurer knowingly exceeds its charter powers or powers granted under its certificate of authority; or(4)If the insurer's certificate of authority to transact insurance therein is suspended or revoked by its state of domicile, or state of entry into the United States if an alien insurer. Source: SL 1966, ch 111, ch 3, 18 (1).
58-6-45. Hearing required on refusal to issue, suspension or revocation of certificate.Except in cases of insolvency or impairment of required capital or surplus, or suspension or revocation by another state as referred to in subdivision 58-6-44(4), the director shall so refuse, suspend, or revoke the certificate of authority only after a hearing granted to the insurer thereon, unless the insurer waives such hearing in writing. Source: SL 1966, ch 111, ch 3, 18 (2).
58-6-46. Grounds for refusal to renew, suspension, or revocation of certificate.The director may refuse to renew or may suspend or revoke an insurer's certificate of authority if the director finds after a hearing thereon that the insurer has violated or failed to comply with any lawful order of the director, any laws of this state relevant to the business of insurance, or any provision of this title other than those for which suspension or revocation is mandatory. Source: SL 1966, ch 111, ch 3, 19 (1); SL 2013, ch 246, 1.
58-6-47. Suspension or revocation of certificate after hearing, grounds.The director shall suspend or revoke an insurer's certificate of authority on any of the following grounds if he finds after a hearing thereon that the insurer:(1)Is in unsound condition, or in such condition or using such methods and practices in the conduct of its business, as to render its further transaction of business in this state hazardous or injurious to its policyholders or to the public;(2)Has failed, after written request therefor by the director, to remove or discharge an officer or director who has been convicted of any crime involving fraud, dishonesty, or moral turpitude;(3)With such frequency as to indicate its general business practice in this state, has without just cause refused to pay claims arising under coverages provided by its policies, whether the claim is in favor of an insured or is in favor of a third person with respect to the liability of an insured to such third person, or, with like frequency, without just cause compels insureds or claimants to accept less than the amount due them or to employ attorneys or to bring suit against the insurer or such an insured to obtain full payment or settlement of such claims;(4)Is affiliated with and under the same general management, or interlocking directorate, or ownership as another insurer which transacts direct insurance in this state without having a certificate of authority therefor, except as permitted under this title.(5)Refuses to be examined, or if its directors, officers, employees, or representatives refuse to submit to examination relative to its affairs, or to produce its accounts, records, and files for examination by the director when required, or refuse to perform any legal obligation relative to the examination;(6)Has failed to pay any final judgment rendered against it in this state upon any policy, bond, recognizance, or undertaking issued or guaranteed by it, within thirty days after the judgment became final, or within thirty days after time for taking an appeal has expired, or within thirty days after dismissal of an appeal before final determination, whichever date is the later. Source: SL 1966, ch 111, ch 3, 19 (2).
58-6-48. Suspension of certificate on commencement of delinquency proceedings.The director may without advance notice or a hearing thereon, immediately suspend the certificate of authority of any insurer as to which proceedings for receivership, conservatorship, rehabilitation, or other delinquency proceedings, have been commenced in any state by the public insurance supervisory official of such state. Source: SL 1966, ch 111, ch 3, 19 (3).
58-6-49. Order of suspension, revocation, or refusal to renew certificate--Replacement of policies.Each suspension or revocation of, or refusal to renew, an insurer's certificate of authority shall be by the director's order given to the insurer as provided by 58-4-17. If the director finds that the public health, safety, and welfare of insureds is imperiled due to being covered under a policy of insurance by an insurer or carrier whose certificate of authority has been revoked, and all appeals of the revocation have been exhausted the director may also order that the insurer or carrier replace all policies with equivalent policies issued by an authorized insurer in this state or otherwise provide for the transfer of all such risk through an arrangement approved by the director. Source: SL 1966, ch 111, ch 3, 20 (1); SL 2013, ch 246, 2.
58-6-5. Foreign insurer--Investments in state without a certificate of authority.A foreign insurer may make investments in this state without a certificate of authority as provided by 58-6-1. Such an insurer shall not be subject to any other provisions of this title. Source: SL 1966, ch 111, ch 3, 3.
58-6-50. Notice to insurance producers of suspension, revocation, or refusal to renew certificate--Insurance Producers' authority.Upon suspending or revoking or refusing to renew the insurer's certificate of authority, the director shall forthwith give, by registered or certified mail, notice thereof to the insurer's insurance producers in this state of record in the department, and shall likewise suspend or revoke the authority of the insurance producers to represent the insurer. Source: SL 1966, ch 111, ch 3, 20 (2); SL 1982, ch 28, 18; SL 2001, ch 286, 77.
58-6-51. Publication of notice of suspension, revocation, or refusal to renew certificate of authority.The director may also publish notice of such suspension, revocation, or refusal in one or more newspapers of general circulation in this state. Source: SL 1966, ch 111, ch 3, 20 (3).
58-6-52. Duration of suspension of certificate of authority--Rescission or shortening.Suspension of an insurer's certificate of authority shall be for such period as the director specifies in the order of suspension, but not to exceed one year. During the suspension the director may rescind or shorten the suspension by his further order. Source: SL 1966, ch 111, ch 3, 21 (1).
58-6-53. Rights and obligations of insurer during suspension.During the suspension period the insurer shall not solicit or write any new business in this state, but shall file its annual statement, pay fees, licenses, and taxes as required under this title, and may service its business already in force in this state, as if the certificate of authority had continued in full force. Source: SL 1966, ch 111, ch 3, 21 (2).
58-6-54. Reinstatement of certificate of authority which has not terminated where cause for suspension no longer exists.After an insurer has been suspended and if the insurer's certificate of authority has not terminated, the insurer's certificate of authority shall be reinstated if the insurer can demonstrate to the satisfaction of the director that cause for suspension no longer exists. Source: SL 1966, ch 111, ch 3, 21(3); SL 1988, ch 391.
58-6-55. Reinstatement of authority of insurance producers--Notice to insurer and insurance producers.Upon reinstatement of the insurer's certificate of authority, the authority of its insurance producers in this state to represent the insurer shall likewise reinstate. The director shall promptly notify by registered or certified mail the insurer and its insurance producers in this state, of record in the division, of such reinstatement. If pursuant to 58-6-51 the director has published notice of the suspension, the director shall in like manner publish notice of the reinstatement. Source: SL 1966, ch 111, ch 3, 21 (4); SL 1982, ch 28, 18; SL 2001, ch 286, 78.
58-6-56. Suspension, revocation, or refusal to renew certificate because of deficiency of assets or impairment of capital or surplus--Cessation of business in state.Upon suspension, revocation, or refusal to renew the certificate of authority of an insurer on account of deficiency of assets, if a foreign insurer, or failure to cure an impairment of the capital of a domestic stock insurer, or surplus of a reciprocal or domestic mutual insurer, as provided under subdivision 58-6-44(2), every officer and director of the insurer must, either separately or jointly with one or more of the others and within four days after notice of such suspension, revocation, or refusal was given to the insurer by the director, notify by registered or certified mail every person authorized by the insurer, as of immediately prior to such suspension, revocation, or refusal, to write business for the insurer in South Dakota, immediately to cease such writing; and each such person so notified shall immediately cease to write any further business for the insurer in South Dakota. Source: SL 1966, ch 111, ch 3, 22 (1); SL 1982, ch 28, 18.
58-6-57. Failure to notify or continuation of business after notice as felony.Each individual made responsible for the notification under 58-6-56, who fails so to notify, and every person so authorized who, after being so notified or otherwise being informed as to such impairment or suspension, revocation, or refusal, solicits or writes further business for the insurer, is guilty of a Class 4 felony. Source: SL 1966, ch 111, ch 3, 22 (2); SL 1978, ch 359, 5.
58-6-58. Impairment of assets, capital, or surplus--Suspension, revocation, or refusal to renew certificate of authority--Rehabilitator or receiver of insurer not required to notify agents.Sections 58-6-56 and 58-6-57 do not apply to any person who has been appointed as and is acting as rehabilitator or receiver of the insurer in judicial proceedings in a court of the United States or of the State of South Dakota. Source: SL 1966, ch 111, ch 3, 22 (3).
58-6-59. Liability of officers and directors of impaired insurers.The liability of the officers and directors of impaired insurers shall be determined in accordance with the provisions of 58-5-118. Source: SL 1966, ch 111, ch 3, 23.
58-6-6. Eligibility of insurer for certificate of authority.To qualify for and hold authority to transact insurance in this state, an insurer must be otherwise in compliance with this title and with its charter provisions, and must be an incorporated stock insurer, or an incorporated mutual insurer, or a reciprocal insurer, of the same general type as may be formed as a domestic insurer under this title. Source: SL 1966, ch 111, ch 3, 4.
58-6-60. Notice to insurer and insurance producers of refusal, suspension, or revocation of certificate.Upon refusal, suspension, or revocation of an insurer's certificate of authority, the director shall forthwith give notice thereof by registered or certified mail to the insurer and to its insurance producers in this state of record in the director's office. Source: SL 1966, ch 111, ch 3, 25 (1); SL 1982, ch 28, 18; SL 2001, ch 286, 79.
58-6-61. Suspension or revocation of authority of insurance producers--Notice by director.Such refusal, suspension, or revocation shall likewise automatically suspend or revoke, as the case may be, the authority of all such insurance producers to act as insurance producers of the insurer in this state, and the director shall so state in the notice to insurance producers provided for in 58-6-60. Source: SL 1966, ch 111, ch 3, 25 (2); SL 2001, ch 286, 80.
58-6-67. Superseded.
58-6-68. Insurers subject to taxation--Filing of returns and reports--Exemption of qualified pension, annuity, or profit-sharing plans.Insurers shall be subject to taxation according to the provisions of Title 10 and shall file such tax returns and reports as may be directed by the director, provided, however, that no tax shall be due or payable as to premiums or considerations received from policies or contracts issued in connection with a pension, annuity, or profit-sharing plan exempt or qualified under section 401, 403(b), 404, 408, 457, or 501(a) of the United States Internal Revenue Code with respect to the tax payable in 1973 and annually thereafter. Source: SL 1966, ch 111, ch 3, 28 (1); SL 1972, ch 260, 1; SL 1975, ch 306; SL 1989, ch 422.
58-6-69. Report and payment of tax by surplus line brokers.Surplus line brokers shall report and pay the taxes upon surplus line policies written pursuant to chapter 58-32. Source: SL 1966, ch 111, ch 3, 28 (2).
58-6-7. Eligibility of insurer for certificate of authority--Necessity for maintenance of required reserves.No insurer shall be authorized to transact insurance in this state which does not maintain reserves as required by the chapter of this title relating to assets and liabilities, applicable to the kinds of insurance transacted by such insurer, wherever transacted in the United States. Source: SL 1966, ch 111, ch 3, 4 (1).
58-6-70. Retaliatory tax provisions--Exception.If any other state or foreign country imposes any taxes, licenses, and other fees, in the aggregate, or fines, penalties, deposit requirements, or other material obligations, prohibitions, or restrictions upon South Dakota insurers, or upon the insurance producers or representatives of such insurers, which are, pursuant to the laws of that other state or country, in excess of those directly imposed upon similar insurers, or upon the insurance producers or representatives of such insurers, of that other state or country under the statutes of this state, then, so long as the laws of that other state or country continue in force or are so applied, the director of the Division of Insurance shall impose the same taxes, licenses, and other fees, in the aggregate, or fines, penalties, deposit requirements, or other material obligations, prohibitions, or restrictions of whatever kind upon the insurers, or upon the insurance producers or representatives of the insurers, of the other state or country doing business or seeking to do business in South Dakota. Any tax, license, or other fee or obligation imposed on South Dakota insurers or their insurance producers or representatives by any first or second class municipality, county, or other political subdivision or agency of the other state or country is considered to be imposed by such state or country within the meaning of this section. The time and period of payment of the retaliatory tax is the same, in all cases, as that of the gross premiums tax provided for in 10-44-2. No interest charges or credits may be made or allowed for the use or loss of the use of funds due to any difference in the time or period of payment used in this state and the time or period used in a foreign state or country.This provision does not apply to that portion of a life insurance policy's annual premiums exceeding one hundred thousand dollars and to that portion of the annual consideration on an annuity contract exceeding five hundred thousand dollars. Source: SL 1966, ch 111, ch 3, 29 (1); SL 1982, ch 354; SL 1992, ch 60, 2; SL 2001, ch 54, 2; SL 2001, ch 286, 85; SL 2008, ch 260, 1.
58-6-71. Exemption from retaliatory tax provisions.Section 58-6-70 shall not apply as to personal income taxes, nor as to ad valorem taxes on real or personal property, nor as to special purpose obligations or assessments imposed by another state in connection with particular kinds of insurance other than property insurance; except that deductions, from premium taxes or other taxes otherwise payable, allowed on account of real estate or personal property taxes paid shall be taken into consideration by the director in determining the propriety and extent of retaliatory action under 58-6-70. Source: SL 1966, ch 111, ch 3, 29 (2).
58-6-72. Domicile of alien insurer for retaliatory tax purposes.For the purposes of 58-6-70 and subject to the provisions of 58-6-73, the domicile of an alien insurer, shall be that state in which is located its principal place of business in the United States. Source: SL 1966, ch 111, ch 3, 29 (3).
58-6-73. Domicile of Canadian insurer for retaliatory tax purposes.In case of an insurer formed under the laws of Canada or a province thereof, its domicile for the purposes of 58-6-70 shall be deemed to be that province in which its head office is situated. Source: SL 1966, ch 111, ch 3, 29 (4).
58-6-74. Dissolution or retirement of insurer during year--Filing of reports and collection of taxes not defeated.In the event any insurer shall dissolve or retire from this state, either voluntarily or involuntarily, during any calendar year, such dissolution or voluntary or involuntary retirement from this state shall not defeat the filing of reports and the assessment and collection of the taxes imposed by this title with respect to the premiums written or deposits held during that part of such calendar year prior to such dissolution or retirement from this state. In any such case the report herein required to be filed shall be filed within thirty days after such dissolution or retirement from this state. In the case of an insurer taken over for liquidation or rehabilitation the report shall be filed within six months thereafter. Source: SL 1966, ch 111, ch 32, 1.
58-6-75. Annual and quarterly statement of financial condition of insurer--Filing with director--Form and contents--Timeliness of filing.Each domestic insurer and those domestic insurers subject to chapters 58-34, 58-37A, 58-38, 58-39, 58-40, and 58-41, and foreign insurers if required by the director, shall annually on or before March first, and quarterly on or before May fifteenth, August fifteenth, and November fifteenth, unless the time is extended by the director for good cause shown, file with the director a true statement of its financial condition, transactions, and affairs as of the December thirty-first preceding for an annual statement and as of March thirty-first, June thirtieth, and September thirtieth, for a quarterly statement. Any statement is to be in a form and content as is approved or adopted for current use by the National Association of Insurance Commissioners or its successor organization, for use as to the type of insurer and kinds of insurance to be reported upon. The director may require any additional information considered necessary to be supplied with the annual or quarterly statement. The statement of an alien insurer, if required by the director, shall be filed annually on or before September first and shall relate only to its transactions and affairs in the United States unless the director requires otherwise. Any annual and quarterly statement and amendments and addenda to any annual and quarterly statement and any interim statement or amendments thereto shall also be filed with the National Association of Insurance Commissioners. Any statement filed with the National Association of Insurance Commissioners shall also be submitted on diskette.Any statement shall be prepared in accordance with the Annual Statement Instructions Manual and the Accounting Practices and Procedures Manual prescribed by the National Association of Insurance Commissioners as adopted by rule by the director pursuant to chapter 1-26. The director may also, by rule promulgated pursuant to chapter 1-26, establish additional practices and procedures the director considers necessary.Unless the time for filing has been extended, an insurer shall pay a penalty of one hundred dollars per day for every day the statement is late, not to exceed twenty-five thousand dollars.For purposes of this section only a statement with a postmark date of the due date or earlier is considered timely filed. Source: SL 1966, ch 111, ch 3, 27; SL 1992, ch 342, 1; SL 1993, ch 97, 4; SL 1993, ch 357, 3; SL 1994, ch 375, 1; SL 1995, ch 276; SL 2001, ch 271, 1.
58-6-76. Summary of statement of financial condition of insurer--Publication by director.The director of the Division of Insurance shall cause a summary, condensed from the annual statement of each company to be published three times, at the expense of the company, at legal rates, in a legal newspaper printed and published in each judicial circuit of the state in which the insurance company has a licensed insurance producer. Condensed statements for publication shall be made on blanks furnished by the director, which shall be uniform as to the information conveyed to the public and which, set in nonpareil type, together with the annual certificate of authority of the company, constitute a printed statement uniformly ten inches in length. A printer's affidavit, in duplicate, shall be filed with the director in all cases. The affidavit shall state that the insurance company has paid the newspaper the authorized rate for publishing legal notices, that the full amount named inures to the sole benefit of the publisher or publishers thereof, that no agreement or understanding for the division thereof was made with any person, and that no part thereof was agreed to be paid to any person. Every affidavit of publication shall state in plain terms that the full amount authorized herein was charged and collected for the publication. Source: SL 1966, ch 111, ch 3, 27; SL 1982, ch 355; SL 2001, ch 286, 86.
58-6-77. Time for publication of summary statement by director--Publication in judicial circuits.The director shall cause the publication of such statements to be made within sixty days from the end of the limit of time provided by law for filing such annual statements. The director shall, thereafter, provide for publication of the annual statements in such judicial circuits as shall be occupied by the appointment of an insurance producer after the first statements have been assigned. Source: SL 1966, ch 111, ch 3, 27; SL 2001, ch 286, 87.
58-6-78. Director to supply summary statement to each legal newspaper published in each judicial circuit--Recognition of legal newspaper.The director shall supply at least one such statement to each legal newspaper published in each judicial circuit, if there are a sufficient number of such statements to be published so to supply each newspaper, and no newspaper shall receive a second statement for publication until each legal newspaper in each circuit shall be furnished at least one such statement for publication. If there are insufficient statements to supply all newspapers in one year, the statements for the succeeding year shall be first supplied to those newspapers not supplied the previous year, and they shall be so supplied in each succeeding year. The publisher of any legal newspaper published in this state, who desires his publication to be recognized in the distribution of annual statements, shall each year, on or before the first day of April, furnish to the director an affidavit that the newspaper he seeks to have recognized is a legal newspaper. Source: SL 1966, ch 111, ch 3, 27.
58-6-79. Publication requirements do not apply to fraternal or benevolent life association transactions nor to mutual insurance companies or associations.Nothing in 58-6-76 to 58-6-78, inclusive, which relates to the publication of statements shall relate to any fraternal or benevolent life association transacting business in this state, nor to any mutual insurance company or association organized under the laws of this state. Source: SL 1966, ch 111, ch 3, 27.
58-6-8. Denial of authority to engage in business when contrary to public interest--Denial when managed by unqualified personnel--Affiliates.The director, after a hearing, shall not grant or continue authority to engage in the insurance business in this state of any insurer when contrary to public interest or when the principal management personnel of such insurer is found by him to be untrustworthy or not of good character, or so lacking in insurance company managerial experience as to make the proposed operation hazardous to the insurance-buying public or to its stockholders; or which he has good reason to believe is affiliated directly or indirectly through ownership, control, management, reinsurance transactions, or other insurance or business relations, with any person or persons whose business operations, to the detriment of insurers, stockholders, or creditors, are or have been marked by manipulation of assets, accounts, or reinsurance, or by bad faith. Source: SL 1966, ch 111, ch 3, 4 (2).
58-6-80. Confidentiality of analysis ratios and examination synopses--Participation in regulatory information system.All financial analysis ratios and examination synopses concerning insurance companies that are submitted to the department by the National Association of Insurance Commissioners' Insurance Regulatory Information System are confidential and may not be disclosed by the department.All insurers subject to this statute shall participate in the National Association of Insurance Commissioners Insurance Regulatory Information System. Source: SL 1992, ch 342, 3.
58-6-9. Continuance of authorization of prior authorized mutual and stock insurers--Participating policyholders--Quorum--Proxies--Issuance of nonvoting participating policies.Any mutual and stock insurer authorized on July 1, 1966, to transact insurance in this state shall be eligible to continue such authorization if otherwise in compliance with this title and its charter provisions. As to any such domestic insurer, each holder of a policy of insurance who is entitled to participate in profits and savings, shall be entitled to participate and vote at all meetings of stockholders and to cast the same number of votes which he was entitled to cast under the articles of incorporation and bylaws of such insurer on July 1, 1966. At all such meetings, to constitute a quorum of such participating policyholders, there shall be present in person or by proxy at least ten percent of the total of such participating policyholders. Solicitation of proxies from such participating policyholders shall be subject to the same regulations and restrictions as apply to a domestic mutual insurer. Except as hereinbefore otherwise provided, such an insurer shall in all respects be subject to all laws regulating stock companies.Any mutual and stock company authorized and doing business pursuant to this section may issue nonvoting participating policies. The issuance of such nonvoting participating policies may not affect the voting rights of holders of participating policies issued by a mutual and stock company pursuant to the first paragraph of this section. Source: SL 1966, ch 111, ch 3, 4 (3); SL 1981, ch 358.
58-6A-1.Definition of terms.Terms used in this chapter mean:(1)"Board of directors" or "board," the governing body of the risk retention group as elected by the shareholders or members to establish policy, elect or appoint officers and committees, and make other governing decisions;(2)"Completed operations liability," any liability arising out of the installation, maintenance, or repair of any product at a site which is not owned or controlled by:(a)Any person who performs installation, maintenance, or repair of any product; or(b)Any person who hires an independent contractor to perform installation, maintenance, or repair of any product; but includes liability for activities which are completed or abandoned before the date of the occurrence giving rise to the liability;(3)"Director," the insurance director of South Dakota or the commissioner, director, or superintendent of insurance in any other state;(4)"Director of the risk retention group," an individual designated in the articles of the risk retention group, or designated, elected, or appointed by any other manner, name, or title to act as a director;(5)"Domicile," for purposes of determining the state in which a purchasing group is domiciled:(a)For a corporation, the state in which the purchasing group is incorporated; and(b)For an unincorporated entity, the state of its principal place of business;(6)"Hazardous financial condition," based on its present or reasonably anticipated financial condition, a risk retention group, although not yet financially impaired or insolvent, which is unlikely to be able:(a)To meet obligations to policyholders with respect to known claims and reasonably anticipated claims; or(b)To pay other obligations in the normal course of business;(7)"Insurance," primary insurance, excess insurance, reinsurance, surplus lines insurance, and any other arrangement for shifting and distributing risk which is determined to be insurance under the laws of this state;(8)"Liability," legal liability for damages, including costs of defense, legal costs and fees, and other claims expenses because of injury to a person, damage to the person's property, or other damage or loss to any other person resulting from or arising out of any business, whether profit or nonprofit, trade, product, services, including professional services, premises or operations. It does not include personal risk liability and an employer's liability with respect to its employees other than legal liability under the Federal Employers' Liability Act (45 U.S. C. 51 et seq.);(9)"Personal risk liability," liability for damages because of injury to any person, damage to property, or other loss or damage resulting from any personal, family or household responsibilities or activities, rather than from responsibilities or activities referred to in subdivision (8);(10)"Plan of operation or a feasibility study," an analysis which presents the expected activities and results of a risk retention group including, at a minimum:(a)For each state in which the risk retention group intends to operate, the coverages, deductibles, coverage limits, rates and rating classification systems for each line of insurance the group intends to offer;(b)Historical and expected loss experience of the proposed members and national experience of similar exposures to the extent that this experience is reasonably available;(c)Pro forma financial statements and projections; (d)Appropriate opinions by a qualified, independent casualty actuary, including a determination of minimum premium or participation levels required to commence operations and to prevent a hazardous financial condition;(e)Identification of management, underwriting procedures, managerial oversight methods, investment policies, and reinsurance agreements; (f)Information sufficient to verify that the risk retention group's members are engaged in businesses or activities similar or related with respect to the liability to which the members are exposed by virtue of any related, similar, or common business, trade, product, services, premises, or operations;(g)Identification of each state in which the risk retention group has obtained, or sought to obtain, a charter and license, and a description of its status in each state; and(h)Other matters as may be prescribed by the director, supervisor, or commissioner of the state in which the risk retention group is chartered for liability insurance companies authorized by the insurance laws of that state;(11)"Product liability," liability for damages because of any personal injury, death, emotional harm, consequential economic damage, or property damage, including damages resulting from the loss of use of property, arising out of the manufacture, design, importation, distribution, packaging, labeling, lease, or sale of a product, but does not include the liability of any person for those damages if the product involved was in the possession of such a person when the incident giving rise to the claim occurred;(12)"Purchasing group," any group which:(a)Has as one of its purposes the purchase of liability insurance on a group basis;(b)Purchases such insurance only for its group members and only to cover their similar or related liability exposure, as described in subsection (c) herein;(c)Is composed of members whose businesses or activities are similar or related with respect to the liability to which members are exposed by virtue of any related, similar, or common business, trade, product, services, premises, or operations; and(d)Is domiciled in any state;(13)"Risk retention group," any corporation or other limited liability association formed under the laws of any state, Bermuda, or the Cayman Islands:(a)Whose primary activity consists of assuming and spreading all, or any portion, of the liability exposure of the group members;(b)Which is organized for the primary purpose of conducting the activity described under subsection (a);(c)Which is chartered and licensed as a liability insurance company and authorized to engage in the business of insurance under the laws of any state; or before January 1, 1985, was chartered or licensed and authorized to engage in the business of insurance under the laws of Bermuda or the Cayman Islands and, before such date, had certified to the insurance director of at least one state that it satisfied the capitalization requirements of such state, except that any such group shall be considered to be a risk retention group only if it has been engaged in business continuously since such date and only for the purpose of continuing to provide insurance to cover product liability or completed operations liability;(d)Which does not exclude any person from membership in the group solely to provide for members of such a group a competitive advantage over such a person;(e)Which has as its members only persons who have an ownership interest in the group and which has as its owners only persons who are members who are provided insurance by the risk retention group; or has as its sole member and sole owner an organization which is owned by persons who are provided insurance by the risk retention group; (f)Whose members are engaged in businesses or activities similar or related with respect to the liability of which such members are exposed by virtue of any related, similar, or common business, trade, product, services, premises, or operations;(g)Whose activities do not include the provision of insurance other than liability insurance for assuming and spreading all or any portion of the liability of its group members; and reinsurance with respect to the liability of any other risk retention group or any members of such other group which is engaged in businesses or activities so that such group or member meets the requirement described in subsection (f) from membership in the risk retention group which provides such reinsurance; and(h)The name of which includes the term, risk retention group;(14)"Service provider," any auditor, accountant, actuary, investment advisor, lawyer, managing general underwriter, or any other party responsible for underwriting, determination of rates, collection of premiums, adjusting and settling a claim, or the preparation of a financial statement. The term, lawyer, in this definition does not include defense counsel retained by the risk retention group to defend claims, unless the amount of fees paid to the lawyer is material as referenced in 58-6A-3.2;(15)"State," any state of the United States or the District of Columbia. Source: SL 1987, ch 372, 1; SL 2016, ch 232, 2.
58-6A-10. Prohibited acts by risk retention group.The following acts by a risk retention group are hereby prohibited:(1)The solicitation or sale of insurance by a risk retention group to any person who is not eligible for membership in such group; and(2)The solicitation or sale of insurance by, or operation of, a risk retention group that is in a hazardous financial condition or is financially impaired. Source: SL 1987, ch 372, 10.
58-6A-11. Insurance company as member or owner.No risk retention group shall be allowed to do business in this state if an insurance company is directly or indirectly a member or owner of such risk retention group, other than in the case of a risk retention group all of whose members are insurance companies. Source: SL 1987, ch 372, 11.
58-6A-12. Compliance with voluntary dissolution or delinquency order by group not chartered if financially impaired.A risk retention group not chartered in this state and doing business in this state shall comply with a lawful order issued in a voluntary dissolution proceeding or in a delinquency proceeding commenced by a state insurance director if there has been a finding of financial impairment after an examination under this chapter. Source: SL 1987, ch 372, 12.
58-6A-13. Financial contribution to or benefit from insurance insolvency guaranty fund prohibited.No risk retention group may be permitted to join or contribute financially to any insurance insolvency guaranty fund, or similar mechanism, in this state, nor shall any risk retention group, or its insureds, receive any benefit from any such fund for claims arising out of the operations of such risk retention group. Source: SL 1987, ch 372, 13.
58-6A-14. Countersignature on policy not required. A policy of insurance issued to a risk retention group or any member of that group is not required to be countersigned. Source: SL 1987, ch 372, 14; SL 2021, ch 210,  3.
58-6A-15. Prohibited insurance coverage.A risk retention group may not offer insurance coverage prohibited under the insurance laws of this state or declared unlawful by the Supreme Court of this state. Source: SL 1987, ch 372, 15.
58-6A-16.1. Exemptions for purchasing group and insurer in regard to liability insurance--Subject to other laws.A purchasing group and its insurer or insurers are subject to all applicable laws of this state, except that a purchasing group and its insurer or insurers are exempt, in regard to liability insurance for the purchasing group, from any law that would:(1)Prohibit the establishment of a purchasing group;(2)Make it unlawful for an insurer to provide or offer to provide insurance on a basis providing advantages to a purchasing group or its members based on their loss and expense experience, which coverage is not afforded to other persons with respect to rates, policy forms, coverages, or other matters;(3)Prohibit a purchasing group or its members from purchasing insurance on a group basis as described in subdivision (2) of this section;(4)Prohibit a purchasing group from obtaining insurance on a group basis because the group has not been in existence for a minimum period of time or because any member has not belonged to the group for a minimum period of time;(5)Require that a purchasing group shall have a minimum number of members, common ownership or affiliation, or certain legal form;(6)Require that a certain percentage of a purchasing group shall obtain insurance on a group basis;(7)Otherwise discriminate against a purchasing group or any of its members; or(8)Require that any insurance policy issued to a purchasing group or any of its members be countersigned by an insurance producer residing in this state. Source: SL 1988, ch 392, 4; SL 2001, ch 286, 91.
58-6A-17.1. Notice to director of changes.A purchasing group shall, within ten days, notify the director of any changes in any of the items set forth in 58-6A-17. Source: SL 1988, ch 392, 6.
58-6A-17.2. Information required by director--Time for giving notice and information.Each group that is required to give notice pursuant to 58-6A-17 shall also furnish such information as may be required by the director to:(1)Verify that the entity qualifies as a purchasing group;(2)Determine where the purchasing group is located; and(3)Determine appropriate tax treatment.Any purchasing group which was doing business in this state prior to July 1, 1988, shall, within thirty days thereafter, furnish notice to the director pursuant to the provisions of 58-6A-17 and furnish such information as may be required pursuant to 58-6A-17.1 and 58-6A-18. Source: SL 1988, ch 392, 7.
58-6A-17. Notice to director--Contents.Any purchasing group which intends to do business in this state shall furnish notice to the director which shall:(1)Identify the state in which the group is domiciled;(2)Specify the lines and classifications of liability insurance which the purchasing group intends to purchase;(3)Identify the insurance company from which the group intends to purchase its insurance and the domicile, together with the complete business address, of such company;(4)Identify the principal place of business of the group, together with the complete business address;(5)Provide such other information as may be required by the director to verify that the purchasing group is qualified under 58-6A-1;(6)Identify all other states in which the group intends to do business; and(7)Specify the method by which, and the person through whom insurance shall be offered to its members whose risks are resident or located in this state. Source: SL 1987, ch 372, 17; SL 1988, ch 392, 5.
58-6A-18. Designation of director as agent for purchasing group--Exceptions.The purchasing group shall register with and designate the director as its agent solely for the purpose of receiving service of legal documents or process, except that such requirements do not apply in the case of a purchasing group:(1)Which was domiciled before April 1, 1986, and is domiciled on and after October 27, 1986, in any state of the United States;(2)Which before October 27, 1986, purchased insurance from an insurance carrier licensed in any state, and since October 27, 1986, purchased its insurance from an insurance carrier licensed in any state;(3)Which was a purchasing group under the requirements of the Product Liability Risk Retention Act of 1981 before October 27, 1986; and(4)Which does not purchase insurance that was not authorized for purposes of an exemption under that act, as in effect before October 27, 1986. Source: SL 1987, ch 372, 18.
58-6A-19.1. Purchase from risk retention group not chartered or insurer not admitted in state prohibited--Exception.A purchasing group may not purchase insurance from a risk retention group that is not chartered in a state or from an insurer not admitted in the state in which the purchasing group is located, unless the purchase is effected through a licensed insurance producer acting pursuant to the surplus lines laws and regulations of such state. Source: SL 1988, ch 392, 9; SL 2001, ch 286, 92.
58-6A-19.2. Notice of unprotected risk when liability insurance obtained from insurer not admitted in this state or risk retention group.Any purchasing group which obtains liability insurance from an insurer not admitted in this state or a risk retention group shall inform each of the members of such group which have a risk resident or located in this state that such risk is not protected by an insurance insolvency guaranty fund in this state and that such risk retention group or such insurer may not be subject to all insurance laws and regulations of this state. Source: SL 1988, ch 392, 10.
58-6A-19.3. Purchase of insurance providing for deductible or self-induced retention applicable to whole group prohibited--Application to individuals allowed--Aggregate limits standards.No purchasing group may purchase insurance providing for a deductible or self-insured retention applicable to the group as a whole. However, coverage may provide for a deductible or self-insured retention applicable to individual members. Any purchase of insurance by purchasing groups is subject to the same standards regarding aggregate limits which are applicable to all purchases of group insurance. Source: SL 1988, ch 392, 11.
58-6A-19.4. Insurance producer or broker license required for purchasing liability insurance from risk retention group.No person, firm, association, or corporation may act or aid in any manner in soliciting, negotiating, or procuring liability insurance in this state from a risk retention group unless the person, firm, association, or corporation is licensed as an insurance producer in accordance with Title 58. Source: SL 1988, ch 392, 12; SL 2001, ch 286, 93.
58-6A-19.5. Insurance producer or broker license required to solicit liability insurance for purchasing group from insurer or risk retention group.No person, firm, association, or corporation may act or aid in any manner in soliciting, negotiating, or procuring liability insurance in this state for a purchasing group from an authorized insurer or a risk retention group chartered in a state unless the person, firm, association, or corporation is licensed as an insurance producer in accordance with Title 58. Source: SL 1988, ch 392, 13; SL 2001, ch 286, 94.
58-6A-19.6. Insurance producer or broker license required to solicit liability insurance for member of purchasing group.No person, firm, association, or corporation may act or aid in any manner in soliciting, negotiating, or procuring liability insurance coverage in this state for any member of a purchasing group under a purchasing group's policy unless the person, firm, association, or corporation is licensed as an insurance producer in accordance with Title 58. Source: SL 1988, ch 392, 14; SL 2001, ch 286, 95.
58-6A-19.7. Surplus lines producer or excess line producer license required to solicit liability insurance from unauthorized insurer for purchasing group.No person, firm, association, or corporation may act or aid in any manner in soliciting, negotiating, or procuring liability insurance from an insurer not authorized to do business in this state on behalf of a purchasing group located in this state unless the person, firm, association, or corporation is licensed as a surplus lines producer or excess line producer in accordance with Title 58. Source: SL 1988, ch 392, 15; SL 2001, ch 286, 96.
58-6A-2. Charter and license of risk retention group--Approval of plan of operation or feasibility study--Revision of plan or study--Notice to National Association of Insurance Commissioners.Any risk retention group seeking to be chartered in this state shall be chartered and licensed as a liability insurance company authorized by the insurance laws of this state and, except as provided in this chapter, shall comply with all of the laws, rules, and requirements applicable to such insurers chartered and licensed in this state. Before it may offer insurance in any state, each risk retention group shall also submit for approval to the director of insurance of this state a plan of operation or a feasibility study and revisions of such plan or study if the group intends to offer any additional lines of liability insurance. If any subsequent material change is made to the plan of operation or feasibility study, the risk retention group shall submit an appropriate revision to the director within ten days of any change. No group may offer any additional lines of liability insurance in this state or any other state until a revision of the plan or study is approved by the director. When filing an application for charter, the risk retention group shall provide to the director a summary of information, including the name of the risk retention group, the identity of the initial members of the group, the identity of those persons who organized the group or who will provide administrative services or otherwise influence or control the activities of the group, the amount and nature of initial capitalization, the coverages to be afforded, and the states in which the group intends to operate. Upon receipt, the director shall forward the information to the National Association of Insurance Commissioners. Providing notification to the National Association of Insurance Commissioners is in addition, and is not sufficient, to satisfy the requirements of this chapter. Source: SL 1987, ch 372, 2; SL 2016, ch 232, 14.
58-6A-20. Director's use of enforcement powers--Injunctive authority.The director may use any of the enforcement powers available under the laws of this state so long as those powers are not specifically preempted by the Product Liability Risk Retention Act of 1981, as amended by the risk retention amendments of 1986. This includes, but is not limited to, the director's administrative authority to investigate, issue subpoenas, conduct depositions and hearings, issue orders, and impose penalties. With regard to any investigation, administrative proceedings or litigation, the director may rely on the procedural law and regulations of this state. The injunctive authority of the director in regard to risk retention groups is restricted by the requirement that any injunction be issued by a court of competent jurisdiction. Source: SL 1987, ch 372, 20.
58-6A-21. Penalty for violation.Any risk retention group which violates any provision of this chapter is subject to fines and penalties applicable to licensed insurers generally, including revocation of its license or the right to do business in this state. Source: SL 1987, ch 372, 21.
58-6A-22. Broker license--Waiver of residency requirements.Any person acting, or offering to act, as an insurance producer for a risk retention group or purchasing group, which solicits members, sells insurance coverage, purchases coverage for its members located within this state, or otherwise does business in this state shall, before commencing any such activity, obtain a license from the Division of Insurance. The residency requirements shall be waived for any insurance producer license issued under this chapter. Source: SL 1987, ch 372, 22; SL 2001, ch 286, 97.
58-6A-23. Enforcement of injunction against risk retention group in hazardous financial condition.Any order issued by any district court of the United States enjoining a risk retention group from soliciting or selling insurance, or operating in any state or in all states or in any territory or possession of the United States upon a finding that such a group is in a hazardous financial condition is enforceable in the courts of this state. Source: SL 1987, ch 372, 23.
58-6A-24. Promulgation of rules.The director may promulgate, pursuant to chapter 1-26, such rules relating to risk retention groups as may be necessary or desirable to carry out the provisions of this chapter. Source: SL 1987, ch 372, 24.
58-6A-3.1. Majority of risk retention group directors to be independent--Board determinations as to material relationship.The board of directors of the risk retention group shall have a majority of independent directors. If the risk retention group is a reciprocal, then the attorney-in-fact shall adhere to the same standards regarding independence of operation and governance as imposed on the risk retention group's board of directors or subscriber's advisory committee under these standards. In addition, to the extent permissible under state law, a service provider of a reciprocal risk retention group shall contract with the risk retention group and not the attorney-in-fact.No director of the risk retention group qualifies as independent unless the board of directors affirmatively determines that the director of the risk retention group has no material relationship as described in 58-6A-3.2 with the risk retention group. Each risk retention group shall disclose these determinations to the group's domestic regulator, at least annually. For the purposes of this section, any person that is a direct or indirect owner of or subscriber in the risk retention group or is an officer, director of the risk retention group, or employee of such an owner and insured, unless some other position of the officer, director of the risk retention group, or an employee constitutes a material relationship, as contemplated by section 3901(a)(4)(E)(ii) of the Liability Risk Retention Act in effect as of January 1, 2016, is considered to be independent. Source: SL 2016, ch 232, 3.
58-6A-3.10. Code of business conduct and ethics.The board of directors shall adopt and disclose a code of business conduct and ethics for directors, officers, and employees. Each director, officer, and employee shall promptly disclose to the board of directors any waivers of the code. The code of business conduct and ethics shall include the following topics:(1)Conflicts of interest;(2)Matters covered under the corporate opportunities doctrine under the state of domicile;(3)Confidentiality;(4)Fair dealing;(5)Protection and proper use of risk retention group assets;(6)Compliance with all applicable laws, rules, and regulations; and(7)Requiring the reporting of any illegal or unethical behavior which affects the operation of the risk retention group. Source: SL 2016, ch 232, 12.
58-6A-3.11. Notice to director of noncompliance with standards.If the manager, president, or chief executive officer of the risk retention group becomes aware of any material noncompliance with any standards described in 58-6A-3.1 to 58-6A-3.11, inclusive, the manager, president, or officer shall promptly notify the domestic regulator in writing. Source: SL 2016, ch 232, 13.
58-6A-3.12. Application of 58-6A-1 to 58-6A-3.11.Any retention group licensed before July 1, 2016, shall be in compliance with 58-6A-1 to 58-6A-3.11, inclusive, by July 1, 2017. Any risk retention group licensed after June 30, 2016, shall be in compliance with 58-6A-1 to 58-6A-3.11, inclusive, at licensure. Source: SL 2016, ch 232, 1.
58-6A-3.2. Criteria of material relationship.A material relationship includes:(1)The receipt in any one twelve-month period of compensation or payment of any other item of value greater than or equal to five percent of the risk retention group's gross written premium for the twelve-month period or two percent of the risk retention group's surplus, whichever is greater, as measured at the end of any fiscal quarter falling in the twelve-month period by a person with the risk retention group or:(a)The person's immediate family member;(b)A business with which the person is affiliated from the risk retention group; or(c)A consultant or service provider to the risk retention group.A person with the risk retention group or an immediate family member of the person is not independent until one year after the person's compensation from the risk retention group falls below the threshold;(2)A relationship with an auditor where a director of the risk retention group or an immediate family member of a director of the risk retention group who is affiliated with or employed in a professional capacity by a present or former internal or external auditor of the risk retention group is not independent until one year after the end of the affiliation, employment, or auditing relationship; and(3)A relationship with a related entity where a director of the risk retention group or an immediate family member of a director of the risk retention group who is employed as an executive officer of another company where any of the risk retention group's present executives serve on that other company's board of directors is not independent until one year after the end of the service or the employment relationship. Source: SL 2016, ch 232, 4.
58-6A-3.3. Material service provider contracts.The term of any material service provider contract with the risk retention group may not exceed five years. Any material service provider contract, or its renewal, requires the approval of the majority of the risk retention group's independent directors. The risk retention group's board of directors shall have right to terminate any service provider, audit, or actuarial contracts at any time for cause after providing adequate notice as defined in the contract. The service provider contract is deemed material if the amount to be paid for the contract is greater than or equal to five percent of the risk retention group's annual gross written premium or two percent of its surplus, whichever is greater. Source: SL 2016, ch 232, 5.
58-6A-3.4. Notice to director of intent to enter into service provider contract meeting criteria of material relationship.No service provider contract meeting the criteria of material relationship contained in 58-6A-3.2 may be entered into unless the risk retention group has notified the director in writing of the risk retention group's intention to enter into the contract at least thirty days before entering into the transaction and the director has not disapproved the contract within that period. Source: SL 2016, ch 232, 6.
58-6A-3.5. Written policy in plan of operation.The risk retention group's board of directors shall adopt a written policy in the plan of operation as approved by the board that requires the board to:(1)Assure that all owners and insureds of the risk retention group receive evidence of ownership interest;(2)Develop a set of governance standards applicable to the risk retention group;(3)Oversee the evaluation of the risk retention group's management including the performance of the managing general underwriter or any other party responsible for underwriting, determination of rates, collection of premiums, adjusting or settling a claim, or the preparation of a financial statement;(4)Review and approve the amount to be paid for each material service provider; and(5)Review and approve, at least annually:(a)The risk retention group's goals and objectives relevant to the compensation of officers and service providers;(b)The officers' and service providers' performance in light of those goals and objectives; and(c)The continued engagement of the officers and material service providers. Source: SL 2016, ch 232, 7.
58-6A-3.6. Members of audit committee.The risk retention group shall have an audit committee composed of at least three independent board members as defined in 58-6A-3.1 and 58-6A-3.2. A nonindependent board member may participate in the activities of the audit committee, if invited by the committee, but cannot be a member of the audit committee. Source: SL 2016, ch 232, 8.
58-6A-3.7. Purpose of audit committee.The audit committee of the risk retention group shall have a written charter that defines the committee's purpose, which, at a minimum, shall:(1)Assist board oversight of the integrity of financial statements, the compliance with legal and regulatory requirements, and the qualifications, independence, and performance of the independent auditor and actuary;(2)Discuss the annual audited financial statements and quarterly financial statements with management;(3)Discuss the annual audited financial statements with the group's independent auditor and, if advisable, discuss the group's quarterly financial statements with the group's independent auditor;(4)Discuss policies with respect to risk assessment and risk management;(5)Meet separately and periodically, either directly or through a designated representative of the committee, with management and the independent auditor;(6)Review with the independent auditor any audit problems or difficulties and management's response;(7)Set clear hiring policies of the risk retention group as to the hiring of employees or former employees of the independent auditor;(8)Require the external auditor to rotate the lead or coordinating audit partner having primary responsibility for the risk retention group's audit as well as the audit partner responsible for reviewing that audit so that neither individual performs audit services for more than five consecutive fiscal years; and(9)Report regularly to the board of directors. Source: SL 2016, ch 232, 9.
58-6A-3.8. Waiver of audit committee requirement.The domestic regulator may waive the requirement to establish an audit committee composed of independent board members if the risk retention group is able to demonstrate to the domestic regulator that it is impracticable to do so and the risk retention group's board of directors itself is otherwise able to accomplish the purposes of an audit committee, as described in 58-6A-3.7. Source: SL 2016, ch 232, 10.
58-6A-3.9. Governance standards.The board of directors shall adopt and disclose governance standards and make the information available electronically through the risk retention group's website or by other means. The risk retention group shall provide the governance standards to members or insureds on request. The adopted governance standards shall include the following:(1)Concerning the directors of the risk retention group:(a)A process by which the directors are elected by the owners or insureds;(b)Qualification standards;(c)Responsibilities;(d)Access to management and, as necessary and appropriate, independent advisors;(e)Compensation; and(f)Orientation and continuing education;(2)The policies and procedures that are followed for management succession; and(3)The policies and procedures that are followed for annual performance evaluation of the board. Source: SL 2016, ch 232, 11.
58-6A-3. Information submitted to director.Before offering insurance in this state, a risk retention group not chartered in this state shall submit to the director:(1)A statement identifying the states in which the risk retention group is chartered and licensed as a liability insurance company, date of chartering, its principal place of business, and other information, including information on its membership, as the director of this state may require to verify that the risk retention group is qualified under this chapter;(2)A copy of the group's plan of operations or a feasibility study and revisions of the plan or study submitted to its state of domicile. However, the provision relating to the submission of a plan of operation or a feasibility study does not apply with respect to any line or classification of liability insurance which was defined in the Product Liability Risk Retention Act of 1981, before October 27, 1986, and was offered before such date by any risk retention group which had been chartered and operating for not less than three years before such date; (3)A statement of registration which designates the director as the group's agent for the purpose of receiving service of legal documents or process; and(4)A copy of any material revision to the group's plan of operation or feasibility study within thirty days of the date of the approval of the revision by the director of the group's chartering state, or if no such approval is required, within thirty days of filing. Source: SL 1987, ch 372, 3; SL 2016, ch 232, 15.
58-6A-4. Financial information submitted to director.Any risk retention group doing business in this state shall submit to the director:(1)A copy of the group's financial statement submitted to its state of domicile, which shall be certified by an independent public accountant and contain a statement of opinion on loss and loss adjustment expense reserves made by a member of the American Academy of Actuaries or a qualified loss reserve specialist under criteria established by the National Association of Insurance Commissioners;(2)A copy of each examination of the risk retention group as certified by the director or public official conducting the examination;(3)Upon request by the director, a copy of any audit performed with respect to the risk retention group; and(4)Such information as may be required to verify its continuing qualification as a risk retention group under this chapter. Source: SL 1987, ch 372, 4.
58-6A-5.1. Rate of taxation on premiums--Interest, fines and penalties--Payment.The premium tax imposed by chapter 10-44 and taxes on premiums paid for coverage of risks resident or located in this state by a purchasing group or any member of a purchasing group shall be imposed at the same rate and subject to the same interest, fines, and penalties as that applicable to premium taxes and taxes on premiums paid for similar coverage from a similar insurance source by other insureds. The tax may be paid first by such insurance source or the insurance producer for the purchasing group or by the purchasing group or by each member of a purchasing group. Source: SL 1988, ch 392, 1; SL 2001, ch 286, 89.
58-6A-5. Taxation of premiums--Payment by insurance producers or brokers--Payment by risk retention group--Report of premiums.All premiums paid for coverages within this state to risk retention groups are subject to taxation at the same rate and subject to the same interest, fines, and penalties for nonpayment as that applicable to foreign admitted insurers. To the extent insurance producers are utilized, they shall report and pay the taxes for the premiums for risks which they have placed with or on behalf of a risk retention group not chartered in this state. To the extent insurance producers are not utilized or fail to pay the tax, each risk retention group shall pay the tax for risks insured within this state. Further, each risk retention group shall report all premiums paid to it for risks insured within this state. Source: SL 1987, ch 372, 5; SL 2001, ch 286, 88.
58-6A-6. Compliance with Unfair Trade Practices Act.Any risk retention group, its insurance producers, and representatives shall comply with the Unfair Trade Practices Act of this state, 58-33-66 to 58-33-69, inclusive. Source: SL 1987, ch 372, 6; SL 2001, ch 286, 90.
58-6A-7. Compliance with laws regarding deceptive, false, or fraudulent acts or practices--Injunction.Any risk retention group shall comply with the laws of this state, chapter 58-33, regarding deceptive, false, or fraudulent acts or practices. However, if the director seeks an injunction regarding such conduct, the injunction shall be obtained from a court of competent jurisdiction. Source: SL 1987, ch 372, 7.
58-6A-8. Examination by director.Any risk retention group shall submit to an examination by the director to determine its financial condition if the director of the jurisdiction in which the group is chartered has not initiated an examination or does not initiate an examination within sixty days after a request by the director of this state. Any such examination shall be coordinated to avoid unjustified repetition and conducted in an expeditious manner in accordance with the National Association of Insurance Commissioners' Examiners Handbook. Source: SL 1987, ch 372, 8.
58-6A-9. Notice contained on policy--Contents.Any policy issued by any person, firm, association, or corporation licensed pursuant to the provisions of chapter 58-6A, on business placed with risk retention groups or written through a purchasing group, shall inform each prospective insured of the provisions of the notice and shall contain in ten-point type on the front page and the declaration page, the following notice:NOTICEThis policy is issued by your risk retention group. Your risk retention group may not be subject to all of the insurance laws and regulations of your state. State insurance insolvency guaranty funds are not available for your risk retention group. Source: SL 1987, ch 372, 9; SL 1988, ch 392, 2.
58-7-1. Amounts required to be deposited by domestic insurers--Financial institutions to report to director.All deposits required by this title shall be kept in a financial institution approved by the director. A domestic property and casualty or health insurer shall deposit an amount not less than fifty percent of the required unearned premium reserves on their outstanding policies. Domestic life insurers shall deposit an amount not less than the required reserves on their outstanding policies, including annuity and supplementary contracts, but excluding premium notes, policy loans, and other policy liens referred to in subdivision 58-26-1(3) and the net amount of uncollected and deferred premiums and annuity considerations referred to in subdivision 58-26-1(4). The financial institution shall report quarterly to the director the insurers that have deposits with it and the amounts and kinds of assets and securities. Withdrawal of securities and assets on deposit shall be pursuant to the custodial agreement. Source: SL 1966, ch 111, ch 7, 1 (1); SL 1977, ch 406; SL 1991, ch 398, 1.
58-7-10. Deposits of reserves of domestic life insurer--Assets comprising--Holding for common benefit of policyholders and annuity contracts.Deposits of the reserves of a domestic life insurer shall consist of securities and assets permitted for investment by chapter 58-27. Deposits of reserves made by domestic life insurers shall be held for the common benefit of all the holders of its life insurance policies and annuity contracts. Source: SL 1966, ch 111, ch 7, 3 (3), 4 (3).
58-7-11. Deposits of reserves of domestic insurers other than life--Holding for common benefit of all policyholders.Deposits of reserves made by domestic insurers other than life shall be held for the common benefit of all the holders of its policies. Source: SL 1966, ch 111, ch 7, 3 (5).
58-7-12. Deposits of foreign insurers--Assets comprising--Holding for purposes required by law and as specified by director.Deposits of foreign insurers made under this title shall consist of such assets as are required by the director. Deposits required pursuant to this title shall be held for such purposes as is required by such law, and as specified by the director's order requiring such deposit to be made. Source: SL 1966, ch 111, ch 7, 3 (4), 4 (4); SL 1991, ch 398, 5.
58-7-13. Assignment to director of securities not negotiable by delivery--Power of attorney.The director shall require the insurer to either assign to the director and his successors in office all securities being deposited under this title which are not negotiable by delivery or to give the director irrevocable power of attorney authorizing the transfer of the securities or any part thereof then or thereafter on deposit for any purpose within the scope of the director's statutory powers. Source: SL 1966, ch 111, ch 7, 8 (1); SL 1991, ch 398, 4.
58-7-14. Real estate used as deposit--Deed of trust, execution, and recording prior to deposit with director--Appraisal required.If the insurer uses real estate as a deposit, the insurer shall execute and record a deed of trust to the director which shall be kept by the financial institution. Prior to the execution and recordation of the deed of trust, the insurer shall submit to the director a current appraisal of the real estate by an appraiser approved by the director. Source: SL 1966, ch 111, ch 7, 8 (3); SL 1991, ch 398, 6.
58-7-16. Record by director of assets deposited.The director shall keep a record of the assets and securities comprising each deposit, showing as far as practical the amount and market value of each item. Source: SL 1966, ch 111, ch 7, 6 (2); SL 1991, ch 398, 8.
58-7-17. Release of assigned security--Reassignment to insurer or other person.Upon release to the insurer, or other person entitled thereto, of any security that may have been assigned pursuant to 58-7-13, the director shall reassign the same to such insurer or other person entitled thereto. Source: SL 1966, ch 111, ch 7, 8 (2).
58-7-18. Deposit of reserves in financial institutions.Deposits required under this title may be made in South Dakota safe deposit institutions, banks, or trust companies selected by the insurer with the director's prior approval or may be made in the depository outside of the state approved by the director. The director may, upon written request of the insurer, permit a deposit to be made with and held by the trust department of a national or state bank approved by the director for the purpose and under depository or custodial arrangements approved by the director. Source: SL 1966, ch 111, ch 7, 5 (1); SL 1991, ch 398, 9.
58-7-2. Assets acceptable for deposit of reserves.Deposits of reserves of a domestic insurer under 58-7-1 shall consist of securities and assets which the insurer is authorized to hold as admitted assets. Source: SL 1966, ch 111, ch 7, 1 (4).
58-7-20. Terms of depository or custodial arrangements for deposit of reserves.All depository or custodial arrangements shall comply in substance with the requirements of this title as to like deposits of other insurers, as to the amount, purposes, maintenance, replenishment, release, and withdrawal of such deposit or part thereof, as to the rights of the insurer therein, and in all other respects except as to actual custody. Source: SL 1966, ch 111, ch 7, 5 (4); SL 1991, ch 398, 11.
58-7-21. Forms and terms of depository or custodial arrangement.The form and terms of all depository or custodial arrangements shall be prescribed or approved by the director consistent with the applicable provisions of this title. Source: SL 1966, ch 111, ch 7, 5 (6); SL 1991, ch 398, 12.
58-7-22. Compensation and expenses of depository or custodian borne by insurer.The compensation and expenses of the depository or custodian shall be borne by the insurer. Source: SL 1966, ch 111, ch 7, 5 (7).
58-7-23. Nonliability of director and state for safekeeping by custodian.The director and the State of South Dakota shall have no liability as to the safekeeping of any such deposit by the depository or custodian thereof. Source: SL 1966, ch 111, ch 7, 7.
58-7-24. Custodial arrangements--Termination by director--New arrangements.The director may terminate any depository or custodial arrangement and require a new arrangement. No arrangement may be terminated without the written authorization of the director. Source: SL 1966, ch 111, ch 7, 5 (5); SL 1991, ch 398, 13.
58-7-25. Effect of deposit in foreign state.If any domestic insurer is required to deposit with a public officer of any foreign state or any agency of that state any securities or assets for security of policyholders, to the extent that those securities or assets are admissible for that purpose under this chapter, and upon approval by the director that by the deposit the insurer's policyholders are as adequately secured as if such deposit had been made under this chapter, the deposit in the foreign state shall have the same effect as if made with the director. If any change is made in the deposit, the insurer shall be required to immediately notify the director of the change. Source: SL 1966, ch 111, ch 7, 5 (8); SL 1991, ch 398, 14.
58-7-26. Sufficiency of deposit--Valuation of assets.For the purpose of determining the sufficiency of its deposit in this state the assets and securities of the insurer on deposit shall be valued at current market value except bonds which may, in the discretion of the director, be valued as provided in 58-26-2. Source: SL 1966, ch 111, ch 7, 13 (1); SL 1969, ch 134.
58-7-27. Decline in market value of deposited assets--Deposit of additional assets or securities.If for any reason the current market value of such assets and securities falls below the amount of deposit required of the insurer under this title, the insurer shall promptly deposit other or additional assets or securities eligible for deposit and in amount sufficient to cure the deficiency. If the insurer has failed to cure the deficiency within thirty days after receipt of notice thereof by registered or certified mail from the director, the director shall forthwith without further notice revoke the insurer's certificate of authority. Source: SL 1966, ch 111, ch 7, 13 (2).
58-7-28. Appraisal or valuation of deposited assets or securities--Cost borne by insurer.The director may, prior to acceptance for deposit of any particular asset or security, or at any time thereafter while so deposited, have the same appraised or valued by appraisers approved by the director. The costs of any appraisal or valuation shall be borne by the insurer. Source: SL 1966, ch 111, ch 7, 9; SL 1991, ch 398, 15.
58-7-29. Deposit exceeding requirements--Release to insurer upon request--Release during insolvency of insurer.An insurer may so deposit and have on deposit assets or securities in an amount exceeding its deposit required or otherwise permitted under this title, for the purpose of absorbing fluctuations in the value of assets and securities deposited, and to facilitate the exchange and substitution of such assets and securities. During the solvency of the insurer any such excess shall be released to the insurer upon its request. During the insolvency of the insurer such excess deposit shall be released only as provided in 58-7-37. Source: SL 1966, ch 111, ch 7, 11.
58-7-3. Credit of other deposit against reserve deposit.A domestic insurer may credit toward the deposit the amount of any other deposit of the insurer required by the director for the protection of its policyholders. Source: SL 1966, ch 111, ch 7, 1 (3); SL 1991, ch 398, 2.
58-7-30. Right of insurer to deposited assets and securities during solvency.While the insurer remains solvent and is in compliance with this title it may:(1)Demand, receive, sue for, and recover the income from the assets or securities deposited;(2)Exchange and substitute for the deposited assets or securities, or any part thereof, other eligible assets or securities of equivalent or greater value; and(3)At any reasonable time inspect any such deposit. Source: SL 1966, ch 111, ch 7, 10.
58-7-31. Levy upon deposited assets and securities.No judgment creditor or other claimant of an insurer shall have the right to levy or to proceed by any remedies, provisional or otherwise, upon any of the assets or securities of the insurer held on deposit in this state. As to deposits pursuant to the retaliatory law, 58-6-70 to 58-6-73, inclusive, levy thereupon shall be permitted if so provided in the director's order under which the deposit is made. Source: SL 1966, ch 111, ch 7, 12.
58-7-32. Deposits by foreign or alien insurers not subject to taxation.Deposits made by foreign or alien insurers shall not be subject to taxation. Source: SL 1966, ch 111, ch 7, 5 (2).
58-7-33. Duration of deposit of assets and securities. Every deposit made in this state by an insurer pursuant to this title, including assets and securities held in another state under custodial arrangements, shall be held as long as there is outstanding any liability of the insurer as to which the deposit was so required; or if a deposit required under the retaliatory law, 58-6-70 to 58-6-73, inclusive, the deposit shall be held for so long as the basis of such retaliation exists. Source: SL 1966, ch 111, ch 7, 14 (1); SL 2021, ch 210,  4.
58-7-34. Release of deposit on request of domestic insurer.Upon the request of a domestic insurer, the director shall direct the depository or custodian to return to the insurer the whole or any portion of the assets and securities of the insurer held on deposit if the director is satisfied that the assets and securities to be returned are subject to no liability and are no longer required to be held by any provision of law or purposes of the original deposit. If the insurer has reinsured all its outstanding risks in another insurer or insurers authorized to transact insurance in this state and the insurer, by written notice, notifies the director that the assets and securities have been assigned, transferred and set over to the reinsuring insurer or insurers, the director shall require the depository or custodian to deliver the assets and securities to the insurer or insurers assuming the risks. The notice shall be accompanied by a duly verified copy of the assignment, transfer, or conveyance. In the case of deposits of the reserves of domestic life insurers, the insurers shall submit proof satisfactory to the director that the reinsurer has deposited or will deposit, and will maintain on deposit in public custody through the insurance supervisory official of its state of domicile, assets and securities of like quality in an amount not less than the reserves of the policies and contracts so reinsured, in addition to any other deposit of such insurer required or permitted by law. Unless the reinsurer is required to have on deposit all of its reserves, the insurer shall submit proof satisfactory to the director that the deposit of the reserves will be maintained by the state of its domicile for the special benefit and protection of the holders of the life insurance policies and annuity contracts so reinsured. Source: SL 1966, ch 111, ch 7, 14 (2); SL 1991, ch 398, 16.
58-7-35. Return of deposit of foreign insurer.The director shall direct the depository or custodian to return to a foreign insurer any deposit made pursuant to this title by the insurer, if:(1)The insurer has ceased transacting business in this state, or in the United States, and the insurer is not subject to any liability in this state on account of which the deposit was held; or(2)The deposit is no longer required by any provision of law; or(3)The insurer, during its solvency has made a similar deposit in another state and has filed with the director the certificate or evidence thereof, under the conditions provided for in subdivisions 58-6-34(1) and (2). Source: SL 1966, ch 111, ch 7, 14 (3); SL 1991, ch 398, 17.
58-7-36. Return of deposit upon merger or consolidation of insurer.Upon the merger or consolidation of an insurer that has made a deposit in this state, the director may, after preserving the interests of South Dakota policyholders, direct the depository or custodian to return the deposit to the resulting or surviving corporation, or to any person it may designate for that purpose, if the resulting or surviving corporation is or becomes authorized to transact an insurance business in this state. Source: SL 1966, ch 111, ch 7, 14(3); SL 1988, ch 393; SL 1991, ch 398, 18.
58-7-37. Insurer subject to delinquency proceedings--Surrender of deposited assets and securities to authorized officer of court.If the insurer is subject to delinquency proceedings as defined in this title, upon the order of a court of competent jurisdiction, the director shall yield the assets and securities held on deposit to the receiver, conservator, rehabilitator, or liquidator of the insurer, or to any other properly designated official. Source: SL 1966, ch 111, ch 7, 14 (4).
58-7-38. Release of deposited assets--Terms--Nonliability of director acting in good faith.No release of deposited assets and securities may be made except upon application to and the written order of the director and under the terms of the custodial or depository arrangement. The director is not personally liable for the release of any deposit made by him in good faith. Source: SL 1966, ch 111, ch 7, 14 (5); SL 1991, ch 398, 19.
58-7-4. Annual deposit of additional securities to cover increase of reserves.Annually on or before April first, the insurer shall deposit any additional securities required under 58-7-1 and related to the increase of such reserves during the calendar year next preceding as determined from the insurer's annual statement as of December thirty-first of such preceding year. Source: SL 1966, ch 111, ch 7, 1 (2).
58-7-5. Ineligibility for deposit of securities in default.If default occurs in the payment of interest or principal of any deposited security and such default continues for a period of one hundred twenty days, the director may declare such security no longer eligible for deposit under 58-7-1. Source: SL 1966, ch 111, ch 7, 1 (5).
58-7-6. Authorized deposits of insurers.The following deposits of insurers shall be accepted and held, and are subject to the provisions of this chapter:(1)Deposits required under this title for authority to transact insurance business in this state;(2)Deposits of domestic insurers if made pursuant to the laws of other states, provinces, and countries as requirement for authority to transact insurance in that state, province, or country;(3)Deposits of reserves made by domestic insurers;(4)Deposits in additional amounts as are permitted to be made under 58-7-29. Source: SL 1966, ch 111, ch 7, 2; SL 1991, ch 398, 3.
58-7-7. Purpose of deposits.Such deposits shall be held for purposes set forth in 58-7-8 to 58-7-12, inclusive. Source: SL 1966, ch 111, ch 7, 3.
58-7-8. Certificates of deposit--Eligible securities--Purpose of deposits.All such deposits required under 58-6-33 to 58-6-35, inclusive, for authority to transact insurance in this state shall consist of certificates of deposit, or any combination of securities of the kinds described in 58-27-9, 58-27-11, 58-27-12, 58-27-14, and 58-27-15. Deposits made in this state under 58-6-33 to 58-6-35, inclusive, shall be held for the purpose stated in 58-6-34. Source: SL 1966, ch 111, ch 7, 3 (1), 4 (1).
58-7-9. Deposit of domestic insurer held in this state pursuant to laws of another state or country--Assets comprising--Protection of all policyholders of insurer.All other deposits of a domestic insurer held in this state pursuant to the laws of another state, province, or country shall be comprised of assets of the kinds described in 58-7-8, and of such additional securities required or permitted by the laws of such state, province, or country except common stocks, mortgages and real estate. A deposit made in this state by a domestic insurer transacting insurance in another state, province, or country, and as required by the laws of such other state, province, or country, shall be held for the protection of all the insurer's policyholders or all its policyholders and creditors or for such other purpose or purposes as may be specified pursuant to such laws. Source: SL 1966, ch 111, ch 7, 3 (2), 4 (2).
58-8-1. Representing or aiding unauthorized insurer as misdemeanor.No person may in this state, directly or indirectly, act as insurance producer for, or otherwise represent any insurer not then authorized to transact insurance business in this state, in the solicitation, negotiation, or effectuation of insurance or of annuity contracts, inspection of risks, fixing of rates, investigation or adjustment of losses, collection of premiums, or in any other manner in the transaction of insurance business with respect to subjects of insurance resident, located or to be performed in this state. Any violation of this section is a Class 2 misdemeanor. Source: SL 1966, ch 111, ch 12, 1 (1); SL 1978, ch 359, 2; SL 2001, ch 286, 98.
58-8-10. Service of process on agent of unauthorized insurer other than director.Service of process in any such action, suit or proceeding shall in addition to the manner provided in 58-8-8 and 58-8-9, be valid if served upon any person within this state who, in this state on behalf of such insurer, is:(1)Soliciting insurance; or(2)Making, issuing, or delivering any contract of insurance; or(3)Collecting or receiving any premium, membership fee, assessment, or other consideration for insurance;and a copy of such process is sent within ten days thereafter by registered or certified mail by the plaintiff or plaintiff's attorney to the defendant at the last known principal place of business of the defendant, and the defendant's receipt, or the receipt issued by the post office with which the letter is registered or certified, showing the name of the sender of the letter and the name and address of the person to whom the letter is addressed, and the affidavit of the plaintiff or plaintiff's attorney showing a compliance herewith are filed with the clerk of the court in which such action is pending on or before the date the defendant is required to appear, or within such further time as the court may allow. Source: SL 1966, ch 111, ch 12, 6; SL 1982, ch 28, 18.
58-8-12. Mode of service of process cumulative.Nothing in this chapter shall limit or abridge the right to serve any process, notice, or demand upon any insurer in any other manner now or hereafter permitted by law. Source: SL 1966, ch 111, ch 12, 8.
58-8-13. Conditions precedent to filing of pleadings by unauthorized foreign or alien insurer--Deposit or bond--Procurement of certificate of authority.Before any unauthorized foreign or alien insurer shall file or cause to be filed any pleading in any action, suit, or proceeding instituted against it, such unauthorized insurer shall in addition to any other requirement that may be imposed by law either:(1)Deposit with the clerk of the court in which such action, suit, or proceeding is pending cash or securities or file with such clerk a bond with good and sufficient sureties, to be approved by the court, in an amount to be fixed by the court sufficient to secure the payment of any final judgment which may be rendered in such action; provided, however, that the court may in its discretion make an order dispensing with such deposit or bond where the insurer makes a showing satisfactory to such court that it maintains in a state of the United States funds or securities, in trust or otherwise, sufficient and available to satisfy any final judgment which may be entered in such action, suit or proceedings; or(2)Procure a certificate of authority to transact the business of insurance in this state. Source: SL 1966, ch 111, ch 12, 9 (1).
58-8-14. Motion of unauthorized foreign or alien insurer to quash or set aside service of process--Deposit or bond not required--Grounds for motion.Nothing in 58-8-13 is to be construed to prevent an unauthorized foreign or alien insurer from filing a motion to quash any process or to set aside service thereof made in the manner provided in 58-8-8 to 58-8-10, inclusive, on the ground either:(1)That such unauthorized insurer has not done any of the acts enumerated in 58-8-7; or(2)That the person on whom service was made pursuant to 58-8-10 was not doing any of the acts therein enumerated. Source: SL 1966, ch 111, ch 12, 9 (3).
58-8-15. Action against unauthorized insurer commenced by substituted process--Postponement by court to give defendant opportunity to defend.The court in any action, suit or proceeding, in which service is made in the manner provided in 58-8-8 to 58-8-10, inclusive, may order such postponement as may be necessary to afford the defendant reasonable opportunity to comply with the provisions of 58-8-13 and to defend such action. Source: SL 1966, ch 111, ch 12, 9 (2).
58-8-16. Vexatious refusal by unauthorized foreign or alien insurer to make payment--Attorney fees of plaintiff.In any action against an unauthorized foreign or alien insurer upon a contract of insurance issued or delivered in this state to a resident thereof or to a corporation authorized to do business therein, if the insurer has failed for thirty days after demand prior to the commencement of the action to make payment in accordance with the terms of the contract, and it appears to the court that such refusal was vexatious and without reasonable cause, the court may allow to the plaintiff a reasonable attorney fee and include such fee in any judgment that may be rendered in such action. Failure of an insurer to defend any such action shall be deemed prima facie evidence that its failure to make payment was vexatious and without reasonable cause. Source: SL 1966, ch 111, ch 12, 10.
58-8-17. Exemptions from unauthorized insurers process provisions.The provisions of 58-8-6 to 58-8-19, inclusive, shall not apply to any action, suit or proceeding against any unauthorized foreign or alien insurer arising out of a contract of:(1)Reinsurance of the liability of an admitted insurer;(2)Insurance against perils of navigation, transit, or transportation upon hulls, freights, or disbursements, or other ship owner interest; upon goods, wares, merchandise, and all other personal property and interests therein, in course of exportation from or importation into any country, or transportation coastwise, including transportation by land or water from point of origin to final destination and including war risks; and marine builder's risks, dry docks and marine railways, including insurance of ship repairer's liability, and protection and indemnity insurance, but excluding insurance covering bridges or tunnels;(3)Aircraft insurance;(4)Insurance on property or operations of railroads engaged in interstate commerce;(5)Insurance in accordance with the surplus line law;(6)Insurance against legal liability arising out of the ownership, operation, or maintenance of any property having a permanent situs outside of this state;(7)Insurance against loss of or damage to any property having a permanent situs outside this state; or(8)Where such contract contains a provision designating the director to be its true and lawful attorney upon whom may be served all lawful process in any action, suit, or proceeding instituted by or on behalf of an insured or beneficiary arising out of any contract or where the insurer enters a general appearance in any such action, suit, or proceeding. Source: SL 1966, ch 111, ch 12, 11.
58-8-18. Uniformity of interpretation of chapter.This chapter shall be so interpreted as to effectuate its general purpose to make uniform the law of those states which enact it. Source: SL 1966, ch 111, ch 12, 2 (2).
58-8-19. Citation of unauthorized insurers process provisions.Sections 58-8-6 to 58-8-19, inclusive, constitute and may be cited as the Unauthorized Insurers Process Act. Source: SL 1966, ch 111, ch 12, 2 (1).
58-8-2. Acts which do not constitute representing or aiding unauthorized insurer.Section 58-8-1 shall not apply to:(1)Acceptance of service of process by the director under 58-8-8;(2)Surplus lines insurance, and other transactions as to which a certificate of authority is not required of an insurer as stated in 58-6-4;(3)Reinsurance as authorized by chapter 58-14;(4)The services of an adjuster with respect to claims under policies lawfully solicited, issued and delivered outside South Dakota;(5)The professional services of an attorney at law. Source: SL 1966, ch 111, ch 12, 1 (1).
58-8-3. Advertising relating to unauthorized insurers as misdemeanor.It is a Class 2 misdemeanor for any person to publish or print in this state in any newspaper, magazine, periodical, circular, letter, pamphlet, or in any other manner, or to publish by radio or television broadcasting in this state, any advertisement or other notice, either directly or indirectly, setting forth the advantages of or soliciting business for any insurer, insurance producer, or other person who has not been authorized to transact insurance business in this state. Source: SL 1966, ch 111, ch 12, 1 (2); SL 1978, ch 359, 2; SL 2001, ch 286, 99.
58-8-4. Acceptance of advertising without proof of authority to do business in state as misdemeanor.No person may accept for publication or printing any newspaper, magazine, or other periodical, or for radio or television broadcasting in this state, any advertisement or other notice, either directly or indirectly setting forth the advantages of or soliciting business for any insurer, insurance producer, or other person, unless the publisher holds a certificate to the effect that the insurer, insurance producer, or other person named therein is authorized to transact insurance business in this state for the current license year. The certificate shall be issued by the director without cost to any person applying therefor.Any violation of this section is a Class 2 misdemeanor. Source: SL 1966, ch 111, ch 12, 1 (3); SL 1978, ch 359, 2; SL 2001, ch 286, 100.
58-8-5. Distribution of advertising matter as to advantages of doing business with unauthorized insurer as misdemeanor.It is a Class 2 misdemeanor for any manufacturer, jobber, wholesaler, or retailer to distribute or to cause to be distributed any match books or other advertising matter, directly or indirectly, setting forth the advantages of or soliciting business for any insurer, insurance producer, or other person, who has not been authorized to transact insurance business in this state. Source: SL 1966, ch 111, ch 12, 1 (4); SL 1978, ch 359, 2; SL 2001, ch 286, 101.
58-8-6. Unauthorized insurers--Purposes of Process Act.The purpose of 58-8-6 to 58-8-19, inclusive, is to subject certain insurers to the jurisdiction of the courts of this state in suits by or on behalf of insureds or beneficiaries under insurance contracts. The Legislature declares that it is a subject of concern that many residents of this state hold policies of insurance issued or delivered in this state by insurers not authorized to do business in this state, thus presenting to such residents the often insuperable obstacle of resorting to distant forums for the purpose of asserting legal rights under such policies. In furtherance of such state interest, the Legislature herein provides a method of substituted service of process upon such insurers and declares that in so doing it exercises its power to protect its residents and to define, for the purpose of this statute, what constitutes doing business in this state, and also exercises powers and privileges available to the state by virtue of Public Law 15, 79th Congress of the United States, Chapter 20, 1st Sess., S. 340, as amended, which declares that the business of insurance and every person engaged therein shall be subject to the laws of the several states. Source: SL 1966, ch 111, ch 12, 3.
58-8-7. Acts by unauthorized insurer constituting appointment of director of insurance as agent for service of process.Any of the following acts in this state, effected by mail or otherwise, by an unauthorized foreign or alien insurer:(1)The issuance or delivery of contracts of insurance to residents of this state or to corporations authorized to do business therein;(2)The solicitation of applications for such contracts;(3)The collection of premiums, membership fees, assessments, or other considerations for such contracts; or(4)Any other transaction of insurance business;is equivalent to and shall constitute an appointment by such insurer of the director to be its true and lawful attorney, upon whom may be served all lawful process in any action, suit, or proceeding instituted by or on behalf of an insured or beneficiary arising out of any such contract of insurance, and any such act shall be signification of its agreement that such service of process is of the same legal force and validity as personal service of process in this state upon such insurer. Source: SL 1966, ch 111, ch 12, 4.
58-8-8. Manner of service of process--Duties of director.Such service of process shall be made by delivering to and leaving with the director or some person in apparent charge of his office two copies thereof and the payment to him of a fee as set forth in subdivision 58-2-29(12)(c) which shall be taxed in the costs of the proceeding. The director shall forthwith mail by registered or certified mail one of the copies of such process to the defendant at its last known principal place of business, and shall keep a record of all process so served upon him. Source: SL 1966, ch 111, ch 12, 5; SL 1975, ch 305, 3; SL 1982, ch 28, 18.
58-8-9. Notice by mail to insurer--Proof of service.Service of process pursuant to 58-8-8 is sufficient, provided notice of such service and a copy of the process are sent within ten days thereafter by registered or certified mail by plaintiff or plaintiff's attorney to the defendant at its last known principal place of business, and the defendant's receipt, or receipt issued by the post office with which the letter is registered or certified, showing the name of the sender of the letter and the name and address of the person to whom the letter is addressed, and the affidavit of the plaintiff or plaintiff's attorney showing a compliance herewith are filed with the clerk of the court in which such action is pending on or before the date the defendant is required to appear, or within such further time as the court may allow. Source: SL 1966, ch 111, ch 12, 5; SL 1982, ch 28, 18.
58-9-1. Definitions not mutually exclusive.It is intended that certain insurance coverages may come within the definitions of two or more kinds of insurance as defined in this chapter, and the inclusion of such coverage within one definition shall not exclude it as to any other kind of insurance within the definition of which such coverage is likewise reasonably includable. Source: SL 1966, ch 111, ch 4, 1.
58-9-10. Marine protection and indemnity insurance included."Marine and transportation insurance" includes "marine protection and indemnity insurance," meaning insurance against, or against legal liability of the insured for, loss, damage, or expense arising out of, or incident to, the ownership, operation, chartering, maintenance, use, repair, or construction of any vessel, craft, or instrumentality in use in ocean or inland waterways, including liability of the insured for personal injury, illness, or death or for loss of or damage to the property of another person. Source: SL 1966, ch 111, ch 4, 5 (2).
58-9-11. Casualty insurance including vehicle insurance."Casualty insurance" includes vehicle insurance, insurance against loss of or damage to any land vehicle or aircraft or any draft or riding animal or to property while contained therein or thereon or being loaded or unloaded therein or therefrom, from any hazard or cause, and against any loss, liability, or expense resulting from or incidental to ownership, maintenance, or use of any such vehicle, aircraft, or animal; and provision of medical, hospital, surgical, disability benefits to injured persons and funeral and death benefits to dependents, beneficiaries, or personal representatives of persons killed, irrespective of legal liability of the insured, when issued as an incidental coverage with or supplemental to insurance on the vehicle, aircraft, or animal. Source: SL 1966, ch 111, ch 4, 6 (1) (a).
58-9-12. Casualty insurance including automobile guaranty insurance."Casualty insurance" includes automobile guaranty insurance, insurance of the mechanical condition, or freedom from defective or worn parts or equipment, of motor vehicles. Source: SL 1966, ch 111, ch 4, 6 (1) (b).
58-9-13. Casualty insurance including liability insurance."Casualty insurance" includes liability insurance, insurance against legal liability for the death, injury, or disability of any human being, or for damage to property; and provision of medical, hospital, surgical, disability benefits to injured persons and funeral and death benefits to dependents, beneficiaries, or personal representative of persons killed, irrespective of legal liability of the insured, when issued as incidental coverage with or supplemental to liability insurance. Source: SL 1966, ch 111, ch 4, 6 (1) (c).
58-9-14. Casualty insurance including workers' compensation insurance."Casualty insurance" includes workers' compensation insurance, insurance of the obligations accepted by, imposed upon, or assumed by employers under law for death, disablement, or injury of employees. Source: SL 1966, ch 111, ch 4, 6 (1) (d).
58-9-15. Casualty insurance including burglary and theft insurance."Casualty insurance" includes burglary and theft insurance, insurance against loss or damage by burglary, theft, larceny, robbery, forgery, fraud, vandalism, malicious mischief, confiscation, or wrongful conversion, disposal, or concealment, or from any attempt at any of the foregoing; including supplemental coverage for medical, hospital, surgical, and funeral expense incurred by the named insured or any other person as a result of bodily injury during the commission of a burglary, robbery, or theft by another; also insurance against loss of or damage to moneys, coins, bullion, securities, notes, drafts, acceptances, or any other valuable papers and documents, resulting from any cause. Source: SL 1966, ch 111, ch 4, 6 (1) (e).
58-9-16. Casualty insurance including personal property floater insurance."Casualty insurance" includes personal property floater insurance, insurance upon personal effects against loss or damage from any cause, under a personal property floater. Source: SL 1966, ch 111, ch 4, 6 (1) (f).
58-9-17. Casualty insurance including glass."Casualty insurance" includes insurance against loss or damage to glass, including its lettering, ornamentation, and fittings. Source: SL 1966, ch 111, ch 4, 6 (1) (g).
58-9-18. Casualty insurance including boiler and machinery insurance."Casualty insurance" includes boiler and machinery insurance, insurance against any liability and loss or damage to property or interest resulting from accidents to or explosions of boilers, pipes, pressure containers, machinery, or apparatus, and to make inspection of and issue certificates of inspection upon boilers, machinery, and apparatus of any kind, whether or not insured. Source: SL 1966, ch 111, ch 4, 6 (1) (h).
58-9-19. Casualty insurance including leakage and fire extinguishing equipment insurance."Casualty insurance" includes leakage and fire extinguishing equipment insurance, insurance against loss or damage to any property or interest caused by the breakage or leakage of sprinklers, hoses, pumps, and other fire extinguishing equipment or apparatus, water pipes or containers, or by water entering through leaks or openings in buildings, and insurance against loss or damage to such sprinklers, hoses, pumps, and other fire extinguishing equipment or apparatus. Source: SL 1966, ch 111, ch 4, 6 (1) (i).
58-9-2. Life insurance defined."Life insurance" is insurance on human lives. Life insurance includes also the granting of endowment benefits, additional benefits in event of death or dismemberment by accident or accidental means, additional benefits in event of the insured's disability, and optional modes of settlement of proceeds of life insurance. Life insurance does not include workers' compensation coverages. Source: SL 1966, ch 111, ch 4, 2.
58-9-20. Casualty insurance including credit insurance."Casualty insurance" includes credit insurance, insurance against loss or damage resulting from failure of debtors to pay their obligations to the insured. Source: SL 1966, ch 111, ch 4, 6 (1) (j).
58-9-21. Casualty insurance including malpractice insurance."Casualty insurance" includes malpractice insurance, insurance against legal liability of the insured, and against loss, damage, or expense incidental to a claim of such liability, and including medical, hospital, surgical, and funeral benefits to injured persons, irrespective of legal liability of the insured, arising out of the death, injury, or disablement of any person, or arising out of damage to the economic interest of any person, as the result of negligence in rendering expert, fiduciary, or professional service. Source: SL 1966, ch 111, ch 4, 6 (1) (k).
58-9-22. Casualty insurance including insurance against congenital defects."Casualty insurance" includes insurance against congenital defects in human beings. Source: SL 1966, ch 111, ch 4, 6 (1) (l).
58-9-23. Casualty insurance including livestock insurance."Casualty insurance" includes livestock insurance, insurance against loss of or damage to livestock, and services of a veterinary for such animals. Source: SL 1966, ch 111, ch 4, 6 (1) (m).
58-9-24. Casualty insurance including elevator insurance."Casualty insurance" includes elevator insurance, insurance against loss of or damage to any property of the insured, resulting from the ownership, maintenance or use of elevators, except loss or damage by fire. Source: SL 1966, ch 111, ch 4, 6 (1) (n).
58-9-25. Casualty insurance including entertainments insurance."Casualty insurance" includes entertainments insurance, insurance indemnifying the producer of any motion picture, television, radio, theatrical, sport, spectacle, entertainment, or similar production, event, or exhibition against loss from interruption, postponement, or cancellation thereof due to death, accidental injury, or sickness of performers, participants, directors, or other principals. Source: SL 1966, ch 111, ch 4, 6 (1) (o).
58-9-26. Casualty insurance including loss from failure to file instrument relating to personal property."Casualty insurance" includes insurance against loss resulting from failure to file or record written instruments affecting the title of or creating a lien upon personal property. Source: SL 1966, ch 111, ch 4, 6 (1) (p).
58-9-27. Casualty insurance including other unclassified insurance."Casualty insurance" includes insurance against any other kind of loss, damage, or liability properly a subject of insurance and not within any other kind of insurance as defined in this chapter, if such insurance is not disapproved by the director of insurance as being contrary to law or public policy. Source: SL 1966, ch 111, ch 4, 6 (1) (q).
58-9-28. Medical, hospital, surgical, funeral, and accident insurance incidental to other insurance.Provision of medical, hospital, surgical, and funeral benefits, and of coverage against accidental death or injury, as incidental to and part of other insurance as stated under 58-9-11, 58-9-13, 58-9-15, and 58-9-21 shall for all purposes be deemed to be the same kind of insurance to which it is so incidental, and shall not be subject to provisions of this title applicable to life and health insurances. Source: SL 1966, ch 111, ch 4, 6 (2).
58-9-29. Surety insurance including fidelity insurance."Surety insurance" includes fidelity insurance, insurance to guarantee the fidelity of persons holding positions of public or private trust. Source: SL 1966, ch 111, ch 4, 7 (1).
58-9-3. Health insurance defined."Health insurance" is insurance of human beings against bodily injury, disablement, or death by accident or accidental means, or the expense thereof, or against disablement or expense resulting from sickness, or childbirth, or against expenses incurred in prevention of sickness, or dental care, and every insurance appertaining thereto. Health insurance does not include workers' compensation insurance. Source: SL 1966, ch 111, ch 4, 3.
58-9-30. Surety insurance including workers' compensation insurance."Surety insurance" includes insurance or guaranty of the obligations of employers under workers' compensation laws. Source: SL 1966, ch 111, ch 4, 7 (2).
58-9-31. Surety insurance including performance bonds."Surety insurance" includes insurance guaranteeing the performance of contracts, other than insurance policies, and guaranteeing and executing bonds, undertakings, and contracts of suretyship. Source: SL 1966, ch 111, ch 4, 7 (3).
58-9-32. Surety insurance including indemnification of banks, brokers, and financial institutions."Surety insurance" includes insurance indemnifying banks, bankers, brokers, financial or moneyed corporations or associations against loss, resulting from any cause, of bills of exchange, notes, bonds, securities, evidences of debt, deeds, mortgages, warehouse receipts, or other valuable papers, documents, money, precious metals, and articles made therefrom, jewelry, watches, necklaces, bracelets, gems, precious and semiprecious stones, including any loss while the same are being transported in armored motor vehicles, or by messenger, but not including any other risks of transportation or navigation; also insurance against loss or damage to insured's premises, furniture, furnishings, fixtures, equipment, safes, and vaults therein, caused by burglary, robbery, theft, vandalism, malicious mischief, or any attempt thereat. Source: SL 1966, ch 111, ch 4, 7 (4).
58-9-33. Title insurance defined."Title insurance" is the insurance of owners of property or others having an interest therein or liens or encumbrances thereon, against loss by encumbrance, or defective titles, or invalidity, or adverse claim to title. Source: SL 1966, ch 111, ch 4, 8.
58-9-4. Burial insurance--Definition--Compliance with provisions concerning life insurers required.Burial insurance as used in this section includes any kind of agreement, certificate, policy, contract, bond, assurance guarantee, or other arrangement, by bylaw, regulation or otherwise, in or by which the party issuing such certificate, policy, contract, bond, assurance guarantee, or other arrangement agrees to provide for the burial of a named or designated person, or to save harmless anyone for the whole or any part of the costs of the burial of the body of a named or designated person, or to pay any part or all of the incidents of the burial of the body of a named or designated person. Any person engaging in the business of burial insurance shall be subject to and shall comply with all of the provisions of this title concerning the organization, qualification and conduct of life insurers. Nothing in this section shall be construed to limit or restrict the definitions of life insurance or life insurer under 58-9-2 and 58-9-3. Source: SL 1966, ch 111, ch 32, 4.
58-9-5. Property insurance defined."Property insurance" is insurance on real or personal property of every kind and of every interest therein, whether on land, water, or in the air, against loss or damage from any and all hazards or causes, and against loss consequential upon such loss or damage, other than noncontractual legal liability for any such loss or damage. Source: SL 1966, ch 111, ch 4, 4.
58-9-6. Marine and transportation insurance defined--Vehicles--Goods transported."Marine and transportation insurance" includes insurance against any kind of loss or damage to vessels, craft, aircraft, cars, automobiles, and vehicles of every kind, as well as all goods, freights, cargoes, merchandise, effects, disbursements, profits, moneys, bullion, precious stones, securities, choses in action, evidences of debt, valuable papers, bottomry, and respondentia interests and all other kinds of property and interests therein, in respect to, appertaining to or in connection with any and all risks or perils of navigation, transit, or transportation, including war risks, on or under any seas or other waters, on land or in the air, or while being assembled, packed, crated, baled, compressed, or similarly prepared for shipment or while awaiting the same or during any delays, storage, transshipment, or reshipment incident thereto, including marine builder's risks and all personal property floater risks. Source: SL 1966, ch 111, ch 4, 5 (1) (a).
58-9-7. Marine and transportation insurance including personal injury or property damage."Marine and transportation insurance" includes insurance against any kind of loss or damage to person or to property in connection with or appertaining to a marine, inland marine, transit, or transportation insurance, including liability for loss of or damage to either, arising out of or in connection with the construction, repair, operation, maintenance, or use of the subject matter of such insurance, but not including life insurance or surety bonds nor insurance against loss by reason of bodily injury to the person arising out of the ownership, maintenance, or use of automobile. Source: SL 1966, ch 111, ch 4, 5 (1) (b).
58-9-8. Marine and transportation insurance including jewelry and precious metals."Marine and transportation insurance" includes insurance against any kind of loss or damage to precious stones, jewels, jewelry, gold, silver, and other precious metals, whether used in business or trade or otherwise and whether the same be in course of transportation or otherwise. Source: SL 1966, ch 111, ch 4, 5 (1) (c).
58-9-9. Marine and transportation insurance including transportation structures."Marine and transportation insurance" includes insurance against any kind of loss or damage to bridges, tunnels, and other instrumentalities of transportation and communication, excluding buildings, their furniture and furnishings, fixed contents and supplies held in storage, unless fire, tornado, sprinkler leakage, hail, explosion, earthquake, riot and/or civil commotion are the only hazards to be covered; piers, wharves, docks and slips, excluding the risks of fire, tornado, sprinkler leakage, hail, explosion, earthquake, riot and/or civil commotion; other aids to navigation and transportation, including dry docks and marine railways, against all risks. Source: SL 1966, ch 111, ch 4, 5 (1) (d).
58-10-1. Application to all insurance and annuity contracts--Exceptions.Chapters 58-10 to 58-12, inclusive, apply as to all insurance contracts and annuity contracts, other than:(1)Reinsurance;(2)Policies or contracts not issued for delivery in this state or not delivered in this state, except as provided in 58-11-12 to 58-11-20, inclusive. Source: SL 1966, ch 111, ch 22, 1 (1), (2); SL 1967, ch 129, 6.
58-10-10. Insurance against fire, tornado, or lightning--Measure of damages where property wholly destroyed.Whenever any policy of insurance is written or renewed to insure any real property in this state, including structures on land owned by a person other than the insured, against loss by fire, tornado, or lightning and the property insured is wholly destroyed, without criminal fault on the part of the insured or the insured's assigns, the amount of insurance written in the policy shall be taken conclusively to be the true value of the property insured and the true amount of loss and measure of damages, with the following conditions:(1)This section applies only if a total fire loss occurs ninety days or more after the policy was made or written or ninety days or more after the policy limits were increased by twenty-five percent or more at the insured's request. However, within the first ninety days, payment to the insured shall be in accordance with the terms and conditions of the policy for valuation of the property absent stated amount;(2)Subdivision (1) of this section does not apply to unchanged renewal policies, to policies with inflation adjustment limits or to policies which are being converted to replacement cost coverage from a lesser value form and upon which there is a written agreement between the company and the insured that the policy will be written on a valued basis;(3)Builders' risk policies of insurance covering property in the process of being constructed shall be valued and settled according to the actual value of that portion of the construction completed at the time of the fire, tornado, or lightning loss;(4)Property in the process of being newly constructed for the purpose of serving as a residence, other than property covered by a builder's risk policy, shall be valued and settled according to the terms and conditions of the policy for valuation of that portion of the construction completed at the time of the fire, tornado, or lightning loss;(5)If two or more policies are written upon the same property interest, each insurer shall pay only that proportion of the cost of the loss that the limit of liability under its policy bears to the total amount of insurance covering the loss;(6)Any claim for loss of an appurtenant structure or other appurtenant property covered under the policy shall be settled for actual replacement or actual cash value, depending on the policy provisions applicable to the structure or other property, unless a specific value was assigned to each structure or property prior to the loss; and(7)This section does not apply to any claim for total loss to any building which is insured under a commercial blanket form with one amount covering two or more buildings. Any claim for total loss to a building so insured shall be settled for actual replacement or actual cash value depending on the policy provisions applicable to the building. Source: SL 1966, ch 111, ch 22, 5; SL 1967, ch 136; SL 1985, ch 389; SL 1995, ch 277; SL 1997, ch 285, 1; SL 1999, ch 247, 1; SL 2009, ch 258, 1.
58-10-11. Change of property interest on death of insured.A change of interest, by will or succession, on the death of the insured, does not avoid an insurance of property and the insurance passes to the person taking his interest in the thing insured. Source: SL 1966, ch 111, ch 22, 7.
58-10-12. Transfer of property interest between joint insureds.A transfer of interest by one of several partners, joint owners, or owners in common, who are jointly insured, to the others, does not avoid an insurance of property even though it has been agreed that the insurance shall cease upon an alienation of the thing insured. Source: SL 1966, ch 111, ch 22, 8.
58-10-13. Trust defined.For purposes of subdivision 58-10-4(6), the term, trust, includes any trust, including a business trust, and the term, beneficiary, includes the interest of any beneficiary in a trust, including a beneficial owner of a business trust. Source: SL 2006, ch 251, 2.
58-10-14. Business trust defined.For purposes of subdivision 58-10-4(6), the term, business trust, means a business trust subject to chapter 47-14A or chapter 47-14B. Source: SL 2006, ch 251, 3.
58-10-15. Trust to be governed by South Dakota law.An insurance contract for which an insurable interest exists under subdivision 58-10-4(6), is a life insurance policy issued for delivery to a trust governed by South Dakota law. Source: SL 2006, ch 251, 4.
58-10-16. Retroactive effect of statutory provisions regarding trusts.The provisions of subdivision 58-10-4(6) and 58-10-13 to 58-10-15, inclusive, are effective retroactively to November 2, 1889. Source: SL 2006, ch 251, 5.
58-10-17. Creation of entity to purchase, hold, or administer insurance contract on life of individual settlor.A person who has an insurable interest in the life of an individual settlor pursuant to subdivisions 58-10-4(1) to (6), may create an entity solely for the purpose of purchasing, holding, or administering an insurance contract on the life of the individual settlor. Neither an insurance policy issued to the entity nor any ownership interest in the entity itself may be sold or voluntarily transferred to any entity other than one with an insurable interest in the life of the same individual settlor pursuant to subdivisions 58-10-4(1) to (6). For purposes of this section, entity, has the same meaning as the definition of, person, in subdivision 58-1-2(14). Source: SL 2015, ch 247, 1.
58-10-2. Policy defined."Policy" means the written contract of or written agreement for or effecting insurance, by whatever name called, and includes all clauses, riders, endorsements, and papers which are a part thereof. Source: SL 1966, ch 111, ch 22, 2.
58-10-3. Procurement of insurance on own life or body for benefit of another--Interest required for insurance on life or body of another.Any individual of competent legal capacity may procure or effect an insurance contract upon his own life or body for the benefit of any person. But no person shall procure or cause to be procured any insurance contract upon the life or body of another individual unless the benefits under such contract are payable to the individual insured or his personal representatives, or to a person having, at the time when such contract was made, an insurable interest in the individual insured. Source: SL 1966, ch 111, ch 22, 4 (1).
58-10-4. Insurable interest in personal insurance defined.Insurable interest with reference to personal insurance includes only interests as follows:(1)Interests in individuals related closely by blood, marriage, or by law, a substantial interest engendered by love and affection;(2)For other persons, a lawful and substantial economic interest in having the life, health, or bodily safety of the individual insured continue, as distinguished from an interest which would arise only by, or would be enhanced in value by, the death, disablement, or injury of the individual insured;(3)A person who is a party to a contract or option for the purchase or sale of an interest in a business partnership or firm, or of shares of stock of a closed corporation or of an interest in the shares, has an insurable interest in the life of each individual party to the contract and for the purpose of the contract only, in addition to any insurable interest which may otherwise exist as to the life of the individual;(4)A charitable organization that meets the requirements of section 501(c)3 of the Internal Revenue Code of 1986, as amended to January 1, 1992, and owns or purchases life insurance on an insured who consents to the ownership or purchase of the insurance has an insurable interest in the life of the insured;(5)A financial institution, as defined in subdivision 10-43-1(4), to whom a debt is owed has an insurable interest in the life of the insured to the extent of the debt owed by the insured, irrespective of any statute of limitation regarding the enforceability of the debt;(6)The trustee of a trust established by an individual settlor has an insurable interest in the life of that individual settlor, and has the same insurable interest in the life of any other individual as does such individual settlor. However, the settlor must be the insured or have an insurable interest as required by subdivisions (1) to (5), inclusive, of this section. The trustee of a trust has the same insurable interest in the life of any other individual as does any beneficiary of the trust with respect to proceeds of insurance on the life of such individual or any portion of such proceeds that are allocable to such beneficiary's interest in such trust. If multiple beneficiaries of a trust have an insurable interest in the life of the same individual, the trustee of such trust has the same aggregate insurable interest in such individual's life as such beneficiaries with respect to proceeds of insurance on the life of such individual or any portion of such proceeds that are allocable in the aggregate to such beneficiaries' interest in the trust. A trustee of a business trust has the same insurable interest in the life of any individual as does any beneficial owner in any individual or any beneficial owners in the aggregate in any individual. Source: SL 1966, ch 111, ch 22, 4 (3); SL 1989, ch 423, 1; SL 1992, ch 343; SL 2000, ch 237, 1; SL 2006, ch 251, 1.
58-10-5. Insurance benefits recoverable from beneficiary without insurable interest.If the beneficiary, assignee, or other payee under any contract made in violation of 58-10-3 receives from the insurer any benefits thereunder accruing upon the death, disablement, or injury of the individual insured, the individual insured or his personal representative, as the case may be, may maintain an action to recover such benefits from the person so receiving them. Source: SL 1966, ch 111, ch 22, 4 (2); SL 1995, ch 167, 188.
58-10-6.1. Assignment of incidents of ownership under life insurance policy--Assignment before July 1, 1989, enforceable.Subject to the policy terms on assignment, a person whose life is insured under a policy of life insurance may assign with his spouse's written consent any or all incidents of ownership granted him under the policy, including but not limited to any right to designate a beneficiary or to pay premiums. If a policy of life insurance has been issued in conformity with this section, no transfer of the policy or any interest thereunder shall be invalid by reason of a lack of insurable interest of the transferee in the life of the insured or the payment of premiums thereafter by the transferee. Insurance contracts which were assigned before July 1, 1989, shall be deemed enforceable under this section. Source: SL 1989, ch 423, 2.
58-10-6. Consent of insured required for life or health insurance on an individual.No life or health insurance contract upon an individual, except a contract of group life insurance or of group or blanket health insurance, shall be made or become effective unless at the time of the making of the contract such individual applies therefor or has consented thereto in writing, except in the following cases:(1)A spouse may effectuate such insurance upon the other spouse.(2)Any person having an insurable interest in the life of a minor, or any person upon whom a minor is dependent for support and maintenance, may effectuate insurance upon the life of or pertaining to such minor.(3)Family policies may be issued insuring any two or more members of a family on an application signed by either parent, a stepparent, or by a husband or wife. Source: SL 1966, ch 111, ch 22, 9.
58-10-7. Insurance of property--Insurable interest required.No contract of insurance of property or of any interest in property or arising from property shall be enforceable as to the insurance except for the benefit of persons having an insurable interest in the things insured as at the time of the loss. Source: SL 1966, ch 111, ch 22, 6 (1).
58-10-8. Insurable interest in property defined."Insurable interest" as used in 58-10-7 and 58-10-9 means any actual, lawful, and substantial economic interest in the safety or preservation of the subject of the insurance free from loss, destruction, or pecuniary damage or impairment. Source: SL 1966, ch 111, ch 22, 6 (2).
58-10-9. Measure of insurable interest in property.The measure of an insurable interest in property is the extent to which the insured might be directly damnified by loss, injury, or impairment thereof. Source: SL 1966, ch 111, ch 22, 6 (3).
58-11-1. Premium defined.Premium is the consideration for insurance by whatever name called. Any assessment, or any membership, policy, survey, inspection, service, or similar fee or other charge in consideration for an insurance contract is deemed part of the premium. However, the premium for title insurance shall be the rates filed and approved in 58-25-7. Source: SL 1966, ch 111, ch 22, 3; SL 1995, ch 66, 2; SL 2009, ch 259, 1; SL 2014, ch 229, 1.
58-11-10. Additional policy provisions--Approval of director.A policy may contain additional lawful provisions, including reasonable policy exclusions, not inconsistent with this title, subject to the director's approval. Source: SL 1966, ch 111, ch 22, 18; SL 2010, ch 235, 1.
58-11-11. Charter and bylaws, inclusion as part of contract of insurance--Subscriber's agreement or power of attorney of a reciprocal insurer as part of contract.No policy shall contain any provision purporting to make any portion of the charter, bylaws or other constituent document of the insurer, other than the subscriber's agreement or power of attorney of a reciprocal insurer, a part of the contract unless such portion is set forth in full in the policy. Any policy provision in violation of this section shall be invalid. Source: SL 1966, ch 111, ch 22, 19.
58-11-12. Policy forms--Filing with and approval by director--Group policy certificates filed for informational purposes.No basic insurance policy or annuity contract form, or group certificate form, or application form where written application is required and is to be made a part of the policy or contract, or printed rider or endorsement form or form of renewal certificate, shall be delivered or issued for delivery in this state, unless the form has been filed with and approved by the director, except that certificates delivered, but not solicited in this state, pursuant to a group policy issued or delivered outside the State of South Dakota shall be filed with the director for informational purposes. A form filed with the director for informational purposes does not exempt that group policy or certificate from complying with any other applicable provisions of Title 58 or state law. Source: SL 1966, ch 111, ch 22, 13 (1); SL 1975, ch 308; SL 1996, ch 291.
58-11-13. Policies exempt from form provisions.Section 58-11-12 shall not apply to surety bonds, or to specially rated inland marine risks, nor to policies, riders, endorsements, or forms of unique character designed for and used with relation to insurance upon a particular subject, or which relate to the manner of distribution of benefits or to the reservation of rights and benefits under life or health insurance policies and are used at the request of the individual policyholder, contract holder, or certificate holder. Source: SL 1966, ch 111, ch 22, 13 (1).
58-11-14. Continuation of use of prior filings until otherwise prescribed.Every form of insurance document and every rate or other filing lawfully in use immediately prior to July 1, 1966, may continue to be so used until the director otherwise prescribes pursuant to this title. Source: SL 1966, ch 111, ch 22, 13 (5).
58-11-15. Order of director exempting insurance documents from requirements as to form.The director may, by order, exempt from the requirements of 58-11-12 for so long as he deems proper, any insurance document or form or type thereof as specified in such order, to which, in his opinion, said section may not practically be applied, or the filing and approval of which are, in his opinion, not desirable or necessary for the protection of the public. Source: SL 1966, ch 111, ch 22, 13 (4).
58-11-16. Property, marine and transportation, casualty and surety insurance coverages--Filing of forms by rating organizations.As to forms for use in property, marine and transportation, casualty and surety insurance coverages, the filing required by 58-11-12 may be made by rating organizations on behalf of its members and subscribers; but this provision shall not be deemed to prohibit any such member or subscriber from filing any such forms on its own behalf. Source: SL 1966, ch 111, ch 22, 13 (1).
58-11-17. Time for filing of forms--Approval or disapproval by director.Every filing pursuant to 58-11-12 shall be made not less than thirty days in advance of any such delivery. At the expiration of such thirty days, the form so filed shall be deemed approved unless prior thereto it has been approved or disapproved by order of the director. Approval of any such form by the director shall constitute a waiver of any unexpired portion of such waiting period. Source: SL 1966, ch 111, ch 22, 13 (2).
58-11-18. Extension of time for approval or disapproval of filing by director--Notice to insurer--Approval at expiration of extended period.The director may extend by not more than thirty days the period within which he may so approve or disapprove any such form, by giving notice to the insurer of such extension before expiration of the initial thirty-day period. At the expiration of any such period as so extended, and in the absence of such prior affirmative approval or disapproval, any such form shall be deemed approved. Source: SL 1966, ch 111, ch 22, 13 (2).
58-11-19. Withdrawal of approval of form by director--Notice.The director may at any time, after notice and for cause shown, withdraw any such approval. Source: SL 1966, ch 111, ch 22, 13 (2).
58-11-2. Contents of policy.Every policy as defined by 58-10-2 shall specify:(1)The names of the parties to the contract;(2)The subject of the insurance;(3)The risks insured against;(4)The time when the insurance takes effect and the duration thereof;(5)The premium; and(6)The conditions pertaining to the insurance. Source: SL 1966, ch 111, ch 22, 16 (1).
58-11-20. Order of director disapproving form or withdrawing previous approval--Detailed statement of grounds.Any order of the director disapproving any such form or withdrawing a previous approval shall state the grounds therefor and the particulars thereof in such detail as reasonably to inform the insurer thereof. Source: SL 1966, ch 111, ch 22, 13 (3).
58-11-21. Grounds for disapproval of form or withdrawal of previous approval.The director shall disapprove any form filed under 58-11-12, or withdraw any previous approval thereof, only if the form:(1)Is in any respect in violation of or does not comply with this title;(2)Contains or incorporates by reference, where such incorporation is otherwise permissible, any inconsistent, ambiguous, or misleading clauses, or exceptions and conditions which deceptively affect the risk purported to be assumed in the general coverage of the contract;(3)Has any title, heading, or provision which is misleading;(4)Is printed or otherwise reproduced illegibly. Source: SL 1966, ch 111, ch 22, 14.
58-11-22. Identification of contracts issued and forms filed with director--Change in form.All policies and annuity contracts issued, and the forms thereof filed with the director, shall have printed thereon an appropriate designating letter or figure, or combination thereof identifying the respective forms of policies or contracts. Whenever any change is made in any such form, the designating letters, figures, or terms thereon shall be correspondingly changed. Source: SL 1966, ch 111, ch 22, 16 (4).
58-11-23. Execution of policy by authorized representative of insurer.Every insurance policy shall be executed in the name of and on behalf of the insurer by its officer, attorney in fact, employee, or representative duly authorized by the insurer. Source: SL 1966, ch 111, ch 22, 20 (1).
58-11-24. Facsimile signature used on policy.A facsimile signature of any such executing individual may be used in lieu of an original signature. Source: SL 1966, ch 111, ch 22, 20 (2).
58-11-25. Unauthorized facsimile signature does not invalidate policy--Estoppel by issuance of surety bond with facsimile signature.No insurance contract heretofore or hereafter issued and which is otherwise valid shall be rendered invalid by reason of the apparent execution thereof on behalf of the insurer by the imprinted facsimile signature of an individual not authorized so to execute as of the date of the policy.Any company which issues a bond as surety with facsimile signature under the law of this state shall, in any proceeding to enforce the liability which it has assumed to incur, be estopped to deny its corporate power to execute such instrument or assume such liability. Source: SL 1966, ch 111, ch 22, 20 (3); SL 1980, ch 170, 2.
58-11-26. Underwriters' policy--Joint and several liability--True name of insurer.Two or more authorized insurers may, with the director's approval, jointly issue, and shall be jointly and severally liable on, an underwriters' policy bearing their names. Any one insurer may issue policies in the name of an underwriter's department and such policy shall plainly show the true name of the insurer. Source: SL 1966, ch 111, ch 22, 21 (1).
58-11-27. Combination policy--Contents.Two or more insurers may, with the approval of the director, issue a combination policy which shall contain provisions substantially as follows:(1)That the insurers executing the policy shall be severally liable for the full amount of any loss or damage, according to the terms of the policy, or for specified percentages or amounts thereof, aggregating the full amount of insurance under the policy; and(2)That service of process, or of any notice or proof of loss required by such policy, upon any of the insurers executing the policy, shall constitute service upon all such insurers. Source: SL 1966, ch 111, ch 22, 21 (2).
58-11-28. Underwriters' and combination policies provisions do not apply to cosurety obligations.Sections 58-11-26 and 58-11-27 shall not apply to cosurety obligations. Source: SL 1966, ch 111, ch 22, 21 (3).
58-11-29. Binders or other contracts for temporary insurance--Terms--Fraudulent statement as misdemeanor.Binders or other contracts for temporary insurance may be made orally or in writing, and shall be deemed to include all the usual terms of the policy as to which the binder was given together with such applicable endorsements as are designated in the binder, except as superseded by the clear and express terms of the binder. Any insurance producer or surplus lines broker who knowingly makes any false or fraudulent material statement on a binder, certificate of insurance, or other document offered as proof of insurance is guilty of a Class 1 misdemeanor for each offense. Source: SL 1966, ch 111, ch 22, 24 (1); SL 1990, ch 394; SL 2001, ch 286, 102.
58-11-3. Statement of basis and rates for determination of premium included in policy.If under the policy, the exact amount of premium is determinable only at stated intervals or at termination of the contract, a statement of the basis and rates upon which the premium is to be determined and paid shall be included. Source: SL 1966, ch 111, ch 22, 16 (2).
58-11-30. Duration of binder.No binder shall be valid beyond the issuance of the policy with respect to which it was given, or beyond ninety days from its effective date, whichever period is the shorter. Source: SL 1966, ch 111, ch 22, 24 (2).
58-11-31. Extension or renewal of binder--Approval of director.If the policy has not been issued a binder may be extended or renewed beyond such ninety days with the written approval of the director, or in accordance with such rules and regulations relative thereto as the director may promulgate. Source: SL 1966, ch 111, ch 22, 24 (3).
58-11-32. Binder provisions do not apply to life or health insurance.Sections 58-11-29 to 58-11-31, inclusive, shall not apply to life or health insurances. Source: SL 1966, ch 111, ch 22, 24 (4).
58-11-33. Delivery of policy--Payment of premium--Insured not meeting condition required by insurer.Subject to the insurer's requirements as to payment of premium, every policy shall be mailed or delivered to the insured or to the person entitled thereto within a reasonable period of time after its issuance except where a condition required by the insurer has not been met by the insured. Source: SL 1966, ch 111, ch 22, 25 (1).
58-11-34. Insurance of motor vehicle sales contracts, copy of policy delivered to vendee, mortgagor, or pledgor, contents--Inapplicable to inland marine floater policies.In event the original policy is delivered or is so required to be delivered to or for deposit with any vendor, mortgagee, or pledgee of any motor vehicle, and in which policy any interest of the vendee, mortgagor, or pledgor in or with reference to such vehicle is insured, a duplicate of such policy setting forth the name and address of the insurer, insurance classification of vehicle, type of coverage, limits of liability, premiums for the respective coverages, and duration of the policy, or memorandum thereof containing the same such information, shall be delivered by the vendor, mortgagee, or pledgee to each such vendee, mortgagor, or pledgor named in the policy or coming within the group of persons designated in the policy to be so included. If the policy does not provide coverage of legal liability for injury to persons or damage to the property of third parties, a statement of such fact shall be printed, written, or stamped conspicuously on the face of such duplicate policy or memorandum. This section does not apply to inland marine floater policies. Source: SL 1966, ch 111, ch 22, 25 (2).
58-11-35. Renewal or extension of policy at option of insurer.Any insurance policy terminating by its terms at a specified expiration date and not otherwise renewable, may be renewed or extended at the option of the insurer and upon a currently authorized policy form and at the premium rate then required therefor, for additional periods by certificate or by endorsement of the policy, and without requiring the issuance of a new policy. Source: SL 1966, ch 111, ch 22, 26.
58-11-36. Assignment of policies.A policy may be assignable or not assignable, as provided by its terms. Subject to its terms relating to assignability, any life or health policy, whether heretofore or hereafter issued, under the terms of which the beneficiary may be changed upon the sole request of the insured or owner, may be assigned either by pledge or transfer of title, by an assignment executed by the insured or owner alone and delivered to the insurer, whether or not the pledgee or assignee is the insurer. Any such assignment shall entitle the insurer to deal with the assignee as the owner or pledgee of the policy in accordance with the terms of the assignment, until the insurer has received at its home office written notice of termination of the assignment or pledge, or written notice by or on behalf of some other person claiming some interest in the policy in conflict with the assignment. Source: SL 1966, ch 111, ch 22, 27.
58-11-37. Policy not complying with statutory form--Validity--Construction.A policy delivered or issued after June 30, 1966, for delivery to any person in this state in violation of this title, but otherwise binding on the insurer, shall be held valid, but shall be construed as provided in this title. Source: SL 1966, ch 111, ch 22, 22 (1).
58-11-38. Policy, rider, or endorsement containing condition, omission or provision not in compliance with requirements--Validity--Construction.Any insurance policy, rider, or endorsement issued after June 30, 1966, and otherwise valid which contains any condition, omission or provision not in compliance with the requirements of this title, shall not be thereby rendered invalid but shall be construed and applied in accordance with such conditions and provisions as would have applied had such policy, rider, or endorsement been in full compliance with this title. Source: SL 1966, ch 111, ch 22, 22 (2).
58-11-39. Construction of insurance contract--Terms and conditions--Modification by rider, endorsement, or application made part of policy.Every insurance contract shall be construed according to the entirety of its terms and conditions as set forth in the policy and as amplified, extended, or modified by any rider, endorsement, or application lawfully made a part of the policy. Source: SL 1966, ch 111, ch 22, 23.
58-11-4. Contents of policy--Exemption of surety contracts or group insurance policies.Sections 58-11-2 and 58-11-3 shall not apply to surety contracts or to group insurance policies. Source: SL 1966, ch 111, ch 22, 16 (3).
58-11-40. Application for life or health insurance as evidence--Annuity contract--Copy made a part of policy--Inapplicable to industrial life policy.No application for the issuance of any life or health insurance policy or annuity contract shall be admissible in evidence in any action relative to such policy or contract, unless a true copy of the application was attached to or otherwise made a part of the policy or contract when issued. This provision shall not apply to industrial life insurance policies. Source: SL 1966, ch 111, ch 22, 11 (1).
58-11-41. Application for reinstatement or renewal of life or health insurance--Copy requested by insured--Effect of noncompliance by insurer.If any policy of life or health insurance delivered in this state is reinstated or renewed, and the insured or the beneficiary or assignee of the policy makes written request to the insurer for a copy of the application, if any, for such reinstatement or renewal, the insurer shall, within thirty days after receipt of such request at its home office, deliver or mail to the person making such request a copy of such application reproduced by any legible means. If such copy is not so delivered or mailed after having been so requested, the insurer shall be precluded from introducing the application in evidence in any action or proceeding based upon or involving the policy or its reinstatement or renewal. In the case of such a request from a beneficiary, the time within which the insurer is required to furnish a copy of such application shall not begin to run until after receipt of evidence satisfactory to the insurer of the beneficiary's vested interest in the policy or contract. Source: SL 1966, ch 111, ch 22, 11 (2).
58-11-42. Alteration of application for life or health insurance--Written consent of applicant--Insertions by insurer.No alteration of an application for any life or health insurance policy shall be made by any person other than the applicant without the applicant's written consent. However, insertions may be made by the insurer, for administrative purposes only, in such manner as to indicate that such insertions are not to be ascribed to the applicant. Any change to an application for administrative purposes is an addition to an application made in conjunction with the processing of the application and does not include the altering of coverage amounts, types, options selected by the applicant, or the altering of any other information provided by the applicant. Source: SL 1966, ch 111, ch 22, 10; SL 2012, ch 243, 1.
58-11-43. Application for insurance other than life or health--Use as evidence--Failure to furnish copy to insured.As to kinds of insurance other than life or health insurance, no application for insurance signed by or on behalf of the insured shall be admissible in evidence in any action between the insured and the insurer arising out of the policy so applied for, if the insurer has failed, at expiration of thirty days after receipt by the insurer of written demand therefor by or on behalf of the insured, to furnish to the insured a copy of such application reproduced by any legible means. Source: SL 1966, ch 111, ch 22, 11 (3).
58-11-44.1. Unanswered questions no basis for denial of recovery unless insurer demanded answers.Questions on an application for a life or health insurance policy or annuity contract which are not answered shall not serve as a basis for denying recovery pursuant to subdivisions 58-11-44(1) to (3), inclusive, unless the insurer challenges the same and demands an answer within ninety days from receipt of the application. Source: SL 1974, ch 310.
58-11-44.2. Requests for information and actions based on applicant's failure to meet insurer's underwriting requirements permissible.Nothing in 58-11-44 prohibits an insurer or an insurer's representative from:(1)Requesting information from an applicant for the purpose of determining that applicant's insurability; or(2)Underwriting an application or declining coverage based upon that applicant's failure to meet the insurer's underwriting requirements. Source: SL 2011, ch 214, 2.
58-11-44. Application for insurance or annuity--Statements by insured deemed representations--Omissions, concealment, and incorrect statements preventing recovery.All statements and descriptions in any application for an insurance policy, certificate, or annuity contract, by or on behalf of the insured or annuitant, shall be deemed to be representations and not warranties. No misrepresentation, omission, concealment of fact, or incorrect statement prevents a recovery under the policy or contract unless:(1)Fraudulent or an intentional misrepresentation of a material fact; or(2)Material either to the acceptance of the risk, or to the hazard assumed by the insurer; or(3)The insurer in good faith would either not have issued the policy or contract, or would not have issued it at the same premium rate, or would not have issued a policy or contract in as large an amount, or would not have provided coverage with respect to the hazard resulting in the loss, if the true facts had been made known to the insurer as required either by the application for the policy or contract or otherwise.With respect to any health insurance policy or certificate, subdivisions (2) and (3) of this section only apply to excepted benefits.No applicant, insured, or annuitant may be asked to warranty or certify whether or not the applicant, insured, or annuitant is insurable. Source: SL 1966, ch 111, ch 22, 12; SL 2011, ch 214, 1.
58-11-45.1. Reporting agencies and persons listed with director.The director of the Division of Insurance may require companies issuing policies to which 58-11-45 to 58-11-54, inclusive, are applicable to file with him the names and addresses of reporting agencies or persons of the nature described in 58-11-45.3 and the geographical areas for which these reporting agencies or persons provide such service. Source: SL 1970, ch 270, 1.
58-11-45.2. Applicant for liability insurance not to be prejudiced by false reports.No applicant for insurance seeking a policy for coverage of a motor vehicle as that term is defined in subdivision 58-11-45(5) shall be disadvantaged in his attempt to secure proof of financial responsibility required by chapter 32-35 by reason of any false, mistaken, or malicious report given to an insurer and by it considered in connection with his application. Source: SL 1970, ch 270, 1.
58-11-45.3. Informant to be identified if insurance refused--Violation as misdemeanor.If an applicant for such insurance has made a full disclosure to the insurance producer of the insurer in response to the insurance producer's inquiry and the application is tendered with premium, the insurer, if it fails or refuses to issue the policy based upon information other than the insurance producer's recommendation, shall notify the insurance producer and the applicant of the name and location of the person or agency upon which such insurer relied as a basis for its failure or refusal to insure. Any violation of this section is a Class 2 misdemeanor. Source: SL 1970, ch 270, 1; SL 1978, ch 359, 2; SL 2001, ch 286, 104.
58-11-45. Cancellation and nonrenewal of automobile policy or coverage--Definition of terms.Terms used in 58-11-46 to 58-11-54, inclusive, mean:(1)"Automobile collision coverage," includes all coverage of loss or damage to an automobile insured under the policy resulting from collision or upset;(2)"Automobile liability coverage," includes only coverage of bodily injury and property damage liability, medical payments, and uninsured motorists' coverage;(3)"Automobile physical damage coverage," includes all coverage of loss or damage to an automobile insured under the policy except loss or damage resulting from collision or upset;(4)"Nonpayment of premium," failure of the named insured to discharge when due any of the insured's obligations in connection with the payment of premiums on a policy, or any installment of the premium, whether the premium is payable directly to the insurer or its insurance producer or indirectly under any premium finance plan or extension of credit;(5)"Policy," an automobile liability, automobile physical damage, or automobile collision policy, or any combination thereof, delivered or issued for delivery in this state, insuring a single individual or husband and wife resident of the same household, as named insured, and under which the insured vehicles therein designated are of the following types only:(a)A motor vehicle of the private passenger or station wagon type that is not used as a public or livery conveyance for passengers, nor rented to others; or(b)Any other four-wheel motor vehicle with a load capacity of fifteen hundred pounds or less which is not used in the occupation, profession, or business of the insured;However, 58-11-46 to 58-11-54, inclusive, do not apply (i) to any policy issued under an automobile assigned risk plan, or (ii) to any policy insuring more than four automobiles, or (iii) to any policy covering garage, automobile sales agency, repair shop, service station, or public parking place operation hazards;(6)"Renewal" or "to renew," the issuance and delivery by an insurer of a policy replacing at the end of the policy period a policy previously issued and delivered by the same insurer, or the issuance and delivery of a certificate or notice extending the term of a policy beyond its policy period or term. However, any policy with a policy period or term of less than six months shall for the purpose of 58-11-46 to 58-11-54, inclusive, be considered as if written for a policy period or term of six months. Moreover, any policy written for a term longer than one year or any policy with no fixed expiration date, shall for the purpose of 58-11-46 to 58-11-54, inclusive, be considered as if written for successive policy periods or terms of one year, and such policy may be terminated at the expiration of any annual period upon giving sixty days' notice of cancellation prior to such anniversary date, and the cancellation is not subject to any other provisions of 58-11-46 to 58-11-54, inclusive. Source: SL 1968, ch 138, 1; SL 1974, ch 311, 1; SL 2001, ch 286, 103.
58-11-46. Notice of cancellation of automobile policy--Reasons for cancellation.A notice of cancellation of a policy shall be effective only if it is based on one or more of the following reasons:(1)Nonpayment of premium;(2)The driver's license or motor vehicle registration of the named insured or of any other operator who either resides in the same household or customarily operates an automobile insured under the policy has been under suspension or revocation during the policy period or, if the policy is a renewal, during its policy period or the one hundred eighty days immediately preceding its effective date; or(3)For any person who is insured based upon participation in the 24/7 sobriety program and who is no longer a participant in the 24/7 sobriety program due to noncompliance with the 24/7 sobriety program.This section shall not apply to nonrenewal. Source: SL 1968, ch 138, 2 (A), (D); SL 2009, ch 260, 1.
58-11-47. Reasons for cancellation not applicable to automobile policy in effect less than sixty days--Application of notice provisions to policies.The provisions of 58-11-46 do not apply to any policy or coverage that has been in effect less than sixty days at the time notice of cancellation is mailed or delivered by the insurer unless it is a renewal policy. The notice provisions of 58-11-49 apply to any policy for which notice to cancel is given prior to sixty days from the policy effective date. A policy that has been in effect for less than sixty days may be cancelled for any reason if the notice is given prior to the expiration of sixty days from the policy effective date. Source: SL 1968, ch 138, 2 (B); SL 2004, ch 298, 1.
58-11-48. Modification of automobile physical damage coverage not deemed cancellation.Modification of automobile physical damage coverage by the inclusion of a deductible not exceeding one hundred dollars shall not be deemed a cancellation of the coverage or of the policy. Source: SL 1968, ch 138, 2 (C).
58-11-49. Time for mailing or delivery of notice of cancellation of automobile policy--Provision for statement of reason for cancellation.No notice of cancellation of an insurance policy specified in 58-11-46 is effective unless mailed or delivered by the insurer to the named insured at least twenty days before the effective cancellation date. However, if cancellation is for nonpayment of premium the insurer shall mail or deliver notice of cancellation with the reason for cancelling at least twenty days before the effective cancellation date. Unless the reason for cancelling accompanies or is stated in the notice of cancellation, the notice of cancellation shall state or be accompanied by a statement that the insured may receive the reason for cancellation if he mails or delivers a written request to the insurer.This section does not apply to nonrenewal. Source: SL 1968, ch 138, 3; SL 1983, ch 372, 2.
58-11-5. Standard or uniform provisions of insurance contracts--Waiver of required use by director.Insurance contracts shall contain such standard or uniform provisions as are required by the applicable provisions of this title pertaining to contracts of particular kinds of insurance. The director may waive the required use of a particular provision in a particular insurance policy form if he finds such provision unnecessary for the protection of the insured and inconsistent with the purposes of the policy. Source: SL 1966, ch 111, ch 22, 15 (1).
58-11-50. Request of insured for reason for cancellation.Where the reason for cancellation does not accompany or is not included in the notice of cancellation, the insurer shall upon written request of the named insured, mailed or delivered to the insurer not less than fifteen days prior to the effective date of cancellation, specify in writing the reason for such cancellation. Such reason shall be mailed or delivered to the named insured within five days after receipt of such request. Source: SL 1968, ch 138, 7.
58-11-51. Notice of nonrenewal of automobile policy--Time for notice--Exceptions to requirement for notice--Renewal not waiver of grounds for cancellation.No insurer may fail to renew a policy unless the insurer mails or delivers to the named insured, at the address shown in the policy, at least sixty days' advance notice of the intention not to renew. This section does not apply:(1)If the insurer has manifested its willingness to renew;(2)If the policyholder is transferred to an insurer that is a member of the same insurance group as the previous insurer and notice of such transfer is given in the form adopted by rule by the Division of Insurance pursuant to chapter 1-26; nor(3)In case of nonpayment of premium. However, notwithstanding the failure of an insurer to comply with this section, the policy shall terminate on the effective date of any other insurance policy with respect to any automobile designated in both policies.Renewal of a policy does not constitute a waiver or estoppel with respect to grounds for cancellation which existed before the effective date of such renewal. Source: SL 1968, ch 138, 4; SL 1974, ch 311, 2; SL 2000, ch 238, 1.
58-11-52. Proof of notice of cancellation or nonrenewal of automobile policy or coverage.Proof of mailing of notice of cancellation, or of intention not to renew or of reasons for cancellation, to the named insured at the address shown in the policy, shall be sufficient proof of notice. Source: SL 1968, ch 138, 5.
58-11-53. Notice of eligibility for assigned risk plan on cancellation or nonrenewal of automobile liability insurance.When a policy of automobile liability insurance is canceled, other than for nonpayment of premium, or in the event of failure to renew a policy of automobile liability insurance to which 58-11-51 applies, the insurer shall notify the named insured of his possible eligibility for automobile liability insurance through the automobile liability assigned risk plan. Such notice shall accompany or be included in the notice of cancellation or the notice of intent not to renew. Source: SL 1968, ch 138, 6.
58-11-54. Director or insurer not liable for statements as to reasons for cancellation or refusal of automobile coverage.No liability on the part of and no cause of action of any nature may arise against the director of the Division of Insurance or against any insurer, its authorized representative, its insurance producers, its employees, or any firm, person, or corporation furnishing to the insurer information as to reasons for cancellation, for any statement made by any of them in any written notice of cancellation, notice of nonrenewal, or statement in their notice of refusal to insure, or in any other communication, oral or written specifying the reasons for cancellation, nonrenewal, or refusal to insure, or the providing of information pertaining thereto, or for statements made or evidence submitted at any hearings conducted in connection therewith. Source: SL 1968, ch 138, 8; SL 1970, ch 270, 2; SL 2001, ch 286, 105.
58-11-55.1. Use of age or occupation in determining issuance or renewal of policies.An insurer may use age in determining whether to issue or renew life, health, or annuity policies. An insurer may use occupation in determining whether to issue or renew a life or disability policy. Source: SL 1997, ch 287, 2.
58-11-55.2. Applicability of 58-11-55.Except as provided by 58-15-45 and 58-11-55.1, 58-11-55 applies to all types of insurance issued by all insurers under Title 58. However, nothing in 58-11-55 may be construed as applying to or affecting the right of any fraternal benefit society subject to chapter 58-37A to determine its eligibility requirements for membership or be construed as applying to or affecting the offering of benefits exclusively to members or persons eligible for membership in the society by a subsidiary corporation or an affiliated organization of the society. Source: SL 1997, ch 287, 3.
58-11-55.3. Promulgation of rules to prevent unfair discrimination.The director may promulgate rules for the purpose of preventing unfair discrimination pursuant to 58-11-55. The rules may include definition of terms, identification of general practices or nonrenewal guidelines used by insurers which would violate or be in compliance with 58-11-55, and application practices which violate 58-11-55. In considering the adoption of any rule pursuant to this section, the director shall consider how the rule may serve to implement the purpose of preventing unfair discrimination as prohibited by 58-11-55 and how the rule may impact the availability and price of insurance in this state. Source: SL 1997, ch 287, 4.
58-11-55. Discrimination in issuance or renewal of automobile insurance policy as misdemeanor--Exceptions.Except as provided in 58-11-55.1 and 58-11-55.2, no insurer may refuse to issue or to renew a policy or certificate solely because of the age, residence, race, color, creed, national origin, ancestry, occupation, or marital status of the applicant or the insured. Violation of this section is a Class 2 misdemeanor. Nothing in this section requires an insurer to issue or renew a policy or certificate to a person who is not a resident of this state. Source: SL 1968, ch 138, 9 as added by SL 1969, ch 139; SL 1978, ch 359, 2; SL 1997, ch 287, 1; SL 2002, ch 235, 2.
58-11-57. Assigned risk plan for automobile liability insurance.After consultation with insurance companies authorized to issue automobile liability policies in this state, the director of the Division of Insurance shall approve reasonable plans for the equitable apportionment of motor vehicle liability policies of applicants who are in good faith entitled to but are unable to procure policies through ordinary methods. All such insurance companies shall subscribe to and participate in the approved plan. An applicant for a policy, a person insured under the plan, or any insurance company affected, may appeal to the director from any ruling or decision of the manager or committee designated to operate the plan. Any person aggrieved by an order or act of the director may appeal pursuant to chapter 1-26. Source: SL 1980, ch 350.
58-11-6. Policy not to contain provisions inconsistent with standard or uniform provisions--Substitute provision, approval by director.No policy shall contain any provision inconsistent with or contradictory to any standard or uniform provision used or required to be used, but the director may approve any substitute provision which is, in his opinion, not less favorable in any particular to the insured or beneficiary than the provisions otherwise required. Source: SL 1966, ch 111, ch 22, 15 (2).
58-11-62. Notice of intent to cease marketing block of business--What constitutes cessation of marketing block of business.No insurer may cease marketing a block of business in this state unless, at least ninety days prior to the cessation of marketing, the insurer submits to the director written notice of the intent to cease marketing, including a statement of the facts and causes for cessation. Cessation of marketing a block of business includes discontinuing selling insurance as defined in chapter 58-9 as follows:(1)All lines or any one line;(2)All policies under one policy form;(3)All individual or group policies; or(4)All commercial or personal policies.The director may, upon request, waive any portion of the ninety-day notice period required by this section if the director determines that the insurer could not have reasonably complied with the notice requirement. Source: SL 1991, ch 399.
58-11-63. Regulation of form and content of policies, policy forms, standards, and procedures for filings, cancellation, and nonrenewal of policies.The division may promulgate rules pursuant to chapter 1-26 to establish specific requirements for the regulation of the form and content of policies and policy forms, standards, and procedures for filings, and the cancellation and nonrenewal of policies as found in this chapter. The requirements may include:(1)Definition of terms used in the rules;(2)Standards for the issuance of waivers;(3)Standards for determining what are substantially similar provisions as provided by 58-11-7;(4)Filing, content, requirements, and procedures for policy forms;(5)Standards for orders for exemption;(6)Binder requirements;(7)Procedures and requirements for cancellation and nonrenewal of policies;(8)Operation requirements of the assigned risk plan including approval of plan rules;(9)Replacement of coverage and calculation of refunds; and(10)Procedures for collection of applicable fees by the director. Source: SL 1994, ch 377.
58-11-64. Definition of terms.Terms used in 58-11-64 to 58-11-76, inclusive, mean:(1)"Accident and health carrier," an entity licensed to offer accident and health insurance in this state, or subject to the insurance laws of this state, or subject to the jurisdiction of the director, that contracts or offers to contract to provide, deliver, arrange for, pay for, or reimburse any of the costs of health care services, or any insurer that provides policies of supplemental, disability income, medicare supplement, or long-term care insurance;(2)"Director," the director of the Division of Insurance;(3)"Health care services," services for the diagnosis, prevention, treatment, cure, or relief of a health condition, illness, injury, or disease;(4)"Policy form," any policy, contract, certificate, rider, endorsement, evidence of coverage, or any amendments thereto that are required by law to be filed with the director for approval prior to their sale or issuance for sale in this state;(5)"Supplemental documents," documents required to be filed in support of policy forms that may or may not be subject to approval;(6)"Type of insurance," those coverages listed on the NAIC Uniform Life, Accident and Health, Annuity, and Credit Product Coding Matrix under the headings Continuing Care Retirement Communities, Health, Long Term Care, and Medicare Supplement. Source: SL 2008, ch 261, 1.
58-11-65. Carriers subject to filing requirements.Sections 58-11-64 to 58-11-76, inclusive, apply to any individual or group health policy form issued by a carrier as defined in subdivision 58-18B-1(3) required to be filed with the director for review or approval. Source: SL 2008, ch 261, 2.
58-11-66. Filing and director approval required.No policy form subject to the provisions of 58-11-64 to 58-11-76, inclusive, may be delivered or issued for delivery in this state, unless it has been filed with and approved by the director. Source: SL 2008, ch 261, 3.
58-11-67. Filing requirements--Availability on internet.The director shall create a document containing filing requirements for each type of insurance. The document shall contain a list of all product filing requirements contained in the statutes and rules and published bulletins in this state with appropriate citations to each, including the citation for the type of insurance that is required to be filed. The document shall be available on the internet site of the Division of Insurance.The director shall update the document no less frequently than annually, and within thirty days of any change in any law, rule, or bulletin requiring its amendment. Source: SL 2008, ch 261, 4.
58-11-68. Filer to indicate location of each requirement on policy form filing.A filer shall submit a copy of the document with a policy form filing, indicating the location within the policy form or supplemental documents for each requirement contained in the document, and certifying that the policy form meets all requirements of state law. Source: SL 2008, ch 261, 5.
58-11-69. Approval or disapproval of filing--Review period.The director shall review and approve, provide notice of deficiencies, or disapprove the initial filing within sixty days of receipt. At the end of the review period, the form is deemed approved if the director has taken no action. Any notice of deficiencies or disapproval shall be in writing and based only on the specific provisions of applicable statutes including 58-11-21, rules, or bulletins published by the director and contained in the document created by the director pursuant to 58-11-67. The notice of deficiencies or disapproval shall provide the reasons for the notice of deficiencies or disapproval and sufficient detail for the filer to bring the policy form into compliance, and shall cite any specific statute, rule, or bulletin upon which the notice of deficiencies or disapproval is based. Source: SL 2008, ch 261, 6.
58-11-7. Substitute provisions required by law of domicile of foreign or alien insurer, approval by director.In lieu of the provisions required by this title for contracts for particular kinds of insurance, substantially similar provisions required by the law of the domicile of a foreign or alien insurer may be used when approved by the director. Source: SL 1966, ch 111, ch 22, 15 (3).
58-11-70. Correction of deficiencies.A filer may resubmit a policy form that corrects any deficiencies or resubmit a disapproved policy form, and a revised certification, within thirty days of its receipt of the director's notice of deficiencies or disapproval. Any policy form not resubmitted within thirty days of the notice of deficiencies is deemed withdrawn. Any disapproved policy form not resubmitted within thirty days is disapproved. Source: SL 2008, ch 261, 7.
58-11-71. Review of resubmitted filing--Review period.The director shall review the resubmitted filing and certification, and shall approve or disapprove it within thirty days. Notice of deficiencies or disapproval shall be in writing and shall provide a detailed description of the reasons for the disapproval and sufficient detail for the filer to bring the policy form into compliance and shall cite any specific statute, rule, or bulletin upon which the disapproval is based. No further extensions of time may be taken unless the filer has introduced new provisions in the resubmission or the filer has materially modified any substantive provisions of the policy form, in which case the director may extend the time for review by an additional thirty days. At the end of the review period, the policy form is deemed approved if the director has taken no action. Source: SL 2008, ch 261, 8.
58-11-72. Resubmitted form not to be disapproved for reasons other than in initial disapproval--Exceptions.Except as provided in this section, the director may not disapprove a resubmitted policy form for reasons other than those initially set forth in the original notice of deficiencies or disapproval. The director may disapprove a resubmitted policy form for reasons other than those initially set forth in the original notice of deficiencies or disapproval if:(1)The filer has introduced new provisions in the resubmission;(2)The filer has materially modified any substantive provisions of the policy form;(3)There has been a change in any statute, rule, or published bulletin; or(4)There has been reviewer error and the written disapproval fails to state a specific provision of applicable statute, rule, or bulletin that is necessary to have the policy form conform to the requirements of law. Source: SL 2008, ch 261, 9.
58-11-73. Grossly inadequate filings.The director may return a grossly inadequate filing to the filer without triggering any of the time deadlines set forth in 58-11-64 to 58-11-76, inclusive. For purposes of this section, a grossly inadequate filing means a filing that fails to provide key information, including state-specific information, regarding a product, policy, or rate, or that demonstrates an insufficient understanding of what is required to comply with state statutes or rules. Source: SL 2008, ch 261, 10.
58-11-74. Limitations on director's authority.Except in cases of a material error or omission in a policy form that has been approved or deemed approved pursuant to the provisions of 58-11-64 to 58-11-76, inclusive, the director may not:(1)Retroactively disapprove a filing; or(2)With respect to those policy forms, examine the filer during a routine or targeted market conduct examination for compliance with any later-enacted policy form filing requirements. However, the policy forms may be examined for compliance with any later-enacted requirement to the extent that the later-enacted requirement applies to new issues of the policy form or to renewals of policies issued under the policy form. Source: SL 2008, ch 261, 11.
58-11-75. Application to existing approved policy forms.The provisions of 58-11-64 to 58-11-76, inclusive, do not apply to existing approved or deemed-approved policy forms except upon policy renewal or anniversary date. Source: SL 2008, ch 261, 12.
58-11-76. Construction with other time periods.If a rate filing or marketing material is required to be filed or approved for a specific policy form, the time frames for review, approval or disapproval, resubmission, and re-review of those rates or materials shall be the same as those provided in 58-11-64 to 58-11-76, inclusive, for the review of policy forms. Source: SL 2008, ch 261, 13.
58-11-77. Appeal of disapproval of rate or policy form filing.Any insurer may make a written request to the director to appeal a disapproval of a rate or policy form filing pursuant to this chapter, by requesting a hearing within thirty days of the date of the disapproval. A notice of hearing shall be issued within thirty days of receipt of a written request. The hearing shall be held pursuant to the provisions of chapter 1-26. Source: SL 2015, ch 248, 1.
58-11-8. Assessable policies--Special contents.Every assessable policy delivered or issued for delivery in this state by an insurer, together with any application therefor shall have conspicuously printed near the top of the face of such policy and application thereof in bold-face type of a size not less than the largest type used for any heading or caption in the policy or application, the words "Important: this is an assessable policy," or "Important: this is an application for an assessable policy." Source: SL 1966, ch 111, ch 22, 17.
58-11-9.1. Motor vehicle insured by insolvent liability insurer defined as uninsured--Rights of insurer making payment under uninsured motorist coverage.For the purpose of uninsured motorist coverage the term "uninsured motor vehicle" shall be deemed to include an insured motor vehicle where the liability insurer thereof is unable to make payment with respect to the legal liability of its insured within the limits specified therein because of insolvency. In the event of payment by an insurer to any person under the uninsured motorist coverage, the insurer making such payment shall, to the extent thereof, be entitled to the proceeds of any settlement or judgment resulting from the exercise of any rights of recovery of such person against any person or organization legally responsible for the damage for which such payment is made, including the proceeds recoverable from the assets of the insolvent insurer. Source: SL 1966, ch 111, ch 22, 16 (5) as added by SL 1968, ch 136.
58-11-9.10. Increase in automobile insurance premiums due to drug-related offenses prohibited.No automobile insurer may increase the premium rate as a result of a conviction, adjudication of delinquency or revocation under 32-12-52.3. Source: SL 1990, ch 249, 2.
58-11-9.11. Increase in automobile insurance premiums due to certain alcohol-related offenses by a minor prohibited.No automobile insurer may increase the premium rate as a result of a conviction, adjudication of delinquency or revocation under 32-12-52.4. Source: SL 1990, ch 250, 2.
58-11-9.2. Notice required when automobile policy does not include liability insurance.Any automobile policy and certificate of insurance which is issued on any automobile registered or principally garaged in this state and which does not provide bodily injury and property damage liability insurance, shall contain the following notice in ten point, or larger, bold print on the face of the policy and certificate: "This policy does not provide bodily injury and property damage liability insurance or any other coverage for which a specific premium charge is not made, and does not comply with any Financial Responsibility Law." Source: SL 1971, ch 268; SL 1990, ch 393.
58-11-9.3. Exclusion of named person or reduction of coverage in motor vehicle policy--Minimum liability coverage.An insurance policy covering a private passenger automobile or other motor vehicle registered or principally garaged in this state may by written agreement with the named insured exclude a named individual from coverage. The policy may also contain a restrictive endorsement reducing the limits of liability or collision coverage when the vehicle is operated by a named person or class of persons. However, if the policy does provide liability coverage to a person or persons named in a restrictive endorsement, the liability coverage may not be less than the minimum prescribed by chapter 32-35. Source: SL 1971, ch 269; SL 1994, ch 376.
58-11-9.4. Underinsured motorist coverage to be available with liability policies--Limitation of coverage--Exception.No motor vehicle liability policy of insurance may be issued or delivered in this state with respect to any motor vehicle registered or principally garaged in this state, except for snowmobiles, unless underinsured motorist coverage is provided therein at a face amount equal to the bodily injury limits of the policy. However, the coverage required by this section may not exceed the limits of one hundred thousand dollars because of bodily injury to or death of one person in any one accident and, subject to the limit for one person, three hundred thousand dollars because of bodily injury to or death of two or more persons in any one accident, unless additional coverage is requested by the insured. Any policy insuring government owned vehicles may not be required to provide underinsured motorist coverage. Source: SL 1975, ch 315, 1; SL 1981, ch 359, 1; SL 1986, ch 418, 1; SL 1988, ch 394, 1; SL 1989, ch 424; SL 1997, ch 286, 2.
58-11-9.5. Payment to insured for portion of judgment not collected from underinsured motorist--Coverage limits.Subject to the terms and conditions of such underinsured motorist coverage, the insurance company agrees to pay its own insured for uncompensated damages as its insured may recover on account of bodily injury or death arising out of an automobile accident because the judgment recovered against the owner of the other vehicle exceeds the policy limits thereon. Coverage shall be limited to the underinsured motorist coverage limits on the vehicle of the party recovering less the amount paid by the liability insurer of the party recovered against. Source: SL 1975, ch 315, 2; SL 1981, ch 359, 2; SL 1986, ch 418, 2; SL 1988, ch 394, 2.
58-11-9.6. Subrogation of insurer--Assignment of judgment--Liability issuer allowed to pay limits under policy.The issuer of the underinsured motorist coverage is subrogated to any amounts the insurer so pays and, upon payment, has an assignment of the judgment against the other party to the extent of the money paid. Refusal of the issuer of the underinsured motorist coverage to waive its statutory right of subrogation does not constitute bad faith. A liability insurer may pay the limits of the liability policy it issued without obtaining a complete release on behalf of its insured. Such payment does not abrogate any continuing duty to defend and does not constitute bad faith. Source: SL 1975, ch 315, 3; SL 1988, ch 395; SL 1989, ch 425.
58-11-9.7. Adding of insured's uninsured and underinsured motorist coverage limits prohibited--Exception.In no case may an insured's uninsured motorist coverage limits and underinsured motorist coverage limits be added together to determine the limit of insurance coverage available to an injured person for any one accident. However, this provision does not preclude recovery under both an insured's underinsured and uninsured coverages where two or more separate motor vehicle operators, one uninsured and the other underinsured, are determined to be liable. Source: SL 1986, ch 417, 2.
58-11-9.8. Adding of uninsured motorist coverage limits for multiple vehicles prohibited.Regardless of the number of policies involved, vehicles involved, persons covered, claims made, vehicles or premiums shown on the insured's policy, or premiums paid, in no event may the limit of liability for uninsured motorist coverage for two or more of the insured's motor vehicles be added together to determine the limit of insurance coverage available to an injured person for any one accident. Source: SL 1986, ch 417, 3.
58-11-9.9. Adding of underinsured motorist coverage limits for multiple vehicles prohibited.Regardless of the number of policies involved, vehicles involved, persons covered, claims made, vehicles or premiums shown on the insured's policy, or premiums paid, in no event may the limit of liability for underinsured motorist coverage for two or more of the insured's motor vehicles be added together to determine the limit of insurance coverage available to an injured person for any one accident. Source: SL 1986, ch 417, 4.
58-11-9. Motor vehicle insurance--Uninsured motorist and hit-and-run coverage--Amount of coverage--Uninsured motorist coverage not required for government owned vehicles.No policy insuring against loss resulting from liability imposed by law for bodily injury or death suffered by any person arising out of the ownership, maintenance, or use of a motor vehicle may be delivered or issued for delivery in this state with respect to any motor vehicle registered or principally garaged in this state, except for snowmobiles, unless coverage is provided therein or supplemental thereto in limits for bodily injury or death equal to the coverage provided by such policy for bodily injury and death, for the protection of persons insured thereunder who are legally entitled to recover damages from owners or operators of uninsured motor vehicles and hit-and-run motor vehicles because of bodily injury, sickness, or disease, including death, resulting therefrom. However, the coverage required by this section may not exceed the limits of one hundred thousand dollars because of bodily injury to or death of one person in any one accident and, subject to the limit for one person, three hundred thousand dollars because of bodily injury to or death of two or more persons in any one accident, unless additional coverage is requested by the insured. Any policy insuring government owned vehicles may not be required to provide uninsured motorist coverage. Source: SL 1966, ch 111, ch 22, 16 (5); SL 1972, ch 261; SL 1975, ch 307; SL 1981, ch 359, 3; SL 1982, ch 356; SL 1997, ch 286, 1.
58-11A-1. Definitions.Terms used in this chapter, unless the context otherwise clearly requires:(1)"Company" or "insurer," any life or health insurance company, fraternal benefit society, nonprofit health service corporation, nonprofit hospital service corporation, nonprofit medical service corporation, prepaid health plan, dental care plan, vision care plan, pharmaceutical plan, health maintenance organization, or any similar organization;(2)"Policy" or "policy form," any policy, contract, plan, or agreement of life or health insurance, including credit life insurance and credit health insurance, delivered or issued for delivery in this state by any company subject to this chapter; any certificate, contract or policy issued by a fraternal benefit society; and any certificate issued pursuant to a group insurance policy delivered or issued for delivery in this state;(3)"Text," all printed matter except the following:(a)The name and address of the insurer; the name, number, or title of the policy; the table of contents or index; captions and subcaptions; specification pages, schedules, or tables; and(b)Any policy language which is drafted to conform to the requirements of any federal law, regulation, or agency interpretation; any policy language required by any collectively bargained agreement; any medical terminology; any words which are defined in the policy; and any policy language required by law or regulation. However, the insurer may identify the language or terminology excepted by this section and may certify, in writing, that the language or terminology is entitled to be excepted by this section. Source: SL 1981, ch 360, 1.
58-11A-2. Policies subject to chapter.This chapter applies to any policy delivered or issued for delivery in this state by any company on or after the date such forms must be approved under this chapter, but nothing in this chapter applies to:(1)Any policy which is a security subject to federal jurisdiction;(2)Any group policy covering a group of one thousand or more lives at date of issue, other than a group credit life insurance policy or a group credit health insurance policy. However, this may not exempt any certificate issued pursuant to a group policy delivered or issued for delivery in this state;(3)Any group annuity contract which serves as a funding vehicle for pension, profit-sharing, or deferred compensation plans;(4)Any form used in connection with, as a conversion from, as an addition to or in exchange pursuant to a contractual provision for a policy delivered or issued for delivery on a form approved or permitted to be issued prior to the dates such forms must be approved under this chapter; or(5)The renewal of a policy delivered or issued for delivery prior to the dates such forms must be approved under this chapter. Source: SL 1981, ch 360, 2.
58-11A-3. Reading ease--Printing--Style--Index or table of contents.In addition to any other requirements of law, no policy forms, except as stated in 58-11A-4, may be delivered or issued for delivery in this state on or after the dates such forms must be approved under this chapter, unless:(1)The text achieves a minimum score of forty on the Flesch Reading Ease Test or an equivalent score on any other comparable test;(2)It is printed, except for specification pages, schedules, and tables, in not less than ten point type, one point leaded;(3)The style, arrangement, and overall appearance of the policy give no undue prominence to any portion of the text of this policy or to any endorsements or riders; and(4)It contains a table of contents or an index of the principal sections of the policy if the policy has more than three thousand words printed on three or fewer pages of text or if the policy has more than three pages, regardless of the number of words. Source: SL 1981, ch 360, 3.
58-11A-4. Alternate reading ease tests.Other reading tests may be approved by the director of the Division of Insurance for use as an alternative to the Flesch Reading Ease Tests if it is comparable in result to the Flesch Reading Ease Test. Source: SL 1981, ch 360, 4.
58-11A-5. Certificate concerning reading ease--Additional information--Evaluation of attachments to policy.Filings subject to this chapter shall be accompanied by a certificate signed by an officer of the insurer stating that it meets the minimum reading ease score on the test used or stating that the score is lower than the minimum required by 58-11A-3 but should be approved in accordance with 58-11A-7. To confirm the accuracy of any certification, the director of the Division of Insurance may require the submission of further information to verify the certification in question. At the option of the insurer, riders, endorsements, applications, and other forms made a part of the policy may be scored as separate forms or as part of the policy with which they may be used. Source: SL 1981, ch 360, 5.
58-11A-6. Variation of reading ease requirement--Grounds.The director of the Division of Insurance may authorize a lower score than the Flesch Reading Ease Score required in 58-11A-3 whenever, in his sole discretion, he finds that a lower score will provide a more accurate reflection of the readability of a policy form, is warranted by the nature of a particular policy form or type or class of policy forms or is caused by certain policy language which is drafted to conform to the requirements of any state law, regulation, or agency interpretation. Source: SL 1981, ch 360, 6.
58-11A-7. Other laws governing policy contents.A policy form meeting the requirements of 58-11A-3 shall be approved notwithstanding the provisions of any other laws which specify the content of policies if the policy form provides the policyholders and claimants protection not less favorable than they would be entitled to under such laws. Source: SL 1981, ch 360, 7.
58-11A-8. Dates after which policies must comply with this chapter--Extension.Except as provided in 58-11A-2, this chapter applies to all policy forms filed on or after July 1, 1983. No policy form may be delivered or issued for delivery in this state on or after July 1, 1986, unless approved by the director of the Division of Insurance or permitted to be issued under this chapter. Any policy form which has been approved or permitted to be issued prior to July 1, 1986, and which meets the standards set by this chapter, need not be refiled for approval but may continue to be lawfully delivered or issued for delivery in this state upon the filing with the director of a list of such forms identified by form number and accompanied by a certificate as to each such form in the manner provided in 58-11A-5. The director may, in his sole discretion, extend the dates in this section. Source: SL 1981, ch 360, 8.
58-11A-9. Law permitting issuance of policies after form on file for specified period.Nothing in this chapter may be construed to negate any law of this state permitting the issuance of any policy form after it has been on file for the time period specified. Source: SL 1981, ch 360, 9.
58-12-1. Forms for proof of loss--Furnishing by insurer on request.An insurer shall furnish, upon written request of any person claiming to have a loss under an insurance contract issued by such insurer, forms of proof of loss for completion by such person, but such insurer shall not, by reason of the requirement so to furnish forms, have any responsibility for or with reference to the completion of such proof or the manner of any such completion or attempted completion. Source: SL 1966, ch 111, ch 22, 29.
58-12-10. Benefits, rights, privileges, or options nontransferable under annuity contract--Not subject to commutation--Exemption from execution.If an annuity contract so provides, the benefits, rights, privileges, or options accruing under such contract to a beneficiary or assignee shall not be transferable nor subject to commutation, and if the benefits are payable periodically or at stated times, the same exemptions and exceptions contained in 58-12-6 to 58-12-9, inclusive, for the annuitant, shall apply with respect to such beneficiary or assignee. Source: SL 1966, ch 111, ch 22, 32 (2).
58-12-11. Payments under life or health insurance policy or annuity contract discharge insurer.Whenever the proceeds of or payments under a life or health insurance policy or annuity contract heretofore or hereafter issued become payable in accordance with the terms of such policy or contract, or the exercise of any right or privilege thereunder, payment thereof by the insurer in accordance therewith or in accordance with any written assignment thereof shall fully discharge the insurer from all claims under the policy or contract unless, before payment is made, the insurer has received at its home office written notice by or on behalf of some other person that such other person claims to be entitled to such payment or some interest in the policy or contract. Source: SL 1966, ch 111, ch 22, 28.
58-12-12. Use of uniform health insurance claim forms.The director shall prescribe the use of nationally recognized uniform health insurance claim forms for hospitals and other medical or dental providers and for governmental agencies which shall be used and accepted by all insurers transacting health insurance, providing medical coverage through a personal automobile policy, workers' compensation, or otherwise providing coverage for medical services and by all hospitals and medical providers, and by governmental agencies of the state that require insurance claim forms for their records. The director shall also prescribe the use of nationally recognized uniform explanation of benefit forms by insurers. Source: SL 1994, ch 381, 5.
58-12-13. Use of claim forms required by federal law excepted.An insurer, governmental agency, hospital, or other medical or dental provider does not violate 58-12-12 by using a claim form or explanation of benefit form which the insurer, governmental agency, hospital, or other medical or dental provider has been required to use by federal law. Source: SL 1994, ch 381, 6.
58-12-14. Promulgation of rules for uniform health insurance claim forms.The director of insurance may, pursuant to chapter 1-26, promulgate rules for the creation, design, implementation, and use of uniform health insurance claim forms and explanation of benefit forms. Source: SL 1994, ch 381, 7.
58-12-15. Paintless dent repair defined.For the purposes of 58-12-15 to 58-12-18, inclusive, paintless dent repair is any auto body repair that removes minor dents by using specifically designed tools to manipulate and flex the metal from the backside of the dent without the necessity of sanding, priming, or painting. Source: SL 2000, ch 239, 1.
58-12-16. Motor vehicle insurer must provide sufficient compensation to restore vehicle to prior condition--Adjustment for paintless dent repair permitted--Conditions.Any insurer providing commercial or personal motor vehicle insurance in this state responsible for repairing a damaged vehicle for which it is liable shall provide sufficient compensation to the insured to restore the vehicle to substantially the same physical condition as prior to the damage, regardless of whether the insured actually chooses to repair the vehicle. The insurer may adjust claims based in whole or in part upon the paintless dent repair method if:(1)The damage is such that the paintless dent repair method is likely to place the damaged area or a portion thereof in substantially the same condition as prior to the damage;(2)A paintless dent repair shop holding a South Dakota sales tax license is willing to perform the work as estimated within a reasonable time frame in the local market area of the insured; and(3)The written estimate provided to the insured prominently discloses the following:(a)That the repair estimate is based in whole or in part upon the paintless dent repair method. Each item of damage adjusted using that method shall be identified;(b)That paintless dent repair may not be the appropriate repair method for all types of damage;(c)That, if the insurer is liable for the damage listed on the estimate, the insurer shall provide sufficient compensation to restore the vehicle to substantially the same physical condition; and(d)That for any damage which paintless dent repair is appropriate, the insured may choose not to repair the vehicle or to have the vehicle repaired using a different method of repair. If the insured chooses either of these options, the insurer is liable only for the cost of the paintless dent repair method.However, if the insurer pays the claim based upon the paintless dent repair method and paintless dent repair was attempted but was unsuccessful, the insurer is liable for any repairs necessary to the area repaired by paintless dent repair, using the conventional method of repair, to restore the vehicle to substantially the same physical condition as prior to the damage. Source: SL 2000, ch 239, 2.
58-12-17. Compensation when paintless dent repair method inappropriate--Requiring unreasonable travel prohibited--Repair shop as payee only if insured agrees.If, for any portion of the vehicle's damage that the insurer has a duty to repair, the paintless dent repair method is inappropriate, the insurer shall compensate the insured for the amount necessary to complete the repairs in the local market area of the insured. The insurer may not require the insured to travel an unreasonable distance to obtain a repair estimate or to have the vehicle repaired. The insurer may not name a repair shop as payee on a compensation check or draft unless agreed to by the insured. Source: SL 2000, ch 239, 3.
58-12-18. Compliance with 58-12-16.An insurer may comply with 58-12-16 by entering into an agreement with a repairer that guarantees repairs and by notifying the insured of such an agreement. Source: SL 2000, ch 239, 4.
58-12-19. Clean claim defined.As used in 58-12-19 to 58-12-21, inclusive, the term, clean claim, means a claim for which there is no need for additional information to determine eligibility or adjudicate the claim. The term, clean claim, does not include a claim for payment of expenses incurred during a period of time for which premiums are delinquent, except to the extent otherwise required by law or a claim for which fraud is suspected. Source: SL 2001, ch 273, 1.
58-12-2. Acts of insurer not constituting waiver of policy provision or defense.Without limitation of any right or defense of an insurer, none of the following acts by an insurer shall be deemed to constitute a waiver of any provision of a policy or of any defense of the insurer thereunder:(1)Acknowledgment of the receipt of notice of loss or claim under the policy;(2)Furnishing forms for reporting a loss or claim, for giving information relative thereto, or for making proof of loss or receiving or acknowledging receipt of any such forms or proof completed or uncompleted;(3)Investigating any loss or claim under any policy. Source: SL 1966, ch 111, ch 22, 30.
58-12-20. Time limits for processing clean claims--Time limit for additional information required.Each clean claim shall be paid to the person entitled thereto, denied, or settled within thirty calendar days after receipt by the carrier if submitted electronically and within forty-five calendar days after receipt by the carrier and if the claim is payable under the plan. If the resolution of an otherwise clean claim requires additional information, the carrier shall, within thirty calendar days after receipt of the claim, give the provider, policyholder, insured, or patient, as appropriate, a full explanation of what additional information is needed in order to determine eligibility or adjudicate the claim. The person receiving a request for additional information shall submit all additional information requested by the carrier within thirty calendar days after receipt of such request. Source: SL 2001, ch 273, 2.
58-12-21. Applicability of 58-12-19 to 58-12-21--Certain policies exempt--No private right of action.Sections 58-12-19 to 58-12-21, inclusive, apply to any health insurer or health maintenance organization that issues health insurance coverage pursuant to chapters 58-17, 58-18, 58-18B, 58-37A, 58-38, 58-39, 58-40, and 58-41. Nothing in 58-12-19 to 58-12-21, inclusive, apply to disability income policies or certificates, accident only, credit health, workers' compensation, long-term care, medicare supplement, automobile medical payment, or other types of health insurance that are not medical expense policies or certificates. Nothing in 58-12-19 to 58-12-21, inclusive, grants a private right of action. Source: SL 2001, ch 273, 3.
58-12-22. Information from insurer's database to Department of Social Services--Data match against recipients--Disclosure--Liability. Within sixty days of a request from the department, the department and an insurer shall negotiate an acceptable format for the transmission of information from the insurer's database of policy holders, sponsors, subscribers, covered individuals in South Dakota, and coverage dates. The format must include the data elements, medium, frequency of reporting, any costs of the insurer to be reimbursed, and procedures that will be followed when a data match is found. The Department of Social Services shall match the name, address, date of birth, and social security number if available, of the insured's policyholders, sponsors, subscribers, and covered individuals against the medicaid eligible recipients and recipients of support enforcement services as defined in subdivision 25-7A-1(19).Upon discovery of a match, the department may incorporate the following information into its recipient database:(1)The name, address, date of birth, social security number if available, and the unique health care identification number of the covered individual;(2)The name, address, date of birth, social security number if available, policy number, and group identification number of the policyholder, sponsor, or subscriber;(3)The name and address of the employer if it is an employer-employee benefit plan;(4)Types of covered services under the plan or policy;(5)Coverage effective date and termination of coverage date for each covered individual; and(6)The name and address of the claim administrator for the policy or plan.The department may not use or disclose any information provided by the insurer other than as permitted or required by law. The insurer may not be held liable for the release of insurance coverage information to the department or the director by any party when done so under the authority of 58-12-22 to 58-12-28, inclusive. Source: SL 2005, ch 263, 1; SL 2021, ch 210,  5.
58-12-23. Application for or acceptance of medical assistance paid by department operates as release of information to facilitate coordination of benefits--Request.Notwithstanding any provision of a policy, plan, contract, or certificate, an insurer shall recognize that an application for medical assistance or acceptance of medical assistance, paid by the Department of Social Services operates as a release of any information kept by the insurer that would facilitate efficient coordination of benefits between the department and the insurer, which may include:(1)The name, address, date of birth, social security number if available, and unique health care identification number of the covered individual;(2)The name, address, date of birth, social security number if available, policy number, group identification number of the policyholder, sponsor, or subscriber;(3)The name and address of the employer if it is an employer-employee benefit plan; types of services covered under the plan or policy; and the name and address of the claims administrator for the policy or plan;(4)Previously paid benefits including the name and address of the payee; and(5)The name and address of claims processing or administration centers, or both.Upon written request by the department, the insurer shall provide the requested information in writing within thirty calendar days of receipt of the request. Source: SL 2005, ch 263, 2; SL 2007, ch 286, 1.
58-12-24. Refusal of reimbursement due to manner, form, or date of claim prohibited--Time for submission of claim.Notwithstanding any provision of a policy, plan, contract, or certificate, no insurer may refuse to reimburse the Department of Social Services for medical assistance paid by the department on the basis of the date of submission of the claim, the type or format of the claim form, or a failure to present proper documentation at the point-of-sale for which reimbursement is sought, if the claim is submitted within three years from the date the item or service was furnished and any action by the department to enforce its rights with respect to such claim is commenced within six years of the department's submission of such claim. Source: SL 2005, ch 263, 3; SL 2007, ch 286, 2.
58-12-25. Reimbursement to department for cost of services.If the Department of Social Services notifies an insurer that the department has paid for services on behalf of an individual who is covered under an individual, group, or blanket health insurance policy or contract that the insurer issued, delivered, entered into, or renewed in the state, to the extent that the insurer is legally liable, it shall reimburse the department for the cost of the services, regardless of any provision in the health insurance policy or contract that requires payment to the policy holder, subscriber, or another payee. If the insurer, after notice from the department, issues payment to any payee other than the department, the insurer remains liable to the department for the amount of benefits paid to the other party. Source: SL 2005, ch 263, 4. 
58-12-26. Insurer defined. For the purposes of 58-12-22 to 58-12-28, inclusive, the term, insurer, means:(1)Any commercial insurance company, employer-employee benefit plan, health maintenance organization, professional association, service benefit plan, public self-funded employer or pool, union, or fraternal group selling or otherwise offering individual or group health insurance coverage including self-insured and self-funded plans;(2)Any profit or nonprofit prepaid plan offering either medical services of full or partial payment for services included in the department's medicaid plan;(3)Any other entity offering health benefits for which a medicaid recipient may be eligible in addition to public medical assistance;(4)Any managed care organization, third-party administrator, pharmacy benefits manager, or other entity which processes claims, administers services, or otherwise manages health benefits on behalf of any of the aforementioned insurers; or(5)Any other party that is by statute, contract, or agreement, legally responsible for payment of a claim for a health care item or service including workers' compensation, automobile insurance, and liability insurance plans. Source: SL 2005, ch 263, 5; SL 2007, ch 286, 3; SL 2021, ch 210,  6.
58-12-27. Department defined. For the purposes of 58-12-22 to 58-12-28, inclusive, the term, department, means the Department of Social Services, or an entity under contract with the Department of Social Services to carry out the functions of 58-12-22 to 58-12-28, inclusive. Source: SL 2005, ch 263, 6; SL 2021, ch 210,  7.
58-12-28. Provisions of chapter 1-27 not applicable to insurer records.The provisions of chapter 1-27 do not apply to any records the insurer is required to provide to the department. Source: SL 2005, ch 263, 7. 
58-12-3.1. Separate hearing on attorney fees--Adding to judgment--Time allowed to request hearing.The determination of entitlement to an allowance of attorney fees as costs and the amount thereof under 58-12-3 shall be made by the court or the Department of Labor and Regulation at a separate hearing of record subsequent to the entry of a judgment or award in favor of the person making claim against the insurance company, and, if an allowance is made, the amount thereof shall be inserted in or added to the judgment or award. Such a hearing shall be afforded upon the request of the claimant made within ten days after entry of the judgment or award. Source: SL 1973, ch 298; SL 2011, ch 1 (Ex. Ord. 11-1), 33, eff. Apr. 12, 2011.
58-12-3. Attorney fees--Recovery in action against self-insured employer or insurer failing to pay loss--Other remedies not barred.In all actions or proceedings hereafter commenced against any employer who is self-insured, or insurance company, including any reciprocal or interinsurance exchange, on any policy or certificate of any type or kind of insurance, if it appears from the evidence that such company or exchange has refused to pay the full amount of such loss, and that such refusal is vexatious or without reasonable cause, the Department of Labor and Regulation, the trial court and the appellate court, shall, if judgment or an award is rendered for plaintiff, allow the plaintiff a reasonable sum as an attorney's fee to be recovered and collected as a part of the costs, provided, however, that when a tender is made by such insurance company, exchange or self-insurer before the commencement of the action or proceeding in which judgment or an award is rendered and the amount recovered is not in excess of such tender, no such costs shall be allowed. The allowance of attorney fees hereunder shall not be construed to bar any other remedy, whether in tort or contract, that an insured may have against the same insurance company or self-insurer arising out of its refusal to pay such loss. Source: SL 1966, ch 111, ch 32, 7; SL 1971, ch 264; SL 1972, ch 262; SL 1976, ch 311; SL 1988, ch 397; SL 2011, ch 1 (Ex. Ord. 11-1), 33, eff. Apr. 12, 2011.
58-12-30. Annual reports of commercial property casualty insurance claims--Exception--Promulgation of rules.Any carrier who is or has provided commercial property casualty coverage in this state shall provide, at the written request of the insured, annual reports of the claims experience of that insured for the immediate past policy period and for any time frames which are not in excess of three years prior to the policy period for which the request was made. A carrier is not required to provide any claim information that pertains to a prior carrier's experience with that insured. The claims report shall be in sufficient detail so as to provide the insured with data sufficient to assess the insured's future commercial property casualty insurance needs. The director may promulgate rules pursuant to chapter 1-26 regarding the content and time frames for the annual reports. Source: SL 2007, ch 287, 1.
58-12-31. Definitions regarding standards for claims processing.Terms used in 58-12-31 to 58-12-37, inclusive, mean:(1)"Director," the director of the South Dakota Division of Insurance;(2)"Insured," the party named on a policy or certificate as the individual with legal rights to the benefits provided by the policy;(3)"Insurer," a person, reciprocal exchange, interinsurer, Lloyd's insurer, fraternal benefit society, and any other legal entity engaged in the business of insurance, including claim agents, brokers, adjusters, and third party administrators. The term also includes medical service plans, hospital service plans, health maintenance organizations, prepaid limited health care service plans, dental plans, and optometric plans. This term does not include any insurance producer licensed pursuant to chapter 58-30, unless an insurance producer is directly involved in the adjudication of claims;(4)"Person," a natural or artificial entity, including individuals, partnerships, associations, trusts, or corporations;(5)"Policy," or "certificate," a contract of insurance, indemnity, medical, health, or hospital service, or annuity issued. The term does not include contracts of workers' compensation, fidelity, suretyship, or boiler and machinery insurance. Source: SL 2014, ch 235, 1.
58-12-32. Application of standards for claims investigation and disposition.The provisions of 58-12-31 to 58-12-37, inclusive, set forth standards for claim investigation and disposition of claims arising under policies or certificates of insurance issued to residents of South Dakota. It does not apply to claims involving workers' compensation, fidelity, suretyship, or boiler and machinery insurance. Nothing in 58-12-31 to 58-12-37, inclusive, may be construed to create or imply a private cause of action for violation of 58-12-31 to 58-12-37, inclusive. No disposition under the provisions of 58-12-31 to 58-12-37, inclusive, or any rule promulgated thereto may be used as evidence in any civil litigation. Nothing herein alters the rules of evidence as contained in title 19. Source: SL 2014, ch 235, 2.
58-12-33. Flagrant or frequent violations--Notice and opportunity to correct inadvertent violations.Any act by an insurer, if committed in violation of this section, is an unfair claims practice if:(1)It is committed flagrantly and in conscious disregard of the provisions of 58-12-31 to 58-12-37, inclusive, or any rule promulgated pursuant to 58-12-31 to 58-12-37, inclusive; or(2)It is committed with such frequency to indicate a general business practice to engage in that type of conduct.For any act defined in 58-12-34, the director shall provide notice and an opportunity to correct the violation pursuant to 58-33-68 if the act was inadvertent. Any act that is committed flagrantly or in conscious disregard of the provisions of 58-12-31 to 58-12-37, inclusive, are not subject to the procedures required under 58-33-68. Source: SL 2014, ch 235, 3.
58-12-34. Acts constituting unfair claims practices.Any of the following acts by an insurer, if committed in violation of 58-12-33, is an unfair claims practice:(1)Knowingly misrepresents to a claimant or an insured a relevant fact or policy provision relating to coverages at issue;(2)Fails to acknowledge with reasonable promptness pertinent communications with respect to claims arising under its policies;(3)Fails to adopt and implement reasonable standards to promptly complete claim investigations and settlement of claims arising under its policies;(4)Fails to make a good faith attempt to effectuate prompt, fair, and equitable settlement of claims submitted in which liability coverage, and causation of claims have become reasonably clear;(5)Compels an insured or beneficiary to institute a suit to recover an amount due under its policies by offering substantially less than the amount ultimately recovered in a suit brought by the insured or beneficiary;(6)Refuses to pay claims without conducting a reasonable claim investigation;(7)Fails to affirm or deny coverage of claims within a reasonable time after having completed a claim investigation related to the claim;(8)Attempts to settle a claim for less than the amount that a reasonable person would believe the insured or beneficiary is entitled by reference to written or printed advertising material accompanying or made part of an application;(9)Attempts to settle a claim on the basis of an application that was materially altered without notice to, or knowledge or consent of, the insured;(10)Makes a claim payment to an insured or beneficiary without indicating the coverage under which each payment is being made;(11)Unreasonably delays a claim investigation or payment of a claim by requiring both a formal proof of loss form and subsequent verification that would result in duplication of information and verification appearing in the formal proof of loss form;(12)Fails, in the case of a claim denial or offer of compromise settlement, to promptly provide a reasonable and accurate explanation of the basis for such action; or(13)Fails to provide forms necessary to present a claim within fifteen days of a request with reasonable explanations regarding their use. Source: SL 2014, ch 235, 4.
58-12-35. Notice of hearing.If the director has reasonable cause to believe that an insurer doing business in this state is engaging in an unfair claims practice and that a proceeding in respect thereto is in the public interest, the director may issue and serve upon the insurer a notice of hearing, which shall set a hearing date not less than thirty days from the date of the notice. The hearing shall be conducted pursuant to chapter 1-26. Prior to conducting a public hearing pursuant to this section against an insurer regulated by chapter 58-35, the director shall attempt to resolve the alleged unfair claims practice with the insurer. Source: SL 2014, ch 235, 5.
58-12-36. Cease and desist order--Monetary penalty--Suspension or revocation of license.If, after the hearing, the director finds an insurer has engaged in an unfair claims practice, the director shall reduce the findings to writing and shall issue and serve the insurer a copy of the findings and an order requiring the insurer to cease and desist from engaging in the act or practice. The secretary of labor and regulation may order either or both of the following:(1)The insurer to pay a monetary penalty of not more than one thousand dollars for each violation but not to exceed an aggregate penalty of one hundred thousand dollars, unless the violation was committed flagrantly and in conscious disregard of 58-12-31 to 58-12-37, inclusive, in which case the penalty may not be more than twenty-five thousand dollars for each violation, but not to exceed an aggregate penalty of two hundred fifty thousand dollars; and(2)Suspension or revocation of the insurer's license if the insurer knew or reasonably should have known it was in violation of 58-12-31 to 58-12-37, inclusive.This section only applies to violations of 58-12-31 to 58-12-37, inclusive. Any penalty imposed pursuant to this section is the sole and exclusive remedy for any act or violation brought by the director under 58-12-31 to 58-12-37, inclusive.The director shall consider the size, the amount of surplus, and the premium volume of the insurer when determining a penalty pursuant to this section. Source: SL 2014, ch 235, 6.
58-12-37. Promulgation of rules regarding definitions and records.The director may promulgate rules, pursuant to chapter 1-26, to carry out the purposes of 58-12-31 to 58-12-37, inclusive. In promulgating rules, the director shall consider the impact of the rule on the cost and availability of insurance in this state and the degree of protection that the rule will have for the insurance buying public in this state. The rules are limited to the following areas:(1)Definition of terms; and(2)Record keeping. Source: SL 2014, ch 235, 7.
58-12-4. Life and health insurance--Exemption of benefits and proceeds from execution.The proceeds of a policy of life or health insurance to the total amount of twenty thousand dollars only, in the absence of any agreement or assignment to the contrary, shall inure to the separate use of the insured, his surviving spouse, or children, as the case may be, independently of the creditors of any of them and shall not be subject to the payment of the debts of any one or all of such persons, notwithstanding that the proceeds may be payable directly to the insured or surviving spouse or children as the named beneficiary or beneficiaries or otherwise; and the proceeds of an endowment policy, payable to the insured on attaining a certain age, to the extent of twenty thousand dollars shall at all times be exempted from the debts of such spouse or children of the insured; and the avails of any life or health insurance or other sum of money not exceeding twenty thousand dollars made payable by any mutual aid or benevolent society to any member or beneficiary spouse or children or both shall likewise be exempt. Source: SL 1966, ch 111, ch 22, 31.
58-12-5. Annuity contract defined.An annuity contract within the meaning of 58-12-6 to 58-12-10, inclusive, shall be any obligation to pay certain sums at stated times, during life or lives, or for a specified term or terms, issued for a valuable consideration, regardless of whether or not such sums are payable to one or more persons, jointly or otherwise but does not include payments under life insurance contracts at stated times during life or lives, or for a specified term or terms. Source: SL 1966, ch 111, ch 22, 32 (3).
58-12-6. Exemption of annuity contract benefits, rights, privileges, and options from execution.The benefits, rights, privileges, and options which under any annuity contract heretofore or hereafter issued are due or prospectively due the annuitant, shall not be subject to execution nor shall the annuitant be compelled to exercise any such rights, powers, or options, nor shall creditors be allowed to interfere with or terminate the contract, except as provided by 58-12-7 to 58-12-9, inclusive. Source: SL 1966, ch 111, ch 22, 32 (1).
58-12-7. Premiums paid on annuity with intent to defraud creditors not exempt from execution.Section 58-12-6 does not apply to amounts paid as premium on any such annuity with the intent to defraud creditors, with interest thereon, and of which the creditor has given the insurer written notice at its home office prior to the making of the payments to the annuitant out of which the creditor seeks to recover. Any such notice shall specify the amount claimed or such facts as will enable the insurer to ascertain such amount, and shall set forth such facts as will enable the insurer to ascertain the annuity contract, the annuitant and the payment sought to be avoided on the ground of fraud. Source: SL 1966, ch 111, ch 22, 32 (1) (a).
58-12-8. Maximum amount of annuity exemption--Excess subject to levy.The total exemption under 58-12-6 of benefits presently due and payable to any annuitant periodically or at stated times under all annuity contracts under which he is an annuitant, shall not at any time exceed two hundred and fifty dollars per month for the length of time represented by such installments, and such periodic payments in excess of two hundred and fifty dollars per month shall be subject to levy in the manner provided by law and the rules of court. Source: SL 1966, ch 111, ch 22, 32 (1) (b).
58-12-9. Application of excess annuities to judgment--Factors considered.If the total benefits presently due and payable to any annuitant under all annuity contracts under which he is an annuitant, shall at any time exceed payment at the rate of two hundred and fifty dollars per month, then the court may order such annuitant to pay to a judgment creditor or apply on the judgment, in installments, such portion of such excess benefits as to the court may appear just and proper, after due regard for the reasonable requirements of the judgment debtor and his family, if dependent upon him, as well as any payments required to be made by the annuitant to other creditors under prior court orders. Source: SL 1966, ch 111, ch 22, 32 (1) (c).
58-13-1. Maximum single risk assumed.No insurer shall retain any risk on any one subject of insurance, whether located or to be performed in this state or elsewhere, in an amount exceeding ten percent of its surplus to policyholders. Source: SL 1966, ch 111, ch 4, 11 (1).
58-13-2. Subject of insurance defined.A "subject of insurance" for the purposes of this chapter, as to insurance against fire and hazards other than windstorm, earthquake, or other catastrophe hazards, includes all properties insured by the same insurer which are customarily considered by underwriters to be subject to loss or damage from the same fire or the same occurrence of such other hazard insured against. Source: SL 1966, ch 111, ch 4, 11 (2).
58-13-3. Surplus to policyholders defined."Surplus to policyholders" for the purposes of this chapter, in addition to the insurer's capital and surplus, shall be deemed to include any voluntary reserves which are not required pursuant to law, and shall be determined from the last sworn statement of the insurer on file with the director, or by the last report of examination of the insurer, whichever is the more recent at time of assumption of risk. Source: SL 1966, ch 111, ch 4, 11 (5).
58-13-4. Deduction for reinsurance or cosuretyship.Reinsurance ceded for which credit is allowed pursuant to chapter 58-14 shall be deducted in determining risk retained. As to surety risks, deductions shall also be made of the amount assumed by any established incorporated cosurety and the value of any security deposited, pledged, or held subject to the surety's consent and for the surety's protection. Source: SL 1966, ch 111, ch 4, 11 (3).
58-13-5. Chapter inapplicable when maximum possible loss not ascertainable.This chapter shall not apply to life or health insurance, annuities, title insurance, insurance of wet marine and transportation risks, workers' compensation insurance, employer's liability coverages, nor to any policy or type of coverage as to which the maximum possible loss to the insurer is not readily ascertainable on issuance of the policy. Source: SL 1966, ch 111, ch 4, 11 (6).
58-13-6. Application of chapter to alien insurers.As to alien insurers, this chapter shall relate only to risks and surplus to policyholders of the insurer's United States branch. Source: SL 1966, ch 111, ch 4, 11 (4).
58-14-1. Reinsurance defined."Reinsurance" is a contract under which an originating insurer, called the "ceding insurer," procures insurance for itself in another insurer, called the "assuming insurer" or the "reinsurer," with respect to part or all of any insurance risk of the originating insurer. Source: SL 1966, ch 111, ch 4, 9.
58-14-10. A lien assuming insurer--Standards--Surplus required--Examination of records.Credit shall be allowed if the reinsurance is ceded to an assuming insurer which is domiciled and licensed in, or in the case of a United States branch of an alien assuming insurer is entered through, a state which employs standards regarding credit for reinsurance substantially similar to those applicable under this chapter and the assuming insurer or United States branch of an alien assuming insurer:(1)Maintains a surplus as regards policyholders in an amount not less than twenty million dollars; and(2)Submits to the authority of this state to examine its books and records.Subdivision (1) of this section does not apply to reinsurance ceded and assumed pursuant to pooling arrangements among insurers in the same holding company system. Source: SL 1992, ch 344, 4.
58-14-11.1. Trust fund requirements for single assuming insurer.The trust fund in 58-14-11 for a single assuming insurer shall consist of funds in trust in an amount not less than the assuming insurer's liabilities attributable to reinsurance ceded by United States ceding insurers, and, in addition, the assuming insurer shall maintain a trusteed surplus of not less than twenty million dollars, except as provided in this section.At any time after a single assuming insurer has permanently discontinued underwriting new business secured by the trust for at least three years, the director with principal regulatory oversight of the trust may authorize a reduction in the required trusteed surplus, but only after a finding, based on an assessment of the risk, that the new required surplus level is adequate for the protection of United States ceding insurers, policyholders, and claimants in light of reasonably foreseeable adverse loss development. The risk assessment may involve an actuarial review, including an independent analysis of reserves and cash flows, and shall consider all material risk factors, including when applicable the lines of business involved, the stability of the incurred loss estimates, and the effect of the surplus requirements on the assuming insurer's liquidity or solvency. The minimum required trusteed surplus may not be reduced to an amount less than thirty percent of the assuming insurer's liabilities attributable to reinsurance ceded by the United States ceding insurers covered by the trust. Source: SL 2017, ch 211, 4.
58-14-11. Credit for reinsurance ceded to insurer maintaining trust fund for payment of valid claims--Annual report of assuming insurer.Credit shall also be allowed if the reinsurance is ceded to an assuming insurer that maintains a trust fund in a qualified United States financial institution for the payment of the valid claims of the assuming insurer's United States ceding insurers, their assigns and successors in interest. The assuming insurer shall report annually to the director information substantially the same as that required to be reported on the National Association of Insurance Commissioners annual statement form by licensed insurers to enable the director to determine the sufficiency of the trust fund. The assuming insurer shall submit to examination of the assuming insurer's books and records by the director and bear the expense of examination. Credit for reinsurance may not be granted pursuant to this section unless the form of the trust and any amendments to the trust have been approved by the commissioner of the state where the trust is domiciled, or the commissioner of another state has accepted principal regulatory oversight of the trust pursuant to the terms of the trust instrument. Source: SL 1992, ch 344, 5; SL 1994, ch 378; SL 2017, ch 211, 3.
58-14-12.1. Trust fund requirements for group including incorporated and individual unincorporated underwriters.In the case of a group including incorporated and individual unincorporated underwriters, the trust in 58-14-11 shall consist of a trusteed account in an amount not less than the respective underwriters' several liabilities attributable to business ceded by United States domiciled ceding insurers to any underwriter in the group. Notwithstanding the other provisions of this chapter, the trust in 58-14-11 for reinsurance ceded under reinsurance agreements with an inception date on or before June 30, 1993, and not amended or renewed after that date, shall consist of a trusteed account in an amount not less than the respective underwriters' several insurance and reinsurance liabilities attributable to business written in the United States. In addition to these trusts, the group shall maintain in trust a trusteed surplus of which one hundred million dollars shall be held jointly for the benefit of United States domiciled ceding insurers of any member of the group for all years of account.The incorporated members of the group with a trust under 58-14-11 may not be engaged in any business other than underwriting as a member of the group and shall be subject to the same level of regulation and solvency control by the group's domiciliary regulator as are the unincorporated members.Within ninety days after its financial statements are due to be filed with the group's domiciliary regulator, the group shall provide to the director an annual certification by the group's domiciliary regulator of the solvency of each underwriter member or, if a certification is unavailable, financial statements, prepared by independent public accountants, of each underwriter member of the group. Source: SL 2017, ch 211, 6.
58-14-12. Trust fund requirements for group of incorporated underwriters.In the case of a group of incorporated underwriters, the trust in 58-14-11 shall be in an amount not less than the group's several liabilities attributable to business ceded by United States ceding insurers to any member of the group pursuant to reinsurance contracts issued in the name of the group. In addition, the group shall maintain a joint trusteed surplus of which one hundred million dollars shall be held jointly for the benefit of United States ceding insurers of any member of the group as additional security for any liabilities, and each member of the group shall make available to the director an annual certification of the member's solvency by the member's domiciliary regulator and financial statements of each underwriter member of the group prepared by its independent public accountant within ninety days after its financial statements are due to be filed with the group's domiciliary regulator. The group shall maintain a trust fund in an amount not less than the group's several liabilities attributable to business ceded by United States domiciled ceding insurers to any member of the group pursuant to reinsurance contracts issued in the name of the group.A group of incorporated underwriters under this section are those under common administration which comply with the filing requirements contained in 58-14-11, that has continuously transacted an insurance business outside the United States for at least three years immediately prior to making application for accreditation, that submits to this state's authority to examine its books and records and bears the expense of the examination, and that has aggregate policyholders' surplus of at least ten billion dollars. Source: SL 1992, ch 344, 6; SL 2017, ch 211, 5.
58-14-13. Establishment of trust--Annual report of balance and investments--Certification of termination of trust. The form of the trust in 58-14-11 and any trust amendments shall be filed with the director of each state in which the ceding insurer beneficiaries of the trust are domiciled. The trust instrument shall provide that contested claims shall be valid and enforceable upon the final order of any court of competent jurisdiction in the United States. The trust shall vest legal title to its assets in the trustees of the trust for its United States policyholders and ceding insurers, their assigns and successors in interest. The trust and the assuming insurer are subject to examination as determined by the director. The trust shall remain in effect for as long as the assuming insurer has outstanding obligations due under the reinsurance agreements subject to the trust.No later than February twenty-eighth of each year, the trustees shall report to the director in writing setting forth the balance of the trust and listing the trust's investments at the preceding year end and shall certify the date of termination of the trust, if so planned, or certify that the trust does not expire prior to the next following December thirty-first. Source: SL 1992, ch 344, 7; SL 2017, ch 211, 7.
58-14-14. Reinsurance credit for certain insurers limited to risks in foreign or alien jurisdictions.Credit shall be allowed if the reinsurance is ceded to an assuming insurer not meeting the requirements of 58-14-8, 58-14-9, 58-14-10, 58-14-11, or 58-14-16.1 but only with respect to the insurance of risks located in foreign or alien jurisdictions where the reinsurance is required by applicable law or regulation of that jurisdiction. Source: SL 1992, ch 344, 8; SL 2017, ch 211, 8.
58-14-15. Allowance of credit for certain insurers not licensed, certified, or accredited in state.If the assuming insurer is not licensed, certified, or accredited to transact insurance or reinsurance in this state, the credit permitted by 58-14-10 or 58-14-11 may not be allowed unless the assuming insurer agrees in the reinsurance agreements:(1)That in the event of the failure of the assuming insurer to perform the assuming insurer's obligations under the terms of the reinsurance agreement, the assuming insurer, at the request of the ceding insurer, shall submit to the jurisdiction of any court of competent jurisdiction in any state of the United States, comply with all requirements necessary to give the court jurisdiction, and abide by the final decision of any court or of any appellate court in the event of an appeal; and(2)To designate the director or a designated attorney as its true and lawful attorney upon whom may be served any lawful process in any action, suit or proceeding instituted by or on behalf of the ceding company.This section is not intended to conflict with or override the obligation of the parties to a reinsurance agreement to arbitrate their disputes if arbitration is created in the agreement. Source: SL 1992, ch 344, 9; SL 2017, ch 211, 9.
58-14-16.1. Credit allowed for reinsurance ceded to certified reinsurer.Credit shall be allowed if the reinsurance is ceded to an assuming insurer that has been certified by the director as a reinsurer in this state and secures the assuming insurer's obligations in accordance with the requirements of 58-14-16.2 to 58-14-16.15, inclusive. Source: SL 2017, ch 211, 12.
58-14-16.10. Trust accounts of certified reinsurer securing obligations as multibeneficiary trust.If a certified reinsurer maintains a trust to fully secure the certified reinsurer's obligations subject to 58-14-11 and chooses to secure the certified reinsurer's obligations incurred as a certified reinsurer in the form of a multibeneficiary trust, the certified reinsurer shall maintain separate trust accounts for the certified reinsurer's obligations incurred under reinsurance agreements issued or renewed as a certified reinsurer with reduced security as permitted by this chapter or comparable laws of other United States jurisdictions and for the certified reinsurer's obligations subject to 58-14-11. It shall be a condition to the grant of certification that the certified reinsurer shall have bound itself, by the language of the trust and agreement with the director with principal regulatory oversight of each trust account, to fund upon termination of any trust account, out of the remaining surplus of the trust any deficiency of any other trust account. Source: SL 2017, ch 211, 21.
58-14-16.11. Minimum trusteed surplus requirements.The minimum trusteed surplus requirements are not applicable with respect to a multibeneficiary trust maintained by a certified reinsurer for the purpose of securing obligations incurred under 58-14-16.8 to 58-14-16.13, inclusive, except that the trust shall maintain a minimum trusteed surplus of ten million dollars. Source: SL 2017, ch 211, 22.
58-14-16.12. Reduction in allowable credit for insufficient security.With respect to obligations incurred by a certified reinsurer under 58-14-16.8 to 58-14-16.13, inclusive, if the security is insufficient, the director shall reduce the allowable credit by an amount proportionate to the deficiency and has the discretion to impose further reductions in allowable credit upon finding that there is a material risk the certified reinsurer' s obligations may not be paid in full when due. Source: SL 2017, ch 211, 23.
58-14-16.13. Terminated or suspended certification--Inactive status.A certified reinsurer whose certification has been terminated for any reason shall be treated as a certified reinsurer required to secure one hundred percent of the certified reinsurer's obligations. For the purposes of this section, the term, terminated, means revocation, suspension, voluntary surrender, and inactive status. If the director continues to assign a higher rating as permitted by other provisions regarding certification, this requirement does not apply to a certified reinsurer in inactive status or to a reinsurer whose certification has been suspended. Source: SL 2017, ch 211, 24.
58-14-16.14. Applicant for certification certified as reinsurer in National Association of Insurance Commissioners accredited jurisdiction.If an applicant for certification has been certified as a reinsurer in a National Association of Insurance Commissioners accredited jurisdiction, the director has the discretion to defer to that jurisdiction's certification and has the discretion to defer to the rating assigned by that jurisdiction. Upon approval by the director, the applicant shall be considered to be a certified reinsurer in this state. Source: SL 2017, ch 211, 25.
58-14-16.15. Inactive certified reinsurers.A certified reinsurer that ceases to assume new business in this state may request to maintain the certified reinsurer's certification in inactive status in order to continue to qualify for a reduction in security for the certified reinsurer's in-force business. An inactive certified reinsurer shall continue to comply with all applicable requirements of certification, and the director shall assign a rating that takes into account, if relevant, the reasons why the reinsurer is not assuming new business. Source: SL 2017, ch 211, 26.
58-14-16.16. Management and notice requirements regarding ceding insurer's reinsurance recoverables.A ceding insurer shall take steps to manage the ceding insurer's reinsurance recoverables proportionate to the ceding insurer's own book of business. A domestic ceding insurer shall notify the director within thirty days after reinsurance recoverables from any single assuming insurer, or group of affiliated assuming insurers, exceeds fifty percent of the domestic ceding insurer's last reported surplus to policyholders, or after the ceding insurer determined that reinsurance recoverables from any single assuming insurer, or group of affiliated assuming insurers, is likely to exceed this limit. The notification shall demonstrate the exposure is safely managed by the domestic ceding insurer. Source: SL 2017, ch 211, 27.
58-14-16.17. Diversification of ceding insurer's reinsurance program--Notice requirements.A ceding insurer shall take steps to diversify the ceding insurer's reinsurance program. A domestic ceding insurer shall notify the director within thirty days after ceding to any single assuming insurer, or group of affiliated assuming insurers, more than twenty percent of the ceding insurer's gross written premium in the prior calendar year, or after the ceding insurer has determined that the reinsurance ceded to any single assuming insurer, or group of affiliated assuming insurers, is likely to exceed this limit. The notification shall demonstrate the exposure is safely managed by the domestic ceding insurer. Source: SL 2017, ch 211, 28.
58-14-16.18. Qualified United States financial institution defined for purposes of subdivision 58-14-16(3).For the purposes of subdivision 58-14-16(3), a qualified United States financial institution, means an institution that:(1)Is organized or, in the case of a United States branch or agency office of a foreign banking organization, licensed under the laws of the United States or any state thereof;(2)Is regulated, supervised, and examined by United States federal or state authorities having regulatory authority over banks and trust companies; and(3)Has been determined by either the director or the Securities Valuation Office of the National Association of Insurance Commissioners to meet the standards of financial condition and standing as are considered necessary and appropriate to regulate the quality of financial institutions whose letters of credit will be acceptable to the director. Source: SL 2017, ch 211, 29.
58-14-16.19. Trust agreement conditions for assuming insurers not meeting certain requirements.If the assuming insurer does not meet the requirements of 58-14-8, 58-14-9, or 58-14-10, the credit permitted by 58-14-11 or 58-14-16.1 may not be allowed unless the assuming insurer agrees in the trust agreement to the following conditions:(1)Notwithstanding any other provisions in the trust instrument, if the trust fund is inadequate because the trust fund contains an amount less than the amount less than the amount required, or if the grantor of the trust has been declared insolvent or placed into receivership, rehabilitation, liquidation, or similar proceedings under the laws of its state or country of domicile, the trustee shall comply with an order of the director with regulatory oversight over the trust or with an order of court of competent jurisdiction directing the trustee to transfer to the director with regulatory oversight all of the assets of the trust fund;(2)The assets shall be distributed by and claims shall be filed with and valued by the director with regulatory oversight in accordance with the laws of the state in which the trust is domiciled that are applicable to the liquidation of domestic insurance companies;(3)If the director with regulatory oversight determines that the assets of the trust fund or any part thereof are not necessary to satisfy the claims of the United States ceding insurer of the grantor of the trust, the assets or part thereof shall be returned by the director with regulatory oversight to the trustee for distribution in accordance with the trust agreement; and(4)The grantor shall waive any right otherwise available to the grantor under United States law that is inconsistent with this section. Source: SL 2017, ch 211, 30.
58-14-16.2. Eligibility for certification as reinsurer.In order to be eligible for certification as a reinsurer, the assuming insurer shall:(1)Be domiciled and licensed to transact insurance or reinsurance in a qualified jurisdiction, as determined by the director pursuant to 58-14-16.4 to 58-14-16.6, inclusive;(2)Maintain minimum capital and surplus, or its equivalent, in an amount promulgated in rule by the director;(3)Maintain financial strength ratings from two or more rating agencies deemed acceptable by the director pursuant to regulation;(4)Agree to submit to the jurisdiction of this state, appoint the director as the assuming insurer's agent for service of process in this state, and agree to provide security for one hundred percent of the assuming insurer's liabilities attributable to reinsurance ceded by the United States ceding insurers if the assuming insurer resists enforcement of a final United States judgment;(5)Agree to meet applicable information filing requirements as determined by the director, both with respect to an initial application for certification and on an ongoing basis; and(6)Satisfy any other requirements for certification deemed relevant by the director. Source: SL 2017, ch 211, 13.
58-14-16.20. Suspension or revocation of reinsurer' s accreditation or certification.If an accredited or certified reinsurer ceases to meet the requirements for accreditation or certification, the director may suspend or revoke the reinsurer' s accreditation or certification. The director shall give the reinsurer notice and opportunity for hearing. The suspension or revocation may not take effect until after the director's order on hearing, unless:(1)The reinsurer waives the reinsurer's right to hearing;(2)The director's order is based on regulatory action by the reinsurer's domiciliary jurisdiction or the volunteer surrender or termination of the reinsurer' s eligibility to transact insurance or reinsurance business in the reinsurer's domiciliary jurisdiction or in the primary certifying state of the reinsurer under 58-14-16.14; or(3)The director finds that an emergency requires immediate action and a court of competent jurisdiction has not stayed the director's action. Source: SL 2017, ch 211, 31.
58-14-16.21. Credit for reinsurance during suspension or revocation.While a reinsurer's accreditation or certification is suspended, no reinsurance contract issued or renewed after the effective date of the suspension qualifies for credit except to the extent that the reinsurer's obligations under the contract are secured in accordance with 58-14-16. If a reinsurer's accreditation or certification is revoked, no credit for reinsurance may be granted after the effective date of the revocation except to the extent the reinsurer's obligations under the contract are secured in accordance with 58-14-16 or 58-14-16.8 to 58-14-16.13, inclusive. Source: SL 2017, ch 211, 32.
58-14-16.22. Fees.The fee for each required document included in any application for accreditation, certification or any annual reinsurance filing, or for approval of or amendments to a trust, required by 58-14-5, 58-14-8, 58-14-9, 58-14-10, 58-14-11, 58-14-13, 58-14-14, or 58-14-16.1 to 58-14-16.3, inclusive, shall be fifty dollars. Source: SL 2017, ch 211, 33.
58-14-16.23. Credit for reinsurance for reinsurers in reciprocal jurisdictions--Eligibility requirements. Credit must be allowed when the reinsurance is ceded to an assuming insurer with its head office or domicile in a reciprocal jurisdiction in compliance with  58-14-16.23 to 58-14-16.34, inclusive. A reciprocal jurisdiction is a jurisdiction that meets one of the following:(1)A non-United States jurisdiction subject to an in-force covered agreement with the United States, each within its legal authority, or, in the case of a covered agreement between the United States and European Union, is a member state of the European Union. For purposes of this chapter, a covered agreement is an agreement entered into pursuant to Dodd-Frank Wall Street Reform and Consumer Protection Act, 31 U.S.C.  313 and 314, that is currently in effect or in a period of provisional application and addresses the elimination, under specified conditions, of collateral requirements as a condition for entering into any reinsurance agreement with a ceding insurer domiciled in this state or for allowing the ceding insurer to recognize credit for reinsurance;(2)A United States jurisdiction that meets the requirements for accreditation under the NAIC financial standards and accreditation program; or(3)A qualified jurisdiction, as determined by the director pursuant to this chapter, that is not otherwise described in subdivisions (1) or (2) of this section and that the director determines meets the following additional requirements:(a)Provides that an insurer that has its head office or is domiciled in a qualified jurisdiction is allowed credit for reinsurance ceded to a United States-domiciled assuming insurer in the same manner as credit for reinsurance is allowed for reinsurance assumed by insurers domiciled in a qualified jurisdiction;(b)Does not require a United States-domiciled assuming insurer to establish or maintain a local presence as a condition for entering into a reinsurance agreement with any ceding insurer subject to regulation by the non-United States jurisdiction or as a condition to allow the ceding insurer to recognize credit for reinsurance;(c)Recognizes the United States state regulatory approach to group supervision and group capital, by providing written confirmation by a competent regulatory authority in a qualified jurisdiction that insurers and insurance groups that are domiciled or maintain their headquarters in this state or another jurisdiction accredited by the NAIC shall be subject only to worldwide prudential insurance group supervision including worldwide group governance, solvency and capital, and reporting by the director or the insurance commissioner of the domiciliary state and will not be subject to group supervision at the level of the worldwide parent undertaking of the insurance or reinsurance group by the qualified jurisdiction; and(d)Provides written confirmation by a competent regulatory authority in the qualified jurisdiction that information regarding insurers and their parent, subsidiary, or affiliated entities shall be provided to the director in accordance with a memorandum of understanding or similar document between the director and the qualified jurisdiction, including the International Association of Insurance Supervisors Multilateral Memorandum of Understanding or other multilateral memoranda of understanding coordinated by the NAIC. Source: SL 2021, ch 211,  1.
58-14-16.24. Credit for reinsurance for reinsurers in reciprocal jurisdictions--Capital and surplus requirements. An assuming insurer under  58-14-16.23 shall have and maintain, on an ongoing basis:(1)A license to transact reinsurance by, and have its head office or be domiciled in, a reciprocal jurisdiction;(2)Minimum capital and surplus, or its equivalent, calculated on at least an annual basis as of the preceding December thirty-first or at the annual date otherwise statutorily reported to the reciprocal jurisdiction, and confirmed pursuant to subdivision 58-14-16.25(6) according to the methodology of its domiciliary jurisdiction, in the following amounts:(a)No less than two hundred fifty million dollars; or(b)If the assuming insurer is an association, including incorporated and individual unincorporated underwriters, minimum capital and surplus equivalents net of liabilities or own funds of the equivalent of at least two hundred fifty million dollars and a central fund containing a balance of the equivalent of at least two hundred fifty million dollars; and(3)Minimum solvency or capital ratio as follows:(a)If the assuming insurer has its head office or is domiciled in a reciprocal jurisdiction as defined in subdivision 58-14-16.23(1), the ratio specified in the applicable covered agreement;(b)If the assuming insurer is domiciled in a reciprocal jurisdiction as defined in subdivision 58-14-16.23(2), a risk-based capital ratio of three hundred percent of the authorized control level calculated in accordance with a formula developed by the NAIC and prescribed by the director; or(c)If the assuming insurer is domiciled in a reciprocal jurisdiction as defined in subdivision 58-14-16.23(3), after consultation with the reciprocal jurisdiction and considering any recommendations published through the NAIC, such solvency or capital ratio as the director determines to be an effective measure of solvency. Source: SL 2021, ch 211,  2.
58-14-16.25. Credit for reinsurance for reinsurers in reciprocal jurisdictions--Adequate assurances required. An assuming insurer under  58-14-16.23 shall agree in writing to provide adequate assurance to the director, in a form prescribed by the director, as follows:(1)The assuming insurer shall provide prompt written notice and explanation to the director if the assuming insurer falls below the minimum requirements set forth in  58-14-16.24, or if any regulatory action is taken against the assuming insurer for serious noncompliance with applicable law;(2)The assuming insurer shall consent in writing to the jurisdiction of the courts of this state and to the appointment of the director as agent for service of process. The director may require that consent for service of process be provided to the director and included in each reinsurance agreement. Nothing in this subdivision limits or alters the capacity of parties to a reinsurance agreement to agree to alternative dispute resolution mechanisms, except to the extent such agreements are unenforceable under applicable insolvency or delinquency laws;(3)The assuming insurer shall consent in writing to pay all final judgments wherever enforcement is sought as obtained by a ceding insurer or its legal successor that have been declared enforceable in the jurisdiction where the judgment was obtained;(4)Each reinsurance agreement must include a provision requiring the assuming insurer to provide security in an amount equal to one hundred percent of the assuming insurer's liabilities attributable to reinsurance ceded pursuant to that agreement if the assuming insurer resists enforcement of a final judgment that is enforceable under the law of the jurisdiction in which it was obtained or a properly enforceable arbitration award, whether obtained by the ceding insurer or by its legal successor on behalf of its resolution estate;(5)The assuming insurer shall confirm that it is not presently participating in any solvent scheme of arrangement that involves this state's ceding insurers and shall agree to notify the ceding insurer and the director and to provide security in an amount equal to one hundred percent of the assuming insurer's liabilities to the ceding insurer if the assuming insurer enters into such a solvent scheme of arrangement. Such security shall be in a form consistent with the provisions of this chapter. For purposes of this section, the term, solvent scheme of arrangement, means a foreign or alien statutory or regulatory compromise procedure subject to requisite majority creditor approval and judicial sanction in the assuming insurer's home jurisdiction either to finally commute liabilities of duly noticed classed members or creditors of a solvent debtor, or to reorganize or restructure the debts and obligations of a solvent debtor on a final basis, and which may be subject to judicial recognition and enforcement of the arrangement by a governing authority outside the ceding insurer's home jurisdiction; and(6)An assuming insurer's supervisory authority shall confirm to the director on an annual basis, as of the preceding December thirty-first or at the annual date otherwise statutorily reported to the reciprocal jurisdiction, that the assuming insurer complies with the requirements of  58-14-16.24.Nothing in this section precludes an assuming insurer from providing the director with information on a voluntary basis. Source: SL 2021, ch 211,  3.
58-14-16.26. Documents that must be provided to the division. An assuming insurer under  58-14-16.23 or its legal successor shall provide, if requested by the director, on behalf of itself and any legal predecessors, the following documentation to the director:(1)For the two years preceding entry into the reinsurance agreement and on an annual basis thereafter, the assuming insurer's annual audited financial statements in accordance with the applicable law of the jurisdiction of its head office or domiciliary jurisdiction, including the external audit report;(2)For the two years preceding entry into the reinsurance agreement, the solvency and financial condition report or actuarial opinion, if filed with the assuming insurer's supervisor; and(3)Prior to entry into the reinsurance agreement and not more than semiannually thereafter:(a)An updated list of all disputed and overdue reinsurance claims that are outstanding for ninety days or more regarding reinsurance assumed from ceding insurers domiciled in the United States; and(b)Information regarding the assuming insurer's assumed reinsurance by ceding insurer, ceded reinsurance by the assuming insurer, and reinsurance recoverable on paid and unpaid losses by the assuming insurer to allow for the evaluation of the criteria set forth in  58-14-16.27. Source: SL 2021, ch 211,  4.
58-14-16.27. Prompt payment practices. An assuming insurer under  58-14-16.23 shall maintain a practice of prompt payment of claims under a reinsurance agreement. The lack of prompt payment is evidenced if any of the following criteria are met:(1)More than fifteen percent of the reinsurance recoverables from the assuming insurer are overdue and in dispute as reported to the director;(2)More than fifteen percent of the assuming insurer's ceding insurers or reinsurers have overdue reinsurance recoverable on paid losses of ninety days or more that are not in dispute and that exceed one hundred thousand dollars for each ceding insurer or as otherwise specified in a covered agreement; or(3)The aggregate amount of reinsurance recoverable on paid losses that are not in dispute but are overdue by ninety days or more exceeds fifty million dollars or as otherwise specified in a covered agreement. Source: SL 2021, ch 211,  5.
58-14-16.28. List or reciprocal jurisdictions to be published. The director shall timely create and publish a list of reciprocal jurisdictions that includes any reciprocal jurisdiction as defined under this chapter. A list of reciprocal jurisdictions is published by the NAIC and the director shall consider any other reciprocal jurisdiction included on the list. The director may approve a jurisdiction that does not appear on the list of reciprocal jurisdictions in accordance with criteria provided in this chapter.The director may remove a jurisdiction from the list of reciprocal jurisdictions upon a determination that the jurisdiction no longer meets one or more of the requirements of a reciprocal jurisdiction in accordance with  58-14-16.23. However, the director may not remove from the list a reciprocal jurisdiction as under subdivisions 58-14-16.23(1) and (2). Upon removal of a reciprocal jurisdiction from this list, credit for reinsurance ceded to an assuming insurer that has its home office or is domiciled in that jurisdiction is allowed if otherwise allowed pursuant to this chapter. Source: SL 2021, ch 211,  6.
58-14-16.29. List of assuming insurers. The director shall timely create and publish a list of assuming insurers that have satisfied the conditions set forth in  58-14-16.23 to 58-14-16.34, inclusive, and to which cessions must be granted credit. The director may add an assuming insurer to the list if an NAIC-accredited jurisdiction has added the assuming insurer to its list of assuming insurers or if, upon initial eligibility, the assuming insurer submits the information to the director as required under  58-14-16.25, except to the extent that submissions conflict with an applicable covered agreement. If an NAIC-accredited jurisdiction has determined that the conditions set forth in  58-14-16.24 to 58-14-16.27, inclusive, have been met, the director has the discretion to defer to that jurisdiction's determination and add such assuming insurer to the list of assuming insurers. The director may accept financial documentation filed with another NAIC-accredited jurisdiction or with the NAIC in satisfaction of the requirements of  58-14-16.24 to 58-14-16.27, inclusive.When requesting that the director defer to another NAIC-accredited jurisdiction's determination, an assuming insurer shall submit a properly executed form prescribed by the director and other additional information as the director may require. A state that has received such a request will notify other states through the NAIC and provide relevant information with respect to the determination of eligibility. Source: SL 2021, ch 211,  7.
58-14-16.3. Eligibility for certification of association including incorporated and individual unincorporated underwriters.An association including incorporated and individual unincorporated underwriters may be a certified reinsurer. In addition to satisfying the requirements of 58-14-16.2, to be eligible for certification:(1)The association shall satisfy the association's minimum capital and surplus requirements through the capital and surplus equivalents, net of liabilities, of the association and the association's members, which shall include a joint central fund that may be applied to any unsatisfied obligation of the association or any of its members, in an amount determined by the director to provide adequate protection;(2)The incorporated members of the association may not be engaged in any business other than underwriting as a member of the association and shall be subject to the same level of regulation and solvency control by the association's domiciliary regulator as are the unincorporated members; and(3)Within ninety days after its financial statements are due to be filed with the association's domiciliary regulator, the association shall provide to the director an annual certification by the association's domiciliary regulator of the solvency of each underwriter member. If the annual certification is unavailable, the association shall file financial statements, prepared by independent public accountants, of each underwriter member of the association. Source: SL 2017, ch 211, 14.
58-14-16.30. Assuming insurers that no longer meet one or more requirements. If the director determines that an assuming insurer no longer meets a requirement under  58-14-16.23 to 58-14-16.34, inclusive, the director may revoke or suspend the eligibility of the assuming insurer.While an assuming insurer's eligibility is suspended, no reinsurance agreement issued, amended, or renewed after the effective date of the suspension qualifies for credit except to the extent that the assuming insurer's obligations under the contract are secured in accordance with  58-14-16.If an assuming insurer's eligibility is revoked, no credit for reinsurance may be granted after the effective date of the revocation with respect to any reinsurance agreements entered into by the assuming insurer, including reinsurance agreements entered into prior to the date of revocation, except to the extent that the assuming insurer's obligations under the contract are secured in a form acceptable to the director and consistent with the provisions of  58-14-16. Source: SL 2021, ch 211,  8.
58-14-16.31. Procedure for denying statement credit. Before denying statement credit or imposing a requirement to post security under  58-14-16.30 or adopting any similar requirement that will have substantially the same regulatory impact as security, the director shall:(1)Communicate with the ceding insurer, the assuming insurer, and the assuming insurer's supervisory authority that the assuming insurer no longer satisfies one of the conditions listed in  58-14-16.24 to 58-14-16.27, inclusive;(2)Provide the assuming insurer with thirty days from the initial communication to submit a plan to remedy the defect and ninety days from the initial communication to remedy the defect, except in exceptional circumstances in which a shorter period is necessary for policyholder and other consumer protection;(3)After the expiration of ninety days or less, as set out in subdivision (2) of this section, if the director determines that no or insufficient action was taken by the assuming insurer, the director may impose any of the requirements under  58-14-16.23 to 58-14-16.34, inclusive; and(4)Provide a written explanation to the assuming insurer of any of the requirements under  58-14-16.23 to 58-14-16.34, inclusive. Source: SL 2021, ch 211,  9.
58-14-16.32. Assuming insurers in receivership. If subject to a legal process of rehabilitation, liquidation, or conservation, the ceding insurer or its representative may seek and, if determined appropriate by the court in which the proceedings are pending, obtain an order requiring that the assuming insurer post security for all outstanding ceded liabilities. Source: SL 2021, ch 211,  10.
58-14-16.33. Effective date for reinsurers in reciprocal jurisdictions. Credit may be taken under  58-14-16.23 to 58-14-16.34, inclusive, only for reinsurance agreements entered into, amended, or renewed on or after July 1, 2021, and only with respect to losses incurred and reserves reported on or after the later of the date on which the assuming insurer has met all eligibility requirements pursuant to  58-14-16.23 to 58-14-16.27, inclusive, or the effective date of the new reinsurance agreement, amendment, or renewal. Nothing in this section alters or impairs a ceding insurer's right to take credit for reinsurance, to the extent that credit is not available under  58-14-16.23 to 58-14-16.34, inclusive, as long as the reinsurance qualifies for credit under any other applicable provision of this chapter. Source: SL 2021, ch 211,  11.
58-14-16.34. Application of reciprocal jurisdiction laws. Nothing in  58-14-16.23 to 58-14-16.34, inclusive:(1)Limits or in any way alters the capacity of parties to a reinsurance agreement to agree on requirements for security or other terms in that reinsurance agreement except as expressly prohibited by this chapter or other applicable law;(2)Authorizes an assuming insurer to withdraw or reduce the security provided under any reinsurance agreement except as permitted by the terms of the agreement; or(3)Limits or alters the capacity of parties to any reinsurance agreement to renegotiate the agreement. Source: SL 2021, ch 211,  12.
58-14-16.4. List of qualified jurisdictions from which domiciled insurer eligible for consideration for certification.The director shall create and publish a list of qualified jurisdictions, under which an assuming insurer licensed and domiciled in the jurisdiction is eligible to be considered for certification by the director as a certified reinsurer.If a certified reinsurer's domiciliary jurisdiction ceases to be a qualified jurisdiction, the director has the discretion to suspend the reinsurer's certification indefinitely, in lieu of revocation. Source: SL 2017, ch 211, 15.
58-14-16.5. Eligibility of non-United States domiciliary jurisdiction to be recognized as qualified jurisdiction.To determine whether the domiciliary jurisdiction of a non-United States assuming insurer is eligible to be recognized as a qualified jurisdiction, the director shall evaluate the appropriateness and effectiveness of the reinsurance supervisory system of the jurisdiction, both initially and on an ongoing basis, and consider the rights, benefits, and the extent of reciprocal recognition afforded by the non-United States jurisdiction to reinsurers licensed and domiciled in the United States. A qualified jurisdiction shall agree to share information and cooperate with the director with respect to all certified reinsurers domiciled within that jurisdiction. A jurisdiction may not be recognized as qualified jurisdiction if the director has determined the jurisdiction does not adequately and promptly enforce final United States judgments and arbitration awards. Additional factors may be considered at the discretion of the director. Source: SL 2017, ch 211, 16.
58-14-16.6. National Association of Insurance Commissioners' list of qualified jurisdictions.A list of qualified jurisdictions shall be published through the National Association of Insurance Commissioners. The director shall consider the list in determining qualified jurisdictions. If the director approves a jurisdiction as qualified that does not appear on the list of qualified jurisdictions, the director shall provide a thoroughly documented justification with criteria to be developed in administrative rules promulgated by the director, pursuant to chapter 1-26, to establish criteria for determining the qualifications of the jurisdictions.United States jurisdictions that meet the requirements for accreditation under the National Association of Insurance Commissioners financial standards and accreditation program shall be recognized as qualified jurisdictions. Source: SL 2017, ch 211, 17.
58-14-16.7. Rating of certified reinsurer.The director shall assign a rating to each certified reinsurer, giving due consideration to the financial strength ratings that have been assigned by rating agencies deemed acceptable to the director. The director shall publish a list of all certified reinsurers and their ratings. Source: SL 2017, ch 211, 18.
58-14-16.8. Obligations assumed from United States ceding insurers to be secured consistent with rating.A certified reinsurer shall secure obligations assumed from United States ceding insurers under 58-14-16.9 to 58-14-16.13, inclusive, at a level consistent with the certified reinsurer's rating. The director may promulgate rules, pursuant to chapter 1-26, to establish standards under 58-14-16.9 to 58-14-16.13, inclusive. Source: SL 2017, ch 211, 19.
58-14-16.9. Security required for domestic ceding insurer to qualify for full financial statement credit for reinsurance ceded to certified reinsurer.In order for a domestic ceding insurer to qualify for full financial statement credit for reinsurance ceded to a certified reinsurer, the certified reinsurer shall maintain security in a form acceptable to the director and consistent with 58-14-16, or in a multibeneficiary trust in accordance with 58-14-11, except as otherwise provided in 58-14-16.8 to 58-14-16.13, inclusive. Source: SL 2017, ch 211, 20.
58-14-16. Asset or reduction from liability for reinsurance ceded to insurer not meeting requirements of 58-14-7--Security.An asset or a reduction from liability for the reinsurance ceded by a domestic insurer to an assuming insurer not meeting the requirements of 58-14-7 shall be allowed in an amount not exceeding the liabilities carried by the ceding insurer. The reduction shall be in the amount of funds held by or on behalf of the ceding insurer, including funds held in trust for the ceding insurer, under a reinsurance contract with the assuming insurer as security for the payment of obligations. The security shall be held in the United States subject to withdrawal solely by, and under the exclusive control of, the ceding insurer; or, in the case of a trust, it shall be held in a qualified United States financial institution, as defined in 58-14-23. This security may be in the form of:(1)Cash;(2)Securities listed by the securities valuation office of the National Association of Insurance Commissioners (NAIC), including any security deemed exempt from filing as defined by the Purposes and Procedures Manual of the NAIC Investment Analysis Office as adopted by administrative rule, and qualifying as admitted assets; (3)Clean, irrevocable, unconditional letters of credit, issued or confirmed by a qualified United States financial institution as defined in 58-14-16.18, effective no later than December thirty-first of the year for which the filing is being made, and in the possession of, or in the trust of, the ceding insurer on or before the filing date of the assuming insurer's annual statement. Letters of credit meeting applicable standards of issuer acceptability as of the dates of issuance or confirmation shall, notwithstanding the issuing or confirming institution's subsequent failure to meet applicable standards of issuer acceptability, continue to be acceptable as security until the security's expiration, extension, renewal, modification, or amendment, whichever occurs first; or(4)Any other form of security acceptable to the director. Source: SL 1992, ch 344, 10; SL 2017, ch 211, 10.
58-14-17. Promulgation of rules.The director may promulgate rules, pursuant to chapter 1-26, concerning requirements, qualifications, and criteria for receiving credit for reinsurance, surplus amounts, accreditation of a reinsurer, certification of a reinsurer, minimum levels for reinsurer capital and surplus, financial rating of reinsurers, recognition and appraisal of qualified jurisdictions, trusts and trust agreements, reinsurance contracts, hazardous investments and evidence of submission to this state's authority, requirements and qualifications for life reinsurance agreements, reserve credits, credits for reinsurance, valuation of assets or reserve credits, the adoption of certain methods and manuals for the valuation of assets, the amount and forms of security supporting reinsurance arrangements, reduction of liability or establishment of assets in a financial statement, circumstances under which credit will be reduced or eliminated, and treatment of existing agreements.The director may also promulgate rules, pursuant to chapter 1-26, regarding reinsurance relating to life insurance policies with guaranteed nonlevel gross premiums or guaranteed nonlevel benefits, universal life insurance policies resulting in the ability of a policyholder to keep a policy in force over a secondary guarantee period, variable annuities with guaranteed death or living benefits, and long-term care insurance policies. The director may also promulgate rules, pursuant to chapter 1-26, to adopt the use and applicability of the National Association of Insurance Commissioners valuation manual for use in calculating the amounts or form of security to be held by reinsurers. Source: SL 1992, ch 344, 11; SL 2017, ch 211, 11.
58-14-18. Application of reinsurance provisions.This section applies to all cessions after July 1, 1993, under reinsurance agreements which have had an inception, anniversary, or renewal date not less than six months after July 1, 1993. Source: SL 1992, ch 344, 12.
58-14-19. Substantially similar defined.For the purposes of this chapter, the term, substantially similar, means standards which equal or exceed the standards of this state. Source: SL 1992, ch 344, 17.
58-14-20. Disallowal of credit or deduction.The director may not allow a credit or deduction to the ceding insurer if the director determines the quality, quantity, or diversity of investments in the trust account of a reinsurer or the surplus to policyholders of the reinsurer is hazardous to a ceding insurer or policyholders. Source: SL 1992, ch 344, 18.
58-14-21. Reinsurer defined--Examination of reinsurer.A reinsurer is an insurer that assumes all or part of the insurance or reinsurance written by another insurer and which meets the requirements of this chapter. The director may examine a reinsurer pursuant to chapter 58-3 and costs shall be assessed pursuant to that chapter. Source: SL 1992, ch 344, 19.
58-14-22. Application of chapter.The requirements of this chapter do not apply to a domestic insurer reinsuring companies pursuant to chapter 58-35. Source: SL 1992, ch 344, 20.
58-14-23. Qualified United States financial institution defined for eligibility to act as fiduciary of a trust.A qualified United States financial institution means, for purposes of those provisions of this chapter specifying those institutions that are eligible to act as a fiduciary of a trust, an institution that:(1)Is organized or, in the case of a United States branch or agency office of a foreign banking organization, licensed under the laws of the United States or any state thereof, and has been granted authority to operate with fiduciary powers; and(2)Is regulated, supervised, and examined by United States federal or state authorities having regulatory authority over banks and trust companies. Source: SL 1992, ch 344, 22; SL 1995, ch 278.
58-14-24. Definition of terms.Terms used in 58-14-24 to 58-14-42, inclusive, mean:(1)"Actuary," any person who is a member in good standing of the American Academy of Actuaries;(2)"Controlling person," any person who, directly or indirectly, has the power to direct or cause to be directed the management, control, or activities of the agent or broker who sells, solicits, negotiates, or places reinsurance;(3)"Reinsurance agent or agent," any person that has authority to bind or manage all or part of the assumed reinsurance business of a reinsurer, including the management of a separate division, department, or underwriting office, and acts as an agent for the reinsurer whether known as a manager or other similar term;(4)"Reinsurance broker or broker," any person, other than an officer or employee of the ceding insurer, who solicits, negotiates, or places reinsurance cessions or retrocessions on behalf of a ceding insurer without the authority or power to bind reinsurance on behalf of the insurer. Source: SL 1992, ch 345, 1.
58-14-25. Persons not agents.The following persons are not agents:(1)Any employee of the reinsurer;(2)Any United States manager of the United States branch of an alien reinsurer;(3)Any underwriting manager who, pursuant to contract, manages all the reinsurance operations of the reinsurer, is under common control with the reinsurer, subject to chapter 58-5A, and whose compensation is not based on the volume of premiums written;(4)Any manager of a group, association, pool, or organization of insurers which engage in joint underwriting or joint reinsurance and who is subject to examination by the director or commissioner of the state in which the manager's principal business office is located. Source: SL 1992, ch 345, 2.
58-14-26. License required to sell, solicit, negotiate, or place reinsurance.No person may sell, solicit, negotiate, or place reinsurance without being licensed pursuant to 58-14-24 to 58-14-42, inclusive, to sell, negotiate, solicit, or place reinsurance. The provisions of chapter 58-30 apply to the extent that the provisions are not inconsistent with this chapter. Source: SL 1992, ch 345, 3; SL 1994, ch 379, 1.
58-14-27. Agent or broker bond--Errors and omissions policy.The director may require an agent or broker under 58-14-24 to 58-14-42, inclusive, to file a bond in an amount acceptable to the director for the protection of the reinsurer or maintain an errors and omissions policy in an amount acceptable to the director, or both. Source: SL 1992, ch 345, 4.
58-14-28. Refusal to license--Reasons.The director may refuse to license an agent or broker in reinsurance if the applicant, any one named on the application, or any member, principal, officer or director of the applicant, is not trustworthy; if any controlling person of the applicant is not trustworthy; if there has been a revocation or suspension of a license; or if the applicant has failed to comply with any prerequisite for the issuance of the license. Upon written request by the applicant, the director shall furnish reasons for the basis of the denial. Source: SL 1992, ch 345, 5.
58-14-29. Written contract between agent or broker and insurer or reinsurer.Any transaction between an agent or broker and the insurer or reinsurer that it represents may only be entered into pursuant to a written contract, specifying the responsibilities of each party. The contract shall, at a minimum, provide that:(1)The insurer or reinsurer may terminate the contract for cause upon written notice to the agent or broker. A reinsurer may immediately suspend the authority of the agent or broker to assume or cede business during the pendency of any dispute regarding the cause for termination. Within thirty days of the termination of the contract with an agent or broker, the insurer or reinsurer shall provide written notification of the termination to the director;(2)The agent or broker shall render accounts to the insurer and reinsurer accurately detailing all transactions, including information necessary to support all commissions, charges and other fees received by, or owed to, the agent or broker, and remit all funds due to the insurer or reinsurer within thirty days of receipt;(3)All funds collected for the insurer's or reinsurer's account shall be held by the agent or broker in a fiduciary capacity in a bank which is a qualified United States financial institution. The agent may retain no more than three months estimated claims payments and allocated loss adjustment expenses. The agent shall maintain a separate bank account for each reinsurer that it represents;(4)The agent or broker shall comply with 58-14-30 and 58-14-31;(5)The agent or broker shall comply with the written standards established by the insurer or reinsurer for the cession or retrocession of all risks; and(6)The broker shall disclose to the insurer any relationship with any reinsurer to which business will be ceded or retroceded. Source: SL 1992, ch 345, 6; SL 1994, ch 379, 2.
58-14-3. Risk limits applicable.An insurer may only reinsure risks within the limits it is authorized to insure. Source: SL 1966, ch 111, ch 4, 10 (1); SL 1992, ch 344, 14.
58-14-30. Records of reinsurance contracts.For at least ten years after expiration of each contract of reinsurance transacted by the agent or broker, the agent or broker shall keep a complete record for each transaction showing:(1)The type of contract, limits, underwriting restrictions, classes or risks, and territory;(2)Period of coverage, including effective and expiration dates, cancellation provisions, and notice required for cancellation. The agent shall also maintain a record of the disposition of outstanding reserves on covered risks;(3)Reporting and settlement requirements of balances;(4)Rate used to compute the reinsurance premium;(5)Names and addresses of reinsurers;(6)Rates of all reinsurance commissions, including the commissions on any retrocessions handled by the agent or broker;(7)Related correspondence and memoranda;(8)Proof of placement;(9)Details regarding retrocessions handled by the agent or broker including the identity of retrocessionaires and percentage of each contract assumed or ceded. Retrocessions for the agent are also subject to 58-14-36;(10)Financial records, including but not limited to, premium and loss accounts; and(11)When the agent or broker procures a reinsurance contract on behalf of a licensed ceding insurer:(a)Directly from any assuming reinsurer, written evidence that the assuming reinsurer has agreed to assume the risk; or(b)If placed through a representative of the assuming reinsurer, other than an employee, written evidence that the reinsurer has delegated binding authority to the representative. Source: SL 1992, ch 345, 7.
58-14-31. Insurer or reinsurer to employ only licensed agent or broker.No insurer or reinsurer may engage the services of any person to act as an agent or broker on its behalf unless the person is licensed as required by 58-14-24 to 58-14-42, inclusive, nor employ an individual who is employed by an agent or broker with which it transacts business, unless an agent or broker is under common control with the insurer and subject to chapter 58-5A. Source: SL 1992, ch 345, 8.
58-14-32. Approval and filing of contract.The written contract with the agent, pursuant to 58-14-29, specifying the responsibilities of each party, shall be approved by the reinsurer's board of directors. At least thirty days before the insurer or reinsurer assumes or cedes business through the agent or broker, the contract in 58-14-29 shall be filed with the director for approval pursuant to 58-5-85 to 58-5-87, inclusive. Source: SL 1992, ch 345, 9.
58-14-33. Additional provisions of contract.In addition to standards set forth in 58-14-29, the contract shall provide:(1)That the reinsurer and insurer shall have access and the right to copy and audit all accounts and records maintained by the agent or broker related to its business in a form usable by the insurer and reinsurer;(2)That the contract cannot be assigned in whole or in part by the agent or broker;(3)That the agent or broker shall comply with the written underwriting and rating standards established by the insurer for the acceptance, rejection or cession of all risks;(4)That the rates, terms, and purposes of commissions, charges, and other fees which the agent or broker may levy against the reinsurer;(5)Whether the agent has the authority to settle claims;(6)If the contract provides for a sharing of interim profits by the agent, that interim profits for property business may not be paid until one year after the end of each underwriting period. Interim profits for casualty business may not be paid for five years after the end of each underwriting period or a later period set by the director for specified lines of casualty insurance. No interim profits may be paid for until the adequacy of reserves on remaining claims has been verified pursuant to 58-14-36;(7)That the agent or broker shall annually provide the insurer or reinsurer with a statement of its financial condition prepared by an independent certified accountant;(8)That the reinsurer shall at least semi-annually conduct an on-site review of the underwriting and claims processing operations of the agent;(9)That the agent shall disclose to the reinsurer any relationship it has with any insurer prior to ceding or assuming any business with the insurer pursuant to the contract; and(10)That within the scope of its actual or apparent authority, the acts of the agent or broker shall be deemed to be the acts of the reinsurer or insurer on whose behalf it is acting. Source: SL 1992, ch 345, 10.
58-14-34. Handling of reinsurer.If the contract permits the agent or broker to settle claims on behalf of the reinsurer, the contract shall state the claims shall be handled as follows:(1)All claims shall be reported to the reinsurer in a timely manner;(2)A copy of the claim file shall be sent to the reinsurer at its request or as soon as it becomes known that the claim:(a)Involves a coverage dispute;(b)May exceed the agent's claims settlement authority or any amount set in that authority;(c)Is open for more than six months; or(d)Is closed by payment of the lesser of an amount set by the company.The director has the authority to initially and at least annually review the amount for settling claims or payment of claims and direct the amount be changed.(3)All claim files shall be the joint property of the reinsurer and agent. However, upon an order of liquidation of the reinsurer, files shall become the sole property of the reinsurer or its estate; the agent shall have reasonable access to and the right to copy the files on a timely basis; and(4)Any settlement authority granted to the agent may be terminated for cause upon the reinsurer's written notice to the agent or upon the termination of the contract. The reinsurer may suspend the settlement authority during the pendency of the dispute regarding the cause of termination. Source: SL 1992, ch 345, 11.
58-14-35. Restrictions on agent.The agent may not:(1)Cede retrocessions on behalf of the reinsurer. However, the agent or broker may cede facultative retrocessions pursuant to obligatory facultative agreements if the contract with the reinsurer contains reinsurance underwriting guidelines for the retrocessions. The guidelines shall include a list of reinsurers with which automatic agreements are in effect, and for each reinsurer, the coverages and amounts or percentages that may be reinsured, and commission schedules;(2)Commit the reinsurer to participate in reinsurance syndicates;(3)Employing another agent or broker who is not lawfully licensed to transact the type of reinsurance for which he is appointed;(4)Without prior approval of the reinsurer, pay or commit the reinsurer to pay a claim, net of retrocessions, that exceeds the lesser of an amount specified by the reinsurer or one percent of the reinsurer's policyholder's surplus as of December thirty-first of the last complete calendar year;(5)Collect any payment from a retrocessionaire or commit the reinsurer to any claim settlement with a retrocessionaire, without prior approval of the reinsurer. If prior approval is given, a report shall be promptly forwarded to the reinsurer;(6)Appoint a sub-agent; or(7)Jointly employ an individual who is employed by the reinsurer unless the agent is under common control with the reinsurer subject to chapter 58-5A. Source: SL 1992, ch 345, 12.
58-14-36. Loss reserves--Actuary's opinion--Employee of agent or broker not to be appointed to reinsurer's board of directors.If an agent or broker establishes loss reserves, the reinsurer shall annually obtain the opinion of an actuary attesting to the adequacy of loss reserves established for losses incurred and outstanding on business produced by the agent. This opinion shall be in addition to any other required loss reserve certification. Binding authority for all retrocessional contracts or participation in reinsurance syndicates shall rest with an officer of the reinsurer who may not be affiliated with an agent or broker. No reinsurer may appoint to its board of directors, any officer, director, employee, controlling shareholder, or sub-producer of its agent or broker; however, this prohibition does not apply to relationships governed by chapter 58-5A or, if applicable, chapter 58-30. Source: SL 1992, ch 345, 13.
58-14-37. Examination of agent or broker--Cost.Any person doing business as an agent or broker under 58-14-24 to 58-14-42, inclusive, is subject to examination by the director. The director shall have access to all books, bank accounts and records of the person in a form usable to the director. Any person contracting with a reinsurer may be examined as if it were the reinsurer. The reinsurer may be required to pay the cost of examination pursuant to 58-3-15. Source: SL 1992, ch 345, 14.
58-14-38. Penalty for violation.Any agent or broker, insurer or reinsurer found by the director, after a hearing conducted in accordance with chapter 1-26, to be in violation of any provision of 58-14-24 to 58-14-42, inclusive, shall:(1)For each separate violation, pay a penalty in an amount not exceeding five thousand dollars;(2)Be subject to revocation or suspension of its license; and(3)If a violation was committed by the agent or broker, the agent or broker shall make restitution to the insurer, reinsurer, rehabilitator, or liquidator of the insurer or reinsurer for the net losses incurred by the insurer or reinsurer attributable to the violation. Source: SL 1992, ch 345, 15.
58-14-39. Rights of third party.Nothing contained in 58-14-24 to 58-14-42, inclusive, limits or restricts the rights of policyholders, claimants, creditors, or other third parties or confer any rights to those persons. Source: SL 1992, ch 345, 16.
58-14-4.1. Association election to succeed to rights and obligations of insolvent insurer under reinsurance contract--Reinsurer's liability to pay claims.Notwithstanding 58-14-4, if a life and health insurance guaranty association has made the election to succeed to the rights and obligations of the insolvent insurer under the contract of reinsurance, the reinsurer's liability to pay covered reinsured claims continues under the contract of reinsurance, subject to the payment to the reinsurer of the reinsurance premiums for such coverage. Payment for such reinsured claims may only be made by the reinsurer pursuant to the direction of the guaranty association or its designated successor. Any payment made at the direction of the guaranty association or its designated successor by the reinsurer discharges the reinsurer of any further liability to any other party for the claim payment. Source: SL 2005, ch 274, 4. 
58-14-4.2. Liquidator of insolvent ceding insurer to provide notice to reinsurer of claim against ceding insurer--Investigation and election to interpose defense.The reinsurance agreement may provide that the domiciliary liquidator of an insolvent ceding insurer shall give written notice to the reinsurer of the pendency of a claim against such ceding insurer on the contract reinsured within a reasonable time after such claim is filed in the liquidation proceeding. During the pendency of such claim, any reinsurer may investigate such claim and interpose, at its own expense, in the proceeding where such claim is to be adjudicated any defenses that it deems available to the ceding insurer or its liquidator. Such expense may be filed as a claim against the insolvent ceding insurer as a Class 6 claim pursuant to 58-29B-124 to the extent of a proportionate share of the benefit that may accrue to the ceding insurer solely as result of the defense undertaken by the reinsurer. If two or more reinsurers are involved in the same claim and a majority in interest elect to interpose a defense to such claim, the expense shall be apportioned in accordance with the terms of the reinsurance agreement as though such expense had been incurred by the ceding insurer. Source: SL 2005, ch 274, 5. 
58-14-4. Credit not allowable as an asset or deduction from liability to ceding insurer--Exceptions--Payments.No credit may be allowed, as an asset or as a deduction from liability, to any ceding insurer for reinsurance unless the reinsurance contract provides, in substance, that in the event of the insolvency of the ceding insurer, the reinsurance is payable under a contract reinsured by the reinsurer on the basis of reported claims allowed in the liquidation proceeding or proof of payment of the claim by a guaranty association without diminution because of the insolvency of the ceding insurer. Such payments shall be made directly to the ceding insurer or to its domiciliary liquidator unless:(1)The contract or other written agreement specifically provides another payee of such reinsurance in the event of the insolvency of the ceding insurer; or(2)The reinsurer, with the consent of the direct insured, has assumed such policy obligations of the ceding insurer as direct obligations of the reinsurer to the payees under such policies and in substitution for the obligations of the ceding insurer to such payees. The consent of the liquidator is required for any such assumption of policy obligations effected after an order of liquidation. Source: SL 1966, ch 111, ch 4, 10 (3); SL 1992, ch 344, 15; SL 2005, ch 274, 3.  
58-14-40. Adoption of rules.The director may adopt rules pursuant to chapter 1-26 for the implementation and administration of the provisions of 58-14-24 to 58-14-42, inclusive. Source: SL 1992, ch 345, 17.
58-14-41. Compliance with and application of 58-14-24 to 58-14-42.No insurer or reinsurer may continue to do business with an agent or broker negotiating, selling, placing or soliciting reinsurance after July 1, 1993, unless the agent or broker is in compliance with 58-14-24 to 58-14-42, inclusive. Sections 58-14-24 to 58-14-42, inclusive, apply to all persons doing insurance business notwithstanding any provision in this title which exempts them from other insurance laws except insurers licensed pursuant to chapter 58-35 which do not have more than one million dollars in direct written premiums and more than one thousand policyholders in any calendar year. Source: SL 1992, ch 345, 18.
58-14-42. Qualified United States financial institution.For the purposes of 58-14-24 to 58-14-42, inclusive, a qualified United States financial institution is an institution that:(1)Is organized or licensed under the laws of the United States or any state;(2)Is regulated, supervised, and examined by United States federal or state authorities having regulatory authority over banks and trust companies; and(3)Has been determined by either the director or the securities valuation office of the National Association of Insurance Commissioners to meet the standards of financial condition and standing as are considered necessary and appropriate to regulate the quality of financial institutions whose letters of credit may be acceptable to the director. Source: SL 1992, ch 345, 19.
58-14-43. Restrictions on brokers connected to a firm or association.No person may act as a broker in this state if the broker maintains an office either directly or as a member or employee of a firm or association, or an officer, director, or employee of a corporation:(1)In this state, unless the broker is a licensed producer in this state; or(2)In another state, unless the broker is a licensed producer in this state or another state having a law substantially similar to this law or the broker is licensed in this state as a nonresident reinsurance intermediary. Source: SL 1994, ch 379, 3.
58-14-44. Restrictions on who may act as agent.No person, firm, association, or corporation may act as an agent:(1)For a reinsurer domiciled in this state, unless the agent is a licensed producer in this state;(2)In this state, if the agent maintains an office either directly or as a member or employee of a firm or association, or an officer, director, or employee of a corporation in this state, unless the agent is a licensed producer in this state;(3)In another state for a nondomestic insurer, unless the agent is a licensed producer in this state or another state having a law substantially similar to this law or the person is licensed in this state as a nonresident reinsurance intermediary. Source: SL 1994, ch 379, 4.
58-14-5. Reinsurance contracts filed by ceding insurer--Cancellation or material change, duty to inform director.A ceding insurer shall file copies of all reinsurance contracts with the director and shall promptly inform the director in writing of the cancellation or any other change of any of its reinsurance treaties or arrangements. Source: SL 1966, ch 111, ch 4, 10 (4); SL 1992, ch 344, 16.
58-14-6. Original insured--No interest in reinsurance.The original insured has no interest in a contract of reinsurance. Source: SL 1966, ch 111, ch 32, 5.
58-14-7. Credit for reinsurance allowed for domestic ceding insurer as asset or reduction.Credit for reinsurance shall be allowed a domestic ceding insurer as either an asset or a reduction from liability on account of reinsurance ceded only when the reinsurer meets any one of the requirements of 58-14-8, 58-14-9, 58-14-10, 58-14-11, 58-14-14, or 58-14-16.1. If meeting the requirements of 58-14-10 or 58-14-11, the requirements of 58-14-15 shall also be met. Credit shall be allowed under 58-14-8, 58-14-9, or 58-14-10 only as respects cessions of those kinds or classes of business which the assuming insurer is licensed or permitted to write or assume in its state of domicile or, in the case of a United States branch of an alien assuming insurer, in the state through which it is entered and licensed to transact insurance or reinsurance. Source: SL 1992, ch 344, 1; SL 2017, ch 211, 1.
58-14-8. Credit allowed for reinsurance if assuming insurer licensed in state.Credit shall be allowed if the reinsurance is ceded to an assuming insurer which is licensed to transact insurance or reinsurance in this state. Source: SL 1992, ch 344, 2.
58-14-9. Requirements for reinsurer to be accredited.Credit shall be allowed if the reinsurance is ceded to an assuming insurer that is accredited as a reinsurer in this state. For a reinsurer to be accredited, the reinsurer shall:(1)File with the director evidence of its submission to this state's jurisdiction;(2)Submit to this state's authority to examine its books and records;(3)Be licensed to transact insurance or reinsurance in at least one state or, in the case of a United States branch of an alien assuming insurer, be entered through and licensed to transact insurance or reinsurance in at least one state; (4)File annually with the director a copy of its annual statement filed with the insurance department of its state of domicile and a copy of its most recent audited financial statement; and(5)Demonstrate to the satisfaction of the director that the reinsurer has adequate financial capacity to meet reinsurance obligations and is otherwise qualified to assume reinsurance from domestic insurers. An assuming insurer is deemed to meet this requirement as of the time of the assuming insurer's application if the assuming insurer maintains a surplus as regards policyholders in an amount not less than twenty million dollars and the assuming insurer's accreditation has not been denied by the director within ninety days after submission of the assuming insurer's application.The director, after reviewing the documents submitted, may approve or disapprove the reinsurer.No credit may be allowed a domestic ceding insurer if the assuming insurer's accreditation has been revoked by the director after notice and hearing.To qualify as an accredited reinsurer, an assuming insurer shall meet all of the requirements of this section.The director may deny accreditation if the director determines that accreditation would not be in the best interest of the ceding insurer and policyholders. Source: SL 1992, ch 344, 3; SL 2017, ch 211, 2.
58-15-1. Application of chapter.This chapter applies only to contracts of life insurance and annuities, other than reinsurance, group life insurance, and group annuities. Source: SL 1966, ch 111, ch 23, 1.
58-15-10. Incontestability provision required--Exceptions.There shall be a provision that the policy, exclusive of provisions relating to health benefits or to additional benefits in the event of death by accident or accidental means, is incontestable, except for nonpayment of premiums or fraud on the part of the applicant or insured, after it has been in force during the lifetime of the insured for a period of two years from its date of issue. Source: SL 1966, ch 111, ch 23, 5; SL 2010, ch 236, 2.
58-15-100. Requirements upon receipt of information establishing knowledge of death.Upon receipt of information establishing knowledge of death, the insurer shall check its records to determine whether the insurer has any other policies, annuity contracts, or retained asset accounts for that insured.Upon receipt of information establishing knowledge of death of an insured, the insurer shall notify each United States affiliate, parent or subsidiary, as appropriate, and any entity with which the insurer contracts that may maintain or control records related to policies, annuity contracts, or retained asset accounts to which 58-15-94 to 58-15-108, inclusive, apply, of the knowledge of death or match, and make a reasonable and good faith effort to ensure that each affiliate, parent or subsidiary, or other entity performs a check of their records. Source: SL 2018, ch 280, 7.
58-15-101. Beneficiary search.If the insurer has not been contacted by a beneficiary within one hundred twenty days of an insurer's receipt of information establishing the insurer's knowledge of death, the insurer shall commence a beneficiary search. The beneficiary search shall be completed within one year from the date the insurer received the information. Source: SL 2018, ch 280, 8.
58-15-102. Disclosure of information to assist in search.An insurer may disclose the minimum necessary personal information about an insured or beneficiary to a person to whom the insurer reasonably believes may be able to assist the insurer to locate the beneficiary or a person otherwise entitled to payment of the proceeds. Source: SL 2018, ch 280, 9.
58-15-103. Search fees and costs not chargeable to beneficiary.An insurer or its service provider may not charge any beneficiary or other authorized representative for any fees or costs associated with a DMF search or verification of a DMF match conducted pursuant to 58-15-94 to 58-15-108, inclusive. Source: SL 2018, ch 280, 10.
58-15-104. Provision of claim forms or instructions to beneficiaries.If the insurer locates a beneficiary and has not received a claim from the beneficiary within thirty days after the date of location, the insurer shall provide appropriate claim forms or instructions to the beneficiary to make a claim. Source: SL 2018, ch 280, 11.
58-15-105. Request for information about beneficiaries.At no later than the policy delivery or the establishment of an account, and upon any change of insured or beneficiary, an insurer shall request information sufficient to ensure that all benefits or proceeds are distributed to the appropriate persons upon the death of the insured including, at a minimum, the name, address, date of birth, social security number, and telephone number of each insured and beneficiary of a policy or account, as applicable.If an insurer issues a policy or provides an account based on information received directly from an insured's employer, the insurer may obtain the beneficiary information by communicating with the insured after the insurer's receipt of the information from the insured's employer. Source: SL 2018, ch 280, 12.
58-15-106. Compliance documentation.The insurer shall retain documentation of compliance with 58-15-94 to 58-15-108, inclusive, for five years. Source: SL 2018, ch 280, 13.
58-15-107. Promulgation of rules regarding identification and location of beneficiaries.The director may promulgate rules, pursuant to chapter 1-26, to provide definition of terms, notification requirements, exemption criteria, beneficiary searches, and forms. Source: SL 2018, ch 280, 14.
58-15-108. Compliance with unclaimed property act.Notwithstanding the provisions of this chapter, if an insurer fails to locate a beneficiary following a beneficiary search, the insurer shall report and remit the proceeds pursuant to chapter 43-41B.Any insurer subject to 58-15-94 to 58-15-108, inclusive, shall comply with all applicable requirements in chapter 43-41B. Source: SL 2018, ch 280, 15.
58-15-11. Exclusions and restrictions unaffected by incontestability clause.A clause in any policy of life insurance providing that such policy shall be incontestable after a specified period shall preclude only a contest of the validity of the policy, and shall not preclude the assertion at any time of defenses based upon provisions in the policy which exclude or restrict coverage, whether or not such restrictions or exclusions are excepted in such clause. Source: SL 1966, ch 111, ch 23, 17.
58-15-12. Payment of premiums provision.There shall be a provision relative to the payment of premiums. Source: SL 1966, ch 111, ch 23, 13.
58-15-13. Grace period in policy.There shall be a provision that a grace period of thirty days, or of four weeks in the case of industrial life insurance policies the premiums for which are payable more frequently than monthly, shall be allowed within which the payment of any premium after the first may be made, during which period of grace the policy shall continue in full force; but if a claim arises under the policy during such period of grace the amount of any premium due or overdue may be deducted from the policy proceeds. Source: SL 1966, ch 111, ch 23, 4.
58-15-14. Automatic premium loan--Provision optional with insurer.The policy, at the insurer's option, may provide for automatic premium loan and may provide that such provisions do not become operative unless so elected by the party entitled to elect. Source: SL 1966, ch 111, ch 23, 9.
58-15-15.10. Insurance policy loan--Loan value of policy.The loan value of a policy shall be determined in accordance with 58-15-16, but no policy may terminate in a policy year as the sole result of change in the interest rate during that policy year. The life insurer shall maintain coverage during that policy year until the time at which it would otherwise have terminated if there had been no change during that policy year. Source: SL 1982, ch 358, 7.
58-15-15.11. Insurance policy loan--Provisions of statutes required in policies.The substance of the pertinent provisions of 58-15-15.6 and 58-15-15.7 regarding the adjustable maximum interest rate shall be set forth in the policies to which they apply. Source: SL 1982, ch 358, 8.
58-15-15.12. Insurance policy loan--Application of statutes on interest rates to prior contracts.The provisions of 58-15-15.4 to 58-15-15.12, inclusive, do not apply to any insurance contract issued before July 1, 1982, unless the policyholder agrees in writing to the applicability of the provisions. No other provision of the law applies to policy loan interest rates unless specifically applicable to such rates. Source: SL 1982, ch 358, 9.
58-15-15.13. Private placement policy defined.A private placement policy is a variable annuity contract or a variable life insurance policy that is:(1)Issued exclusively to a person who is an accredited investor or a qualified purchaser, as such terms are defined in the federal Securities Act of 1933 or the federal Investment Company Act of 1940, or in regulations promulgated under either such statute; and(2)Offered for sale and sold in a transaction that is exempt from registration under the federal Securities Act of 1933. Source: SL 2006, ch 252, 1; SL 2014, ch 229, 2.
58-15-15.14. Premium defined.Premium is the consideration for insurance by whatever name called. Any assessment, or any membership, policy, survey, inspection, service, or similar fee or other charge in consideration for an insurance contract is deemed part of the premium. For a private placement policy, with the consent of the insurer, premium may be in the form of assets to be held by the insurer in a separate account, as long as the fair value of the assets are independently verified at the time of receipt by the insurer. Source: SL 2014, ch 229, 3.
58-15-15.4. Insurance policy loan--Definition of terms.For purposes of 58-15-15.5 to 58-15-15.12, inclusive:(1)The rate of interest on policy loans permitted under 58-15-15.5 to 58-15-15.12, inclusive, includes the interest rate charged on reinstatement of policy loans for the period during and after any lapse of a policy;(2)The term "policy loan" includes any premium loan made under a policy to pay one or more premiums that were not paid to the life insurer as they fell due;(3)The term "policyholder" includes the owner of the policy or the person designated to pay premiums as shown on the records of the life insurer; and(4)The term "policy" includes certificates issued by a fraternal benefit society and annuity contracts which provide for policy loans. Source: SL 1982, ch 358, 1.
58-15-15.5. Published monthly average defined.For purposes of 58-15-15.4 to 58-15-15.12, inclusive, the "published monthly average" means Moody's corporate bond yield average--monthly average corporates, as published by Moody's investors service, incorporated, by yearly order of the director, or in the event that Moody's corporate bond yield average--monthly average corporates is no longer published, a substantially similar average, established by rule promulgated by the director. Source: SL 1982, ch 358, 2; SL 1986, ch 22, 28.
58-15-15.6. Insurance policy loan--Permitted interest rates.Any policy issued on or after July 1, 1982, shall provide for policy loan interest rates through a provision permitting a maximum interest rate of not more than eight percent per annum or a provision permitting an adjustable maximum interest rate established from time to time by the life insurer, as permitted by law. Source: SL 1982, ch 358, 3.
58-15-15.7. Insurance policy loan--Allowable rate under adjustable maximum interest rate.The rate of interest charged on a policy loan made under an adjustable maximum interest rate may not exceed the higher of the "published monthly average" for the calendar month ending two months before the date on which the rate is determined or the rate used to compute the cash surrender values under the policy during the applicable period plus one percent per year. If the maximum rate of interest is determined pursuant to 58-15-15.6 as an adjustable maximum rate, the policy shall contain a provision setting forth the frequency at which the rate is to be determined for that policy. Source: SL 1982, ch 358, 4.
58-15-15.8. Insurance policy loan--Determination of interest under adjustable maximum interest rate.The maximum rate of interest for each policy shall be determined at regular intervals at least once every twelve months, but not more frequently than once in any three-month period. At the intervals specified in the policy, the rate being charged may be increased whenever such increase as determined under an adjustable maximum interest rate would increase that rate by one-half percent or more per year. The rate being charged must be reduced whenever such reduction as determined under 58-15-15.7 would decrease that rate by one-half percent or more per year. Source: SL 1982, ch 358, 5.
58-15-15.9. Insurance policy loan--Notice of interest rate to policyholder.The life insurer shall notify the policyholder at the time a cash loan is made of the initial rate of interest on the loan and shall notify the policyholder with respect to premium loans of the initial rate of interest on the loan as soon as it is reasonably practical to do so after making the initial loan. Notice need not be given to the policyholder when a further premium loan is added, except that the life insurer shall send to policyholders with loans reasonable advance notice of any increase in the rate and shall include in the required notice the substance of the pertinent provisions of 58-15-15.6 and 58-15-15.7 regarding the adjustable maximum interest rate. Source: SL 1982, ch 358, 6.
58-15-15. Insurance policy loan--Security--Maximum amount--Private placement policies.There shall be a provision that after three full years' premiums have been paid and after the policy has a cash surrender value and while no premium is in default beyond the grace period for payment, the insurer shall advance, on proper assignment or pledge of the policy and on the sole security thereof, an amount not to exceed the loan value of the policy. However, in the case of a private placement policy, the obligation of the insurer to advance the loan value of the policy, or any portion of the loan value, is subject to the liquidity of separate account assets comprising such loan value, and the insurer shall advance the loan value of the policy, or any portion of the loan value, as and when the separate account assets from which the loan is to be made, can be, by their respective terms, converted to cash. Source: SL 1966, ch 111, ch 23, 9; SL 1974, ch 313, 1; SL 2006, ch 252, 2; SL 2009, ch 259, 2.
58-15-16. Loans on policies issued prior to the adoption of standard policy provisions--Loan value--Deferment of application--Private placement policies.In the case of those policies issued prior to the operative date specified in 58-15-42, the loan value referred to in 58-15-15 is the reserve at the end of the current policy year on the policy and on any dividend additions thereto, computed according to a mortality table, interest rate, and method of valuation permitted by  58-26-45 to 58-26-84, inclusive, less a sum not more than two and one-half percent of the amount insured by the policy and of any dividend additions thereto. The policy may provide that such loan may be deferred for not exceeding six months after application therefor, and shall contain a table showing in figures the loan values during at least the first twenty years of the policy or during the term of the policy, whichever is the shorter. However, in the case of a private placement policy, the policy may provide that the loan, or portions thereof, may be deferred until the separate account assets, or portion thereof, comprising such loan can be, by their respective terms, converted to cash. Source: SL 1966, ch 111, ch 23, 30 (1); SL 2006, ch 252, 3.
58-15-17. Loans on policies under standard policy provisions--Loan value--Deferment of application--Private placement policies.In the case of policies issued on or after the operative date specified in 58-15-42, the loan value referred to in 58-15-15 shall be the cash surrender value at the end of the current policy year as required by 58-15-33. The policy shall reserve to the insurer the right to defer the granting of a loan, other than for the payment of any premium to the insurer, for six months after application of the loan. For any private placement policy, the loan value shall be equal to the portion of the cash surrender value that can immediately be converted to cash, pursuant to the policyholder's consent. A private placement policy may reserve to the insurer the right to defer the granting of a loan, or any portion of the loan, until the policy separate account assets, from which the loan is to be made, can be, by their respective terms, converted to cash. Source: SL 1966, ch 111, ch 23, 30 (2); SL 2001, ch 54, 3; SL 2003, ch 245, 3; SL 2006, ch 252, 4; SL 2009, ch 259, 3.
58-15-18. Loan value of policy--Indebtedness deducted.The loan value of the policy shall be at least equal to the amount required by 58-15-16 or 58-15-17, provided that the insurer may deduct, either from such loan value or from the proceeds of the loan, any existing indebtedness not already deducted in determining such amount including any interest then accrued but not due, any unpaid balance of the premium for the current policy year, and interest on the loan to the end of the current policy year. Source: SL 1966, ch 111, ch 23, 9.
58-15-19. Delinquent interest on policy loan exceeding amount of loan value--Termination of policy, notice.The policy may also provide that if interest on any indebtedness is not paid when due it shall then be added to the existing indebtedness and shall bear interest at the same rate, and that if and when the total indebtedness on the policy, including interest due or accrued, equals or exceeds the amount of the loan value thereof, then the policy shall terminate and become void but not until at least thirty days' notice shall have been mailed by the insurer to the last known address of the insured or policy owners and of any assignee of record at the home office of the insurer. Source: SL 1966, ch 111, ch 23, 9.
58-15-2. Industrial life insurance defined.For the purpose of this title "industrial life insurance" is that form of life insurance written under policies of face amount of one thousand dollars or less bearing the words "industrial policy" imprinted on the face thereof as part of the descriptive matter, and under which premiums are payable monthly or more often. Source: SL 1966, ch 111, ch 23, 2.
58-15-20. Policy loan provisions inapplicable to term insurance or industrial life insurance policies.Sections 58-15-14 to 58-15-19, inclusive, shall not apply to term policies nor to term insurance benefits provided by rider or supplemental policy provisions, or to industrial life insurance policies. Source: SL 1966, ch 111, ch 23, 9.
58-15-21. Nonforfeiture of benefits--Cash surrender value--Provisions required in policies.There shall be a provision for nonforfeiture benefits and cash surrender value in accordance with the requirements of 58-15-30 or 58-15-31 to 58-15-43, inclusive. Source: SL 1966, ch 111, ch 23, 10.
58-15-22. Reinstatement provisions required in policy.There shall be a provision that unless:(1)The policy has been surrendered for its cash surrender value, or(2)Its cash surrender value has been exhausted, or(3)The paid-up term insurance, if any, has expired, the policy will be reinstated at any time within three years, or two years in the case of industrial life insurance policies, from the date of premium default upon written application therefor, the production of evidence of insurability satisfactory to the insurer, the payment of all premiums in arrears and the payment or reinstatement of any other indebtedness to the insurer upon the policy, all with interest at a rate as provided in 58-15-15.6. Source: SL 1966, ch 111, ch 23, 12; SL 1982, ch 358, 10.
58-15-23. Participating policies--Annual dividends, ascertainment, and apportionment.There shall be a provision in participating policies that, beginning not later than the end of the third policy year, the insurer shall annually ascertain and apportion the divisible surplus, if any, that will accrue on the policy anniversary or other dividend date specified in the policy provided the policy is in force and all premiums to that date are paid. Source: SL 1966, ch 111, ch 23, 8 (1).
58-15-24. Participating policies--Rights of policyholder to dividends.Except as hereinafter provided, any dividend becoming payable shall at the option of the party entitled to elect such option be either:(1)Payable in cash, or(2)Applied to any one of such other dividend options as may be provided by the policy. If any such other dividend options are provided, the policy shall further state which option shall be automatically effective if such party shall not have elected some other option. If the policy specifies a period within which such other dividend option may be elected, such period shall be not less than thirty days following the date on which such dividend is due and payable.The annually apportioned dividend shall be deemed to be payable in cash within the meaning of subdivision (1) above even though the policy provides that payment of such dividend is to be deferred for a specified period, provided such period does not exceed six years from the date of apportionment and that interest will be added to such dividend at a specified rate. If a participating policy provides that the benefit under any paid-up nonforfeiture provision is to be participating, it may provide that any divisible surplus becoming payable or apportioned while the insurance is in force under such nonforfeiture provision shall be applied in the manner set forth in the policy. Source: SL 1966, ch 111, ch 23, 8 (1).
58-15-25. Participating industrial life insurance policies--Annual participation of policy in divisible surplus.In participating industrial life insurance policies, in lieu of the provision required in 58-15-23 and 58-15-24, there shall be a provision that, beginning not later than the end of the fifth policy year, the policy shall participate annually in the divisible surplus, if any, in the manner set forth in the policy. Source: SL 1966, ch 111, ch 23, 8 (2).
58-15-26.1. Insurers to pay interest on life insurance proceeds.Any insurer admitted to transact life insurance in this state shall pay interest on proceeds of, or payments under, any individual or group policy of life insurance which are payable to any beneficiary under a policy issued for delivery in this state. Source: SL 1987, ch 375, 1.
58-15-26.2. Computation of interest.Interest payable pursuant to 58-15-26.1 shall be computed from the date of death of the insured until the date of payment and shall be at the rate of four percent per annum or not less than the current rate of interest on death proceeds left on deposit with the insurer under an interest settlement option, whichever rate is greater. For any private placement policy, the interest shall be computed commencing the latter of sixty days succeeding the date of death of the insured or the date proof of death has been received by the insurer in good order until the date of payment. In any private placement policy, the obligation of the insurer to pay interest on that portion of the policy attributable to separate account assets may only be computed as and when such assets are, by their respective terms, either converted to cash or otherwise dispersible by the insurer. Source: SL 1987, ch 375, 2; SL 2001, ch 54, 5; SL 2003, ch 245, 5; SL 2009, ch 259, 5.
58-15-26.3. Interest not required where beneficiary elects to receive other than lump sum payment.The provisions of 58-15-26.1 do not require the payment of interest in any case in which the beneficiary elects in writing delivered to the insurer to receive the proceeds of or payments under a life insurance policy by any means other than a lump sum payment. Source: SL 1987, ch 375, 3.
58-15-26.4. Notice to beneficiary of interest.In any case in which interest on the proceeds of, or payments under, any policy of life insurance becomes payable pursuant to 58-15-26.1, the insurer shall notify the named beneficiary or beneficiaries at their last known address that interest will be paid on the proceeds of or payments under the policy. The notice shall specify the rate of interest to be paid. Source: SL 1987, ch 375, 4.
58-15-26.5. Application limited.The provisions of 58-15-26.1 to 58-15-26.5, inclusive, shall apply only to deaths of insureds which occur on or after July 1, 1987. Source: SL 1987, ch 375, 5.
58-15-26. Payment of claims for benefits--Private placement policies.There shall be a provision that when a policy becomes a claim by the death of the insured, settlement shall be made upon receipt of due proof of death and, at the insurer's option, surrender of the policy or proof of the interest of the claimant, or both. If an insurer shall specify a particular period prior to the expiration of which settlement shall be made, such period may not exceed two months from the receipt of such proof. For any private placement policy, settlement may be made in cash or, if allowed under the policy, by distributing assets of the separate account to the claimant with the consent of the policyholder or the policyholder's designee, as long as the fair market value of the assets are independently verified at the time of disbursement by the insurer. In any private placement policy, the obligation of the insurer to settle that portion of the policy attributable to separate account assets is subject to the liquidity of such assets, and the insurer shall settle such portion of the policy as and when such assets can be, by their respective terms, either converted to cash, which may be later than two months after the insurer's receipt of due proof of death, or otherwise dispersible by the insurer. Source: SL 1966, ch 111, ch 23, 14; SL 2001, ch 54, 4; SL 2003, ch 245, 4; SL 2006, ch 252, 5; SL 2009, ch 259, 4; SL 2020, ch 207,  1.
58-15-27. Beneficiary to be designated in industrial life policy--Change of beneficiary--Endorsement on policy.An industrial life insurance policy shall have the name of the beneficiary designated thereon with a reservation of the right to change the beneficiary after the issuance of the policy. The policy may also provide that no designation or change of beneficiary shall be binding on the insurer until endorsed on the policy by the insurer, and that the insurer may refuse to endorse the name of any proposed beneficiary who does not appear to the insurer to have an insurable interest in the life of the insured. Source: SL 1966, ch 111, ch 23, 15.
58-15-28. Industrial life policy--Payment of benefits.An industrial life policy may also provide that if the beneficiary designated in the policy does not make a claim under the policy or does not surrender the policy with due proof of death within the period stated in the policy, which shall not be less than thirty days after the death of the insured, or if the beneficiary is the estate of the insured, or is a minor, or dies before the insured, or is not legally competent to give a valid release, then the insurer may make any payment thereunder to the personal representative of the insured, or to any relative of the insured by blood or legal adoption or connection by marriage, or to any person appearing to the insurer to be equitably entitled thereto by reason of having been named beneficiary, or by reason of having incurred expense for the maintenance, medical attention or burial of the insured. The policy may also include a similar provision applicable to any other payment due under the policy. Source: SL 1966, ch 111, ch 23, 15; SL 1995, ch 167, 188.
58-15-29. Installment payments--Table of guaranteed installments required.In case the policy provides that the proceeds may be payable in installments which are determinable at the time of issuance of the policy, there shall be a table showing the amounts of the guaranteed installments. Source: SL 1966, ch 111, ch 23, 11.
58-15-3. Investment of trust funds in life insurance and annuities.Personal representatives, conservators, and trustees may invest the funds of their trusts, in the absence of any provision pertaining to investments contained in the instrument under which they are acting, in insurance policies and annuities of life insurers authorized to do business in South Dakota and, with the approval of the court, may retain and pay premiums on annuities, life insurance policies and health insurance policies benefitting the beneficiary of the trust or the ward or their dependents. Source: SL 1966, ch 111, ch 23, 34; SL 1993, ch 213, 259; SL 1995, ch 167, 188.
58-15-30. Nonforfeiture benefits in policies issued prior to the adoption of standard nonforfeiture law.This section shall apply only to policies of life insurance issued prior to the operative date specified in 58-15-42.The nonforfeiture benefit referred to in 58-15-21 shall be available to the owner of the policy in event of default in premium payments, after premiums shall have been paid for three years, and shall be a stipulated form of insurance, the net value of which shall be at least equal to the reserve at the date of default on the policy and on any dividend additions thereto, computed according to a mortality table, interest rate, and method of valuation permitted by 58-26-17 to 58-26-20, inclusive, less a sum not more than two and one-half percent of the amount insured by the policy and of any existing dividend additions thereto, and less any existing indebtedness to insurer on the policy. The policy shall stipulate that it may be surrendered to the insurer at its home office within one month from date of default for a specified cash value at least equal to the sum which would otherwise be available for the purchase of insurance as aforesaid and may stipulate that the insurer may defer payment for not more than six months after the application therefor is made. Provided, however, that if the benefits under the policy are calculated according to the commissioner's 1958 standard ordinary mortality table, the value of any extended term insurance, with accompanying pure endowment, if any, may be calculated according to rates of mortality not exceeding those shown in the commissioner's 1958 extended term insurance table, and that if the benefits under the policy are calculated according to any other more modern table than the American experience table of mortality, the value of any extended term insurance, with accompanying pure endowment, if any, may be calculated according to rates of mortality not exceeding one hundred thirty percent of the rates according to such more modern table. The policy shall contain a table showing in figures the options available each year upon default in premium payments during at least the first twenty years of the policy, or during the term of the policy, whichever is the shorter. This section shall not apply to term insurance of twenty years or less or to industrial life insurance policies. Source: SL 1966, ch 111, ch 23, 29.
58-15-31. Nonforfeiture benefits in policies issued under standard nonforfeiture law.In the case of policies issued on or after the operative date of 58-15-31 to 58-15-43, inclusive, as defined in 58-15-42, no policy of life insurance, except as stated in 58-15-41, may be delivered or issued for delivery in this state unless it contains in substance the following provisions, or corresponding provisions which in the opinion of the director of the Division of Insurance are at least as favorable to the defaulting or surrendering policyholder as are the minimum requirements specified in 58-15-31 to 58-15-43, inclusive, and are essentially in compliance with 58-15-43.13:(1)That, in the event of default in any premium payment, the insurer will grant, upon proper request not later than sixty days after the due date of the premium in default, a paid-up nonforfeiture benefit on a plan stipulated in the policy, effective as of such due date, of such amount as may be specified in 58-15-34. In lieu of such stipulated paid-up nonforfeiture benefit, the insurer may substitute, upon proper request not later than sixty days after the due date of the premium in default, an actuarially equivalent alternative paid-up nonforfeiture benefit which provides a greater amount or longer period of death benefits or, if applicable, a greater amount or earlier payment of endowment benefits;(2)That, upon surrender of the policy within sixty days after the due date of any premium payment in default after premiums have been paid for at least three full years in the case of ordinary insurance or five full years in the case of industrial insurance, the insurer will pay, in lieu of any paid-up nonforfeiture benefit, a cash surrender value of such amount as may be specified in 58-15-33;(3)That a specified paid-up nonforfeiture benefit shall become effective as specified in the policy unless the person entitled to make such election elects another available option not later than sixty days after the due date of the premium in default;(4)That, if the policy shall have become paid up by completion of all premium payments or if it is continued under any paid-up nonforfeiture benefit which became effective on or after the third policy anniversary in the case of ordinary insurance or the fifth policy anniversary in the case of industrial insurance, the insurer will pay, upon surrender of the policy within thirty days after any policy anniversary, a cash surrender value of such amount as may be specified in 58-15-33;(5)In the case of policies which cause on a basis guaranteed in the policy unscheduled changes in benefits or premiums, or which provide an option for changes in benefits or premiums other than a change to a new policy, a statement of the mortality table, interest rate and method used in calculating cash surrender values and the paid-up nonforfeiture benefits available under the policy. In the case of all other policies, a statement of the mortality table and interest rate used in calculating the cash surrender values and the paid-up nonforfeiture benefits available under the policy, together with a table showing the cash surrender value, if any, and paid-up nonforfeiture benefit, if any, available under the policy on each policy anniversary, either during the first twenty policy years or during the term of the policy, whichever is shorter, such values and benefits to be calculated upon the assumption that there are no dividends or paid-up additions credited to the policy and that there is no indebtedness to the insurer on the policy; and (6)A statement that the cash surrender values and the paid-up nonforfeiture benefits available under the policy are not less than the minimum values and benefits required by or pursuant to the insurance laws of the state in which the policy is delivered; an explanation of the manner in which the cash surrender values and the paid-up nonforfeiture benefits are altered by the existence of any paid-up additions credited to the policy or any indebtedness to the insurer on the policy; if a detailed statement of the method of computation of the values and benefits shown in the policy is not stated therein, a statement that such method of computation has been filed with the insurance supervisory official of the state in which the policy is delivered; and a statement of the method to be used in calculating the cash surrender value and paid-up nonforfeiture benefit available under the policy or any policy anniversary beyond the last anniversary for which such values and benefits are consecutively shown in the policy. Source: SL 1966, ch 111, ch 23, 28 (1); SL 1982, ch 357, 1.
58-15-33. Cash surrender value--Amount available under policy on default of premium--Paid-up policy.Any cash surrender value available under the policy in the event of default in a premium payment due on any policy anniversary, whether or not required by 58-15-31 shall be an amount not less than the excess, if any, of the present value on such anniversary, of the future guaranteed benefits which would have been provided for by the policy, including any existing paid-up additions, if there had been no default, over the sum of the then present value of the adjusted premiums as defined in 58-15-35 to 58-15-38, inclusive, and 58-15-43.1 to 58-15-43.11, inclusive, corresponding to premiums which would have fallen due on and after such anniversary, and the amount of any indebtedness to the insurer on the policy. Any cash surrender value available within thirty days after any policy anniversary under any policy paid up by completion of all premium payments or any policy continued under any paid-up nonforfeiture benefit, whether or not required by 58-15-31, shall be an amount not less than the present value, on such anniversary, of the future guaranteed benefits provided for by the policy, including any existing paid-up additions, decreased by any indebtedness to the insurer on the policy.However, for any policy issued on or after the operative date of  58-15-43.1 to 58-15-43.11, inclusive, which provides supplemental life insurance or annuity benefits at the option of the insured and for an identifiable additional premium by rider or supplemental policy provision, the cash surrender value referred to in the first paragraph of this section shall be an amount not less than the sum of the cash surrender value as defined in that paragraph for an otherwise similar policy issued at the same age without a rider or supplemental policy provision and the cash surrender value as defined in that paragraph for a policy which provides only the benefits otherwise provided by a rider or supplemental policy provision.Further, for any family policy issued on or after the operative date of 58-15-43.1 to 58-15-43.11, inclusive, which defines a primary insured and provides term insurance on the life of the spouse of the primary insured expiring before the spouse's age seventy-one, the cash surrender value referred to in the first paragraph of this section shall be an amount not less than the sum of the cash surrender value as defined in that paragraph for an otherwise similar policy issued at the same age without term insurance on the life of the spouse and the cash surrender value as defined in that paragraph for a policy which provides only the benefits otherwise provided by term insurance on the life of the spouse.Any cash surrender value available within thirty days after any policy anniversary under any policy paid-up by completion of all premium payments or any policy continued under any paid-up nonforfeiture benefit, whether or not required by 58-15-31, shall be an amount not less than the present value, on such anniversary of the future guaranteed benefits provided for by the policy, including any existing paid-up additions, decreased by any indebtedness to the insurer on the policy.If the cash surrender value is in excess of one million dollars, the term, cash surrender value, may include payment of assets to the policyholder as well as payment of cash, if allowed under the policy, with the consent of the policyholder. Source: SL 1966, ch 111, ch 23, 28 (3); SL 1982, ch 357, 2; SL 2001, ch 54, 6; SL 2003, ch 245, 6.
58-15-34. Paid-up nonforfeiture benefits--Default in payment of premium.Any paid-up nonforfeiture benefit available under the policy in the event of default in a premium payment due on any policy anniversary shall be such that its present value as of such anniversary shall be at least equal to the cash surrender value then provided for by the policy or, if none is provided for, that cash surrender value which would have been required by 58-15-33 in the absence of the condition that premiums shall have been paid for at least a specified period. Source: SL 1966, ch 111, ch 23, 28 (4).
58-15-35. Adjustment of premiums under nonforfeiture provisions.Except as provided in 58-15-37, the adjusted premiums for any policy shall be calculated on an annual basis and shall be such uniform percentage of the respective premiums specified in the policy for each policy year, excluding any extra premiums charged because of impairments or special hazards, that the present value, at the date of issue of the policy, of all such adjusted premiums shall be equal to the sum of:(1)The then present value of the future guaranteed benefits provided for by the policy;(2)Two percent of the amount of the insurance, if the insurance be uniform in amount, or of the equivalent uniform amount, as defined in 58-15-36, if the amount of insurance varies with duration of the policy;(3)Forty percent of the adjusted premium for the first policy year;(4)Twenty-five percent of either the adjusted premium for the first policy year or the adjusted premium for a whole life policy of the same uniform or equivalent uniform amount with uniform premiums for the whole of life issued at the same age for the same amount of insurance, whichever is less.However, in applying the percentages specified in subdivisions (3) and (4) above, no adjusted premium shall be deemed to exceed four percent of the amount of insurance or uniform amount equivalent thereto. The date of issue of a policy for the purpose of 58-15-35 to 58-15-38, inclusive, shall be the date as of which the rated age of the insured is determined. This section and 58-15-36 to 58-15-38, inclusive, may not apply to policies issued on or after the operative date of 58-15-43.1 to 58-15-43.11, inclusive. Source: SL 1966, ch 111, ch 23, 28 (5); SL 1982, ch 357, 3.
58-15-36. Amount of insurance varying with duration of policy--Adjustment of premiums.In the case of a policy providing an amount of insurance varying with duration of the policy, the equivalent uniform amount thereof for the purpose of 58-15-35 to 58-15-38, inclusive, shall be deemed to be the uniform amount of insurance provided by an otherwise similar policy, containing the same endowment benefit or benefits, if any, issued at the same age and for the same term, the amount of which does not vary with duration and the benefits under which have the same present value at the date of issue as the benefits under the policy, provided, however, that in the case of a policy providing a varying amount of insurance issued on the life of a child under age ten, the equivalent uniform amount may be computed as though the amount of insurance provided by the policy prior to the attainment of age ten were the amount provided by such policy at age ten. Source: SL 1966, ch 111, ch 23, 28 (5).
58-15-37. Adjusted premiums--Term insurance benefits provided by rider or supplemental policy.The adjusted premiums for any policy providing term insurance benefits by rider or supplemental policy provision shall be equal to:(1)The adjusted premiums for an otherwise similar policy issued at the same age without such term insurance benefits, increased during the period for which premiums for such term insurance benefits are payable, by(2)The adjusted premiums for such term insurance,the foregoing items (1) and (2) being calculated separately and as specified in 58-15-35 and 58-15-36 except that, for the purposes of subdivisions 58-15-35(2), (3), and (4), the amount of insurance or equivalent uniform amount of insurance used in the calculation of the adjusted premiums referred to in item (2) of this section shall be equal to the excess of the corresponding amount determined for the entire policy over the amount used in the calculation of the adjusted premiums in item (1) of this section. Source: SL 1966, ch 111, ch 23, 28 (5).
58-15-38. Adjusted premiums and present values--Computation.Except as otherwise provided in 58-15-43.1 to 58-15-43.11, inclusive, all adjusted premiums and present values referred to in 58-15-31 to 58-15-43, inclusive, shall for all policies of ordinary insurance be calculated on the basis of the commissioner's 1958 standard ordinary mortality table; provided that for any category of ordinary insurance issued on female risks, adjusted premiums and present values may be calculated according to an age not more than six years younger than the actual age of the insured. Such calculations for all policies of industrial insurance shall be made on the basis of the 1941 standard industrial mortality table. However, any insurer may file with the director of the Division of Insurance a written notice of its election that such adjusted premiums and present values shall be calculated on the basis of the commissioner's 1961 standard industrial mortality table, after a specified date before January 1, 1968. Further, whether or not any election has been made, such commissioner's 1961 standard industrial mortality table shall be the basis for such calculations as to all policies of industrial insurance issued on or after January 1, 1968. All calculations shall be made on the basis of the rate of interest specified in the policy for calculating cash surrender values and paid-up nonforfeiture benefits, which rate of interest may not exceed three and one-half percent per annum except that a rate of interest not exceeding four percent per annum may be used for policies issued on or after July 1, 1973, and prior to July 1, 1978, and a rate of interest not exceeding five and one-half percent per annum may be used for policies issued on or after July 1, 1978, except that for any single premium whole life or endowment insurance policy a rate of interest not exceeding six and one-half percent per annum may be used. However, in calculating the present value of any paid-up term insurance with accompanying pure endowment, if any, offered as a nonforfeiture benefit, the rates of mortality assumed in the case of policies of ordinary insurance, may be not more than those shown in the commissioner's 1958 extended term insurance table, and, in the case of policies of industrial insurance, may be not more than one hundred thirty percent of the rates of mortality according to the 1941 standard industrial mortality table, except that when the commissioner's 1961 standard industrial mortality table becomes applicable, as hereinbefore provided, such rates of mortality assumed may be not more than those shown in the commissioner's 1961 industrial extended term insurance table. Further for insurance issued on a substandard basis, the calculation of any such adjusted premiums and present values may be based on such other table of mortality as may be specified by the insurer and approved by the director. Source: SL 1966, ch 111, ch 23, 28 (5); SL 1973, ch 299, 1; SL 1977, ch 412, 1; SL 1982, ch 357, 4.
58-15-39. Default in payment of premium--Computation of cash surrender value and paid-up nonforfeiture benefit.Any cash surrender value and any paid-up nonforfeiture benefit, available under the policy in the event of default in a premium payment due at any time other than on the policy anniversary, shall be calculated with allowance for the lapse of time and the payment of fractional premiums beyond the last preceding policy anniversary. All values referred to in 58-15-33 to 58-15-39, inclusive, may be calculated upon the assumption that any death benefit is payable at the end of the policy year of death. The net value of any paid-up additions, other than paid-up term additions, may be not less than the amounts used to provide such additions. Source: SL 1966, ch 111, ch 23, 28 (6); SL 1982, ch 357, 17.
58-15-4. Standard provisions required in policy of life insurance, exceptions.No policy of life insurance, other than group and pure endowments with or without return of premiums or of premiums and interest, shall be delivered or issued for delivery in this state unless it contains in substance all of the applicable provisions required by 58-15-7 to 58-15-29, inclusive. Source: SL 1966, ch 111, ch 23, 3 (1).
58-15-40. Additional accident benefits--Premiums disregarded in ascertaining cash surrender value.Notwithstanding the provisions of 58-15-33, additional benefits payable in the event of death or dismemberment by accident or accidental means, in the event of total and permanent disability, as reversionary annuity or deferred reversionary annuity benefits, as term insurance benefits provided by a rider or supplemental policy provision to which if issued as a separate policy, 58-15-31 to 58-15-43, inclusive, would not apply, as term insurance on the life of a child or on the lives of children provided in a policy on the life of a parent of the child, if such term insurance expires before the child's age is twenty-six, is uniform in amount after the child's age is one, and has not become paid up by reason of the death of a parent of the child, and as other policy benefits additional to life insurance and endowment benefits, and premiums for all such additional benefits, shall be disregarded in ascertaining cash surrender values and nonforfeiture benefits required by 58-15-33 and 58-15-34, and no such additional benefits shall be required to be included in any paid-up nonforfeiture benefits. Source: SL 1966, ch 111, ch 23, 28 (6).
58-15-41. Nonforfeiture benefit provision inapplicable to reinsurance, group insurance, annuity contracts, or term insurance.The provisions of 58-15-31 to 58-15-43, inclusive, do not apply to any reinsurance; group insurance; pure endowment; annuity or reversionary annuity contract; term policy of uniform amount, which provides no guaranteed nonforfeiture or endowment benefits, or renewal thereof, of twenty years or less expiring before age seventy-one, for which uniform premiums are payable during the entire term of the policy; term policy of decreasing amount, which provides no guaranteed nonforfeiture or endowment benefits, on which each adjusted premium, calculated as specified in 58-15-35 to 58-15-38, inclusive, and 58-15-43.1 to 58-15-43.11, inclusive, is less than the adjusted premium so calculated, on a term policy of uniform amount, or renewal thereof, which provides no guaranteed nonforfeiture or endowment benefits, issued at the same age and for the same initial amount of insurance and for a term of twenty years or less expiring before age seventy-one, for which uniform premiums are payable during the entire term of the policy; policy, which provides no guaranteed nonforfeiture or endowment benefits, for which no cash surrender value, if any, or present value of any paid-up nonforfeiture benefit, at the beginning of any policy year, calculated as specified in 58-15-33 to 58-15-38, inclusive, and 58-15-43.1 to 58-15-43.11, inclusive, exceeds two and one- half percent of the amount of insurance at the beginning of the same policy year; nor policy which is delivered outside this state through an insurance producer or other representative of the company issuing the policy. For purposes of determining the applicability of 58-15-31 to 58-15-43, inclusive, the age at expiry for a joint term life insurance policy is the age at expiry of the oldest life. Source: SL 1966, ch 111, ch 23, 28 (7); SL 1982, ch 357, 19; SL 2001, ch 286, 108.
58-15-42. Notice by company of election to comply with nonforfeiture benefit provisions--Filing with director.After July 1, 1966, any company could file with the director a written notice of its election to comply with the provisions of 58-15-31 to 58-15-43, inclusive, after a specified date before January 1, 1967. After the filing of such notice, then upon such specified date, which shall be the operative date of said sections for such company, this section became operative with respect to the policies thereafter issued by such company. If a company made no such election, the operative date of said sections for such company shall be January 1, 1967. Source: SL 1966, ch 111, ch 23, 28 (8).
58-15-43.1. Adjusted premiums--Calculation on annual basis.Sections 58-15-43.1 to 58-15-43.11, inclusive, apply to all policies issued on or after July 1, 1982. Except as provided in 58-15-43.7, the adjusted premiums for any policy shall be calculated on an annual basis and shall be such uniform percentage of the respective premiums specified in the policy for each policy year, excluding amounts payable as extra premiums to cover impairments or special hazards and also excluding any uniform annual contract charge or policy fee specified in the policy in a statement of the method to be used in calculating the cash surrender values and paid up nonforfeiture benefits, that the present value, at the date of issue of the policy, of all adjusted premiums is equal to the sum of the then present value of the future guaranteed benefits provided for by the policy; one percent of either the amount of insurance, if the insurance be uniform in amount, or the average amount of insurance at the beginning of each of the first ten policy years; and one hundred twenty-five percent of the nonforfeiture net level premium as hereinafter defined. However, in applying the above percentage, no nonforfeiture net level premium may be deemed to exceed four percent of either the amount of insurance, if the insurance be uniform in amount, or the average amount of insurance at the beginning of each of the first ten policy years. The date of issue of a policy for the purpose of this section is the date as of which the rated age of the insured is determined. Source: SL 1982, ch 357, 5.
58-15-43.10. Refiling of nonforfeiture values or methods of computation.Notwithstanding any other provision in this code to the contrary, any refiling of nonforfeiture values or their methods of computation for any previously approved policy form which involves only a change in the interest rate or mortality table used to compute nonforfeiture values do not require refiling of any other provisions of that policy form. Source: SL 1982, ch 357, 14.
58-15-43.11. Notice of election to comply with revised nonforfeiture.After July 1, 1982, any insurer may file with the director of the Division of Insurance a written notice of its election to comply with the provisions of 58-15-43.1 to 58-15-43.11, inclusive, after a specified date before January 1, 1989, which shall be the effective date of 58-15-43.1 to 58-15-43.11, inclusive, for the insurer. If an insurer makes no election, the operative date of this section for such insurer is January 1, 1989. Source: SL 1982, ch 357, 15.
58-15-43.12. Insurance plans to conform to minimum standards of nonforfeiture laws.In the case of any plan of life insurance which provides for future premium determination, the amounts of which are to be determined by the insurer based on then estimates of future experience, or in the case of any plan of life insurance which is of such a nature that minimum values cannot be determined by the methods described in 58-15-31 to 58-15-38, inclusive, and 58-15-43.1 to 58-15-43.11, inclusive, then the director of the Division of Insurance must be satisfied that the benefits provided under the plan are substantially as favorable to policy holders and insureds as the minimum benefits otherwise required by those sections. Further, the director must be satisfied that the benefits and the pattern of premiums of that plan do not mislead prospective policyholders or insureds. In addition the cash surrender values and paid-up nonforfeiture benefits provided by the plan may not be less than the minimum values and benefits required for the plan computed by a method consistent with the principles of this chapter, as determined by regulations promulgated by the director. Source: SL 1982, ch 357, 16.
58-15-43.13. Default in payment of premium--Amount of cash surrender value--Amount of nonforfeiture factor--Policies issued after January 1, 1986.This section, in addition to all other applicable sections of this chapter, applies to all policies issued on or after January 1, 1986. Any cash surrender value available under the policy in the event of default in a premium payment due on any policy anniversary shall be in an amount which does not differ by more than two-tenths of one percent of either the amount of insurance, if the insurance be uniform in amount, or the average amount of insurance at the beginning of each of the first ten policy years, from the sum of the greater of zero and the basic cash value hereinafter specified and the present value of any existing paid-up additions less the amount of any indebtedness to the insurer under the policy. The basic cash value is equal to the present value, on the anniversary, of the future guaranteed benefits which would have been provided for by the policy, excluding any existing paid-up additions and before deduction of any indebtedness to the insurer, if there had been no default, less the then present value of the nonforfeiture factors, as hereinafter defined, corresponding to premiums which would have fallen due on and after such anniversary. However, the effects on the basic cash value of supplemental life insurance or annuity benefits or of family coverage, as described in 58-15-33 or 58-15-35 to 58-15-38, inclusive, whichever is applicable, are the same as are the effects specified in 58-15-33 or 58-15-35 to 58-15-38, inclusive, whichever is applicable on the cash surrender values defined in those sections. The nonforfeiture factor for each policy year is an amount equal to a percentage of the adjusted premium for the policy year, as defined in 58-15-35 to 58-15-38, inclusive, or 58-15-43.1 to 58-15-43.11, inclusive, whichever is applicable. That percentage must be the same percentage for each policy year between the second policy anniversary and the later of the fifth policy anniversary and the first policy anniversary at which there is available under the policy a cash surrender value in an amount, before including any paid-up additions and before deducting any indebtedness, of at least two-tenths of one percent of either the amount of insurance, if the insurance be uniform in amount, or the average amount of insurance at the beginning of each of the first ten policy years; and must be such that no percentage after the later of the two policy anniversaries specified in the preceding may apply to fewer than five consecutive policy years. However, no basic cash value may be less than the value which would be obtained if the adjusted premiums for the policy, as defined in 58-15-35 to 58-15-38, inclusive, or 58-15-43.1 to 58-15-43.11, inclusive, whichever is applicable, were substituted for the nonforfeiture factors in the calculation of the basic cash value.All adjusted premiums and present values referred to in this section shall for a particular policy be calculated on the same mortality and interest bases as are used in demonstrating the policy's compliance with the other sections of this chapter. The cash surrender values referred to in this section shall include any endowment benefits provided for by the policy.Any cash surrender value available other than in the event of default in a premium payment due on a policy anniversary, and the amount of any paid-up nonforfeiture benefit available under the policy in the event of default in a premium payment are determined in manners consistent with the manners specified for determining the analogous minimum amounts in 58-15-31 to 58-15-34, inclusive, 58-15-39 and 58-15-40, and 58-15-43.1 to 58-15-43.11, inclusive. The amounts of any cash surrender values and of any paid-up nonforfeiture benefits granted in connection with additional benefits such as those listed in 58-15-40 shall conform with the principles of this section. Source: SL 1982, ch 357, 18.
58-15-43.2. Nonforfeiture net level premium determined.The nonforfeiture net level premium is equal to the present value, at the date of issue of the policy, of the guaranteed benefits provided for by the policy divided by the present value, at the date of issue of the policy, of an annuity of one per annum payable on the date of issue of the policy and on each anniversary of the policy on which a premium falls due. Source: SL 1982, ch 357, 6.
58-15-43.3. Initial calculation of changes in benefits or premiums--Recalculation after change.In the case of a policy which causes, on a basis guaranteed in the policy, unscheduled changes in benefits or premiums, or which provides an option for changes in benefits or premiums other than a change to a new policy, the adjusted premiums and present values shall initially be calculated on the assumption that future benefits and premiums do not change from those stipulated at the date of issue of the policy. At the time of any such change in the benefits or premiums, the future adjusted premiums, nonforfeiture net level premiums and present values shall be recalculated on the assumption that future benefits and premiums do not change from those stipulated by the policy immediately after the change. Source: SL 1982, ch 357, 7.
58-15-43.4. Recalculated future adjusted premiums.Except as otherwise provided in 58-15-43.7, the recalculated future adjusted premiums for any such policy shall be such uniform percentage of the respective future premiums specified in the policy for each policy year, excluding amounts payable as extra premiums to cover impairments and special hazards, and also excluding any uniform annual contract charge or policy fee specified in the policy in a statement of the method to be used in calculating the cash surrender values and paid-up nonforfeiture benefits, that the present value, at the time of change to the newly defined benefits or premiums, of all the future adjusted premiums is equal to the excess of (A) the sum of the then present value of the then future guaranteed benefits provided for by the policy and the additional expense allowance, if any, over (B) the then cash surrender value, if any, or present value of any paid-up nonforfeiture benefit under the policy. Source: SL 1982, ch 357, 8.
58-15-43.5. Additional expense allowance.The additional expense allowance, at the time of the change to the newly defined benefits or premiums, is the sum of one percent of the excess, if positive, of the average amount of insurance at the beginning of each of the first ten policy years subsequent to the change, over the average amount of insurance prior to the change at the beginning of each of the first ten policy years subsequent to the time of the most recent previous change, or, if there has been no previous change, the date of issue of the policy; and one hundred twenty-five percent of the increase, if positive, in the nonforfeiture net level premium. Source: SL 1982, ch 357, 9.
58-15-43.6. Recalculated nonforfeiture net level premium.The recalculated nonforfeiture net level premium is equal to the result obtained by dividing (A) by (B) if (A) equals the sum of the nonforfeiture net level premium applicable prior to the change times the present value of an annuity of one per annum payable on each anniversary of the policy on or subsequent to the date of the change on which a premium would have fallen due had the change not occurred, and the present value of the increase in future guaranteed benefits provided for by the policy, and (B) equals the present value of an annuity of one per annum payable on each anniversary of the policy on or subsequent to the date of change on which a premium falls due. Source: SL 1982, ch 357, 10.
58-15-43.7. Substandard policy--Calculation of adjusted premiums and present value.Notwithstanding any other provisions of 58-15-43.1 to 58-15-43.11, inclusive, to the contrary, in the case of a policy issued on a substandard basis which provides reduced graded amounts of insurance so that, in each policy year, the policy has the same tabular mortality cost as an otherwise similar policy issued on the standard basis which provides higher uniform amounts of insurance, adjusted premiums, and present values for such substandard policy may be calculated as if it were issued to provide the higher uniform amounts of insurance on the standard basis. Source: SL 1982, ch 357, 11.
58-15-43.8. Adjusted premiums and present values--Calculation--Applicable procedures and tables.All adjusted premiums and present values referred to in 58-15-31 to 58-15-43, inclusive, are calculated for all policies of ordinary insurance on the basis of the commissioner's 1980 standard ordinary mortality table or, at the election of the insurer, for any one or more specified plans of life insurance, the commissioner's 1980 standard ordinary mortality table with ten-year select mortality factors are calculated for all policies of industrial insurance on the basis of the commissioner's 1961 standard industrial mortality table; and are calculated for all policies issued in a particular calendar year on the basis of a rate of interest not exceeding the nonforfeiture interest rate as defined in this section for policies issued in that calendar year. However, the following procedures apply:(1)At the option of the insurer, calculations for all policies issued in a particular calendar year may be made on the basis of a rate of interest not exceeding the nonforfeiture interest rate, as defined in this section, for policies issued in the immediately preceding calendar year;(2)Under any paid-up nonforfeiture benefit, including any paid-up dividend additions, any cash surrender value available, whether or not required by 58-15-31, shall be calculated on the basis of the mortality table and rate of interest used in determining the amount of the paid-up nonforfeiture benefit and paid-up dividend additions, if any;(3)An insurer may calculate the amount of any guaranteed paid-up nonforfeiture benefit including any paid-up additions under the policy on the basis of an interest rate no lower than that specified in the policy for calculating cash surrender values;(4)In calculating the present value of any paid-up term insurance with accompanying pure endowment, if any, offered as a nonforfeiture benefit, the rates of mortality assumed may be not more than those shown in the commissioner's 1980 extended term insurance table for policies of ordinary insurance and not more than the commissioner's 1961 industrial extended term insurance table for policies of industrial insurance;(5)For insurance issued on a substandard basis, the calculation of any adjusted premiums and present values may be based on appropriate modifications of the aforementioned tables;(6)For policies issued prior to the operative date of the valuation manual, any commissioner's standard ordinary mortality tables, adopted after 1980 by the national association of insurance commissioners, that are approved by rules promulgated by the director for use in determining the minimum nonforfeiture standard may be substituted for the commissioner's 1980 standard ordinary mortality table with or without ten-year select mortality factors or for the commissioner's 1980 extended term insurance table. For policies issued on or after the operative date of the valuation manual, the valuation manual shall provide the commissioner's standard mortality table for use in determining the minimum nonforfeiture standard that may be substituted for the commissioner's 1980 standard ordinary mortality table with or without ten-year select mortality factors or for the commissioner's 1980 extended term insurance table. If the director approves by regulation any commissioner's standard ordinary mortality table adopted by the national association of insurance commissioners for use in determining the minimum nonforfeiture standard for policies issued on or after the operative date of the valuation manual that minimum nonforfeiture standard supersedes the minimum nonforfeiture standard provided by the valuation manual; and (7)For policies issued prior to the operative date of the valuation manual, any commissioner's standard industrial mortality tables, adopted after 1980 by the national association of insurance commissioners, that are approved by rules promulgated by the director for use in determining the minimum nonforfeiture standard may be substituted for the commissioner's 1961 standard industrial mortality table or the commissioner's 1961 industrial extended term insurance table. For policies issued on or after the operative date of the valuation manual the valuation manual shall provide the commissioner's standard mortality table for use in determining the nonforfeiture standard that may be substituted for the commissioner's 1961 standard industrial mortality table or the commissioner's 1962 industrial extended term insurance table. If the director approves by regulation any commissioner's standard industrial mortality table adopted by the national association of insurance commissioners for use in determining the minimum nonforfeiture standard for policies issued on or after the operative date of the valuation manual then that minimum nonforfeiture standard supersedes the minimum nonforfeiture standard provided by the valuation manual. Source: SL 1982, ch 357, 12; SL 1986, ch 22, 29; SL 2015, ch 254, 41.
58-15-43.9. Nonforfeiture interest rate.The nonforfeiture interest rate is:(1)For policies issued prior to the operative date of the valuation manual, the nonforfeiture interest rate per annum for any policy issued in a particular calendar year is equal to one hundred twenty-five percent of the calendar year statutory valuation interest rate for the policy as defined in the standard valuation law, rounded to the nearer one quarter of one percent, provided that the nonforfeiture rate may not be less than four percent;(2)For policies issued on or after the operative date of the valuation manual the forfeiture interest rate per annum for any policy issued in a particular calendar year is provided by the valuation manual. Source: SL 1982, ch 357, 13; SL 2015, ch 254, 42.
58-15-43. Citation of standard nonforfeiture law for life insurance.Sections 58-15-31 to 58-15-43, inclusive, shall be known as the standard nonforfeiture law for life insurance.For purposes of 58-15-31 to 58-15-43, the operative date of the valuation manual is January first of the first calendar year that the valuation manual, as defined in 58-26-44.1, is effective. Source: SL 1966, ch 111, ch 23, 28; SL 1977, ch 412, 2; SL 2015, ch 254, 40.
58-15-44. Dating back of application for insurance to reduce premium prohibited--Contract not invalidated. No insurer may knowingly deliver or issue for delivery in this state any life insurance policy that purports to be issued or to take effect as of a date more than six months before the application therefor was made, if thereby the premium on the policy is reduced below the premium that would be payable thereon as determined by the insuring age of the insured at the time when such application was made. No insurance producer or other representative of an insurer may in this state prepare, submit, or accept any application for life insurance that bears a date earlier than the date when the application was made by the insured or applicant, if thereby the premium on the contract is reduced as above stated. Nothing contained in this section invalidates any contract made in violation of this section. This section does not prohibit the exchange, alteration, or conversion of any policy of life insurance. Source: SL 1966, ch 111, ch 23, 35; SL 2001, ch 286, 109; SL 2021, ch 210,  8.
58-15-45. Excluding or restricting coverage in case of death--Permissible exclusions.No policy of life insurance may be delivered or issued for delivery in this state if it contains any provision which excludes or restricts liability for death caused in a certain specified manner or occurring while the insured has a specified status. However, a policy may contain provisions excluding or restricting coverage as specified in the policy in the event of death under any one or more of the following circumstances:(1)Death as a result, directly or indirectly, of war, declared or undeclared, or of action by military forces, or of any act or hazard of such war or action, or of service in the military, naval, or air forces or in civilian forces auxiliary thereto, or from any cause while a member of such military, naval, or air forces of any country at war, declared or undeclared, or of any country engaged in such military action. However, this exclusion is not enforceable unless the applicant is affirmatively advised at the time of delivery of the policy that the policy in question contains war clause exclusions;(2)Death as a result of aviation or any air travel or flight;(3)Death as a result of a specified hazardous occupation or occupations;(4)Death within two years from the date of issue of the policy as a result of suicide, while sane or insane;(5)Any other exclusion or restriction the director may adopt, by rule promulgated pursuant to chapter 1-26, if the exclusion or restriction is in the best interest of the insurance buying public. Source: SL 1966, ch 111, ch 23, 26 (1) (b); SL 1992, ch 346; SL 2002, ch 233, 1.
58-15-46. Excluding or restricting coverage in case of death--Return of premiums, adjustment for indebtedness and dividend credits.A policy which contains any exclusion or restriction pursuant to 58-15-45 shall also provide that in the event of death under the circumstances to which any such exclusion or restriction is applicable, the insurer will return all premiums received under the policy with adjustment for indebtedness and dividend credits. If the policy is a variable policy, the insurer may, if the policy so provides, return all premiums received under the policy with adjustment for indebtedness and adjustment to reflect the investment experience of the separate account. Source: SL 1966, ch 111, ch 23, 26 (2); SL 2001, ch 54, 7.
58-15-47. Prohibited policy provisions--Person soliciting insurance or annuity insurance producer of insured.No policy of life insurance may be delivered or issued for delivery in this state if it contains any provision to the effect that the insurance producer soliciting the insurance or annuity is the insurance producer of the person covered under such contract, or making the acts or representations of such insurance producer binding upon the person so covered. Source: SL 1966, ch 111, ch 23, 26 (1) (f); SL 2001, ch 286, 110.
58-15-48. Prohibited policy provisions--Construction of contract according to laws of other state or country.No policy of life insurance shall be delivered or issued for delivery in this state if it contains any provision that the contract is to be construed according to the laws of any other state or country. Source: SL 1966, ch 111, ch 23, 26 (1) (c).
58-15-49. Prohibited policy provisions--Rights and obligations of insured under contract governed by law of other state.No policy of life insurance shall be delivered or issued for delivery in this state if it contains any provision that the rights and obligations of the insured or any person claiming under such contract are to be governed by any other than the laws of this state. Source: SL 1966, ch 111, ch 23, 26 (1) (d).
58-15-5. Standard provisions inapplicable to annuity contract or health or accident benefits.Section 58-15-4 shall not apply to annuity contracts nor to any provision of a life insurance policy, or contract supplemental thereto, relating to health benefits or to additional benefits in the event of death by accident or accidental means. Source: SL 1966, ch 111, ch 23, 3 (1).
58-15-50. Prohibited policy provisions--Depriving courts of jurisdiction of action against insurer.No policy of life insurance shall be delivered or issued for delivery in this state if it contains any provision depriving the courts of this state of the jurisdiction of any action at law or in equity against the insurer. Source: SL 1966, ch 111, ch 23, 26 (1) (e).
58-15-51. Limitation of action on policy--Minimum time.No policy of life insurance shall be delivered or issued for delivery in this state if it contains any provision limiting the time within which an action at law or in equity may be commenced on such a policy to less than six years after the cause of action shall accrue. Source: SL 1966, ch 111, ch 23, 26 (1) (a).
58-15-52. Prohibited policy provisions inapplicable to group life insurance, health insurance, reinsurance, annuities, and accident benefits under life insurance policy.The provisions of 58-15-45 to 58-15-51, inclusive, do not apply to health insurance, reinsurance, or annuities. The provisions of 58-15-46 to 58-15-51, inclusive, do not apply to group life or to any provision in a life insurance policy or contract supplemental thereto relating to health benefits or to additional benefits in the event of death by accidental means. However, the provisions of 58-15-45 apply to group life insurance and to any provision in a life insurance policy or contract supplemental thereto relating to health benefits or to additional benefits in the event of death by accidental means. Source: SL 1966, ch 111, ch 23, 26 (3); SL 2006, ch 253, 1.
58-15-53. Use of prohibited policy provision which is more favorable to insured.Nothing contained in 58-15-45 to 58-15-51, inclusive, shall prohibit any provision which in the opinion of the director is more favorable to the policyholder than a provision permitted by said sections. Source: SL 1966, ch 111, ch 23, 26 (4).
58-15-54. Prohibited policy provisions in industrial life insurance--Denial of liability because of other insurance.No policy of industrial life insurance shall contain any provision by which the insurer may deny liability under the policy for the reason that the insured has previously obtained other insurance from the same insurer. Source: SL 1966, ch 111, ch 23, 27 (1).
58-15-55. Prohibited policy provisions in industrial life insurance--Right to declare policy void because of disease or ailment of insured.No policy of industrial life insurance shall contain any provision giving the insurer the right to declare the policy void because the insured has had any disease or ailment, whether specified or not, or because the insured has received institutional, hospital, medical, or surgical treatment, except a provision which gives the insurer the right to declare the policy void if the insured has, within two years prior to the issuance of the policy, received institutional, hospital, medical, or surgical treatment or attention and if the insured or claimant under the policy fails to show that the condition occasioning such treatment or attention was not of a serious nature or was not material to the risk. Source: SL 1966, ch 111, ch 23, 27 (2).
58-15-57. Annuity and endowment contracts--Standard provisions required, exceptions.No annuity or pure endowment contract, other than reversionary, survivorship, or group annuities and except as stated herein or in 58-15-58, shall be delivered or issued for delivery in this state unless it contains in substance each of the provisions specified in 58-15-59 to 58-15-64, inclusive. Any of such provisions not applicable to single premium annuities or single premium pure endowment contracts shall not, to that extent, be incorporated therein. Source: SL 1966, ch 111, ch 23, 18 (1).
58-15-58. Standard provisions of annuity and endowment contracts inapplicable to deferred annuities under life insurance policies.Section 58-15-57 shall not apply to contracts for deferred annuities included in, or upon the lives of beneficiaries under, life insurance policies. Source: SL 1966, ch 111, ch 23, 18 (2).
58-15-59.1. Right of annuitant or purchaser to cancel after receipt of contract--Effect of cancellation.Every individual annuity contract, excluding variable annuity contracts, issued for delivery in South Dakota on or after July 1, 1978, by an insurance company or fraternal benefit society, shall have printed on or attached to the annuity contract, a notice stating in substance that the person to whom the annuity contract is issued shall be permitted to return the annuity contract, with a written request for cancellation within ten days of its actual receipt by the purchaser, and to have the premium paid refunded if, after examination of the annuity contract, the purchaser is not satisfied with it for any reason. If annuitant or purchaser pursuant to the notice, returns the annuity contract to the company or fraternal benefit society at its home or branch office or to the insurance producer through whom it was purchased, it is void from the beginning and the parties are in the same position as if no annuity contract had been issued. Source: SL 1978, ch 361, 1; SL 2001, ch 286, 111.
58-15-59.2. Issuance of policies by insurance company or fraternal benefit society--Delivery receipts--Certificates of mailing--Term of retention.An insurance company or fraternal benefit society shall issue policies in this state for which an examination period is required in accordance with one of the following methods:(1)If the policy is delivered by an insurance producer, a receipt shall be signed by the policyowner acknowledging delivery of the policy. The receipt shall include the policy number and the date of the delivery;(2)If the policy is delivered by mail, it shall be sent by registered or certified mail, return receipt requested, or a certificate of mailing shall be obtained showing the date the policy was mailed to the policyowner. For policy issuances verified by a certificate of mailing, it is presumed that the policy is received by the policyowner ten days from the date of mailing.The receipts and the certificates of mailing described in this section shall be retained by the insurer for five years. If a producer obtains the delivery receipt, the producer shall forward the signed delivery receipt to the insurer. Source: SL 1982, ch 28, 18; SL 1987, ch 374, 2; SL 2001, ch 286, 112; SL 2002, ch 232, 2.
58-15-59. Annuities and endowments--Entire agreement contained in contract and application.In an annuity or pure endowment contract, other than a reversionary, survivorship, or group annuity, there shall be a provision that the contract shall constitute the entire contract between the parties or, if a copy of the application is endorsed upon or attached to the contract when issued, a provision that the contract and the application therefor shall constitute the entire contract between the parties. Source: SL 1966, ch 111, ch 23, 21.
58-15-6. Standard provisions inapplicable to single premium or term policies.Any provisions or portions of 58-15-7 to 58-15-29, inclusive, not applicable to single premium or term policies shall to that extent not be incorporated therein. Source: SL 1966, ch 111, ch 23, 3 (2).
58-15-60. Effect of misstatement of age or sex in annuity or endowment contract.In an annuity or pure endowment contract, other than a reversionary, survivorship, or group annuity, there shall be a provision that if the age or sex of the person upon whose life the contract is made, or if any of them has been misstated, the amount payable or benefits accruing under the contract shall be such as the stipulated payments to the insurer would have purchased according to the correct age or sex and that if the insurer shall make or has made any overpayment on account of any such misstatement, the amount thereof with interest at the rate to be specified in the contract but not exceeding six percent per annum, may be charged against the current or next succeeding payments to be made by the insurer under the contract. Source: SL 1966, ch 111, ch 23, 22.
58-15-61. Incontestability provision in annuity or endowment contract.If any statements, other than those relating to age, sex, and identity are required as a condition to issuing an annuity or pure endowment contract, other than a reversionary, survivorship, or group annuity, and subject to 58-15-60, there shall be a provision that the contract shall be incontestable after it has been in force during the lifetime of the person or of each of the persons as to whom such statements are required, for a period of two years from its date of issue, except for nonpayment of stipulated payments to the insurer; and at the option of the insurer such contract may also except any provisions relative to benefits in the event of disability and any provisions which grant insurance specifically against death by accidental means. Source: SL 1966, ch 111, ch 23, 20.
58-15-62. Grace period in annuity or endowment contract.In an annuity or pure endowment contract, other than a reversionary, survivorship, or group annuity, there shall be a provision that there shall be a period of grace of not less than thirty days, within which any stipulated payment to the insurer falling due after the first payment may be made, during which period of grace the contract shall continue in full force; but in case a claim arises under the contract on account of death prior to expiration of the period of grace before the overdue payment to the insurer or the deferred payments of the current contract year, if any, are made, the amount of such payments may be deducted from any amount payable under the contract in settlement. Source: SL 1966, ch 111, ch 23, 19.
58-15-63. Participating annuity or endowment contract--Ascertainment and apportionment of divisible surplus.If an annuity or pure endowment contract, other than reversionary, survivorship, or group annuity, is participating, there shall be a provision that the insurer shall annually ascertain and apportion any divisible surplus accruing on the contract. Source: SL 1966, ch 111, ch 23, 23.
58-15-64. Reinstatement provision required in annuity or endowment contract.In an annuity or pure endowment contract, other than a reversionary, survivorship, or group annuity, there shall be a provision that the contract may be reinstated at any time within one year from the default in making stipulated payments to the insurer, unless the cash surrender value has been paid, but all overdue stipulated payments and any indebtedness to the insurer on the contract shall be paid or reinstated with interest thereon at a rate to be specified in the contract but not exceeding six percent per annum payable annually, and in cases where applicable, the insurer may also include a requirement of evidence of insurability satisfactory to the insurer. Source: SL 1966, ch 111, ch 23, 24.
58-15-65. Reversionary annuity contract--Standard provisions.Except as stated in 58-15-67, no contract for a reversionary annuity shall be delivered or issued for delivery in this state unless it contains in substance each of the provisions specified in 58-15-59 to 58-15-63, inclusive, except that under 58-15-62 the insurer may at its option provide for an equitable reduction of the amount of the annuity payments in settlement of an overdue payment in lieu of providing for deduction of such payments from an amount payable upon settlement under the contract. Source: SL 1966, ch 111, ch 23, 25 (1) (a).
58-15-66. Reinstatement provision required in reversionary annuity contract.Except as stated in 58-15-67, no contract for a reversionary annuity shall be delivered or issued for delivery in this state unless it contains in substance a provision that the contract may be reinstated at any time within three years from the date of default in making stipulated payments to the insurer, upon production of evidence of insurability satisfactory to the insurer, and upon condition that all overdue payments and any indebtedness to the insurer on account of the contract be paid, or, within the limits permitted by the then cash values of the contract, reinstated, with interest as to both payments and indebtedness at a rate to be specified in the contract but not exceeding six percent per annum. Source: SL 1966, ch 111, ch 23, 25 (1) (b).
58-15-67. Reversionary annuity contract provisions inapplicable to group annuities or to annuities included in life insurance policies.Sections 58-15-65 and 58-15-66 shall not apply to group annuities or to annuities included in life insurance policies, and any of such provisions not applicable to single premium annuities shall not to that extent be incorporated therein. Source: SL 1966, ch 111, ch 23, 25 (2).
58-15-68. Incontestability provisions after reinstatement of life insurance policy or annuity contract.A reinstated policy of life insurance or annuity contract may be contested on account of fraud or misrepresentation of facts material to the reinstatement only for the same period following reinstatement and with the same conditions and exceptions as the policy provides with respect to contestability after original issuance. Source: SL 1966, ch 111, ch 23, 31 (1).
58-15-69. Reinstated life insurance policy or annuity contract--Limitation of liability.When any life insurance policy or annuity contract is reinstated, such reinstated policy or contract may exclude or restrict liability to the same extent that such liability could have been or was excluded or restricted when the policy or contract was originally issued and such exclusion or restriction shall be effective from the date of reinstatement. Source: SL 1966, ch 111, ch 23, 31 (2).
58-15-7. Description of policy in title.There shall be a title on the policy, briefly describing the same. Source: SL 1966, ch 111, ch 23, 16.
58-15-70. Policy settlements by life insurer.Any life insurer shall have the power to hold under agreement the proceeds of any policy issued by it, upon such terms and restrictions as to revocation by the policyholder and control by beneficiaries, and with such exemptions from the claims of creditors of beneficiaries other than the policyholder as set forth in the policy or as agreed to in writing by the insurer and the policyholder. Upon maturity of a policy, in the event the policyholder has made no such agreement, the insurer shall have the power to hold the proceeds of the policy under an agreement with the beneficiaries. The insurer shall not be required to segregate the funds so held but may hold them as part of its general assets. Source: SL 1966, ch 111, ch 23, 32.
58-15-71. Life insurance policy--Restrictions on issuing and delivering.No life insurer shall hereafter deliver in this state as a part of or in combination with any insurance, endowment, or annuity contract, any agreement or plan, additional to the rights, dividends, and benefits arising out of any such insurance, endowment, or annuity contract:(1)Which provides for the accumulation of profits over a period of years and for payment of all or any part of such accumulated profits only to members or policyholders of a designated group or class who continue as member or policyholders until the end of a specified period of years; or(2)Which provides that on the death of anyone, other than a beneficiary or a person insured thereunder, the owner or beneficiary of the policy shall receive the payment or granting of anything of value. Source: SL 1966, ch 111, ch 23, 33.
58-15-8.1. Notice of right of cancellation after receipt of policy--"Free look" provision.Every individual life insurance policy issued for delivery in South Dakota on or after July 1, 1982, by an insurance company or fraternal benefit society, shall have a notice printed on or attached to the face page of the policy, stating in substance that the person issued the policy is permitted to return the policy, with a written request for cancellation within ten days of its actual receipt by the purchaser, and to have the premium paid refunded if, after examination of the policy, the purchaser is not satisfied with it for any reason. If a policyholder or purchaser, pursuant to the notice, returns the policy to the company or fraternal benefit society at its home or branch office or to the insurance producer through whom it was purchased, it is void from the beginning and the parties are in the same position as if no policy had been issued. Source: SL 1978, ch 361, 1; SL 1982, ch 359; SL 2001, ch 286, 106.
58-15-8.2. Issuance of policies by insurance company or fraternal benefit society--Delivery receipts--Certificates of mailing--Term of retention.An insurance company or fraternal benefit society shall issue policies in this state for which an examination period is required in accordance with one of the following methods:(1)If the policy is delivered by an insurance producer, a receipt shall be signed by the policyowner acknowledging delivery of the policy. The receipt shall include the policy number and the date of the delivery;(2)If the policy is delivered by mail, it shall be sent by registered or certified mail, return receipt requested, or a certificate of mailing shall be obtained showing the date the policy was mailed to the policyowner. For policy issuances verified by a certificate of mailing, it is presumed that the policy is received by the policyowner ten days from the date of mailing.The receipts and the certificates of mailing described in this section shall be retained by the insurer for five years. If a producer obtains the delivery receipt, the producer shall forward the signed delivery receipt to the insurer. Source: SL 1982, ch 28, 18; SL 1987, ch 374, 1; SL 2001, ch 286, 107; SL 2002, ch 232, 1.
58-15-8. Entire contract contained in policy and application--Statement of applicant not deemed a warranty.There shall be a provision that the policy, or the policy and the application therefor if a copy of such application is endorsed upon or attached to the policy when issued, shall constitute the entire contract between the parties, and that all statements contained in such an application shall, in the absence of fraud, be deemed representations and not warranties. Source: SL 1966, ch 111, ch 23, 6.
58-15-82. Uniform life insurance and annuity request forms--Director to adopt by rule--Insurers to accept.If a policyholder has made a request to cash surrender, to obtain maximum policy loans, or to make an Internal Revenue Code Section 1035 exchange under a life insurance or an annuity policy, the insurer shall forward to the policyholder or the policyholder's insurance producer, within thirty calendar days of receiving the request for the form, any required form to accomplish such transaction. If the insurer does not do so, the policyholder may utilize a uniform life insurance or annuity form for such purpose. The director shall adopt the uniform life insurance and annuity forms by rules promulgated pursuant to chapter 1-26. If the insurer has failed to submit its form to the policyholder or the policyholder's insurance producer within the time period required by this section, the insurer shall accept the uniform form as adopted by the director and may not require the use of any additional form. Source: SL 2002, ch 234, 1.
58-15-83. Plans excluded from application of 58-15-83 to 58-15-93, inclusive.Sections 58-15-83 to 58-15-93, inclusive, do not apply to any reinsurance, group annuity purchased under a retirement plan or plan of deferred compensation established or maintained by an employer (including a partnership or sole proprietorship) or by an employee organization, or by both, other than a plan providing individual retirement accounts or individual retirement annuities under Section 408 of the Internal Revenue Code, as amended to January 1, 1977, premium deposit fund, variable annuity, investment annuity, immediate annuity, any deferred annuity contract after annuity payments have commenced, or reversionary annuity, nor to any contract which shall be delivered outside this state through an agent or other representative of the company issuing the contract. Source: SL 2004, ch 299, 2.
58-15-84. Provisions required in annuity contracts.In the case of contracts issued on or after July 1, 2004, no contract of annuity, except as stated in 58-15-83, may be delivered or issued for delivery in this state unless it contains in substance the following provisions, or corresponding provisions which in the opinion of the director are at least as favorable to the contract holder, upon cessation of payment of considerations under the contract:(1)That upon cessation of payment of considerations under a contract, or upon the written request of the contract owner, the company shall grant a paid-up annuity benefit on a plan stipulated on the contract of such value as is specified in 58-15-86, 58-15-87, 58-15-88, 58-15-89, and 58-15-91;(2)If a contract provides for a lump sum settlement at maturity, or at any other time, that upon surrender of the contract at or prior to the commencement of any annuity payments, the company shall pay in lieu of a paid-up annuity benefit a cash surrender benefit of such amount as is specified in 58-15-86, 58-15-87, 58-15-89, and 58-15-91. Except for a private placement policy the company may reserve the right to defer the payment of the cash surrender benefit for a period not to exceed six months after demand therefor with surrender of the contract after making written request and receiving written approval of the director. The request shall address the necessity and equitability to all policyholders of the deferral. In the case of a private placement policy, the company may reserve the right to defer the payment of the cash surrender value attributable to separate account assets until such assets can, by their respective terms, be converted to cash, which may be greater than six months after demand for such surrender value with surrender of the contract;(3)A statement of the mortality table, if any, and interest rates used in calculating any minimum paid-up annuity, cash surrender, or death benefits that are guaranteed under the contract, together with sufficient information to determine the amounts of the benefits; and(4)A statement that any paid-up annuity, cash surrender, or death benefits that may be available under the contract are not less than the minimum benefits required by any statute of the state in which the contract is delivered and an explanation of the manner in which the benefits are altered by the existence of any additional amounts credited by the company to the contract, and indebtedness to the company on the contact, or any prior withdrawals from or partial surrenders of the contract.Notwithstanding the requirements of this section, a deferred annuity contract may provide that if no considerations have been received under a contract for a period of two full years and the portion of the paid-up annuity benefit at maturity on the plan stipulated in the contract arising from prior considerations paid would be less than twenty dollars monthly, the company may, at its option, terminate the contract by payment in cash of the then present value of the portion of the paid-up annuity benefit, calculated on the basis on the mortality table, if any, and interest rate specified in the contract for determining the paid-up annuity benefit, and by this payment shall be relieved of any further obligation under the contract. Source: SL 2004, ch 299, 3; SL 2006, ch 252, 7.
58-15-85. Minimum values based on minimum nonforfeiture amounts--Minimum nonforfeiture amounts defined.The minimum values as specified in 58-15-86 to 58-15-89, inclusive, and 58-15-91 of any paid-up annuity, cash surrender, or death benefits available under an annuity contract shall be based upon minimum nonforfeiture amounts as defined in this section:(1)The minimum nonforfeiture amount at any time at or prior to the commencement of any annuity payments shall be equal to an accumulation up to such time at rates of interest as indicated in the second paragraph of this section of considerations (as hereinafter defined) paid prior to such time, decreased by the sum of the following:(a)Any prior withdrawals from or partial surrenders of the contract accumulated at rates of interest as indicated in the second paragraph of this section; and(b)An annual contract charge of fifty dollars accumulated at rates of interest as indicated in second paragraph of this section;(c)Any premium tax paid by the company for the contract, accumulated at rates of interest as indicated in second paragraph of this section; and(d)The amount of any indebtedness to the company on the contract, including interest due and accrued;(2)The net considerations for a given contract year used to define the minimum nonforfeiture amount shall be an amount equal to eighty-seven and one-half percent of the gross considerations credited to the contract during that contract year.The interest rate used in determining minimum nonforfeiture amounts shall be an annual rate of interest determined as the lesser of three percent per annum and the following, which shall be specified in the contract if the interest rate will be reset:(1)The five-year constant maturity treasury rate reported by the Federal Reserve as of a date, or average over a period, rounded to the nearest one-twentieth of one percent, specified in the contract no longer than fifteen months prior to the contract issue date or redetermination date pursuant to this section;(2)Reduced by one hundred twenty-five basis points;(3)Where the resulting interest rate is not less than fifteen-hundredths of one percent; and(4)The interest rate shall apply for an initial period and may be redetermined for additional periods.The redetermination date, basis, and period, if any, shall be stated in the contract. The basis is the date or average over a specified period that produces the value of the five-year constant maturity treasury rate to be used at each redetermination date.During the period or term that a contract provides substantive participation in an equity indexed benefit, it may increase the reduction described above by up to an additional one hundred basis points to reflect the value of the equity index benefit. The present value at the contract issue date, and at each redetermination date thereafter, of the additional reduction may not exceed the market value of the benefit. The director may require a demonstration that the present value of the additional reduction does not exceed the market value of the benefit. Lacking such a demonstration that is acceptable to the director, the director may disallow or limit the additional reduction.The director may promulgate rules pursuant to chapter 1-26 to implement the provisions of this section and to provide for further adjustments to the calculation of minimum nonforfeiture amounts for contracts that provide substantive participation in an equity index benefit and for other contracts that the director determines adjustments are justified. Source: SL 2004, ch 299, 4; SL 2022, ch 181, 1.
58-15-86. Present value of paid-up annuity benefit--Computation.Any paid-up annuity benefit available under a contract shall be such that its present value on the date annuity payments are to commence is at least equal to the minimum nonforfeiture amount on that date. Present value shall be computed using the mortality table, if any, and the interest rates specified in the contract for determining the minimum paid-up annuity benefits guaranteed in the contract. Source: SL 2004, ch 299, 5.
58-15-87. Cash surrender benefits--Calculation of minimum--Death benefit.For contracts that provide cash surrender benefits, the cash surrender benefits available prior to maturity may not be less than the present value as of the date of surrender of that portion of the maturity value of the paid-up annuity benefit that would be provided under the contract at maturity arising from considerations paid prior to the time of cash surrender reduced by the amount appropriate to reflect any prior withdrawals from or partial surrenders of the contract, such present value being calculated on the basis of an interest rate not more than one percent higher than the interest rate specified in the contract for accumulating the net considerations to determine maturity value, decreased by the amount of any indebtedness to the company on the contract, including interest due and accrued, and increased by any existing additional amounts credited by the company to the contract. In no event may any cash surrender benefit be less than the minimum nonforfeiture amount at that time. The death benefit under such contracts shall be at least equal to the cash surrender benefit. Source: SL 2004, ch 299, 6.
58-15-88. Contracts without cash surrender benefits--Contracts not providing death benefits prior to commencement of payments--Present value calculations.For contracts that do not provide cash surrender benefits, the present value of any paid-up annuity benefit available as a nonforfeiture option at any time prior to maturity may not be less than the present value of that portion of the maturity value of the paid-up annuity benefit provided under the contract arising from considerations paid prior to the time the contract is surrendered in exchange for, or changed to, a deferred paid-up annuity, such present value being calculated for the period prior to the maturity date on the basis of the interest rate specified in the contract for accumulating the net considerations to determine maturity value, and increased by any additional amounts credited by the company to the contract. For contracts that do not provide any death benefits prior to the commencement of any annuity payments, present values shall be calculated on the basis of such interest rate and the mortality table specified in the contract for determining the maturity value of the paid-up annuity benefit. However, in no event may the present value of a paid-up annuity benefit be less than the minimum nonforfeiture amount at that time. Source: SL 2004, ch 299, 7.
58-15-89. Election to have payments commence at optional maturity date--Maturity date used for calculation of benefits.For the purpose of determining the benefits calculated under 58-15-87 and 58-15-88, in the case of annuity contracts under which an election may be made to have annuity payments commence at optional maturity dates, the maturity date shall be deemed to be the latest date for which election shall be permitted by the contract, but may not be deemed to be later than the anniversary of the contract next following the annuitant's seventieth birthday or the tenth anniversary of the contract, whichever is later. Source: SL 2004, ch 299, 8.
58-15-9. Effect of misstatement in policy regarding age.There shall be a provision that if the age of the insured, or of any other person whose age is considered in determining the premium or benefit has been misstated, any amount payable or benefit accruing under the policy shall be such as the premium would have purchased at the correct age or ages. Source: SL 1966, ch 111, ch 23, 7.
58-15-90. Contracts without cash surrender benefits or death benefits at least equal to minimum nonforfeiture amount--Statement in contract.A contract that does not provide cash surrender benefits or does not provide death benefits at least equal to the minimum nonforfeiture amount prior to the commencement of any annuity payments shall include a statement in a prominent place in the contract that such benefits are not provided. Source: SL 2004, ch 299, 9.
58-15-91. Lapse of time and payments beyond cessation year allowed for calculations.Any paid-up annuity, cash surrender, or death benefits available at any time, other than on the contract anniversary under any contract with fixed scheduled considerations, shall be calculated with allowance for the lapse of time and the payment of any scheduled considerations beyond the beginning of the contract year in which cessation of payment of considerations under the contract occurs. Source: SL 2004, ch 299, 10.
58-15-92. Annuity and life insurance benefits in excess of greater of cash surrender benefits or return of gross considerations with interest--Minimum nonforfeiture benefits--Additional benefits.For a contract which provides, within the same contract by rider or supplemental contract provision, both annuity benefits and life insurance benefits that are in excess of the greater of cash surrender benefits or a return of the gross considerations with interest, the minimum nonforfeiture benefits shall be equal to the sum of the minimum nonforfeiture benefits for the annuity portion and the minimum nonforfeiture benefits, if any, for the life insurance portion computed as if each portion were a separate contract. Notwithstanding the provisions of 58-15-86 to 58-15-89, inclusive, and 58-15-91, additional benefits payable in the event of total and permanent disability, as reversionary annuity or deferred reversionary annuity benefits, or as other policy benefits additional to life insurance, endowment and annuity benefits, and considerations for all such additional benefits, shall be disregarded in ascertaining the minimum nonforfeiture amounts, paid-up annuity, cash surrender, and death benefits that may be required by 58-15-83 to 58-15-93, inclusive. The inclusion of such benefits may not be required in any paid-up benefits, unless the additional benefits separately would require minimum nonforfeiture amounts, paid-up annuity, cash surrender, and death benefits. Source: SL 2004, ch 299, 11.
58-15-93. Election to apply provisions of 58-15-83 to 58-15-93 to annuity contracts--Application of provisions after second anniversary.After July 1, 2004, a company may elect to apply its provisions to annuity contracts on a contract form-by-contract form basis before the second anniversary of the effective date of 58-15-83 to 58-15-93, inclusive. In all other instances, 58-15-83 to 58-15-93, inclusive, shall become operative with respect to annuity contracts issued by the company after the second anniversary of the effective date of 58-15-83 to 58-15-93, inclusive. Source: SL 2004, ch 299, 12.
58-15-94. Applicability of 58-15-94 to 58-15-108.The requirements of 58-15-94 to 58-15-108, inclusive, apply to any in-force and future policy, annuity contract, and retained asset account as of July 1, 2018.Sections 58-15-94 to 58-15-108, inclusive, do not apply to a policy, annuity contract, or retained asset account of an insurer unless the policy, annuity contract, or retained asset account was issued or delivered in this state.The requirements of 58-15-94 to 58-15-108, inclusive, do not apply to an annuity used to fund an employment-based retirement plan or program where the insurer does not perform the record-keeping services or the insurer is not committed by the terms of the annuity contract to pay death benefits to the beneficiaries of specific plan participants. Source: SL 2018, ch 280, 1.
58-15-95. Definition of terms regarding identification and location of beneficiaries.Terms used in 58-15-94 to 58-15-108, inclusive, mean:(1)"Beneficiary," any party entitled to receive the proceeds from a policy, an annuity contract, or a retained asset account;(2)"Beneficiary search," reasonable and good faith efforts, that an insurer documents, to identify a beneficiary, determine a current address for the beneficiary, and contact the beneficiary;(3)"Death Master File" or "DMF," the United States Social Security Administration's Death Master File or any other database or service that is at least as comprehensive as the United States Social Security Administration's Death Master File for determining that an individual has reportedly died;(4)"Death Master File match," a search of the DMF that results in a match of the social security number or name and date of birth of an insured;(5)"Insured," an individual identified in a policy, retained asset account, or annuity contract whose death obligates the insurer to pay benefits or proceeds;(6)"Knowledge of death," knowledge of death of insured by:(a)Receipt of an original or valid copy of a certified death certificate; or(b)A DMF match validated in good faith efforts by the insurer;(7)"Lapse," the termination of a policy resulting from nonpayment of premiums or, in the case of variable life and universal life insurance policies, the depletion of cash value below the amount needed to keep the policy in force;(8)"Policy," any policy or certificate of life insurance that provides a death benefit. The term does not include:(a)Any policy or certificate of life insurance that provides a death benefit under an employee welfare benefit plan subject to the federal Employee Retirement Income Security Act of 1974 (ERISA) as of January 1, 2018, for which the insurer does not provide record-keeping services or under any federal employee benefit program;(b)Preneed insurance;(c)Any policy or certificate of credit life or mortgage life;(d)Any accidental death or health policies, riders, or certificates, including disability and long-term care policies, riders, or certificates; or(e)Any policy issued to a group master policyholder for which the insurer does not provide record-keeping services;(9)"Preneed insurance," any life insurance policy or certificate that is used in combination with, in support of, with an assignment to, or as a guarantee for a prearrangement agreement for goods and services to be provided at the time of and immediately following the death of the insured. Goods and services includes embalming, cremation, body preparation, viewing or visitation, coffin or urn, memorial stone, and transportation of the deceased. The status of the policy or contract as preneed insurance is determined at the time of issue in accordance with the policy form filing;(10)"Record-keeping services," those circumstances under which the insurer has agreed with a group life insurance policy holder or contract owner to be responsible for obtaining, maintaining, and administering the insurer's system or a system for its agents. The information about each individual insured under an insured's group insurance contract (or a line of coverage thereunder) in the system shall include at least the following information:(a)Social security number or name and date of birth;(b)Beneficiary designation information;(c)Coverage eligibility;(d)Benefit amount; and (e)Premium payment status;(11)"Records," information regarding any policy, annuity contract, and retained asset account maintained in the insurer's administrative system or the administrative system of any third party retained by the insurer. The term does not include the information maintained by a group life insurance policyholder or contract owner;(12)"Retained asset account," any mechanism whereby the settlement of proceeds payable under a policy or individual annuity contract, including the payment of cash surrender value, is accomplished by the insurer or an entity acting on behalf of the insurer establishing an account with check or draft-writing privileges, where those proceeds are retained by the insurer, pursuant to a supplementary contract not involving annuity benefits;(13)"Retained asset account holder," the owner of a retained asset account or other person to file a claim for, or otherwise receive proceeds in accordance with the terms of the retained asset account. Source: SL 2018, ch 280, 2.
58-15-96. Comparison of policies, annuity contracts, and retained asset accounts against DMF.As of January 1, 2019, an insurer shall have compared all in-force policies, annuity contracts, and retained asset accounts at the time of enactment against the full DMF to identify potential matches of its insureds. Source: SL 2018, ch 280, 3.
58-15-97. Semi-annual comparison of lapsed policies, annuity contracts, and retained asset accounts against updated DMF.An insurer shall compare all in-force policies, annuity contracts, and retained asset accounts and policies that lapse in its records against any updates to the DMF on at least a semi-annual basis to identify potential matches of its insureds. Source: SL 2018, ch 280, 4.
58-15-98. Procedures for DMF comparisons--Validation of match.Each insurer shall implement reasonable procedures to do the searches required in 58-15-96 and 58-15-97 that account for:(1)Common nicknames, initials used in lieu of a first or middle name, use of a middle name, compound first and middle names, and interchanged first and middle names;(2)Compound last names, maiden or married names, and hyphens, blank spaces, or apostrophes in last names;(3)Transposition of the month and day portions of the date of birth; and(4)Incomplete social security numbers.Upon identifying a potential match pursuant to this section, an insurer shall promptly make reasonable good faith efforts to validate the match by confirming the death of an insured. Source: SL 2018, ch 280, 5.
58-15-99. Exemption of insurer for financial hardship.The director may exempt an insurer from the DMF comparisons required under 58-15-94 to 58-15-108, inclusive, if the insurer demonstrates to the director's satisfaction that compliance would result in financial hardship to the insurer.In making the determination the director may take into consideration the number of policies involved, the costs of conducting a retroactive search in relation to the collected premiums for those policies, whether the policy information is stored electronically, and whether the insurer previously has engaged in the use of the DMF for its annuity contracts, but not for its life insurance policies. Source: SL 2018, ch 280, 6.
58-16-1. Forms of group life insurance permitted.No policy of group life insurance shall be delivered in this state unless it conforms to one of the descriptions in 58-16-2, 58-16-7, 58-16-12, 58-16-23, and 58-16-30. Source: SL 1966, ch 111, ch 24, 1.
58-16-10. Labor union groups--Minimum number of members required.A policy issued under 58-16-7 must cover at least twenty-five members at date of issue. Source: SL 1966, ch 111, ch 24, 1 (3) (c).
58-16-11. Labor union group--Payment of premium.The premium for a policy issued under 58-16-7 shall be paid by the policyholder, either wholly from the union's funds, or partly from such funds and partly from funds contributed by the insured members specifically for their insurance. No policy may be issued on which the entire premium is to be derived from funds contributed by the insured members specifically for their insurance. A policy on which part of the premium is to be derived from funds contributed by the insured members specifically for their insurance may be placed in force only if at least seventy-five per cent of the then eligible members, excluding any as to whom evidence of individual insurability is not satisfactory to the insurer, elect to make the required contributions. A policy on which no part of the premium is to be derived from funds contributed by the insured members specifically for their insurance must insure all eligible members, or all except any as to whom evidence of individual insurability is not satisfactory to the insurer. Source: SL 1966, ch 111, ch 24, 1 (3) (b).
58-16-12.1. Classes of industry permitted to form groups.For purposes of this chapter industry shall include, but not be limited to, the following classes, and individuals employed in one or more of such classes may establish a fund:(1)Agriculture;(2)Commerce;(3)Construction;(4)Manufacturing;(5)Retail;(6)Service;(7)Transportation; and(8)Wholesale. Source: SDCL, 58-16-12 as added by SL 1974, ch 314.
58-16-12. Industry fund groups--Insurance of employees or members of unions.A policy of group life insurance may be issued to the trustees of a fund established by two or more employers in the same industry, or in related industries, or by one or more labor unions, or by one or more employers and one or more labor unions, which trustees shall be deemed the policyholder, to insure employees of the employers or members of the unions for the benefit of persons other than the employers or the unions, subject to the requirements of 58-16-13 to 58-16-17, inclusive. Source: SL 1966, ch 111, ch 24, 1 (4); SL 1974, ch 314.
58-16-13. Industry fund groups--Issuance to commercial correspondent prohibited, exception.No policy may be issued under 58-16-12 to insure employees of any employer whose eligibility to participate in the fund as an employer arises out of considerations directly related to the employer being a commercial correspondent or business client or patron of another employer, except where such other employer exercises substantial control over the business operations of the participating employers. Source: SL 1966, ch 111, ch 24, 1 (4) (a).
58-16-14. Industry fund groups--Persons eligible for insurance.The persons eligible for insurance under 58-16-12 shall be all of the employees of the employers or all of the members of the unions, or all of any class or classes thereof determined by conditions pertaining to their employment, or to membership in the unions, or to both. The policy may provide that the term "employees" shall include retired employees, and the individual proprietor or partners if an employer is an individual proprietor or a partnership. No director of a corporate employer shall be eligible for insurance under the policy unless such person is otherwise eligible as a bona fide employee of the corporation by performing services other than the usual duties of a director. No individual proprietor or partner shall be eligible for insurance under the policy unless he is actively engaged in and devotes a substantial part of his time to the conduct of the business of the proprietor or partnership. The policy may provide that the term "employees" shall include the trustees or their employees, or both, if their duties are principally connected with such trusteeship. Source: SL 1966, ch 111, ch 24, 1 (4) (b).
58-16-16. Industry fund groups--Minimum number of persons required to be insured.A policy issued under 58-16-12 must cover at date of issue at least one hundred persons; and it must cover an average of not less than three persons per employer unit unless the policy is issued to the trustees of a fund established by employers which have assumed obligations through a collective bargaining agreement and are participating in the fund either pursuant to those obligations with regard to one or more classes of their employees which are encompassed in the collective bargaining agreement or as a method of providing insurance benefits for other classes of their employees, or unless the policy is issued to the trustees of a fund established by one or more labor unions. Source: SL 1966, ch 111, ch 24, 1 (4) (d).
58-16-17. Industry fund groups--Payment of premium.The premium for a policy issued under 58-16-12 shall be paid by the trustees wholly from funds contributed by the employer or employers of the insured persons, or by the union or unions, or by both, or partly from such funds and partly from funds contributed by the insured persons. A policy on which part of the premium is to be derived from funds contributed by the insured persons specifically for their insurance may be placed in force only if at least seventy-five percent of the then eligible persons, excluding any as to whom evidence of insurability is not satisfactory to the insurer, elect to make the required contributions. A policy on which no part of the premium is to be derived from funds contributed by the insured persons specifically for their insurance must insure all eligible persons, or all except any as to whom evidence of individual insurability is not satisfactory to the insurer. Source: SL 1966, ch 111, ch 24, 1 (4) (c).
58-16-18. Insurance of employees or members of group against death of dependents.Any group life policy issued under 58-16-2 to 58-16-17, inclusive, may be extended to insure the employees or members against loss due to the death of their spouses and minor children, or any class or classes thereof, subject to the requirements of 58-16-19 to 58-16-22, inclusive. Source: SL 1966, ch 111, ch 24, 2.
58-16-19. Payment of premium on extended group coverage.The premium for insurance under 58-16-18 shall be paid by the policyholder, either from the employer's or union's funds or funds contributed by the employer or union, or from funds contributed by the insured employees or members, or from both. If any part of the premium is to be derived from funds, contributed by the insured employees or members, the insurance with respect to spouses and children may be placed in force only if at least seventy-five percent of the then eligible employees or members, excluding any as to whose family members evidence of insurability is not satisfactory to the insurer, elected to make the required contribution. If no part of the premium is to be derived from funds contributed by the employees or members, all eligible employees or members, excluding any as to whose family members evidence of insurability is not satisfactory to the insurer, must be insured with respect to their spouses and children. Source: SL 1966, ch 111, ch 24, 2 (1).
58-16-2. Employee group insurance permitted--Beneficiaries.A policy of group life insurance may be issued to an employer, or to the trustees of a fund established by an employer, which employer or trustees shall be deemed the policyholder, to insure employees of the employer for the benefit of persons other than the employer, subject to the requirements of 58-16-3 to 58-16-6, inclusive. However, an employee of a nonprofit charitable employer, may name the employer as the beneficiary of a policy of group life insurance; provided that the employee has furnished the insurer with a notarized statement, signed by the employee, certifying his intent to voluntarily name the employer as the beneficiary. Source: SL 1966, ch 111, ch 24, 1(1); SL 1988, ch 398.
58-16-20. Amount of insurance on dependents based upon plan precluding individual selection.The amount of insurance under 58-16-18 is based upon some plan precluding individual selection either by the employees or members or by the policyholder, employee or union. Source: SL 1966, ch 111, ch 24, 2(2); SL 1983, ch 374, 2.
58-16-21. Termination of group life policy extended to dependents--Issuance of individual policy to spouse, application and payment of premium.Upon termination of insurance under 58-16-18 with respect to the members of the family of any employee or member by reason of the employee's or member's termination of employment, termination of membership in the class or classes eligible for coverage under the policy, or death, the spouse shall be entitled to have issued by the insurer, without evidence of insurability, an individual policy of life insurance without health or other supplementary benefits, providing application for the individual policy shall be made, and the first premium paid to the insurer, within thirty-one days after such termination, subject to the requirements of subdivisions 58-16-39(1), (2), and (3). If any group policy terminates or is amended so as to terminate the insurance of any class of employees or members and the employee or member is entitled to have issued an individual policy under 58-16-40, the spouse shall also be entitled to have issued by the insurer an individual policy, subject to the conditions and limitations provided above. If the spouse dies within the period during which he would have been entitled to have an individual policy issued in accordance with this provision, the amount of life insurance which he would have been entitled to have issued under such individual policy shall be payable as a claim under the group policy, whether or not application for the individual policy or the payment of the first premium therefor has been made. Source: SL 1966, ch 111, ch 24, 2 (3).
58-16-22. Group life policy extended to dependents--One certificate issued to insured person.Notwithstanding 58-16-38, only one certificate need be issued for delivery to an insured person if a statement concerning any dependent's coverage is included in such certificate. Source: SL 1966, ch 111, ch 24, 2 (4).
58-16-23. Issuance of group life policy to creditor--Purpose.A policy of group life insurance may be issued to a creditor, who shall be deemed the policyholder, to insure debtors of the creditor, subject to the requirements of 58-16-24 to 58-16-29, inclusive. Source: SL 1966, ch 111, ch 24, 1 (2).
58-16-24. Debtors eligible for insurance under group life policy--Policy may define "debtor".The debtors eligible for insurance under a policy issued under 58-16-23 shall be all of the debtors of the creditor whose indebtedness is repayable either in installments or in one sum at the end of a period not in excess of eighteen months from the initial date of debt, or all of any class or classes thereof determined by conditions pertaining to the indebtedness or to the purchase giving rise to the indebtedness. The policy may provide that the term "debtors" shall include the debtors of one or more subsidiary corporations, and the debtors of one or more affiliated corporations, proprietors, or partnerships if the business of the policyholder and of such affiliated corporations, proprietors, or partnerships is under common control through stock ownership, contract, or otherwise. No debtor shall be eligible unless the indebtedness constitutes an irrevocable obligation to repay which is binding upon him during his lifetime, at and from the date the insurance becomes effective upon his life. Source: SL 1966, ch 111, ch 24, 1 (2) (a).
58-16-25. Number of insureds required for group coverage of debtors--Evidence of insurability--Age exclusions.A policy may be issued under 58-16-23 only if the group of eligible debtors is then receiving new entrants at the rate of at least one hundred persons yearly, or may reasonably be expected to receive at least one hundred new entrants during the first policy year, and only if the policy reserves to the insurer the right to require evidence of individual insurability if less than seventy-five percent of the new entrants become insured. The policy may exclude from the classes eligible for insurance classes of debtors determined by age. Source: SL 1966, ch 111, ch 24, 1 (2) (c).
58-16-26. Payment of premium for group coverage of debtors.The premium for a policy issued under 58-16-23 shall be paid by the policyholder, either from the creditor's funds, or from charges collected from the insured debtors, or from both. A policy on which part or all of the premium is to be derived from the collection from the insured debtors of identifiable charges not required of uninsured debtors shall not include, in the class or classes of debtors eligible for insurance, debtors under obligations outstanding at its date of issue without evidence of individual insurability unless at least seventy-five percent of the then eligible debtors elect to pay the required charges. A policy on which no part of the premium is to be derived from the collection of such identifiable charges must insure all eligible debtors, or all except any as to whom evidence of individual insurability is not satisfactory to the insurer. Source: SL 1966, ch 111, ch 24, 1 (2) (b).
58-16-27. Amount of insurance on life of debtor limited.The amount of insurance under 58-16-23 on the life of any debtor may at no time exceed the amount owed by him to the creditor. Source: SL 1966, ch 111, ch 24, 1 (2)(f); SL 1969, ch 138; SL 1987, ch 376.
58-16-28. Maximum amount repayable in installments to creditor--Duration of insurance--Limited to amount of unpaid indebtedness.The amount of insurance under 58-16-23 on the life of any debtor shall at no time exceed the amount owed by him which is repayable in installments to the creditor. Where the indebtedness is repayable in one sum to the creditor, the insurance on the life of any debtor shall in no instance be in effect for a period in excess of eighteen months except that such insurance may be continued for an additional period not exceeding six months in the case of default, extension or recasting of the loan. The amount of the insurance on the life of any debtor shall at no time exceed the amount of the unpaid indebtedness. Source: SL 1966, ch 111, ch 24, 1 (2) (d).
58-16-29. Payment to policyholder as reduction of indebtedness.The insurance under 58-16-23 shall be payable to the policyholder. Such payment shall reduce or extinguish the unpaid indebtedness of the debtor to the extent of such payment. Source: SL 1966, ch 111, ch 24, 1 (2) (e).
58-16-3.1. Group life insurance authorized for groups to which group health insurance may be issued.Group life insurance may be issued, under a policy, to any person or organization to which a policy of group health insurance may be issued or delivered in this state to insure any class or classes of individuals that could be insured under such group health policy. Source: SL 2004, ch 300, 1.
58-16-3. Employees eligible for group insurance.The employees eligible for insurance under a policy issued under 58-16-2 shall be all of the employees of the employer, or all of any class or classes thereof determined by conditions pertaining to their employment. The policy may provide that the term "employees" shall include the employees of one or more subsidiary corporations, and the employees, individual proprietors, and partners of one or more affiliated corporations, proprietors, or partnerships if the business of the employer and of such affiliated corporations, proprietors, or partnerships is under common control through stock ownership, or contract or otherwise. The policy may provide that the term "employees" shall include the individual proprietor or partners if the employer is an individual proprietor or a partnership. The policy may provide that the term "employees" shall include retired employees. No director of a corporate employer shall be eligible for insurance under the policy unless such person is otherwise eligible as a bona fide employee of the corporation by performing services other than the usual duties of a director. No individual proprietor or partner shall be eligible for insurance under the policy unless he is actively engaged in and devotes a substantial part of his time to the conduct of the business of the proprietor or partnership. A policy issued to insure the employees of a public body may provide that the term "employees" shall include elected or appointed officials. Source: SL 1966, ch 111, ch 24, 1 (1) (a).
58-16-30. Association groups--Insurance of members--Minimum number of members required.A policy of group life insurance may be issued to an association, which has been in existence for one or more years, and which has a constitution and bylaws, and which was not formed for the exclusive purpose of procuring insurance, insuring at least one hundred members of the association for the benefit of persons other than the association or its officers. Source: SL 1966, ch 111, ch 24, 1 (5).
58-16-31. Standard provisions required for group life insurance policies, exceptions.No policy of group life insurance shall be delivered in this state unless it contains in substance the provisions set forth in 58-16-32 to 58-16-42, inclusive, or provisions which in the opinion of the director are more favorable to the persons insured, or at least as favorable to the persons insured and more favorable to the policyholder, provided, however, that 58-16-38 to 58-16-42, inclusive, shall not apply to policies issued to a creditor to insure debtors of such creditor; that the standard provisions required for individual life insurance policies shall not apply to group life insurance policies; and that if the group life insurance policy is on a plan of insurance other than the term plan, it shall contain a nonforfeiture provision which in the opinion of the director is equitable to the insured persons and to the policyholder, but nothing herein shall be construed to require that group life insurance policies contain the same nonforfeiture provisions as are required for individual life insurance policies. Source: SL 1966, ch 111, ch 24, 3.
58-16-32. Copy of application attached to policy--Statements of insured not warranties--Statement by insured, use in contest.A policy of group life insurance shall contain a provision that a copy of the application, if any, of the policyholder shall be attached to the policy when issued, that all statements made by the policyholder or by the persons insured shall be deemed representations and not warranties, and that no statement made by any person insured shall be used in any contest unless a copy of the instrument containing the statement is or has been furnished to such person or to his beneficiary. Source: SL 1966, ch 111, ch 24, 3 (3).
58-16-33. Misstatement of age of insured--Equitable adjustments of premiums or benefits.A policy of group life insurance shall contain a provision specifying an equitable adjustment of premiums or of benefits or of both to be made in the event the age of a person insured has been misstated, such provision to contain a clear statement of the method of adjustment to be used. Source: SL 1966, ch 111, ch 24, 3 (5).
58-16-34. Evidence of individual insurability--Right of insurer to require.A policy of group life insurance shall contain a provision setting forth the conditions, if any, under which the insurer reserves the right to require a person eligible for insurance to furnish evidence of individual insurability satisfactory to the insurer as a condition to part or all of his coverage. Source: SL 1966, ch 111, ch 24, 3 (4).
58-16-35. Incontestability provision required--Exceptions.A policy of group life insurance shall contain a provision that the validity of the policy may not be contested, except for nonpayment of premiums, after it has been in force for two years from its date of issue; and that no statement made by any person insured under the policy relating to the person's insurability may be used in contesting the validity of the insurance with respect to which such statement was made, after such insurance has been in force prior to the contest for a period of two years during such person's lifetime. No statement made by the group policyholder or any person insured under the group policy may be contested unless it is contained in a written instrument signed by that person. The two-year limitation for contesting the validity of the insurance for any person insured under the policy does not apply to fraud on the part of the applicant or insured. Source: SL 1966, ch 111, ch 24, 3 (2); SL 2010, ch 236, 1.
58-16-36. Grace period required.A policy of group life insurance shall contain a provision that the policyholder is entitled to a grace period of thirty-one days for the payment of any premium due except the first, during which grace period the death benefit coverage shall continue in force, unless the policyholder shall have given the insurer written notice of discontinuance in advance of the date of discontinuance and in accordance with the terms of the policy. The policy may provide that the policyholder shall be liable to the insurer for the payment of a pro rata premium for the time the policy was in force during such grace period. Source: SL 1966, ch 111, ch 24, 3 (1).
58-16-37. Required statement of benefits furnished to insured debtors.A policy of group life insurance issued to a creditor to insure debtors of such creditor shall contain a provision that the insurer will furnish to the policyholder for delivery to each debtor insured under the policy a form which will contain a statement that the life of the debtor is insured under the policy and that any death benefit paid thereunder by reason of his death shall be applied to reduce or extinguish the indebtedness. Source: SL 1966, ch 111, ch 24, 3 (11).
58-16-38.1. Assignment of policy not prohibited--Rights vested in assignee.Nothing in this chapter or in any other law shall be construed to prohibit a person whose life is insured under any policy of group life insurance from making an assignment of all or any part of his rights and privileges under such policy including specifically, but not by way of limitation, any right to designate a beneficiary thereunder and any right to have an individual policy issued to him in accordance with 58-16-39 and 58-16-40. Subject to the terms of any contract between the parties, such an assignment by an insured, made either before or after the effective date of this section, is valid for the purpose of vesting in the assignee, in accordance with any provisions included therein as to the time at which it is to be effective, all of such rights and privileges so assigned, but without prejudice to the insurer on account of any payment it may make or individual policy it may issue in accordance with 58-16-39 and 58-16-40 prior to receipt of notice of this assignment. Source: SL 1971, ch 272.
58-16-38. Certificate to be delivered to insured.Except as provided in 58-16-31, a policy of group life insurance shall contain a provision that the insurer will issue to the policyholder for delivery to each person insured an individual certificate setting forth a statement as to the insurance protection to which he is entitled, to whom the insurance benefits are payable, and the rights and conditions set forth in 58-16-39 to 58-16-41, inclusive. Source: SL 1966, ch 111, ch 24, 3 (7).
58-16-39. Termination of employment or membership causing policy to cease--Issuance of individual policy to person entitled thereto, application and payment of premium.Except as provided in 58-16-31, a policy of group life insurance shall contain a provision that if the insurance, or any portion of it, on a person covered under the policy ceases because of termination of employment or of membership in the class or classes eligible for coverage under the policy, such person shall be entitled to have issued to him by the insurer, without evidence of insurability, an individual policy of life insurance without health or other supplementary benefits, provided application for the individual policy shall be made, and the first premium paid to the insurer, within thirty-one days after such termination, and provided further that:(1)The individual policy shall, at the option of such person, be on any one of the forms, except term insurance, then customarily issued by the insurer at the age and for the amount applied for;(2)The individual policy shall be in an amount not in excess of the amount of life insurance which ceases because of such termination, less the amount of any life insurance for which such person is or becomes eligible under the same or any other group policy within thirty-one days after such termination, provided that any amount of insurance which shall have matured on or before the date of such termination as an endowment payable to the person insured, whether in one sum or in installments or in the form of an annuity, shall not, for the purposes of this provision, be included in the amount which is considered to cease because of such termination; and(3)The premium on the individual policy shall be at the insurer's then customary rate applicable to the form and amount of the individual policy, to the class of risk to which such person then belongs, and to his age attained on the effective date of the individual policy. Source: SL 1966, ch 111, ch 24, 3 (8).
58-16-4. Supplemental life coverage.Supplemental life coverage may be purchased at the employee's option subject to the underwriting criteria of the insurer. Source: SL 1966, ch 111, ch 24, 1 (1) (d); SL 1998, ch 288, 1; SL 2008, ch 262, 1.
58-16-40. Termination of group policy--Issuance of individual policy to insured person, amount of policy.Except as provided in 58-16-31, a group life insurance policy shall contain a provision that if the group policy terminates or is amended to terminate the insurance of any class of insured persons, any person insured at the termination date whose insurance terminates and who has been so insured for at least five years prior to that termination date may have an individual life insurance policy issued to him by the insurer. That policy is subject to the conditions and limitations provided in 58-16-39. However, the group policy may provide that the total amount of the individual policy may not exceed the difference between the amount of the person's group life insurance protection that ended because of the group policy termination or amendment and the amount of any life insurance for which he is eligible under any group policy issued or reinstated by any insurer within thirty-one days after that termination date. Source: SL 1966, ch 111, ch 24, 3 (9); SL 1983, ch 374, 1.
58-16-41. Effect of death of person insured under group policy during period in which entitled to individual policy.Except as provided in 58-16-31, a policy of group life insurance shall contain a provision that if a person insured under the group policy dies during the period within which he would have been entitled to have an individual policy issued to him in accordance with 58-16-39 or 58-16-40 and before such an individual policy shall have become effective, the amount of life insurance which he would have been entitled to have issued to him under such individual policy shall be payable as a claim under the group policy, whether or not application for the individual policy or the payment of the first premium therefor has been made. Source: SL 1966, ch 111, ch 24, 3 (10).
58-16-42. Payment of death benefit--Designated beneficiary--Person incurring expenses incident to last illness or death.Except as provided in 58-16-31, a policy of group life insurance shall contain a provision that any sum becoming due by reason of the death of the person insured shall be payable to the beneficiary designated by the person insured, subject to the provisions of the policy in the event there is no designated beneficiary, as to all or any part of such sum, living at the death of the person insured, and subject to any right reserved by the insurer in the policy and set forth in the certificate to pay at its option a part of such sum not exceeding five hundred dollars to any person appearing to the insurer to be equitably entitled thereto by reason of having incurred funeral or other expenses incident to the last illness or death of the person insured. Source: SL 1966, ch 111, ch 24, 3 (6).
58-16-43. Chapter inapplicable to prior policies.The provisions of this chapter shall not apply to any contracts or policies entered into or issued prior to February 8, 1966, nor to any extensions, renewals, or modifications thereof or amendments thereto whenever made. Source: SL 1966, ch 111, ch 24, 4.
58-16-44. Insurers to pay interest on life insurance proceeds.Any insurer admitted to transact life insurance in this state shall pay interest on proceeds of, or payments under, any individual or group policy of life insurance which are payable to any beneficiary under a policy issued for delivery in this state. Source: SL 1987, ch 375, 1.
58-16-45. Computation of interest.Interest payable pursuant to 58-16-44 shall be computed from the date of death of the insured until the date of payment and shall be at the rate of four percent per annum or not less than the current rate of interest on death proceeds left on deposit with the insurer under an interest settlement option, whichever rate is greater. Source: SL 1987, ch 375, 2.
58-16-46. Interest not required where beneficiary elects to receive other than lump sum payment.The provisions of 58-16-44 do not require the payment of interest in any case in which the beneficiary elects in writing delivered to the insurer to receive the proceeds of or payments under a life insurance policy by any means other than a lump sum payment. Source: SL 1987, ch 375, 3.
58-16-47. Notice to beneficiary of interest.In any case in which interest on the proceeds of, or payments under, any policy of life insurance becomes payable pursuant to 58-16-44, the insurer shall notify the named beneficiary or beneficiaries at their last known address that interest will be paid on the proceeds of or payments under the policy. The notice shall specify the rate of interest to be paid. Source: SL 1987, ch 375, 4.
58-16-48. Application limited.The provisions of 58-16-44 to 58-16-48, inclusive, shall apply only to deaths of insureds which occur on or after July 1, 1987. Source: SL 1987, ch 375, 5.
58-16-49. Carrier and group-type basis defined.Terms used in 58-16-49 to 58-16-54, inclusive, mean:(1)"Carrier," a person or an entity that offers or provides a policy, contract, or certificate of group life insurance coverage in this state. Carrier includes an insurer, or any other person or entity providing a policy, contract, or certificate of group life insurance coverage subject to regulation under this title;(2)"Group-type basis," a benefit plan, other than a salary budget plan utilizing individual insurance policies or subscriber contracts, which meets the following conditions:(a)Coverage is provided through insurance policies to classes of employees or members defined in terms of conditions pertaining to employment or membership;(b)The coverage is not available to the general public and can be obtained and maintained only because of the covered person's membership in or connection with the particular organization or group;(c)There are arrangements for bulk payment of premiums or subscription charges to the carrier; and(d)There is sponsorship of the plan by the employer, union, or association. Source: SL 2009, ch 261, 1.
58-16-50. Application of 58-16-49 to 58-16-54.The provisions of 58-16-49 to 58-16-54, inclusive, apply to any group life insurance policy issued or provided by a carrier on a group or group-type basis covering persons as employees of employers or as members of unions or associations. Source: SL 2009, ch 261, 2.
58-16-51. Discontinuance of group life insurance policies.If a policy or contract subject to the provisions of 58-16-49 to 58-16-54, inclusive, provides for automatic discontinuance of the policy or contract after a premium or subscription charge has remained unpaid through the grace period allowed for such payment, the carrier is liable for valid claims for covered losses incurred prior to the end of the grace period.If the actions of the carrier after the end of the grace period indicate that the carrier considers the policy or contract as continuing in force beyond the end of the grace period, such as, by continuing to recognize claims subsequently incurred, the carrier is liable for valid claims for losses beginning prior to the effective date of the written notice of discontinuance to the policyholder or other entity responsible for making payments or submitting subscription charges to the carrier. The effective date of discontinuance may not be prior to midnight at the end of the third scheduled workday after the date upon which the notice is delivered. Source: SL 2009, ch 261, 3.
58-16-52. Notice of discontinuance.A notice of discontinuance given by the carrier shall include a request to the group policyholder or other entity involved to notify employees covered under the policy of the date as of which the group policy, contract, or certificate will discontinue and to advise that, unless otherwise provided in the policy, contract, or certificate, the carrier is not liable for claims for losses incurred after the date of discontinuance. The notice of discontinuance also shall advise, in any instance in which the plan involves employee contributions, that if the policyholder or other entity continues to collect contributions for the coverage beyond the date of discontinuance, the policyholder or other entity may be held solely liable for the benefits with respect to which the contributions have been collected.The carrier shall prepare and furnish to the policyholder or other entity at the same time the carrier gives a notice of discontinuance, a supply of, or access to, notice forms to be distributed to the employees or members concerned, indicating the discontinuance and the effective date of the discontinuance, and urging the employees or members to refer to their certificates or contracts in order to determine what rights, if any, are available to them upon the discontinuance. Source: SL 2009, ch 261, 4.
58-16-53. Extension of benefits at discontinuance in the event of total disability.Each group policy, contract, or certificate subject to the provisions of 58-16-49 to 58-16-54, inclusive, issued on or after July 1, 2009, or under which the level of benefits is altered, modified, or amended on or after July 1, 2009, shall provide a reasonable provision for extension of benefits in the event of total disability at the date of discontinuance of the group policy, contract, or certificate as required by this section.In the case of a group life plan that contains a disability benefit extension of any type, including premium waiver extension, extended death benefit in event of total disability, or payment of income for a specified period during total disability, the discontinuance of the group policy, contract, or certificate may not operate to terminate the extension.Any applicable extension of benefits or accrued liability shall be described in any policy or contract involved as well as in group insurance certificates. The benefits payable during any period of extension of benefits or accrued liability may be subject to the policy's, contract's, or certificate's regular benefit limits, such as benefits ceasing at exhaustion of a benefit period or of maximum benefits. Source: SL 2009, ch 261, 5.
58-16-54. Responsibilities of prior carrier and succeeding carrier upon discontinuance. The following provisions dictate the responsibility of the prior carrier and succeeding carrier when coverage is discontinued:(1)After discontinuance of the policy, contract, or certificate, the prior carrier remains liable only to the extent of its accrued liabilities and extensions of benefits. The position of the prior carrier shall be the same whether the group policyholder or other entity secures replacement coverage from a new carrier, self-insures, or foregoes the provision of coverage;(2)If the individual was validly covered under the prior plan on the date of discontinuance, each individual who is eligible for coverage in accordance with the succeeding carrier's plan of benefits is, with respect to the class or classes of individuals, eligible and shall be covered under the succeeding carrier's plan if (a) any actively-at-work and nonconfinement rules are met, and (b) if required by the succeeding carrier, the individual requests enrollment;(3)Each individual not covered under the succeeding carrier's plan of benefits in accordance with subdivision (2) shall nevertheless be covered by the succeeding carrier in accordance with the following rules if the individual was validly covered, including benefit extension, under the prior plan on the date of discontinuance and if the individual is a member of the class or classes of individuals eligible for coverage under the succeeding carrier's plan. Any reference in the following subdivisions to an individual who was or was not totally disabled is a reference to the individual's status immediately prior to the date the succeeding carrier's coverage becomes effective;(4)The minimum level of benefits to be provided by the succeeding carrier shall be the applicable level of benefits of the prior carrier's plan reduced by any benefits payable by the prior plan;(5)Coverage shall be provided by the succeeding carrier until the earliest of the following dates:(a)The date the individual becomes eligible under the succeeding carrier's plan as described in subdivision (1);(b)The date the individual's coverage would terminate in accordance with the succeeding carrier's plan provisions applicable to individual termination of coverage, such as at termination of employment or ceasing to be an eligible dependent; or(c)In the case of an individual who was totally disabled, and in the case of a type of coverage for which 58-16-53 requires an extension of benefits or accrued liability, the end of any period of extension benefits or accrued liability that is required of the prior carrier by  58-16-53, or if the prior carrier's policy, contract, or certificate is not subject to that section, but would have been required of the prior carrier had the policy, contract, or certificate been subject to 58-16-53 at the time the prior carrier's plan was discontinued and replaced by the succeeding carrier's plan;(6)In any situation in which a determination of the prior carrier's benefit is required by the succeeding carrier, at the succeeding carrier's request the prior carrier shall furnish a statement of the benefits available or pertinent information, sufficient to permit verification of the benefit determination or the determination itself by the succeeding carrier. For the purposes of this subdivision, benefits of the prior plan shall be determined in accordance with all of the definitions, conditions, and covered expense provisions of the prior plan rather than those of the succeeding plan. The benefit determination shall be made as if coverage had not been replaced by the succeeding carrier; and(7)A succeeding carrier's policy may contain a provision limiting benefits to employees who are actively at work. However, any individual who remains as an employee, was covered by the prior carrier, and was disabled as of the date the succeeding carrier coverage became effective for that employer, will continue to be covered by the prior carrier as long as the individual remains an employee. An individual who is not disabled and is not at work on the date the succeeding carrier's coverage commences is considered actively at work as long as the absence from work is an employer-approved absence. Source: SL 2009, ch 261, 6; SL 2021, ch 210,  9.
58-16-6. Employee group insurance--Payment of premium.The premium for a policy issued under 58-16-2 may be paid entirely by the policyholder, or by funds paid entirely by the insured employees, or by funds contributed by both the policyholder and the insured employees. A policy on which no part of the premium is to be derived from funds contributed by the insured employees must insure all eligible employees, or all except any as to whom evidence of individual insurability is not satisfactory to the insurer. Source: SL 1966, ch 111, ch 24, 1 (1) (b); SL 1998, ch 288, 3; SL 2008, ch 262, 2.
58-16-7. Labor union group insurance permitted.A policy of group life insurance may be issued to a labor union, which shall be deemed the policyholder, to insure members of such union for the benefit of persons other than the union or any of its officials, representatives or agents, subject to the requirements of 58-16-8 to 58-16-11, inclusive. Source: SL 1966, ch 111, ch 24, 1 (3).
58-16-8. Labor union groups--Members of union eligible.The members eligible for insurance under a policy issued under 58-16-7 shall be all of the members of the union, or all of any class or classes thereof determined by conditions pertaining to their employment, or to membership in the union, or both. Source: SL 1966, ch 111, ch 24, 1 (3) (a).
58-16-9. Labor union groups--Amounts based upon plan precluding individual selection.The amounts of insurance under a policy issued under 58-16-7 must be based upon some plan precluding individual selection either by the members or by the union. Source: SL 1966, ch 111, ch 24, 1 (3) (d).
58-17-1.1. Grandfathered plans required to cover low-dose mammography--Extent of coverage.Each policy of health insurance that covers a female and that is delivered, issued for delivery, or renewed in this state, except for a policy that provides coverage for specified disease or other limited benefit coverage, shall provide coverage for screening by low-dose mammography for the presence of occult breast cancer that is subject to the same dollar limits, deductibles, and coinsurance factors as for other radiological examinations. Coverage for the screening shall be provided as follows: ages thirty-five to thirty-nine, one baseline mammography; ages forty to forty-nine, a mammography every other year; and age fifty and older, a mammography every year.As used in this section, "low-dose mammography" means the X-ray examination of the breast using equipment dedicated specifically for mammography, including the X-ray tube, filter, compression device, screens, films and cassettes, with an average radiation exposure delivery of less than one rad midbreast, with two views for each breast and with interpretation by a qualified radiologist.The provisions of this section apply only to grandfathered plans pursuant to 75 Fed. Reg. 116 (2010) to be codified at 26 C.F.R. 54 and 602, 29 C.F.R. 2590, and 45 C.F.R. 147. (SL 2011, ch 216, 19 provides: "The provisions of this Act are repealed if the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010) is found to be unconstitutional in its entirety by a final decision of a federal court of competent jurisdiction and all appeals exhausted or time for appeals elapsed.") Source: SL 1990, ch 397, 1, 2; SL 1991, ch 400, 2; SL 2011, ch 216, 1.
58-17-1.2. Policies to provide coverage for diabetes supplies, equipment and education--Exceptions--Conditions and limitations.Every policy of health insurance delivered, issued for delivery, or renewed in this state, except for policies that provide coverage for specified disease or other limited benefit coverage, shall provide, in writing, coverage for equipment, supplies, and self-management training and education, including medical nutrition therapy, for treatment of persons diagnosed with diabetes if prescribed by a physician or other licensed health care provider legally authorized to prescribe such treatment. Medical nutrition therapy does not include any food items or nonprescription drugs.Coverage for medically necessary equipment and supplies shall include blood glucose monitors, blood glucose monitors for the legally blind, test strips for glucose monitors, urine testing strips, insulin, injection aids, lancets, lancet devices, syringes, insulin pumps and all supplies for the pump, insulin infusion devices, prescribed oral agents for controlling blood sugars, glucose agents, glucagon kits, insulin measurement and administration aids for the visually impaired, and other medical devices for treatment of diabetes.Diabetes self-management training and education shall be covered if: (a) the service is provided by a physician, nurse, dietitian, pharmacist, or other licensed health care provider who satisfies the current academic eligibility requirements of the National Certification Board for Diabetic Educators and has completed a course in diabetes education and training or has been certified as a diabetes educator; and (b) the training and education is based upon a diabetes program recognized by the American Diabetes Association or a diabetes program with a curriculum approved by the American Diabetes Association or the South Dakota Department of Health.Coverage of diabetes self-management training is limited to (a) persons who are newly diagnosed with diabetes or have received no prior diabetes education; (b) persons who require a change in current therapy; (c) persons who have a co-morbid condition such as heart disease or renal failure; or (d) persons whose diabetes condition is unstable. Under these circumstances, no more than two comprehensive education programs per lifetime and up to eight follow-up visits per year need be covered. Coverage is limited to the closest available qualified education program that provides the necessary management training to accomplish the prescribed treatment.The benefits provided in this section are subject to the same dollar limits, deductibles, coinsurance, and other restrictions established for all other benefits covered in the policy. Source: SL 1999, ch 252, 1.
58-17-1.3. Diabetes coverage not required of certain plans and policies.The provisions of 58-17-1.2 do not apply to any plan, policy, or contract that provides coverage only for:(1)Specified disease;(2)Hospital indemnity;(3)Fixed indemnity;(4)Accident-only;(5)Credit;(6)Dental;(7)Vision;(8)Prescription drug;(9)Medicare supplement;(10)Long-term care;(11)Disability income insurance;(12)Coverage issued as a supplement to liability insurance;(13)Workers' compensation or similar insurance;(14)Automobile medical payment insurance;(15)Individual health benefit plans of six-months duration or less that are not renewable; or(16)Individual nonmajor medical insurance. Source: SL 1999, ch 252, 2.
58-17-1.4.Policies required to cover occult breast cancer screening.Each policy of health insurance that covers a female and that is delivered, issued for delivery, or renewed in this state, except for a policy that provides coverage for specified disease or other limited benefit coverage, shall provide coverage for screening for the presence of occult breast cancer.The provisions of this section apply only to plans that are not grandfathered pursuant to 75 Fed. Reg. 116 (2010) to be codified at 26 C.F.R. 54 and 602, 29 C.F.R. 2590, and 45 C.F. R. 147. (SL 2011, ch 216, 19 provides: "The provisions of this Act are repealed if the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010) is found to be unconstitutional in its entirety by a final decision of a federal court of competent jurisdiction and all appeals exhausted or time for appeals elapsed.") Source: SL 2011, ch 216, 13.
58-17-1. Requirements for all health insurance policies delivered in state.No policy of health insurance may be delivered or issued for delivery to any person in this state unless it otherwise complies with this title, with 58-17-1.1 to 58-17-11, inclusive, and with 58-17-84.1 and 58-18-45.1. Source: SL 1966, ch 111, ch 25, 2; SL 1991, ch 400, 1; SL 1999, ch 248, 1.
58-17-10.1. Reduction of benefits because of increase in statutory disability benefits prohibited.No individual insurance policy for loss of time or disability benefits issued, amended, renewed, or delivered in this state shall contain any provision offsetting, or in any other manner reducing, any benefit under the policy by the amount of, or in proportion to, any increase in disability benefits received or receivable under the federal Social Security Act, the Railroad Retirement Act, any veteran's disability compensation and survivor benefits act, workers' compensation, or any similar federal or state law, as amended subsequent to the date of commencement of such benefit. Source: SL 1976, ch 312.
58-17-10.2. Individual policy for insured's spouse required in policies covering spouse--Eligibility--Coverage--Waiting periods.No health insurance policy providing coverage of hospital or medical expense which in addition to covering the insured also provides coverage to the spouse of the insured shall be issued without a provision that provides that upon eligibility for medicare or social security disability benefits by one spouse the other spouse shall be entitled to have issued to him or her, without evidence of insurability, upon application to the company within sixty days following the eligibility, and upon payment of the appropriate premium, an individual policy of accident or health insurance. Such policy shall provide the coverage then being issued by the insurer which is most nearly similar to the existing coverages. This obligation can be met by continuation of coverage for spouse under existing policy at the appropriate premium. Any and all probationary or waiting periods set forth in such policy shall be considered as being met to the extent coverage was in force under the prior policy. Source: SL 1979, ch 343.
58-17-100. Definitions.Terms used in 58-17-100 to 58-17-106, inclusive, mean:(1)"FDA," the federal Food and Drug Administration;(2)"Health insurer," any person who provides health insurance in this state. The term includes a licensed insurance company, a prepaid hospital or medical service plan, a health maintenance organization, a multiple employer welfare arrangement, or any person providing a plan of health insurance subject to state insurance regulation;(3)"Life threatening," either or both of the following:(a)A disease or condition where the likelihood of death is high, unless the course of the disease is interrupted; or(b)A disease or condition with potentially fatal outcomes where the end point of clinical intervention is survival;(4)"Medical literature," a published scientific study in a journal or other publication in which original manuscripts have been published only after critical review for scientific accuracy, validity, and reliability by unbiased independent experts and a determination by the International Committee of Medical Journal Editors that it meets the Uniform Requirements for Manuscripts submitted to biomedical journals. The term, medical literature, does not include a publication or a supplement to a publication that is sponsored to a significant extent by a pharmaceutical manufacturing company or health carrier;(5)"Standard reference compendia," one of the following:(a)The United States Pharmacopeia Drug Information;(b)DRUGDEX; or(c)The American Hospital Formulary Service Drug Information;(6)"Off-label," the use of an FDA approved drug for an indication that is not included in the approved labeling;(7)"Drug," any substance prescribed by a licensed health care provider acting within the scope of the provider's license and that is intended for use in the diagnosis, mitigation, treatment, or prevention of disease and is taken by mouth; injected into a muscle, the skin, a blood vessel, or cavity of the body; applied to the skin; or otherwise assimilated by the body. The term, drug, includes only those substances that are approved by the FDA for at least one indication. Source: SL 2000, ch 242, 1.
58-17-101. Insurer may not exclude certain off-label uses of prescription drugs.No health insurer issuing a policy which provides coverage for prescription drugs may exclude coverage of any drug used for the treatment of cancer or life threatening conditions on the grounds that the drug has not been approved by the FDA for that indication if that drug is recognized for treatment of such indication in one of the standard reference compendia or in the medical literature. The prescribing physician shall submit documentation supporting the proposed off-label use or uses to the insurer, if requested. Any coverage of a drug that serves as the primary treatment required by 58-17-100 to 58-17-106, inclusive, shall also include medically necessary services associated with the administration of the drug. Source: SL 2000, ch 242, 2.
58-17-102. Exceptions.No coverage is required under 58-17-100 to 58-17-106, inclusive, for the following:(1)Any drug that has not been fully licensed or approved by the FDA;(2)The use of any drug if the FDA has determined that use to be contraindicated; or(3)Any experimental drug not otherwise approved for any indication by the FDA. Source: SL 2000, ch 242, 3.
58-17-103. Provisions limited to cancer or life threatening diseases.The provisions of 58-17-100 to 58-17-106, inclusive, apply to drugs used in the treatment for cancer or life threatening diseases only, and nothing in 58-17-100 to 58-17-106, inclusive, may be construed to create, impair, alter, limit, modify, enlarge, abrogate, or prohibit reimbursement for medications used in the treatment of any other disease or condition. Source: SL 2000, ch 242, 4.
58-17-104. Deductibles, copayments, and managed care review not affected.Nothing in 58-17-100 to 58-17-106, inclusive, may be construed to prevent the application of contractual deductibles or copayment provisions or managed care review. Source: SL 2000, ch 242, 5.
58-17-105. Drugs used in research trials not covered.The following drugs or services are not subject to coverage under 58-17-101:(1)Any drug that is used in research trials sponsored by the manufacturer of that drug or a governmental entity; or(2)Any drug or service furnished in a research trial, if the sponsor of the research trial furnishes the drug or service without charge to any participant in the research trial. Source: SL 2000, ch 242, 6.
58-17-106. No reduction or limitation of coverage otherwise required by law.Sections 58-17-100 to 58-17-106, inclusive, may not be used to reduce or limit coverage for off-label use of drugs otherwise required by law or contract. Source: SL 2000, ch 242, 7.
58-17-107. Health insurance policies to provide coverage for prostate cancer screening.Every policy of health insurance that covers a male and that is delivered, issued for delivery, or renewed in this state, except for policies that provide coverage for specified disease or other limited benefit coverage, shall provide the following coverage for diagnostic screening for prostate cancer:(1)An annual medically recognized diagnostic examination, including a digital rectal examination and a prostate-specific antigen test, as follows:(a)For asymptomatic men aged fifty and over; and(b)For men aged forty-five and over at high risk for prostate cancer; and(2)For males of any age who have a prior history of prostate cancer, medically indicated diagnostic testing at intervals recommended by a physician, including the digital rectal examination, prostate-specific antigen test, and bone scan. Source: SL 2001, ch 277, 1.
58-17-108. Disability income insurance defined.For the purposes of 58-17-108 to 58-17-112, inclusive, the term, disability income insurance, means a policy or certificate of insurance that primarily provides payment to or for the benefit of the policyholder or certificate holder based, in whole or in part, upon lost wages or other earned income or business or financial losses as a result of an inability to work due to sickness, injury, or a combination of sickness and injury. Source: SL 2001, ch 276, 1.
58-17-109. Exclusion or reduction of benefits.Any disability income insurance policy may include provisions that exclude or reduce benefits if the insured is collecting other benefits under a government program or is eligible to receive benefits under other insurance coverage. If the insured subsequently receives other benefits for a period for which the insurer paid benefits, the insurer may require reimbursement from the insured for any benefits already paid that otherwise would not have been paid. If the insured fails to make timely application for any other insurance coverage or governmental program for which that insured may be eligible, fails to actively and in good faith pursue all appeals procedures if benefits under other insurance or governmental program have been denied, or fails to produce satisfactory evidence that the applications have been made and the appeals pursued, benefits may be reduced or withheld. Source: SL 2001, ch 276, 2.
58-17-11.1. Issuance of policies by insurance company, nonprofit hospital service plan, medical service corporation, or fraternal benefit society--Delivery receipts--Certificates of mailing--Term of retention.An insurance company, nonprofit hospital service plan, medical service corporation, health maintenance organization, or fraternal benefit society shall issue policies in this state for which an examination period is required in accordance with one of the following methods:(1)If the policy is delivered by an insurance producer, a receipt shall be signed by the policyowner acknowledging delivery of the policy. The receipt shall include the policy number and the date of the delivery;(2)If the policy is delivered by mail, it shall be sent by registered or certified mail, return receipt requested, or a certificate of mailing shall be obtained showing the date the policy was mailed to the policyowner. For policy issuances verified by a certificate of mailing, it is presumed that the policy is received by the policyowner ten days from the date of mailing.The receipts and the certificates of mailing described in this section shall be retained by the insurer for five years. If a producer obtains the delivery receipt, the producer shall forward the signed delivery receipt to the insurer. Source: SL 1982, ch 28, 18; SL 1987, ch 374, 3; SL 2001, ch 286, 115; SL 2002, ch 232, 3.
58-17-11. Return of policy by purchaser--Refund of premium paid--Dissatisfaction with terms after examination.Every individual health insurance policy or contract, except single premium nonrenewable policies or contracts, issued for delivery in South Dakota on or after December 31, 1966, by an insurance company, nonprofit hospital service plan, or medical service corporation, shall have printed thereon or attached thereto a notice stating in substance that the person to whom the policy or contract is issued shall be permitted to return the policy or contract within ten days of its delivery to said purchaser and to have the premium paid refunded if, after examination of the policy or contract, the purchaser is not satisfied with it for any reason. If a policyholder or purchaser pursuant to such notice, returns the policy or contract to the company or association at its home or branch office or to the insurance producer through whom it was purchased, it is void from the beginning and the parties shall be in the same position as if no policy or contract had been issued. Source: SL 1966, ch 111, ch 25, 2 (8); SL 2001, ch 286, 114.
58-17-110. Commencement of loss.No disability income insurance policy may require the loss to commence less than thirty days after the date of the accident. Source: SL 2001, ch 276, 3.
58-17-111. Minimum standards--Exceptions.Except for overhead expense, buy-sell coverage, or other similar business disability income insurance coverage, a disability income insurance policy shall meet the following minimum standards:(1)Provide that periodic payments that are payable at ages after sixty-two and reduced solely on the basis of age are at least fifty percent of the amounts payable immediately prior to age sixty-two or in the case of an employer group plan that has twenty or more employees, that periodic payments are actuarially equivalent regardless of age;(2)Contain an elimination period no greater than:(a)Ninety days in the case of coverage providing a benefit of one year or less;(b)One hundred eighty days in the case of coverage providing a benefit of more than one year but not greater than two years;(c)Three hundred sixty-five days in the case of coverage providing a benefit of more than two years but not greater than five years; or(d)Seven hundred thirty days in the case of coverage providing a benefit greater than five years resulting from sickness or injury;(3)Provide a maximum benefit period of at least six months for long-term disability income insurance and at least twelve weeks for short-term disability income insurance. However, in the case of a policy covering disability arising out of pregnancy, childbirth, or miscarriage, the maximum benefit period may be one month, except if the plan is an employer plan with fifteen or more employees, then the maximum benefit period for pregnancy, childbirth, or miscarriage may not be less than the maximum benefit period for other covered disabilities;(4)Include no reduction in benefits because of any cost of living increase in social security or similar benefits during a benefit period;(5)Require only one elimination period if a policy provides total disability income benefits and partial disability income benefits.A long-term disability income insurance policy may have longer elimination periods if the policy is issued in conjunction with or supplemental to a limited duration self-insured or other short-term disability income policy. The provisions of this section do not apply to an employer plan if at least fifty percent of the covered employee's disability income benefits are subject to federal income taxes. Source: SL 2001, ch 276, 4.
58-17-112. Promulgation of rules regarding disability income policies--Content.The director may promulgate rules pursuant to chapter 1-26 to protect the insurance-buying public with regard to disability income policies. However, the director shall take into account the effect any such rule may have on the availability of coverage. The rules may include:(1)Definition of terms;(2)Permissible exclusions;(3)Return of premium provisions;(4)Terms of renewability;(5)Disclosure requirements;(6)Benefit triggers, if such rules permit the use of activities of daily living as an acceptable benefit trigger; and(7)Limitations, exceptions, and reductions. Source: SL 2001, ch 276, 5.
58-17-12. Required provisions--Captions--Substitutes, approval by director.Except as provided in 58-17-13, each policy of health insurance delivered or issued for delivery to any person in this state shall contain the provisions specified in 58-17-14 to 58-17-29, inclusive, in the words in which the same appear; except, that the insurer may, at its option, substitute for one or more of such provisions corresponding provisions of different wording approved by the director which are in each instance not less favorable in any respect to the insured or the beneficiary. Each such provision shall be preceded individually by the applicable caption shown, or, at the option of the insurer, by such appropriate individual or group captions or subcaptions as the director may approve. Source: SL 1966, ch 111, ch 25, 3 (1).
58-17-13. Omission from policy of inapplicable provision--Approval of director--Modification of inconsistent provision.If any such provision is in whole or in part inapplicable to or inconsistent with the coverage provided by a particular form of policy, the insurer, with the approval of the director shall omit from such policy any inapplicable provision or part of a provision and shall modify any inconsistent provision or part of a provision in such manner as to make the provision as contained in the policy consistent with the coverage provided by the policy. Source: SL 1966, ch 111, ch 25, 3 (2).
58-17-14. Entire contract and change clauses required--Signed acceptance required for endorsements.There shall be a provision as follows: "Entire contract; changes: This policy, including the endorsements and the attached papers, if any, constitutes the entire contract of insurance. No change in this policy is valid until approved by an executive officer of the insurance company and unless such approval is endorsed or attached to this policy. No insurance producer has authority to change this policy or to waive any of its provisions."Any rider, endorsement, or application added to a policy, upon policy issuance, after the date of issue, or at reinstatement or renewal which reduces or eliminates benefits or coverage in the policy requires signed acceptance by the policyholder. After the date of policy issue, any rider or endorsement which increases benefits or coverage with an accompanying increase in premium during the policy term must be agreed to in writing signed by the insured, unless the increased benefits or coverage is required by law. Coverage as required by 58-17-98 may be reduced or eliminated by a rider to, or an endorsement on, a new policy if the insurer would reject the application for the policy without the rider or endorsement based upon the applicant's preexisting condition of the type covered by 58-17-98 and if there is signed acceptance by the policyholder. Source: SL 1966, ch 111, ch 25, 4; SL 1974, ch 315; SL 1982, ch 361; SL 2001, ch 286, 116; SL 2002, ch 234, 2; SL 2003, ch 247, 1; SL 2010, ch 237, 1.
58-17-142. Maximum premium rates for plans issued prior to August 1, 2003--Rate provisions of 58-17-75 to apply upon carrier's discontinuance of active marketing.Any carrier of any in force individual health benefit plan issued guarantee issued policies prior to August 1, 2003, for which rates are established pursuant to 58-17-75, may set and charge a maximum premium rate of not more than two and two-tenths times the base premium rate until January 1, 2005, and may set and charge a maximum premium rate of not more than two and one-half times the base premium rate for each year thereafter, if the carrier actively markets individual major medical policies in this state during the entire year of 2003 and each year thereafter. If, in any year after 2003, the carrier discontinues actively marketing individual health benefit plans in this state, the premium rate provisions of 58-17-75 apply to those policies in force issued guarantee issued policies from the date of the carrier's discontinuance of active marketing.The provisions of this section apply only to grandfathered plans pursuant to 75 Fed. Reg. 116 (2010) to be codified at 26 C.F.R. 54 and 602, as of January 1, 2015, and 29 C.F.R. 2590, as of January 1, 2015, and 45 C.F.R. 147, as of January 1, 2015. Source: SL 2003 (SS), ch 2, 1, eff. Sept. 26, 2003; SL 2015, ch 249, 27.
58-17-145.1. Deadline for submission of health claim under risk pool.Any person covered under a risk pool established pursuant to the provisions of 58-17-113 in the State of South Dakota may submit a health claim within six months from June 30, 2015. Each claim shall be submitted in writing to the Bureau of Human Resources. A claim shall be paid in accordance with the South Dakota risk pool plan document in effect July 1, 2014, through June 30, 2015, inclusive. Source: SL 2015, ch 249, 30.
58-17-146.1. Certain contract terms voidable by dentist. Any assignment or other contractual term in an agreement between an insurer and a dentist that purports to share, transfer, or assign contractual discounts to a third party insurer or entity, without relinquishing the insurer's rights, is severable and voidable at the dentist's option at the time the agreement is executed by the dentist. The third party access provision of the agreement shall be clearly identified.For purposes of this section, a third party insurer or entity does not include an insurer or entity operating under the same brand licensee program as the contracting insurer. Source: SL 2021, ch 212,  1.
58-17-146. Dental insurers prohibited from setting fees for noncovered service.No contract between an insurer and a dentist may require a dentist to provide services for an insured at a fee set by the contract unless the services are covered services under the terms of the insured's plan or policy. For the purposes of this section, the term, covered services, means services reimbursable under the plan, policy, or contract, subject to such contractual limitations on benefits as may apply, including deductibles, waiting periods, frequency limitations, or charges over the benefit maximum. Source: SL 2010, ch 239, 1.
58-17-147. Elective abortion coverage prohibited in qualified health plan offered through health insurance exchange.Pursuant to the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, no qualified health plan offered through a health insurance exchange established in the state may include elective abortion coverage.For the purposes of this section, an elective abortion is an abortion performed for any reason other than a medical emergency as set forth in subdivision 34-23A-1(5). Source: SL 2012, ch 245, 1, 2.
58-17-148. Qualified health plan sold through exchange to provide for placement through licensed insurance producer--Commissions.Any qualified health plan as defined by the Patient Protection and Affordable Care Act of 2010 sold in South Dakota through a public health care exchange, as mandated by the Patient Protection and Affordable Care Act of 2010, shall provide for placement through a licensed insurance producer upon enrollment. Any commission paid by a health insurance carrier for the sale of a qualified health plan through a public health exchange shall be the same as a commission paid by the same health insurance carrier outside the public exchange for a similar plan. Source: SL 2013, ch 249, 1.
58-17-149. Definitions regarding retrospective payment of clean claims for covered services provided during credentialing period.Terms used in 58-17-149 to 58-17-152, inclusive, mean:(1)"Application date," the date on which a health insurer or other entity responsible for the credentialing of health care professionals on behalf of the health insurer receives the health care professional's completed application for credentialing or change request;(2)"Clean claim," as defined in 58-12-19;(3)"Health care professional," as defined in subdivision 58-17F-1(8);(4)"Health insurer," as defined in subdivision 58-17-100(2);(5)"Special Review," a supplemental review of a health care professional's completed application for credentialing or change request by a health insurer or other entity responsible for credentialing of health care professionals necessitated by credible evidence received by a health insurer or other entity responsible for credentialing of health care professionals as it relates to investigation of the following: action taken against the applicant's licensure status, action taken against the applicant's professional society status, verified complaints to facilities, or licensing agency regarding the applicant; the applicant's non-completion of training programs; a criminal proceeding brought against the applicant a malpractice claim brought against the applicant; loss of a Drug Enforcement Administration certificate or state-controlled substance certificate; loss of a Medicare or Medicaid certification status; or involuntary termination of credentialing by a different health insurer. Source: SL 2014, ch 236, 1.
58-17-15. Time limit on certain defenses--Application of section.There shall be a provision as follows: "Time limit on certain defenses: (1) After two years from the date of issue of this policy no misstatements, except fraudulent misstatements, made by the applicant in the application for such policy shall be used to void the policy or to deny a claim for loss incurred or disability, as defined in the policy, commencing after the expiration of such two-year period."The foregoing policy provision may not be construed to affect any legal requirement for avoidance of a policy or denial of a claim during such initial two-year period, nor to limit the application of 58-17-32 to 58-17-39, inclusive, in the event of misstatement with respect to age or occupation or other insurance. This section only applies to excepted benefits. This section does not apply to any long-term care insurance policy or certificate. (SL 2011, ch 216, 19 provides: "The provisions of this Act are repealed if the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010) is found to be unconstitutional in its entirety by a final decision of a federal court of competent jurisdiction and all appeals exhausted or time for appeals elapsed.") Source: SL 1966, ch 111, ch 25, 5; SL 2011, ch 216, 4.
58-17-150. Retrospective payment of clean claims for covered services provided by health care professional during credentialing period--Requirements.A health insurer shall make retrospective payment for all clean claims submitted by a health care professional after the credentialing period for covered services provided by the health care professional during the credentialing period subject to all of the following:(1)The credentialing period begins on the application date and ends on the date that the health insurer or other entity responsible for credentialing health care professionals on behalf of the health insurer has made a final determination approving the health care professional's application to be credentialed and notice has been sent;(2)The health insurer or other entity responsible for credentialing health care professionals on behalf of the health insurer shall, electronically or in writing, notify an applicant of its determination regarding a properly completed application for credentialing within ninety days of receipt of an application containing all information required by the health insurer's credentialing form:(a)If an incomplete application is received, the health insurer or other entity responsible for credentialing of health care professionals on behalf of the insurer shall notify the health care professional of the incomplete application as soon as possible, but no more than thirty days after receipt of the application. The notification shall itemize all documentation or other information that the insurer or entity must receive to complete the application. The health insurer or other entity responsible for credentialing of health care professionals on behalf of the insurer may request additional information if the information provided by the health care professional to the insurer or other entity responsible for credentialing of health care professionals on behalf of the insurer pursuant to this subsection is inaccurate, incomplete, or unclear;(b)A health insurer or other entity responsible for credentialing of health care professionals may take additional time beyond the ninety days if a special review is required;(3)The health care professional may not submit any claim to the health insurer during the credentialing period;(4)A health insurer may not be required to pay any claim submitted by a health care professional during the credentialing period;(5)The health insurer's time period for timely submission of claims may not begin until the credentialing period has ended. The health insurer's rules pertaining to timely submission may not be used to deny payment of any clean claim for medical services provided by a health care professional during the credentialing period, so long as the health care professional submits all such claims within the time period required by the health insurer's rules beginning on the date the health care professional receives notice that the healthcare professional is credentialed;(6)Unless otherwise prohibited by law, after the health care professional is credentialed, the health care professional shall submit all claims to the health insurer for covered services provided by the health care professional during the credentialing period;(7)After the health care professional is credentialed, a health insurer shall pay or deny all clean claims submitted by the health care professional for covered services provided by the health care professional during the credentialing period. Source: SL 2014, ch 236, 2.
58-17-151. Applications to be credentialed.Within ten business days of receiving a request for an application to be credentialed by a health care professional, a health insurer or other entity responsible for the credentialing of health care professionals on behalf of the health insurer shall send an application form to the professional, unless the application to be credentialed is available electronically on a public website. The application form shall identify and itemize all documentation and other information that the insurer or entity must receive in order for an application to be complete. Source: SL 2014, ch 236, 3.
58-17-152. Application of 58-17-149 to 58-17-151.Nothing in 58-17-149 to 58-17-151, inclusive, applies to services provided by a health care professional that are covered by Medicaid, Medicare, TRICARE, or other health care benefit program subject to federal regulations regarding eligibility and provider payments. Nothing in 58-17-149 to 58-17-151, inclusive, requires a health insurer or other entity responsible for credentialing health care professionals on behalf of the health insurer to take any action in violation of the requirements of the National Committee for Quality Assurance (NCQA) or Utilization Review Accreditation Commission (URAC).Nothing in 58-17-149 to 58-17-151, inclusive, requires a health insurer or other entity responsible for credentialing health care professionals on behalf of the health insurer to credential a health care professional or to permit a non-credentialed health care professional to participate in the health insurer's provider network. Source: SL 2014, ch 236, 4.
58-17-153. Coverage for treatment of hearing impairment for persons under age nineteen.Any qualified health plan issued on or after January 1, 2015, that offers coverage for professional audiology services shall include coverage for medically necessary physician services appropriate for the treatment of hearing impairment to a person under the age of nineteen. This shall include professional services rendered by an audiologist licensed pursuant to chapter 36-24.The benefits provided shall be subject to the same dollar limits, deductibles, coinsurance and other limitations provided for other covered benefits in the policy.Nothing in this section requires the payment by the health plan of hearing aids, devices, or equipment to correct hearing impairment or loss. Source: SL 2014, ch 237, 1.
58-17-154. Definitions for 58-17-155 to 58-17-162.Terms used in 58-17-155 to 58-17-162, inclusive, mean:(1)"Applied behavior analysis," the design, implementation, and evaluation of environmental modifications, using behavioral stimuli and consequences, to produce socially significant improvement in human behavior, including the use of direct observation, measurement, and functional analysis of the relationship between environment and behavior;(2)"Autism spectrum disorder," a complex neurodevelopmental medical disorder characterized by social impairment, communication difficulties, and restricted, repetitive, and stereotyped patterns of behavior;(3)"Behavioral health treatment," evidence-based interventions that:(a)Achieve specific improvements in functional capacity of a person; and(b)Are provided or supervised by a licensed practitioner as provided in 58-17-159;(4)"Treatment," evidence-based care which is prescribed or ordered for a person diagnosed with an autism spectrum disorder by a licensed physician or psychologist, including:(a)Behavioral health treatment;(b)Pharmacy care; and(c)Therapeutic care. Source: SL 2015, ch 250, 1; SL 2017, ch 212, 1, eff. Jan. 1, 2018.
58-17-155. Exceptions to application of 58-17-154 to 58-17-162.Nothing in 58-17-154 to 58-17-162, inclusive, applies to nongrandfathered plans in the individual and small group markets that are required to include essential health benefits under the federal Patient Protection and Affordable Care Act of 2010, as in effect on January 1, 2015, or to Medicare supplement, accident-only, specified disease, hospital indemnity, disability income, long-term care, major medical policies with a limited duration of less than twelve months, or other limited benefit hospital insurance policies, or any plan or coverage exempted from state regulation by the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. 18, as in effect on January 1, 2015. Source: SL 2015, ch 250, 2.
58-17-156. Policies, contracts, certificates, and plans subject to 58-17-154 to 58-17-162.Except as provided in 58-17-155, 58-17-154 through 58-17-162 apply to all individual and group health insurance policies, contracts, and certificates issued by health carriers as defined in 58-17H-1 and self-funded nonfederal governmental plans with the exception of the state employee health plan sponsored by the State of South Dakota. Source: SL 2015, ch 250, 3; SL 2020, ch 209,  6.
58-17-157. Coverage for applied behavior analysis for treatment of autism spectrum disorders.Every policy, contract, certificate, or plan subject to the provisions of 58-17-154 to 58-17-162, inclusive, shall provide coverage for applied behavior analysis for the treatment of autism spectrum disorders consistent with 58-17-154 to 58-17-162, inclusive. Source: SL 2015, ch 250, 4.
58-17-158. Authorization, prior approval, and other care management requirements--Annual maximum benefit.Coverage for an applied behavior analysis may be subject to pre-authorization, prior approval, and other care management requirements including limits on the number of individual visits a person may make for applied behavior analysis subject to the general care management provisions of the plan, and may be subject to dollar limits, deductibles, copayments, or coinsurance provisions that apply to other medical or surgical services covered under the policy. The coverage for applied behavior analysis shall provide an annual maximum benefit that may not be less than the following:(1)Through age 6 $36,000(2)Age 7 through age 13 $25,000(3)Age 14 through age 18 $12,500 Source: SL 2015, ch 250, 5.
58-17-159. Qualifications of person performing or supervising applied behavior analysis.Any person who performs or supervises applied behavior analysis shall:(1)Be licensed by the South Dakota Board of Medical and Osteopathic Examiners or the Board of Examiners of Psychologists and have documented training and competence in applied behavior analysis; or(2)Be licensed by the South Dakota Board of Social Workers as a licensed behavior analyst. Source: SL 2015, ch 250, 6; SL 2017, ch 212, 2, eff. Jan. 1, 2018.
58-17-160. Review of treatment.A health carrier or plan provider subject to 58-17-154 to 58-17-162, inclusive, shall have the right to request a review of the treatment that a person is receiving not more than once every three months unless the insurer and the person's licensed physician or licensed psychologist execute an agreement that a more frequent review is necessary. Any agreement regarding the right to review a treatment plan more frequently applies only to a particular person receiving applied behavior analysis and may not apply to all persons receiving applied behavior analysis by a licensed physician, licensed psychologist, or licensed behavior analyst. The cost of obtaining a review under this section shall be paid by the health carrier or plan. Source: SL 2015, ch 250, 7; SL 2017, ch 212, 3, eff. Jan. 1, 2018.
58-17-161. Services under individualized service plan, family service plan, or education program.Nothing in 58-17-154 to 58-17-162, inclusive, may be construed to affect any obligation to provide services to a person under an individualized family service plan, an individualized education program, or an individualized service plan. Source: SL 2015, ch 250, 8.
58-17-162. Effective date of 58-17-154 to 58-17-161.The effective date of 58-17-154 to 58-17-161, inclusive, is the first plan year, policy year, or renewal date on or after January 1, 2016. Source: SL 2015, ch 250, 9.
58-17-163. Dental care insurers to honor assignment of benefits.Any insurer that provides dental care insurance to a person shall honor an assignment, made in writing by the person insured under the policy, of payments due under the policy to a dentist or a dental corporation for dental care services provided to the person that is insured under the policy. Upon notice of the assignment, the insurer shall make payments directly to the dentist or dental corporation providing the dental care services. A dentist or dental corporation with a valid assignment may bill the insurer and notify the insurer of the assignment. Upon request of the insurer, the dentist or dental corporation shall provide a copy of the assignment to the insurer. Source: SL 2017, ch 213, 1.
58-17-164. Revocation of assignment of dental insurance benefits.A person may revoke an assignment made pursuant to 58-17-163 with or without the consent of the dentist or dental corporation. The revocation shall be in writing. The person shall provide notice of the revocation to the insurer. The insurer shall send a copy of the revocation notice to the dentist or dental corporation subject to the assignment. The revocation is effective when both the insurer and the dentist or dental corporation have received a copy of the revocation notice. The revocation is only effective for any charges incurred after both parties have received the revocation notice. Source: SL 2017, ch 213, 2.
58-17-165. Reimbursement of payment from insured following receipt of payment from insurer.If, under an assignment authorized in 58-17-163, a dentist or dental corporation collects payment from a person and subsequently receives payment from the insurer, the dentist or dental corporation shall reimburse the person, less any applicable copayments, deductibles, or coinsurance amounts, within forty-five days. Source: SL 2017, ch 213, 3.
58-17-166. Scope of benefits not affected--Medical benefits not included .Nothing in 58-17-163 to 58-17-165, inclusive, limits an insurer's ability to determine the scope of the insurer's benefits, services, or any other terms of the insurer's policies or to negotiate any contract with a licensed health care provider regarding reimbursement rates or any other lawful provisions.The provisions of 58-17-163 to 58-17-166, inclusive, apply only to any policy of insurance insuring dental care services. The provisions of 58-17-163 to 58-17-166, inclusive, do not apply to any service payable as a medical benefit pursuant to a health benefit plan as defined in subdivision 58-17-66(9). Source: SL 2017, ch 213, 4.
58-17-167. Definitions pertaining to telehealth coverage.Terms used in 58-17-167 to 58-17-170, inclusive, mean:(1)"Health care professional," as defined in 58-17F-1;(2)"Health care services," as defined in 58-17F-1;(3)"Health insurer," as defined in 58-17-100;(4)"Telehealth," the delivery of health care services through the use of HIPAA-compliant interactive audio-video. The term does not include the delivery of health care services through audio-only telephone, electronic mail message, text message, mail service, facsimile transmission, or any combination thereof. Source: SL 2019, ch 211, 1.
58-17-168. Coverage for health care services provided through telehealth.No health insurer may exclude a service for coverage solely because the service is provided through telehealth and not provided through in-person consultation or contact between a health care professional and a patient. Health care services delivered by telehealth must be appropriate and delivered in accordance with applicable law and generally accepted health care practices and standards prevailing at the time the health care services are provided, including rules adopted by the appropriate professional licensing board having oversight of the health care professional providing the health care services. Health insurers are not required to provide coverage for health care services that are not medically necessary.This section does not:(1)Prohibit a health insurer from establishing criteria that a health care professional must meet to demonstrate the safety and efficacy of delivering a particular health care service via telehealth that the health insurer does not already reimburse other health care professionals for delivering via telehealth so long as the criteria are not unduly burdensome or unreasonable for the particular services;(2)Prevent a health insurer from requiring a health care professional to agree to certain documentation or billing practices designed to protect the health insurer or patients from fraudulent claims so long as the practices are not unduly burdensome or unreasonable for the particular services; or(3)Prevent a health insurer from including a deductible, copayment, or coinsurance requirement for a health care service provided via telehealth, if the deductible, copayment, or coinsurance is not in addition to and does not exceed the deductible, copayment, or coinsurance applicable if the same services were provided through in-person contact. Source: SL 2019, ch 211, 2.
58-17-169. Discrimination between coverage for services provided in person and through telehealth prohibited.A health insurance policy, contract, or plan providing for third-party payment may not discriminate between coverage benefits for health care services that are provided in person and the same health care services that are delivered through telehealth as long as the services are appropriate to be provided through telehealth. Nothing in 58-17-167 to 58-17-170, inclusive, prohibits a health insurer and a health care professional from entering into a contract for telehealth with terms subject to negotiation. Source: SL 2019, ch 211, 3.
58-17-17. Grace period on premiums required in policy.There shall be a provision as follows: "Grace period: A grace period of __________ (insert a number not less than seven days for weekly premium policies, ten days for monthly premium policies and thirty-one days for all other policies) days will be granted for the payment of each premium falling due after the first premium, during which grace period the policy shall continue in force." If a claim arises under the policy during such period of grace the amount of any proportionate premium due or overdue for the grace period may be deducted from the policy proceeds but such deduction shall not renew the policy or further extend the grace period. Claims arising during a grace period shall be compensable whether or not a renewal premium has been tendered or accepted subject to any other policy defenses.A policy which gives the policyholder the right to select any one of two or more modes of premium payment by remitting an amount stated in the policy for that particular mode of payment, without requiring any formal request on the part of the policyholder for changing the mode of premium payment, shall provide a grace period of thirty-one days. Source: SL 1966, ch 111, ch 25, 6; SL 1977, ch 407, 1.
58-17-170. Application of telehealth coverage requirements.The requirements of 58-17-168 and 58-17-169 apply to any health insurer offering any individual or group health insurance policy, contract, certificate, or plan delivered, issued for delivery, or renewed in South Dakota on or after January 1, 2020. The requirements of 58-17-168 and 58-17-169 do not apply to any plan, policy, or contract providing coverage only for:(1)Specified disease;(2)Hospital indemnity;(3)Fixed indemnity;(4)Accident-only;(5)Credit accident and health insurance;(6)Vision;(7)Prescription drug;(8)Medicare supplement;(9)Long-term care;(10)Disability income insurance;(11)Coverage issued as a supplement to liability insurance;(12)Workers' compensation or similar insurance;(13)Automobile medical payment insurance; or(14)Individual health benefit plans of six-months or less duration that are not renewable.The requirements of 58-17-168 and 58-17-169 do not apply to services offered that are not part of the policy, contract, certificate, or plan offered and for which there is no premium charged. Source: SL 2019, ch 211, 4.
58-17-171. Payment for dental services--Credit card requirement prohibited.No plan of insurance insuring dental care services may contain restrictions on methods of payment to the dentist in which the only acceptable payment method is a credit card payment. Source: SL 2022, ch 182, 1.
58-17-18. Renewal of policy--Restriction on company's right to refuse.A policy in which the insurer reserves the right to refuse renewal shall have the following clause at the beginning of the provision in 58-17-17,"Unless not less than thirty days prior to the premium due date the insurer has delivered to the insured or has mailed to his last address as shown by the records of the insurer written notice of its intention not to renew this policy beyond the period for which the premium has been accepted." Source: SL 1966, ch 111, ch 25, 6; SL 1977, ch 407, 2.
58-17-19. Reinstatement when premium not paid within grace period.There shall be a provision as follows: "Reinstatement: If any renewal premium be not paid within the time granted the insured for payment, a subsequent acceptance of premium by the insurer or by any insurance producer duly authorized by the insurer to accept such premium, without requiring in connection therewith an application for reinstatement, shall reinstate the policy; provided, however, that if the insurer or such insurance producer requires an application for reinstatement and issues a conditional receipt for the premium tendered, the policy will be reinstated upon approval of such application by the insurer or, lacking such approval, upon the forty-fifth day following the date of such conditional receipt unless the insurer has previously notified the insured in writing of its disapproval of such application. The reinstated policy shall cover only loss resulting from such accidental injury as may be sustained after the date of reinstatement and loss due to such sickness as may begin more than ten days after such date. In all other respects the insured and insurer shall have the same rights thereunder as they had under the policy immediately before the due date of the defaulted premium, subject to any provisions endorsed hereon or attached hereto in connection with a reinstatement. Any premium accepted in connection with a reinstatement shall be applied to a period for which premium has not been previously paid, but not to any period more than sixty days prior to the date of reinstatement." Source: SL 1966, ch 111, ch 25, 7; SL 2001, ch 286, 117.
58-17-2.1. Health insurance on a franchise plan.Health insurance on a franchise plan is hereby declared to be that form of health insurance issued to:(1)Three or more employees of any corporation, copartnership, or individual employer or any governmental corporation, agency, or department thereof; or(2)Ten or more members of any trade, occupational, or professional association, or of a labor union, or of any other association having had an active existence for at least two years where such association or union has a constitution or bylaws and is formed in good faith for purposes other than that of obtaining insurance; where such persons, with or without their dependents, are issued the same form of an individual policy varying only as to amounts and kinds of coverage applied for by such persons, under an arrangement whereby the premiums on such policies may be paid to the insurer periodically by the employer, with or without payroll deductions, or by the association for its members, or by some designated person acting on behalf of such employer or association or by the insured directly to the insurer, if permitted by the insurer. The term, employees, as used in this section may be deemed to include the officers, managers, and employees and retired employees of the employer and the individual proprietor or partnership.Health insurance may be marketed on a franchise basis to members or employees of an employer, labor union, or association. Except as provided for by 58-18B-2, health insurance marketed on a franchise basis may have the individual's premiums paid by the employer, labor union, or association. Marketing a policy on a franchise basis does not exempt any policy from any applicable requirement under this title except as provided in 58-33-13. Source: SL 1966, ch 111, ch 25, 30 as added by SL 1968, ch 137; SL 2000, ch 241, 1, 2.
58-17-2.2. Conversion privileges of insured's spouse upon divorce.No accident or health insurance policy providing coverage of hospital or medical expense which in addition to covering the insured also provides coverage to the spouse of the insured shall be issued without a provision that provides that upon divorce of the insured and the insured's spouse, the spouse is entitled to have issued to him or her, without evidence of insurability, upon application to the company within thirty days following the eligibility, and upon payment of the appropriate premium, an individual policy of accident or health insurance. Such policy shall provide the coverage then being issued by the insurer which is most nearly similar to the existing coverages. This obligation can be met by continuation of coverage for spouse under existing policy at the appropriate premium. Any and all probationary or waiting periods set forth in such policy shall be considered as being met to the extent coverage was in force under the prior policy. Source: SL 1980, ch 354.
58-17-2.3. Dependent coverage termination--Age--Full-time students.No insurer or health carrier issuing health insurance coverage, other than excepted benefits, that provides dependent coverage for any qualifying child, as defined by rules promulgated pursuant to 58-17-87, may terminate coverage due to attainment of a limiting age below age twenty-six. If the dependent remains a full-time student upon attaining the age of twenty-six, but not exceeding the age of twenty-nine, the insurer shall provide for the continuation of coverage for that dependent at the insured's option. However, the provisions of this section do not apply to any qualifying relative, as defined by rules promulgated pursuant to 58-17-87, whose gross income is less than the exemption amount as prescribed by the director by rules promulgated pursuant to chapter 1-26. Continuation of coverage for full-time students attaining the age of twenty-four is not required if the dependent has other creditable coverage in force nor required for any full-time students who attained the age of twenty-four prior to July 1, 2007. (SL 2011, ch 216, 19 provides: "The provisions of this Act are repealed if the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010) is found to be unconstitutional in its entirety by a final decision of a federal court of competent jurisdiction and all appeals exhausted or time for appeals elapsed.") Source: SL 2005, ch 265, 1; SL 2007, ch 288, 1; SL 2011, ch 216, 2.
58-17-2. Persons covered by policy.A policy of health insurance shall purport to insure only one person, except that a policy may insure, originally or by subsequent amendment, upon the application of an adult member of a family, who shall be deemed the policyholder, any two or more eligible members of that family, including husband, wife, dependent children, or any children under a specified age which shall not exceed nineteen years and any other person dependent upon the policyholder or any other person related to and resident in the household of the insured. Source: SL 1966, ch 111, ch 25, 2 (3).
58-17-20. Omission of provision as to application of premiums accepted in connection with reinstatement--Right of insured to continue policy in force by payment of premiums.The last sentence of the provision in 58-17-19 may be omitted from any policy which the insured has the right to continue in force subject to its terms by the timely payment of premiums until at least age fifty, or, in the case of a policy issued after age forty-four, for at least five years from its date of issue. Source: SL 1966, ch 111, ch 25, 7.
58-17-21. Notice of claim--Provision required in policy.There shall be a provision as follows: "Notice of claim: Written notice of claim must be given to the insurer within twenty days after the occurrence or commencement of any loss covered by the policy, or as soon thereafter as is reasonably possible. Notice given by or on behalf of the insured or the beneficiary to the insurer at __________ (insert the location of such office as the insurer may designate for the purpose), or to any authorized insurance producer of the insurer, with information sufficient to identify the insured, shall be deemed notice to the insurer." Source: SL 1966, ch 111, ch 25, 8; SL 2001, ch 286, 118.
58-17-22. Notice of claim--Loss of time benefit--Optional provision, insertion by insurer.In a policy providing a loss-of-time benefit which may be payable for at least two years, an insurer may at its option insert the following between the first and second sentences of the provision in 58-17-21: "Subject to the qualifications set forth below, if the insured suffers loss of time on account of disability for which indemnity may be payable for at least two years, he shall, at least once in every six months after having given notice of the claim, give to the insurer notice of continuance of the disability, except in the event of legal incapacity. The period of six months following any filing of proof by the insured or any payment by the insurer on account of such claim or any denial of liability in whole or in part by the insurer shall be excluded in applying this provision. Delay in the giving of such notice shall not impair the insured's right to any indemnity which would otherwise have accrued during the period of six months preceding the date on which such notice is actually given." Source: SL 1966, ch 111, ch 25, 8.
58-17-23. Claim forms--Furnishing by insurer.There shall be a provision as follows: "Claim forms: The insurer, upon receipt of a notice of claim, will furnish to the claimant such forms as are usually furnished by it for filing proofs of loss. If such forms are not furnished within fifteen days after the giving of such notice the claimant shall be deemed to have complied with the requirements of this policy as to proof of loss upon submitting, within the time fixed in the policy for filing proofs of loss, written proof covering the occurrence, the character and the extent of the loss for which claim is made." Source: SL 1966, ch 111, ch 25, 9.
58-17-24. Proofs of loss--Provision required in policy.There shall be a provision as follows: "Proofs of loss: Written proof of loss must be furnished to the insurer at its said office in case of claim for loss for which this policy provides any periodic payment contingent upon continuing loss within ninety days after the termination of the period for which the insurer is liable and in case of claim for any other loss within ninety days after the date of such loss. Failure to furnish such proof within the time required shall not invalidate nor reduce any claim if it was not reasonably possible and in no event, except in the absence of legal capacity, later than one year from the time proof is otherwise required." Source: SL 1966, ch 111, ch 25, 10.
58-17-25. Time of payment of claims--Provision required in policy.There shall be a provision as follows: "Time of payment of claims: Indemnities payable under this policy for any loss other than loss for which this policy provides any periodic payment, will be paid immediately upon receipt of due written proof of such loss. Subject to due written proof of loss, all accrued indemnities for loss for which this policy provides periodic payment will be paid __________ (insert period for payment which must not be less frequently than monthly) and any balance remaining unpaid upon termination of liability will be paid immediately upon receipt of due written proof." Source: SL 1966, ch 111, ch 25, 11.
58-17-26. Payment of claims--Persons to whom benefits payable--Provision required in policy.There shall be a provision as follows: "Payment of claims: Indemnity for loss of life will be payable in accordance with the beneficiary designation and the provisions respecting such payment which may be prescribed herein and effective at the time of payment. If no such designation or provision is then effective, such indemnity shall be payable to the estate of the insured. Any other accrued indemnities unpaid at the insured's death may, at the option of the insurer, be paid either to such beneficiary or to such estate. All other indemnities will be payable to the insured." Source: SL 1966, ch 111, ch 25, 12.
58-17-27. Payment of claims--Optional provisions, insertion by insurer.The following provisions, or either of them, may be included with the provision in 58-17-26 at the option of the insurer: "If any indemnity of this policy shall be payable to the estate of the insured, or to an insured or beneficiary who is a minor or otherwise not competent to give a valid release, the insurer may pay such indemnity, up to an amount not exceeding $__________ (insert an amount which shall not exceed one thousand dollars), to any relative by blood or connection by marriage of the insured or beneficiary who is deemed by the insurer to be equitably entitled thereto. Any payment made by the insurer in good faith pursuant to this provision shall fully discharge the insurer to the extent of such payment.""Subject to any written direction of the insured in the application or otherwise all or a portion of any indemnities provided by this policy on account of hospital, nursing, medical, or surgical services may, at the insurer's option and unless the insured requests otherwise in writing not later than the time of filing proof of such loss, be paid directly to the hospital or person rendering such services; but it is not required that the service be rendered by a particular hospital or person." Source: SL 1966, ch 111, ch 25, 12.
58-17-28. Physical examination of insured--Autopsy in death claims--Provision required in policy.There shall be a provision as follows: "Physical examinations and autopsy: The insurer at its own expense shall have the right and opportunity to examine the person of the insured when and as often as it may reasonably require during the pendency of a claim hereunder and to make an autopsy in case of death where it is not forbidden by law." Source: SL 1966, ch 111, ch 25, 13.
58-17-29. Action to recover under policy--Time for beginning.There shall be a provision as follows: "Legal actions: No action at law or in equity shall be brought to recover on this policy prior to the expiration of sixty days after written proof of loss has been furnished in accordance with the requirements of this policy. No such action shall be brought after the expiration of three years after the written proof of loss is required to be furnished." Source: SL 1966, ch 111, ch 25, 14.
58-17-3. Time of commencement and termination to be set out in policy.The time when the insurance takes effect and terminates shall be expressed in a policy of health insurance. Source: SL 1966, ch 111, ch 25, 2 (2).
58-17-30.1. Continuation of coverage for child with intellectual or physical disability--Proof of dependency.An individual health insurance policy, which is delivered or issued for delivery in this state and which provides that coverage of a dependent child shall terminate upon attainment of the limiting age for dependent children specified in the policy, shall also provide that attainment of such limiting age shall not operate to terminate the coverage of such child while the child is and continues to be both (a) incapable of self-sustaining employment by reason of intellectual disability or physical disability and (b) chiefly dependent upon the policyholder for support and maintenance, provided proof of such incapacity and dependency is furnished to the insurer by the policyholder within thirty-one days of the child's attainment of the limiting age and subsequently as may be required by the insurer but not more frequently than annually after the two-year period following the child's attainment of the limiting age. Source: SL 1969, ch 140; SL 2013, ch 125, 18.
58-17-30.2. Family coverage to include newborn or newly adopted children--Payment of claim not to be withheld during bonding period of adopted child.Any individual health insurance policy and individual or indemnity type contract issued by a nonprofit corporation which offers coverage for a family member of an insured or subscriber shall provide that the health insurance benefits applicable for children are payable with respect to a newly born child of the insured or subscriber from the moment of birth or to a newly adopted child of the insured or subscriber from the beginning of the six-month adoption bonding period. The newly born or newly adopted child shall be added to the policy without underwriting and without the imposition of any preexisting waiting period. Any policy or contract issued before July 1, 1974, shall, upon its next anniversary date, also provide that the health insurance benefits applicable for children are payable with respect to a newly born child of the insured or subscriber from the moment of birth or to a newly adopted child of the insured or subscriber from the beginning of the six-month adoption bonding period. Payment of any valid insurance claim may not be withheld during the bonding period of an adopted child. Source: SL 1974, ch 322; SL 1976, ch 313, 1; SL 1977, ch 408; SL 1983, ch 375, 1; SL 1988, ch 401; SL 1994, ch 387, 5.
58-17-30.3. Premature birth and congenital defects covered--Applicability.The coverage for a newly born child from the moment of birth or for a newly adopted child, from the beginning of the six-month adoption bonding period, shall consist of coverage of injury or sickness including the necessary care and treatment of premature birth and medically diagnosed congenital defects and birth abnormalities. The provisions of 58-17-30.2 to 58-17-30.4, inclusive, apply to any individually written health benefit plan issued or renewed by any health insurer, health carrier, health maintenance organization, fraternal benefit society, nonprofit medical and surgical plan, nonprofit hospital service plan, or other entity providing coverage through a health benefit plan subject to the provisions of this title. Source: SL 1974, ch 322; SL 1976, ch 313, 2; SL 1983, ch 375, 2; SL 1984, ch 327, 13; SL 2001, ch 274, 1; SL 2015, ch 249, 1.
58-17-30.4. Notice of birth or adoption required for continued coverage.An insurer may require notice that a newly born or newly adopted child is to be added to the policy or that coverage is to be changed from single or spousal coverage to family coverage. However, the insurer may not require notification sooner than the birth of the child or the start of the adoption bonding period. If the child is added or coverage changed to family coverage before the birth of the child or the start of the adoption bonding period, no additional premium may be charged by the insurer until the birth of the child or the start of the adoption bonding period. The insurer shall take reasonable steps to provide adequate notice to insureds of the need to alter coverage to ensure newborn or adopted children are covered and of the lack of premium adjustment until the birth of the child or the start of the adoption bonding period. An insurer is considered to have taken reasonable steps if prominent disclosure of the requirements of this section are included in a certificate, subscriber contract, evidence of coverage, or employee handbook if such are provided to all insureds.If payment of a specific premium or subscription fee is required to provide coverage for a child, the policy or contract may require that notification of birth of a newly born child or notification of the start of the six-month adoption bonding period for an adopted child and payment of the required premium or fees be furnished to the insurer or nonprofit service or indemnity corporation within thirty-one days after the date of birth or start of the bonding period in order to have the coverage continued beyond the thirty-one day period. Source: SL 1974, ch 322; SL 1983, ch 375, 3; SL 1994, ch 387, 6.
58-17-30.5. Coverage for inpatient alcoholism treatment required.Any insurer which delivers or issues for delivery in this state any insurance policy under this chapter which provides coverage on an expense incurred basis shall offer, in writing, to include in such policy or contract issued or renewed on or after July 1, 1979, coverage for the inpatient treatment of alcoholism in licensed hospitals and residential primary treatment facilities approved by the State of South Dakota which are carrying out an approved program pursuant to the diagnosis and recommendation of a doctor of medicine. When coverage for inpatient treatment is included in any policy, such coverage shall include inpatient treatment at any South Dakota approved inpatient alcoholism treatment facility. Source: SL 1977, ch 410, 2; SL 1979, ch 344, 1.
58-17-30.6. Alcoholism benefits provided--Days of care.The alcoholism coverage to be offered shall provide benefits on the same basis as benefits provided for the treatment of other sicknesses covered under the policy; however, the coverage by the insurance carrier need not exceed thirty days' care in any six-month period, and the total days care per recipient need not exceed ninety days during the life of the contract. Source: SL 1977, ch 410, 3.
58-17-30.7. Policies excluded from alcoholism coverage requirements.Sections 58-17-30.5 and 58-17-30.6 do not apply to accident only, or limited or specified disease policies. Source: SL 1977, ch 410, 4; SL 1979, ch 344, 2; SL 1982, ch 362; SL 1999, ch 249, 1.
58-17-30.8. Exclusion of benefits for injury while under the influence of alcohol or drugs prohibited--Exception for sickness or injury caused in commission of felony.A policy or certificate of health insurance for an individual that is delivered, issued for delivery, or renewed in this state may not exclude the payment of benefits for injuries sustained by an insured person because the insured was under the influence of alcohol or drugs, as defined by 32-23-1.Nothing in this section precludes a health insurer from excluding coverage for an insured for any sickness or injury caused in the commission of a felony. Source: SL 1997, ch 290, 1, 7.
58-17-30.9. Notice that dependent is no longer eligible for coverage--Premium adjustment.For any insurer that chooses to automatically cover any newborn or newly adopted child as a dependent without requiring the notice in 58-17-30.4 and does not collect or track the demographic information on the dependent child, the insurer shall take reasonable steps to provide adequate notice of the insured's responsibility to advise the insurer when there is no longer any child eligible for dependent coverage. An insurer is considered to have taken reasonable steps if prominent disclosure of this responsibility is included in the policy or certificate, subscriber contract, evidence of coverage, or employee handbook if such are provided to all insureds and also provided to prospective insureds at the time of application for coverage. Upon receipt of a notice that a dependent is no longer eligible, the insurer shall adjust the coverage accordingly and, if applicable, return to the insured any unearned premium. This section applies to any policy or certificate subject to the provisions of chapters 58-17 and 58-18. Source: SL 2013, ch 247, 1.
58-17-31. Optional policy provisions.Except as provided in 58-17-13, no policy of health insurance delivered or issued for delivery to any person in this state shall contain provisions respecting the matters set forth in 58-17-32 to 58-17-40, inclusive, unless such provisions are in the words in which the same appear in the applicable section, except that the insurer may, at its option, use in lieu of any such provision a corresponding provision of different wording approved by the director which is not less favorable in any respect to the insured or the beneficiary. Any such provision contained in the policy shall be preceded individually by the applicable caption or, at the option of the insurer, by such appropriate individual or group captions or subcaptions as the director may approve. Source: SL 1966, ch 111, ch 25, 16.
58-17-32. Occupational change--Policy provision for adjustment of premium or benefits.There may be a provision as follows: "Change of occupation: If the insured be injured or contract sickness after having changed his occupation to one classified by the insurer as more hazardous than that stated in this policy or while doing for compensation anything pertaining to an occupation so classified, the insurer will pay only such portion of the indemnities provided in this policy as the premium paid would have purchased at the rates and within the limits fixed by the insurer for such more hazardous occupation. If the insured changes his occupation to one classified by the insurer as less hazardous than that stated in this policy, the insurer, upon receipt of proof of such change of occupation, will reduce the premium rate accordingly, and will return the excess prorata unearned premium from the date of change of occupation or from the policy anniversary date immediately preceding receipt of such proof, whichever is the more recent. In applying this provision, the classification of occupational risk and the premium rates shall be such as have been last filed by the insurer prior to the occurrence of the loss for which the insurer is liable or prior to date of proof of change in occupation with the state official having supervision of insurance in the state where the insured resided at the time this policy was issued; but if such filing was not required, then the classification of occupational risk and the premium rates shall be those last made effective by the insurer in such state prior to the occurrence of the loss or prior to the date of proof of change in occupation." Source: SL 1966, ch 111, ch 25, 17.
58-17-33. Misstatement of age--Policy provision for adjustment of benefits.There may be a provision as follows: "Misstatement of age: If the age of the insured has been misstated all amounts payable under this policy shall be such as the premium paid would have purchased at the correct age." Source: SL 1966, ch 111, ch 25, 18.
58-17-34. Earnings of insured--Policy provision for adjustment of benefits.There may be a provision as follows: "Relation of earnings to insurance: If the total monthly amount of loss of time benefits promised for the same loss under all valid loss of time coverage upon the insured, whether payable on a weekly or monthly basis, shall exceed the monthly earnings of the insured at the time disability commenced or his average monthly earnings for the period of two years immediately preceding a disability for which claim is made, whichever is the greater, the insurer will be liable only for such proportionate amount of such benefits under this policy as the amount of such monthly earnings or such average monthly earnings of the insured bears to the total amount of monthly benefits for the same loss under all such coverage upon the insured at the time such disability commences and for the return of such part of the premiums paid during such two years as shall exceed the prorata amount of the premiums for the benefits actually paid hereunder; but this shall not operate to reduce the total monthly amount of benefits payable under all such coverage upon the insured below the sum of two hundred dollars or the sum of the monthly benefits specified in such coverages, whichever is the lesser, nor shall it operate to reduce benefits other than those payable for loss of time." Source: SL 1966, ch 111, ch 25, 19 (1).
58-17-35. Earnings adjustment clause to be coupled with insured's right to continue policy in force.The policy provision in 58-17-34 may be inserted only in a policy which the insured has the right to continue in force subject to its terms by the timely payment of premiums until at least age fifty, or, in the case of a policy issued after age forty-four, for at least five years from its date of issue. Source: SL 1966, ch 111, ch 25, 19 (2).
58-17-36. Option of insurer to define "valid loss of time coverage".The insurer may, at its option, include in the provision in 58-17-34 a definition of "valid loss of time coverage," approved as to form by the director, which definition shall be limited in subject matter to coverage provided by governmental agencies or by organizations subject to regulation by insurance law or by insurance authorities of this or any other state of the United States or any province of Canada, or to any other coverage the inclusion of which may be approved by the director or any combination of such coverages. In the absence of such definition such term shall not include any coverage provided for such insured pursuant to any compulsory benefit statute, including any workers' compensation or employer's liability statute, or benefits provided by union welfare plans or by employer or employee benefit organizations. Source: SL 1966, ch 111, ch 25, 19 (2).
58-17-37. Unpaid premiums--Deduction from benefits.There may be a provision as follows: "Unpaid premiums: Upon the payment of a claim under this policy, any premium then due and unpaid or covered by any note or written order may be deducted therefrom." Source: SL 1966, ch 111, ch 25, 20.
58-17-38. Conformity with state statutes of insured.There may be a provision as follows: "Conformity with state statutes: Any provision of this policy which, on its effective date is in conflict with the statutes of the state in which the insured resides on such date is hereby amended to conform to the minimum requirements of such statutes." Source: SL 1966, ch 111, ch 25, 21.
58-17-39. Illegal occupation of insured.There may be a provision as follows: "Illegal occupation: The insurer shall not be liable for any loss to which a contributing cause was the insured's commission of or attempt to commit a felony or to which a contributing cause was the insured's being engaged in an illegal occupation." Source: SL 1966, ch 111, ch 25, 22.
58-17-4.1. Filing and approval of individual policy premium rates.Premium rates charged for any individual accident and health insurance policy issued pursuant to this chapter shall be filed with and are subject to the approval of the director. The rates shall be filed for approval, administered, and reviewed subject to all of the applicable procedures in accordance with 58-11-64 to 58-11-76, inclusive. (SL 2011, ch 216, 19 provides: "The provisions of this Act are repealed if the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010) is found to be unconstitutional in its entirety by a final decision of a federal court of competent jurisdiction and all appeals exhausted or time for appeals elapsed.") Source: SL 1988, ch 399, 1; SL 2006, ch 254, 1; SL 2011, ch 216, 3.
58-17-4.2. Premium rates required to be reasonable--Rules to establish minimum standards promulgated by director.Premium rates charged for any individual accident and health insurance policy pursuant to this chapter shall be reasonable in relation to the benefits available under the policy. The director shall promulgate rules pursuant to chapter 1-26 to establish minimum standards in accordance with accepted actuarial principles and practices, for loss ratios of individual accident and health insurance policies on the basis of incurred claims experience and earned premiums. Source: SL 1988, ch 399, 2.
58-17-4. Consideration for policy to be stated.The entire money and other considerations therefor shall be expressed in a policy of health insurance. Source: SL 1966, ch 111, ch 25, 2 (1).
58-17-40. Renewal of policy at option of insurer.Health insurance policies, other than accident insurance only policies, in which the insurer reserves the right to refuse renewal on an individual basis, shall provide in substance in a provision thereof or in an endorsement thereon or rider attached thereto that subject to the right to terminate the policy upon nonpayment of premium when due, such right to refuse renewal may not be exercised so as to take effect before the renewal date occurring on, or after and nearest, each policy anniversary, or in the case of lapse and reinstatement, at the renewal date occurring on, or after and nearest, each anniversary of the last reinstatement, and that any refusal of renewal shall be without prejudice to any claim originating while the policy is in force. The clause making reference to lapse and reinstatement may be omitted at the insurer's option. Source: SL 1966, ch 111, ch 25, 23.
58-17-41. Order of policy provisions.The provisions which are the subject of 58-17-14 to 58-17-39, inclusive, or any corresponding provisions which are used in lieu thereof in accordance with such sections, shall be printed in the consecutive order of the provisions in such sections or, at the option of the insurer, any such provision may appear as a unit in any part of the policy, with other provisions to which it may be logically related, provided that the resulting policy shall not be in whole or in part unintelligible, uncertain, ambiguous, abstruse, or likely to mislead a person to whom the policy is offered, delivered or issued. Source: SL 1966, ch 111, ch 25, 24.
58-17-42. Age limit in policy--Effect of acceptance of premiums or misstatement of age.If any policy of health insurance contains a provision establishing, as an age limit or otherwise, a date after which the coverage provided by the policy will not be effective, and if such date falls within a period for which premium is accepted by the insurer or if the insurer accepts a premium after such date, the coverage provided by the policy will continue in force until the end of the period for which premium has been accepted. In the event the age of the insured has been misstated and if, according to the correct age of the insured, the coverage provided by the policy would not have become effective, or would have ceased prior to the acceptance of such premium or premiums, then the liability of the insurer shall be limited to the refund, upon request, of all premiums paid for the period not covered by the policy. Source: SL 1966, ch 111, ch 25, 28.
58-17-43. Third parties taking policy covering insured.The word "insured," as used in this chapter, shall not be construed as preventing a person other than the insured with a proper insurable interest from making application for and owning a policy covering the insured or from being entitled under such a policy to any indemnities, benefits, and rights provided therein. Source: SL 1966, ch 111, ch 25, 25.
58-17-44. Foreign or alien insurer--Policy provision required by home state.Any policy of a foreign or alien insurer, when delivered or issued for delivery to any person in this state, may contain any provision which is not less favorable to the insured or the beneficiary than the provisions of this chapter and which is prescribed or required by the law of the state or country under which the insurer is organized. Source: SL 1966, ch 111, ch 25, 26 (1).
58-17-45. Policy of domestic insurer delivered in other state--Compliance with laws of other state.Any policy of a domestic insurer may, when issued for delivery in any other state or country, contain any provision permitted or required by the laws of such other state or country. Source: SL 1966, ch 111, ch 25, 26 (2).
58-17-46. Policy provisions not subject to chapter--Conforming to statute required.No policy provision which is not subject to this chapter shall make a policy, or any portion thereof, less favorable in any respect to the insured or the beneficiary than the provisions thereof which are subject to this chapter. Source: SL 1966, ch 111, ch 25, 27 (1).
58-17-47. Nonconforming and conflicting provisions construed in conformity with statute.A policy delivered or issued for delivery to any person in this state in violation of this chapter shall be held valid but shall be construed as provided in this chapter. When any provision in a policy subject to this chapter is in conflict with any provision of this chapter, the rights, duties, and obligations of the insurer, the insured and the beneficiary shall be governed by the provisions of this chapter. Source: SL 1966, ch 111, ch 25, 27 (2).
58-17-48. Liability and workers' compensation insurance--Inapplicability of health insurance provisions.Nothing in 58-17-1 to 58-17-47, inclusive, shall apply to or affect any policy of liability or workers' compensation and employers liability insurance. Source: SL 1966, ch 111, ch 25, 1 (1).
58-17-49. Health insurance provisions inapplicable to group or blanket policy.Nothing in 58-17-1 to 58-17-47, inclusive, shall apply to or affect any group or blanket policy. Source: SL 1966, ch 111, ch 25, 1 (2).
58-17-5. Identification of forms, riders and endorsements--Form number, location.Each form for a policy of health insurance, including riders and endorsements, shall be identified by a form number in the lower left-hand corner of the first page thereof. Source: SL 1966, ch 111, ch 25, 2 (6).
58-17-50. Life insurance, endowment or annuity contracts not subject to health insurance provisions.Nothing in 58-17-1 to 58-17-47, inclusive, shall apply to or affect life insurance, endowment, or annuity contracts, or contracts supplemental thereto which contain only such provisions relating to health insurance as:(1)Provide additional benefits in case of dismemberment or loss of sight, or of death by accident or accidental means, or as(2)Operate to safeguard such contracts against lapse, or to give a special surrender value or special benefit or an annuity in the event that the insured or annuitant becomes totally and permanently disabled, as defined by the contract or supplemental contract. Source: SL 1966, ch 111, ch 25, 1 (3).
58-17-51. Health insurance provisions inapplicable to reinsurance.Nothing in 58-17-1 to 58-17-47, inclusive, shall apply to or affect reinsurance. Source: SL 1966, ch 111, ch 25, 1 (4).
58-17-52. Prior contracts or policies excepted.The provisions of 58-17-1 to 58-17-51, inclusive, shall not apply to any contracts or policies entered into or issued prior to February 8, 1966, nor to any extensions, renewals, or modifications thereof or amendments thereto whenever made. Source: SL 1966, ch 111, ch 25, 29.
58-17-53. Optometric services--Reimbursement, exceptions.If an insurer provides by contract, policy, certificate, or any other means whatever, for a service, or for the partial or total reimbursement, payment, or cost of a service to or on behalf of any of its policyholders, group policyholders, subscribers, or group subscribers, or any other person or groups of persons, which service is within the lawful scope of practice of a licensed optometrist, the person rendering the service or the policyholder, subscriber, or other person is entitled to partial or total reimbursement, payment, or cost of that service, whether the service is performed by a licensed physician or by a licensed optometrist. Unless the contract, policy, certificate, or other means employed otherwise provides, there is no reimbursement of payment for ophthalmic materials, lenses, spectacles, eyeglasses, or appurtenances thereto. Reimbursement may be denied to a policyholder treating himself or any member of his family residing in his household, provided, however, that reimbursement for durable medical equipment, pharmaceuticals, and prosthetic devices may not be denied where within policy coverages. Source: SL 1966, ch 111, ch 32, 8; SL 1982, ch 363, 1.
58-17-54.1. Copayment or coinsurance amounts for chiropractic, physical therapy, or occupational therapy services.No health insurer may impose any copayment or coinsurance amount on an insured for services rendered by a doctor of chiropractic licensed pursuant to chapter 36-5, an occupational therapist licensed pursuant to chapter 36-31, or a physical therapist licensed pursuant to chapter 36-10 that is greater than the copayment or coinsurance amount imposed on the insured for the services of a primary care physician or practitioner for the same or a similar diagnosed condition even if a different nomenclature is used to describe a condition. Source: SL 2011, ch 217, 1; SL 2012, ch 244, 1.
58-17-54. Reimbursement provisions applicable to all healing arts licensees--Self-insurance plans for public employees--Restrictions on policy limitations.Notwithstanding any provision of any policy of insurance subject to the general provisions of this title, if a policy or contract provides for reimbursement for any service which may be legally performed by a person licensed in this state for the practice of medicine, surgery, anesthesia by a certified registered nurse anesthetist licensed under chapter 36-9, psychology, dentistry, osteopathy, social work by an independent social worker licensed under 36-26-17, optometry, chiropractic, or podiatry, the reimbursement under that policy or contract may not be denied if the service is rendered by a person so licensed. The provisions of this section apply to all practitioners licensed pursuant to chapters 36-4A and 36-9A after July 1, 1980, and to any plan of self-insurance for public employees. Reimbursement may be denied to a policyholder treating himself or any member of his family residing in his household. However, reimbursement for durable medical equipment, pharmaceuticals, and prosthetic devices may not be denied if within policy coverages.No policy, certificate, or contract may exclude or limit reimbursement for any lawful diagnostic or treatment service by a licensee under chapter 36-5 if the exclusion or limitation is based wholly or in part on any requirement that the service be performed in a place of service not normally used by the licensee.A policy, certificate, or contract may only limit or make optional the reimbursement for any lawful diagnostic or treatment service by a licensee under chapters 36-4 and 36-5 if the limitation is based on a rational basis which is not solely related to the license under, or practices authorized by, chapter 36-5 or is not dependent upon a method of classification, categorization or description based directly or indirectly upon differences in terminology used by different licensees in describing human ailments or in the diagnosis or treatment of human ailments.This section does not require reimbursement for any method or service not necessary, not reasonable or not generally accepted by the peers of the particular licensed health care provider. Source: SL 1970, ch 273; SL 1980, ch 355, 2; SL 1981, ch 24, 6; SL 1982, ch 363, 2; SL 1986, ch 419, 1; SL 1988, ch 402; SL 1989, ch 427; SL 1993, ch 360.
58-17-55. Reimbursement provisions applicable to licensed hospitals.Notwithstanding any provision of any policy of insurance subject to the general provisions of this title, whenever such policy or contract provides for reimbursement for any service which may be legally performed by a hospital licensed in this state which has an organized medical staff with permanent facilities including inpatient beds and which is primarily engaged in providing diagnostic or therapeutic services for medical diagnosis, treatment, or care of injured and disabled, rehabilitation services for the physical rehabilitation of the injured and disabled, either on its premises or in facilities under the supervision of physicians on a pre-arranged basis to inpatients, reimbursement for coverage provided under such policy or contracts shall not be denied. Source: SL 1977, ch 409.
58-17-56. Reimbursement for service rendered or supervised by qualified mental health professional.Notwithstanding any provision of any policy of insurance subject to the general provisions of this title, whenever such policy or contract provides for reimbursement for any service rendered by or directly supervised by a qualified mental health professional as defined in 27A-1-3, which may be legally performed by a mental health center as defined by 27A-1-1, reimbursement for coverage provided under such policy or contracts may not be denied. However, the provisions of this section only apply to the services defined in 58-17-98. Source: SL 1987, ch 377; SL 1991, ch 220, 1 and 2; SL 2003, ch 152, 2.
58-17-57. Abuse of health insurance as misdemeanor.A person who provides health care commits abuse of health insurance, if, as a regular business practice, he knowingly accepts from any third-party payor, as payment in full for services rendered, the amount the third-party payor covers, or submits a fee to a third-party payor which is higher than the fee he has agreed to accept from the insured with the understanding of waiving the required deductible or co-payment, if the effect of either business practice is to eliminate the need for payment by the insured of any required deductible or co-payment applicable in the insured's health benefit plan. Abuse of health insurance is a Class 1 misdemeanor. Source: SL 1989, ch 429, 1.
58-17-58. Waiver of required deductible or co-payment for charitable purposes permitted.However, a person may waive any required deductible or co-payment for charitable purposes if:(1)The person who provides the health care determines that the services are necessary for the immediate health and welfare of the insured;(2)The waiver is made on a case-by-case basis and the person who provides the health care determines that payment of the deductible or co-payment would create a substantial financial hardship for the insured; and(3)The waiver is not a regular business practice of the person who provides the health care. Source: SL 1989, ch 429, 2.
58-17-59. When waiver presumed.Any person who provides health care and who waives the deductible or co-payment for more than one-fourth of his patients during any calendar year, excluding waivers under 58-17-58, or who advertises that he will accept from any third-party payor, as payment in full for services rendered, the amount the third-party payor covers, is presumed to be waiving the deductible or co-payment as a regular business practice. Source: SL 1989, ch 429, 3.
58-17-6. Style and arrangement of policy provisions--Printing, size of type.The style, arrangement, and overall appearance of a policy of health insurance shall give no undue prominence to any portion of the text, and every printed portion of the text of the policy and of any endorsements or attached papers shall be plainly printed in light-faced type of a style in general use, the size of which shall be uniform and not less than ten point with a lower case unspaced alphabet length not less than one hundred twenty point; the "text" shall include all printed matter except the name and address of the insurer, name or title of the policy, the brief description, if any, and captions and subcaptions. Source: SL 1966, ch 111, ch 25, 2 (4).
58-17-60. Certain payments exempt.Payments made pursuant to federal medicare laws or payments made to the health-care provider according to a contract or agreement between an employer and employee which requires a third-party payor to pay the full amount for health-care services are exempt from 58-17-57 to 58-17-60, inclusive. Source: SL 1989, ch 429, 4.
58-17-61. Assignment of health insurance proceeds to certain hospitals authorized.Any person insured by a health insurance company, health maintenance organization, preferred provider organization, individual practice association, or nonprofit hospital service corporation may assign in writing benefits from such policy, contract, or certificate to a hospital licensed pursuant to chapter 34-12. If such assignment is executed and written notice thereof is given, the insurance company, health maintenance organization, preferred provider organization, individual practice association, or nonprofit hospital service corporation shall pay the benefits directly to the hospital.Nothing in this section modifies the scope of coverage or the amount of benefits payable under a health insurance policy, contract, or certificate. Source: SL 1989, ch 430.
58-17-62. Coverage for phenylketonuria.Every policy of health insurance that is delivered, issued for delivery or renewed in this state, except for policies that provide coverage for specified disease or other limited benefit coverage, shall offer coverage for testing, diagnosis, and treatment of phenylketonuria including dietary management, formulas, case management, intake and screening, assessment, comprehensive care planning, and service referral. Source: SL 1992, ch 348, 1.
58-17-63. Health benefit plan defined.For the purposes of 58-17-64, 58-18-63, 58-38-36, and 58-40-33, a health benefit plan is any hospital or medical policy or certificate, hospital or medical service plan, or health maintenance organization subscriber contract. The term does not include specified disease, hospital indemnity, fixed indemnity, fixed duration of one year or less, accident-only, credit, dental, vision, medicare supplement, long-term care, or disability income insurance, coverage issued as a supplement to liability insurance, workers' compensation or similar insurance, or automobile medical payment insurance. Source: SL 1994, ch 381, 3.
58-17-64. Minimum loss ratio for individual health benefit plans.Premium rates for individual health benefit plans shall produce a minimum lifetime loss ratio of not less than sixty-five percent. The director may promulgate rules pursuant to chapter 1-26 which modify the minimum loss ratio required based on the specific design of the product or other objective and pertinent criteria. Source: SL 1994, ch 381, 4.
58-17-65. Individual health insurance plan used in conjunction with managed care plan or utilization review organization. If a managed care plan or utilization review organization is used in conjunction with an individual health insurance plan, the managed care plan or utilization review organization shall establish a written utilization review program, registering a utilization review organization, and requesting information in the same manner as a managed care plan or utilization review organization subject to chapter 58-17H. Source: SL 1996, ch 296, 7; SL 2021, ch 210,  10.
58-17-66. Definitions for 58-17-66 through 58-17-87.Terms used in 58-17-66 to 58-17-87, inclusive, mean:(1)"Actuarial certification," any written statement by a member of the American Academy of Actuaries or other person approved by the director that a carrier is in compliance with the provisions of 58-17-66 to 58-17-87, inclusive, based upon the person's examination and a review of the appropriate records and the actuarial assumptions and methods used by the carrier in establishing premium rates for applicable individual health benefit plans;(2)"Affiliate" or "affiliated," any person who, directly or indirectly, through one or more intermediaries, controls or is controlled by, or is under common control with, any other specified person;(3)"Base premium rate," the lowest premium rate charged or which could have been charged for each class of business for a rating period under a rating system for that class of business, by the carrier to individuals with similar case characteristics for health benefit plans with the same or similar coverage;(4)"Carrier," any person that provides individual health insurance in the state, includes an insurance company, a prepaid hospital or medical service plan, a health maintenance organization, a multiple employer welfare arrangement, and any other entity providing a plan of health insurance or health benefits subject to state insurance regulation;(5)"Church plan," a church plan as defined in section 3(33) of the Employee Retirement Income Security Act of 1974 as adopted by the director pursuant to chapter 1-26;(6)"Class of business," all or a separate grouping of persons established pursuant to 58-17-66 to 58-17-87, inclusive;(7)"Dependent," any spouse, an unmarried child under the age of nineteen years, an unmarried child who is a full-time student under the age of twenty-three and who is financially dependent upon the parent, and any other person who qualifies as a dependent under this title;(8)"Director," the director of the Division of Insurance;(9)"Health benefit plan," any hospital or medical policy or certificate, hospital or medical service plan, or health maintenance organization subscriber contract of more than six-month duration. The term does not include, unless otherwise provided, specified disease, hospital indemnity, fixed indemnity, accident-only, credit, dental, vision, medicare supplement, long-term care, short term major medical plan, or disability income insurance; coverage issued as a supplement to liability insurance, worker's compensation or similar insurance; or automobile medical payment insurance;(10)"Index rate," the arithmetic average of the applicable base premium rate and the corresponding highest premium rate for each class of business for persons with similar case characteristics;(11)"New business premium rate," the premium rate charged or offered by an individual carrier to persons with similar case characteristics for newly issued health benefit plans with the same or similar coverage for each class of business for a rating period;(12)"Rating characteristics," the demographic characteristics of individuals which are considered by the carrier in the determination of premium rates for the individuals;(13)"Rating period," the calendar period for which premium rates established by a carrier are assumed to be in effect; and(14)"Short term major medical plan," a major medical policy that is issued for a limited duration of less than twelve months and renewable at the option of the insurer. Source: SL 1996, ch 286, 1; SL 1997, ch 289, 1; SL 2020, ch 208,  1.
58-17-67. Professional association defined.For purposes of 58-17-66 to 58-17-87, inclusive, the term, professional association, means any association that meets all of the following criteria:(1)Serves a single profession that requires a significant amount of education, training, or experience or a license or certificate from a state authority to practice the profession;(2)Has been actively in existence for five years;(3)Has a constitution and by-laws or other analogous governing documents;(4)Has been formed and maintained in good faith for purposes other than obtaining insurance;(5)Is not owned or controlled by a carrier or affiliated with a carrier;(6)Does not condition membership in the association on health status of claims experience;(7)Has at least one thousand members if it is a national association; five hundred members if it is a state association; or two hundred members if it is a local association;(8)All members and dependents of members are eligible for coverage regardless of health status or claims experience;(9)Is governed by a board of directors and sponsors annual meetings of its members; and(10)Does not allow producers to market association memberships, accept applications for memberships, or sign up members. Source: SL 1996, ch 286, 2.
58-17-68. Professional association plan defined.For purposes of 58-17-66 to 58-17-87, inclusive, the term, professional association plan, means a health benefit plan offered through a professional association that covers members of a professional association and their dependents, and not others, in this state regardless of the situs of delivery of the policy or contract and which meets all the following criteria:(1)Conforms with all the provisions of the rate requirements of 58-17-66 to 58-17-87, inclusive;(2)Provides renewability of coverage for the members and dependents of members of the professional association that meets the renewability requirements of 58-17-66 to 58-17-87, inclusive;(3)Provides availability of coverage for the members and dependents of members of the professional association without regard to health status; and(4)Is offered by a carrier that offers health benefit plan coverage to any professional association seeking health benefit plan coverage from the carrier. Source: SL 1996, ch 286, 3; SL 2003 (SS), ch 1, 28.
58-17-69. Creditable coverage defined.For purposes of 58-17-66 to 58-17-87, inclusive, the term, creditable coverage, means benefits or coverage provided under:(1)An employer-based health insurance or health benefit arrangement that provides benefits similar to or exceeding benefits provided under the basic health benefit plan or an employee welfare benefit plan as defined in section 3(1) of the Employee Retirement Income Security Act of 1974 as adopted by the director pursuant to chapter 1-26, to the extent that the plan provides directly or through insurance, reimbursement or otherwise to employees or their dependents medical care for the diagnosis, cure, mitigation, treatment, or prevention of disease, or amounts paid for the purpose of affecting any structure or function of the body and amounts paid for the transportation primarily for and essential to medical care;(2)An individual health benefit plan, including coverage issued by any health maintenance organization or pre-paid hospital or medical services plan that provides benefits similar to or exceeding the benefits provided under the basic health benefit plan as approved pursuant to chapter 1-26, but excluding limited benefit plans and dread disease plans;(3)Medicare or medicaid;(4)Chapter 55 of Title 10, United States Code;(5)A medical care program of the Indian Health Service or of a tribal organization;(6)A state health benefits risk pool;(7)A health plan offered under Chapter 89 of Title 5, United States Code;(8)A public health plan;(9)A health benefit plan under section 5(e) of the Peace Corps Act (22 U.S.C. 2504(e));(10)A church plan;(11)A college plan;(12)A short term or limited duration plan; or(13)An individual health benefit plan, including coverage issued by any health maintenance organization or pre-paid hospital or medical services plan that provided benefits less than the benefits provided under the basic health benefit plan as approved pursuant to chapter 1-26, but excluding the following excepted benefits:(a)Coverage only for accident including accidental death and dismemberment;(b)Disability income insurance;(c)Liability insurance including general liability insurance and automobile liability insurance;(d)Coverage issued as a supplement to liability insurance;(e)Workers' compensation or similar insurance;(f)Automobile medical payment insurance;(g)Credit only insurance including mortgage insurance;(h)Coverage for on-site medical clinics; and(i)Limited scope dental and long-term care insurance, if provided under a separate policy, certificate, or contract of insurance, or not otherwise an integral part of a plan. Source: SL 1996, ch 286, 4; SL 1997, ch 289, 2; SL 1998, ch 289, 1; SL 1999, ch 250, 1; SL 2001, ch 275, 1; SL 2004, ch 301, 1.
58-17-7. Documents forming part of policy--Setting forth in full, rates and classifications excepted.A policy of health insurance shall contain no provision purporting to make any portion of the charter, rules, Constitution, or bylaws of the insurer a part of the policy unless such portion is set forth in full in the policy, except in the case of the incorporation of, or reference to, a statement of rates or classification of risks, or short-rate table filed with the director. Source: SL 1966, ch 111, ch 25, 2 (7).
58-17-70. Application of 58-17-66 to 58-17-87, inclusive.Sections 58-17-66 to 58-17-87, inclusive, apply to any individual health benefit plan or certificate delivered or issued for delivery in the state. Sections 58-17-66 to 58-17-87, inclusive, apply to any certificate issued to an eligible person that evidences coverage under a policy or contract issued to a trust or association or other similar grouping of persons, regardless of the situs of delivery of the policy or contract, if the eligible person pays the premium and is not being covered under the policy or contract pursuant to continuation of benefit provisions applicable under federal or state law. The following are not subject to the provisions of 58-17-66 to 58-17-87, inclusive:(1)Any medicare supplement policy;(2)Any long-term care policy;(3)Any contract or certificate marketed on a group basis that is subject to regulation under chapter 58-18B or 58-18-42 to 58-18-51.1, inclusive;(4)Any certificate issued to an eligible person that evidences coverage under a professional association plan;(5)Any policy or certificate of specified disease, short-term hospital-surgical care of six months or less duration, hospital confinement indemnity, limited benefit health insurance, or other policy or certificate that provide benefits less than as provided for under subdivision 58-17-69(2) if the carrier offering the policy or certificate at the time of filing for policy form approval, submits a statement certifying that policies or certificates described in this section are being offered and marketed as supplemental health insurance or as individual health benefit plans of six-month duration or less and not renewable, and not as a substitute for hospital or medical expense insurance or major medical insurance. For policy forms approved prior to July 1, 1996, the carrier shall submit such a statement with the director. If such a statement certifying that the policies or certificates are being offered as supplemental health insurance and not as a substitute for major medical insurance is either not filed or is withdrawn, the carrier offering such coverage shall, in addition to the policy or certificate providing coverage that is less than major medical, offer and actively market an individual major medical policy to any person who is solicited for coverage for the nonmajor medical products it offers. Source: SL 1996, ch 286, 5; SL 1998, ch 289, 2; SL 2003 (SS), ch 1, 29.
58-17-71. Separate classes of individual business--Reasons--Number.A carrier may establish a separate class of individual business only to reflect substantial differences in expected claims experience or administrative costs related to the following reasons:(1)The carrier used more than one type of system for the marketing and sale of health benefit plans to individuals; or(2)The carrier has acquired a class of business from another carrier.A carrier may establish up to three separate classes of individual business under this section. Source: SL 1996, ch 286, 6.
58-17-72. Transitional period when additional class of business acquired.The director may provide for a period of transition in order for a carrier to come into compliance with 58-17-71 in the instance of acquisition of an additional class of business from another carrier. Source: SL 1996, ch 286, 7.
58-17-73. Director approval required to establish additional classes of business--Rates or rating methodologies.The director may approve the establishment of additional classes of business upon application to the director and a finding by the director that such action would enhance the efficiency and fairness of the individual marketplace. Nothing in 58-17-66 to 58-17-87, inclusive, requires a carrier to change any of its rates or rating methodologies for any business other than the individual business subject to the provisions of 58-17-66 to 58-17-87, inclusive. Source: SL 1996, ch 286, 8.
58-17-74.1. Premium rate limitations.Any health benefit plan issued before July1, 1996, is subject to the rating limitations provided in this section. For a class of business, the premium rates charged during a rating period to individuals with similar case characteristics for the same or similar coverage, or the rates that could be charged to such individuals under the rating system for that class of business, may not exceed three times the base premium rate after July1, 2001, two and one-half times the base premium rate after July 1, 2003, and two times the base premium rate after July1, 2005. Source: SL 2000, ch 240, 1; SDCL 58-17-4.3; SL 2005, ch 10, 41. 
58-17-74. Provisions for premium rates for individual health benefit plans.Premium rates for individual health benefit plans subject to 58-17-66 to 58-17-87, inclusive, are subject to the following provisions:(1)Any new policy issued after the effective date of 58-17-66 to 58-17-87, inclusive, is subject to the provisions of 58-17-66 to 58-17-87, inclusive;(2)The index rate for a rating period for any class of individual business may not exceed the index rate for any other class of individual business by more than twenty percent;(3)For a class of business, the premium rates charged during a rating period to individuals with similar case characteristics for the same or similar coverage, or the rates that could be charged to such individuals under the rating system for that class of business, may not vary from the index rate by more than thirty percent of the index rate;(4)An adjustment applied to a single block of business may not exceed the adjustment applied to all blocks of business by more than fifteen percent due to the claim experience or health status of that block of business;(5)Any adjustment in rates for claim experience and duration of coverage may not be charged to specific individual policyholders. Any such adjustment shall be applied uniformly to the rates charged for any person and dependents of the person within each class of business;(6)Premium rates for individual health benefit plans shall comply with the requirements of 58-17-66 to 58-17-87, inclusive;(7)Each carrier shall apply rating factors consistently with respect to all persons in a class of business. Rating factors shall produce premiums for identical persons which differ only by the amounts attributable to plan design;(8)No carrier may use characteristics other than age, gender, lifestyle, family composition, and geographic area without prior approval of the director. The maximum rating differential based solely on age may not exceed a factor of 5:1; and(9)All rate adjustments based on geographic area shall reflect actual differences in the health care costs of the respective areas.The rating provisions of subdivisions (1), (2), (3), (4), and (6) of this section do not apply to individual health benefit plans issued by a carrier to qualifying individuals on a guaranteed issue basis. However, the rate for any individual covered on a guaranteed issue basis may not exceed two and one half times the base rate of the class of business with the lowest index rate. Source: SL 1996, ch 286, 9; SL 2008, ch 263, 1.
58-17-75. Promulgation of rules for rates charged for individual health benefit plans.The director shall promulgate rules pursuant to chapter 1-26 to ensure that rating practices used by carriers are consistent with the purposes of 58-17-66 to 58-17-87, inclusive, including rules that ensure that differences in rates charged for individual health benefit plans by carriers are reasonable, and reflect objective differences in plan design, age, and gender of the insured. Source: SL 1996, ch 286, 10.
58-17-76. Transfer into or out of class of business.No carrier may transfer a person involuntarily into or out of a class of business. No carrier may offer to transfer a person into or out of a class of business unless such an offer is made to transfer all persons in the class of business without regard to claim experience or duration of coverage since issue. Source: SL 1996, ch 286, 11.
58-17-77. Temporary suspension of premium rates for individual health insurance--Reasons.The director may suspend for a specified period the application of subdivision 58-17-74(2) as to the premium rates for one or more rating periods upon a filing by the carrier and a finding by the director either that the suspension is reasonable in light of the financial condition of the carrier or that the suspension would enhance the efficiency and fairness of the marketplace for individual health insurance. Source: SL 1996, ch 286, 12.
58-17-78. Required disclosure when offering individual health benefit plan.In connection with the offering for sale of any individual health benefit plan to a person, a carrier shall make a reasonable disclosure, as part of its solicitation and sales materials, of:(1)The extent to which premium rates for a specified person are established or adjusted based upon age and gender;(2)The provisions of the individual health benefit plan concerning the carrier's right to change premium rates and the factors that affect changes in premium rates;(3)The provisions relating to renewability of policies and contracts; and(4)The provisions relating to any preexisting condition provision. Source: SL 1996, ch 286, 13.
58-17-79. Documentation of rating methods and practices.Each carrier shall maintain at its principal place of business a complete and detailed description of its rating practices and renewal underwriting practices, including information and documentation that demonstrate that its rating methods and practices are based upon commonly accepted actuarial assumptions and are in accordance with sound actuarial principles. Source: SL 1996, ch 286, 14.
58-17-8. Exceptions and reductions of coverage to be clearly set out.The exceptions and reductions of indemnity shall be set forth in a policy of health insurance and, other than those contained in 58-17-14 to 58-17-39, inclusive, shall be printed, at the insurer's option, either included with the benefit provision to which they apply, or under an appropriate caption such as "Exceptions," or "Exceptions and Reductions," except that if an exception or reduction specifically applies only to a particular benefit of the policy, a statement of such exception or reduction shall be included with the benefit provision to which it applies. Source: SL 1966, ch 111, ch 25, 2 (5).
58-17-81. Availability of information on rating methods and practices of carriers offering individual health benefit plans.A carrier shall make the information and documentation described in 58-17-79 available to the director upon request. Except in cases of violations of 58-17-66 to 58-17-87, inclusive, the information is proprietary and trade secret information and may not be disclosed by the director to persons outside of the division, except in the case of an administrative proceeding, to the Office of Hearing Examiners or the court in question or except as agreed to by the carrier or as ordered by a court of competent jurisdiction. Source: SL 1996, ch 286, 16.
58-17-82. Renewal of individual health benefit plans--Exceptions.An individual health benefit plan subject to 58-17-66 to 58-17-87, inclusive, is renewable with respect to any person or dependent at the option of the person and may not be terminated by the insurer at any time, except as provided in 58-17-15 or in any of the following cases:(1)The individual has failed to pay premiums or contributions in accordance with the terms of the health insurance coverage or the insurer has not received timely premium payments;(2)Fraud or intentional misrepresentation of material fact by the person;(3)In the case of a health insurance issuer that offers health insurance coverage in the market through a network plan, there are no longer any enrollees in connection with the plan who live, reside, or work in the service area of the issuer or in the area for which the issuer is authorized to do business and the issuer would deny enrollment with respect to the plan as provided for in 58-18B-37;(4)Election by the carrier not to renew all of its individual health benefit plans delivered or issued for delivery to persons in the state. In such a case, the carrier shall provide advance notice of its decision under this subdivision to the director in each state in which it is licensed and provide notice of the decision not to renew coverage to all affected individuals and to the director in each state in which an affected insured individual is known to reside at least one hundred eighty days before the nonrenewal of any individual health benefit plans by the carrier. Notice to the director under this subdivision shall be provided at least three working days before the notice to the affected individuals. In such instances, the director shall assist the affected persons in finding replacement coverage;(5)In the case of health insurance coverage that is made available only through one or more bona fide associations, the membership of an employer in the association (on the basis of which the coverage is provided) ceases but only if the coverage is terminated uniformly without regard to any health status-related factor relating to any covered individual; or(6)The insured individual becomes eligible for medicare coverage under Title XVIII of the Social Security Act, unless federal law requires that medicare coverage under Title XVIII be excluded as a reason for renewability of coverage;(7)If the issuer decides to discontinue offering a particular type of individual health insurance offered in the individual market, coverage of such type may be discontinued if:(a)The issuer provides notice to each insured provided coverage of this type in such market (and any participant and beneficiary covered under such coverage) of the discontinuation at least ninety days prior to the date of the discontinuation of the coverage;(b)The issuer offers to each insured provided coverage of this type in such market, the option to purchase all other health insurance coverage currently being offered by the issuer to an individual health plan in such market; or(c)In exercising the option to discontinue coverage of this type and in offering the option of coverage under subsection (b), the issuer acts uniformly without regard to the claims experience of those insured or any health status-related factor relating to any participant or beneficiary covered or any new participant or beneficiary who may become eligible for such coverage. Source: SL 1996, ch 286, 17; SL 1997, ch 289, 3; SL 2003, ch 248, 1.
58-17-83. Election not to renew individual health benefit plan--Future business restricted.No carrier that elects not to renew an individual health benefit plan under subdivision 58-17-82(4) may write new business in the individual health benefit plan market in the state for a period of five years from the date of notice to the director. Source: SL 1996, ch 286, 18.
58-17-84.1.(Text of section effective until the first plan year, policy year, or renewal date on or after January 1, 2019) Anesthesia and hospitalization for dental care to be provided certain covered persons. Any health benefit plan as defined by 58-17-63 shall cover anesthesia and hospital charges for dental care provided to a covered person who:(1)Is a child under age five; or(2)Is severely disabled or otherwise suffers from a developmental disability as determined by a licensed physician which places such person at serious risk.Such coverage applies regardless of whether the services are provided in a hospital or a dental office. A health carrier may require prior authorization of hospitalization for dental care procedures in the same manner that prior authorization is required for hospitalization for other covered diseases or conditions.(Text of section effective the first plan year, policy year, or renewal date on or after January 1, 2019) Anesthesia and hospital or ambulatory surgery center charges for dental care to be covered for certain persons. Any health benefit plan as defined by 58-17-63 shall cover anesthesia and hospital or ambulatory surgery center charges for dental care provided to a covered person who:(1)Is a child under age five; or(2)If determined by a licensed physician, is severely disabled, has a developmental disability, or otherwise has a medical condition that places the person at serious medical risk.The coverage applies regardless of whether the services are provided in a hospital, ambulatory surgery center, or a dental office. A health carrier may require prior authorization in the same manner that prior authorization is required for other covered diseases or conditions. Source: SL 1999, ch 248, 2; SL 2018, ch 279, 1, eff. Jan. 1, 2019.
58-17-84. Provisions for carriers providing individual coverage other than excepted benefits.Any health carrier providing individual coverage, other than excepted benefits, shall comply with the following provisions:(1)No individual coverage may deny, exclude, or limit benefits for a covered individual for claims incurred more than twelve months following the effective date of the person's coverage due to a preexisting condition. No policy may define a preexisting condition more restrictively than:(a)A condition that would have caused an ordinarily prudent person to seek medical advice, diagnosis, care, or treatment during the twelve months immediately preceding the effective date of coverage;(b)A condition for which medical advice, diagnosis, care, or treatment was recommended or received during the twelve months immediately preceding the effective date of coverage; or(c)A pregnancy existing on the effective date of coverage;(2)The health carrier shall waive any time period applicable to a preexisting condition exclusion or limitation period with respect to particular services for the aggregate period of time a person was previously covered by creditable coverage, excluding limited benefit plans and dread disease plans that provided benefits with respect to such services, if the creditable coverage was continuous to a date not more than sixty-three days before the application for the new coverage. A period of time a person was previously covered may not be aggregated if there was a break in coverage of sixty-three days or more. The coverage shall count a period of creditable coverage without regard to the specific benefits covered under the policy, unless the health carrier elects to credit it based on coverage of benefits within several classes or categories of benefits specified in rules adopted pursuant to chapter 1-26, by the director;(3)A health maintenance organization which does not utilize a preexisting waiting period may use an affiliation period in lieu of a preexisting waiting period. No affiliation period may exceed two months in length. No premium may be charged for any portion of the affiliation period. If the health maintenance organization utilizes neither a preexisting waiting period nor an affiliation period, the health maintenance organization may use other criteria designed to avoid adverse selection provided that those criteria are approved by the director;(4)Genetic information may not be treated as a condition for which a preexisting condition exclusion may be imposed in the absence of a diagnosis of the condition related to such information; and(5)A condition may not be defined or considered as preexisting if the condition arose after a person began creditable coverage and if there was not a break in coverage which exceeded sixty-three days.For purposes of this section, the effective date of coverage is the first day the person became covered for either accidents or sicknesses. Except for plans grandfathered pursuant to 75 Fed. Reg. 116 (2010) to be codified at 26 C.F.R. 54 and 602, 29 C.F.R. 2590, and 45 C.F.R. 147, no covered person under the age of nineteen is subject to a preexisting condition limitation or exclusion for any plan year beginning on or after September 23, 2010. Excepted benefits are subject to the provisions of 58-17-97. (SL 2011, ch 216, 19 provides: "The provisions of this Act are repealed if the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010) is found to be unconstitutional in its entirety by a final decision of a federal court of competent jurisdiction and all appeals exhausted or time for appeals elapsed.") Source: SL 1996, ch 286, 19; SL 1997, ch 289, 4; SL 2001, ch 275, 2; SL 2003, ch 248, 2; SL 2011, ch 216, 6.
58-17-87. Director to promulgate rules for individual health insurance--Scope of rules. The director shall promulgate rules pursuant to chapter 1-26 to cover:(1)Terms or renewability;(2)Conditions of eligibility;(3)Benefit limitations, exceptions, and reductions;(4)Definition of terms;(5)Filing requirements for forms, rates, and rate schedules;(6)Marketing practices;(7)Reporting practices;(8)Compensation arrangements between insurers or other entities and their agents, representatives, or producers;(9)Suitability and appropriateness of the policy sold;(10)Certificates of coverage;(11)Determinations with regard to waiting periods;(12)College plans;(13)Creditable coverages;(14)Breaks in coverage;(15)The application of waiting periods; and(16)Risk spreading mechanisms.The director shall promulgate rules pursuant to chapter 1-26 that specify prohibited policy or certificate provisions not otherwise specifically authorized by statute which, in the opinion of the director, are unjust, unfair, or unfairly discriminatory to any person insured or proposed for coverage under an individual policy or certificate. The director shall also promulgate rules pursuant to chapter 1-26 assuring public access to rate and form information and establishing procedures for rate and form approvals and disapprovals. If any federal standards are in place which would require additional steps to meet those standards beyond what is required by this chapter, the director shall promulgate rules to require the offering of health insurance plans, the underwriting and coverage criteria that may be utilized for such health insurance plans, and other requirements related to the coverage criteria and availability of health insurance to individuals in this state in order to minimally meet the federal standards. Source: SL 1996, ch 286, 22; SL 1997, ch 289, 6; SL 1998, ch 289, 4; SL 2021, ch 210,  11.
58-17-88. Minimum inpatient care coverage following delivery.If a health insurance policy that is issued or renewed on or after July 1, 1996, provides maternity coverage, the policy shall provide coverage for a minimum of forty-eight hours of inpatient care following a vaginal delivery and a minimum of ninety-six hours of inpatient care following delivery by cesarean section for a mother and her newborn child in a health care facility licensed pursuant to chapter 34-12, except as otherwise provided in 58-17-89. Any policy that provides coverage for complications of pregnancy, and does not provide other maternity benefits, is not required to comply with this section. Source: SL 1996, ch 292, 1; SL 1998, ch 290, 1.
58-17-89. Shorter hospital stay permitted--Follow-up visit within forty-eight hours required.If the treating physician determines that the mother and the newborn meet medical criteria contained in Guidelines for Perinatal Care, Third Edition, of the American Academy of Pediatrics and the American College of Obstetricians and Gynecologists as in effect on January 1, 1996, a health insurance policy may provide coverage for a shorter length of hospital inpatient stay for services related to maternity and newborn care than is required in 58-17-88 if the coverage includes one follow-up visit in the first forty-eight hours after discharge to verify the condition of the mother and newborn. Source: SL 1996, ch 292, 2.
58-17-9. Renewal of policy at option of insurer--Statement in policy so informing the policyholder.In any case where a policy of health insurance is subject to renewal at the option of the insurer there shall be prominently printed both on the cover page and on the first page of such policy a statement so informing the policyholder. Source: SL 1966, ch 111, ch 25, 2 (9).
58-17-90. Notice to policyholders--Disclosures.The health insurer shall provide notice to policyholders regarding the coverage required by 58-17-88 and 58-17-89 in accordance with rules adopted by the director of the Division of Insurance pursuant to chapter 1-26. The notice shall be in writing and prominently positioned in any literature or correspondence. The notice shall be transmitted to policyholders in the next mailing to policyholders, in the yearly informational packet sent to policyholders, or by January 1, 1997, whichever is earliest. Source: SL 1996, ch 292, 3.
58-17-97. Provisions covering preexisting conditions.Any accident and sickness policy or certificate subject to the provisions of this chapter, other than credit health insurance as defined in subdivision 58-19-2(1) and a health benefit plan as defined in 58-17-66, shall comply with the following provisions:(1)No policy or certificate may deny, exclude, or limit benefits for a covered individual for claims incurred more than twelve months following the effective date of the person's coverage due to a preexisting condition;(2)No policy or certificate may define a preexisting condition more restrictively than:(a)A condition that would have caused an ordinarily prudent person to seek medical advice, diagnosis, care, or treatment during the twelve months immediately preceding the effective date of coverage;(b)A condition for which medical advice, diagnosis, care, or treatment was recommended or received during the twelve months immediately preceding the effective date of coverage; or(c)A pregnancy existing on the effective date of coverage. Source: SL 1997, ch 288, 2; SL 2001, ch 275, 4; SL 2013, ch 248, 1.
58-17-98. Health insurance policies to provide coverage for biologically-based mental illnesses.Every policy of health insurance that is delivered, issued for delivery, or renewed in this state, except for policies that provide coverage for specified disease or other limited benefit coverage, shall provide, in writing, coverage for the treatment and diagnosis of biologically-based mental illnesses with the same dollar limits, deductibles, coinsurance factors, and restrictions as for other covered illnesses.The term, biologically-based mental illness, means schizophrenia and other psychotic disorders, bipolar disorder, major depression, and obsessive-compulsive disorder. Source: SL 1998, ch 291, 1; SL 1999, ch 251, 1.
58-17-99. Application of 58-17-98--Exemptions.The provisions of 58-17-98 do not apply to any plan, policy, or contract that provides coverage only for:(1)Specified disease;(2)Hospital indemnity;(3)Fixed indemnity;(4)Accident-only;(5)Credit;(6)Dental;(7)Vision;(8)Prescription drug;(9)Medicare supplement;(10)Long-term care;(11)Disability income insurance;(12)Coverage issued as a supplement to liability insurance;(13)Workers' compensation or similar insurance;(14)Automobile medical payment insurance; or(15)Individual health benefit plans of six-months duration or less that are not renewable. Source: SL 1998, ch 291, 7.
58-17A-1.Definition of terms.Terms used in this chapter mean:(1)"Applicant," in the case of an individual medicare supplement policy or subscriber contract, the person who seeks to contract for insurance benefits; and in the case of a group medicare supplement policy or subscriber contract, the proposed certificate holder;(2)"Certificate," any certificate issued under a group medicare supplement policy, which policy has been delivered or issued for delivery in this state;(3)"Certificate form," the form on which the certificate is delivered or issued for delivery by the issuer;(4)"Issuer," includes insurance companies, fraternal benefit societies, health care service plans, health maintenance organizations, and any other entity delivering or issuing for delivery in this state medicare supplement policies or certificates;(5)"Medicare," the Health Insurance for the Aged Act, Title XVIII of the Social Security Amendments of 1965 and as amended through December31, 1991;(6)"Medicare supplement policy," a group or individual policy of health insurance or a subscriber contract of nonprofit hospital, medical and surgical service plans, or health maintenance organizations, which is advertised, marketed, or designed primarily as a supplement to reimbursements under medicare for the hospital, medical or surgical expenses of persons eligible for medicare. The term does not include insurance policies or health care benefit plans, including group conversion policies, provided to medicare eligible persons which policies are not marketed or held to be medicare supplement policies or benefit plans, nor does it apply to a policy or contract of one or more employers or labor organizations, or of the trustees of a fund established by one or more employers or labor organizations, or combination thereof, for employees or former employees or a combination thereof, or for members or former members, or a combination thereof, of the labor organizations. The term does not include a policy issued pursuant to a contract under Section 1876 of the federal Social Security Act, 42 U.S.C. 1395 et seq., or a policy issued under a demonstration project specified in 42 U.S. C. 1395ss(g)(i). The term does not include any medicare advantage plan established under Medicare Part C, any outpatient prescription drug plan established under Medicare Part D, or any health care prepayment plan that provides benefits pursuant to an agreement under 1833(a)(1)(A) of the Social Security Act;(7)"Policy form," the form on which the policy is delivered or issued for delivery by the issuer. Source: SL 1982, ch 360, 1; SL 1989, ch 431, 1; SL 1990, ch 396, 1; SL 1992, ch 347, 1; SL 1996, ch 293, 1; SL 2005, ch 267, 1.  
58-17A-10. Filing requirements--Master policy--Rates, rating schedules, and supporting documentation--Riders or amendments to delete outpatient prescription drug benefits.Every issuer providing group medicare supplement insurance benefits to a resident of this state shall file a copy of the master policy and any certificate used in this state in accordance with the filing requirements and procedures applicable to group medicare supplement policies issued in this state.Every issuer providing medicare supplement policies or certificates in this state shall annually file its rates, rating schedule, and supporting documentation demonstrating that it is in compliance with the applicable loss ratio standards of this state. All filings of rates and rating schedules shall demonstrate that the actual and expected losses in relation to premiums comply with the requirements of this chapter.An issuer shall file any riders or amendments to policy or certificate forms to delete outpatient prescription drug benefits as required by the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 for any policy or certificate issued in this state. Source: SL 1989, ch 431, 4; SL 1992, ch 347, 11; SL 2005, ch 267, 2. 
58-17A-11. Premiums to be adjusted to produce a loss ratio conforming with minimum standards--Form of adjustments.Every issuer providing medicare supplement insurance or benefits to a resident of this state shall make premium adjustments as are necessary to produce an expected loss ratio under a policy or certificate as will conform with minimum loss ratio standards for medicare supplement policies and certificates which is expected to result in a loss ratio at least as great as that originally anticipated in the rates used to produce current premiums by the issuer. No premium adjustment which would modify the loss ratio experience under the policy other than the adjustments described herein may be made with respect to a policy at any time other than upon its renewal date. Premium adjustments shall be in the form of refunds or premium credits and shall be made no later than upon renewal if a credit is given, or within sixty days of the renewal date if a refund is provided to the premium payer. Source: SL 1989, ch 431, 5; SL 1992, ch 347, 12.
58-17A-13. Review of advertisements of issuers providing medicare supplement insurance.Every issuer providing medicare supplement insurance policies or certificates in this state shall provide, prior to its use, a copy of any advertisement used in this state whether through written, radio, or television medium to the director for review. Source: SL 1989, ch 431, 9; SL 1992, ch 347, 13.
58-17A-14. Requirements for replacement of policy.An issuer replaces a medicare supplement policy if:(1)The issuer discontinues or does not renew a medicare supplement policy and offers an alternative medicare supplement policy to its insured; or(2)The newer policy has an effective date which coincides with or which is within thirty days after the date the older policy covering that same insured discontinued. An issuer does not violate medicare supplement replacement requirements unless that issuer or its representative knew or reasonably should have known of the older policy. Source: SL 1989, ch 432, 2; SL 1992, ch 347, 14; SL 1993, ch 361; SL 1995, ch 279.
58-17A-15. Sale of second policy prohibited except as replacement--Liability of issuer.No issuer or insurance producer may sell a medicare supplement policy to a person who has an existing, in force medicare supplement policy unless the issuer or insurance producer is replacing the existing coverage. However, no issuer is liable beyond a refund of premium for the duplication of such medicare supplement coverage when a statement, signed by the insured, is obtained from the insured verifying that no other medicare supplement coverage is then in effect. Source: SL 1989, ch 432, 3; SL 1992, ch 347, 15; SL 2001, ch 286, 121.
58-17A-16. Additional penalties for violation of title.In addition to any other applicable penalties or other administrative remedies for violations of this title, the director may require issuers violating any provision of this chapter or rules promulgated pursuant to this chapter to cease marketing any medicare supplement policy or certificate in this state which is related directly or indirectly to a violation, or may require such issuer to take such actions as are necessary to comply with the provisions of this chapter, or both. Source: SL 1992, ch 347, 16.
58-17A-17. Conditional or discriminatory policy or certificate prohibited.No issuer may deny or condition the issuance or effectiveness of any medicare supplement policy or certificate available for sale in this state, nor discriminate in the pricing of a policy or certificate because of the health status, claims experience, receipt of health care, or medical condition of an applicant if an application for a policy or certificate is submitted prior to or during the six-month period beginning with the first day of the month in which an individual is sixty-five years of age or older and is enrolled for benefits under medicare part B. Each medicare supplement policy and certificate currently available from an issuer shall be made available to all applicants who qualify under this section without regard to age.This does not prevent the exclusion of benefits under a policy or certificate during the first six months based on a preexisting condition for which the policyholder or certificate holder received treatment or was otherwise diagnosed during the six months before the policy or certificate became effective. Source: SL 1992, ch 347, 17; SL 1996, ch 293, 3.
58-17A-2. Regulations to establish specific standards for policy provisions.The director shall promulgate rules pursuant to chapter 1-26 to establish specific standards and requirements for medicare supplement policies and certificates. The standards and requirements shall be in addition to and in accordance with applicable laws of this state and may cover, but are not limited to:(1)Terms of renewability;(2)Initial and subsequent conditions of eligibility;(3)Nonduplication of coverage;(4)Probationary periods;(5)Benefit limitations, exceptions, and reductions;(6)Elimination periods;(7)Requirements for replacement;(8)Recurrent conditions;(9)Definitions of terms;(10)Filing requirements for forms and rates and rate schedules;(11)Marketing practices;(12)Reporting practices;(13)Compensation arrangements between insurers or other entities and their agents, representatives, or producers;(14)Suitability and appropriateness of policy sold;(15)Data on application forms;(16)Continuation and conversion rights;(17)Loss ratio requirements and refund and credit calculations;(18)Suspension and reinstitution of coverage; and(19)Refund of premium for duplication and suspension and reinstitution of coverage.The director may promulgate rules pursuant to chapter 1-26 that specify prohibited policy or certificate provisions not otherwise specifically authorized by statute which, in the opinion of the director, are unjust, unfair, or unfairly discriminatory to any person insured or proposed for coverage under a medicare supplement policy or certificate. The director may also promulgate rules assuring public access to rate and form information, establishing procedures for rate and form approvals or disapprovals, and establishing a uniform methodology for calculating and reporting loss ratios.The director shall promulgate rules pursuant to chapter 1-26 to establish minimum standards for benefits and claims payment under medicare supplement policies and certificates and to establish procedures for rate hearings. Source: SL 1982, ch 360, 2; SL 1989, ch 431, 2; SL 1990, ch 396, 2; SL 1992, ch 347, 2.
58-17A-3.1. Preexisting conditions provision prohibited in replacement policy--Exception.A policy or certificate of insurance providing medicare supplement benefits which is sold to a consumer to replace an existing, in-force medicare supplement policy may not contain any provision limiting payment of benefits due to preexisting conditions of the insured except, if there is any time period remaining relating to the exclusion of coverage for preexisting conditions as specified in the underlying policy, that remaining waiting period for coverage of preexisting conditions shall apply to the new policy unless the policy otherwise provides a lesser waiting period. The waiver applies to all time periods applicable to preexisting conditions, waiting periods, elimination periods, and probationary periods in the new medicare supplement. Source: SL 1989, ch 432, 1; SL 1997, ch 291, 2.
58-17A-3. Preexisting conditions--Policy provisions.Notwithstanding any other provision of law, a medicare supplement policy or certificate may not exclude or limit benefits for losses incurred more than six months from the effective date of coverage for a preexisting condition. The policy or certificate may not define a preexisting condition more restrictively than a condition for which medical advice was given or treatment was recommended by or received from a physician within six months before the effective date of coverage. Source: SL 1982, ch 360, 3; SL 1992, ch 347, 3.
58-17A-4. Reasonable benefits required--Regulations to establish minimum standard from loss ratios--Policies issued through mail or mass media advertising.Medicare supplement policies shall return to policyholders benefits which are reasonable in relation to the premium charged. The director shall issue regulations to establish minimum standards for loss ratios of medicare supplement policies on the basis of incurred claims experience or incurred health care expenses where coverage is provided by a health maintenance organization on a service rather than reimbursement basis and earned premiums and in accordance with accepted actuarial principles and practices. For purposes of regulations issued pursuant to this section, medicare supplement policies issued as a result of solicitations of individuals through the mail or mass media advertising, including both print and broadcast advertising, shall be treated as individual policies. Source: SL 1982, ch 360, 4; SL 1989, ch 431, 3; SL 1992, ch 347, 4.
58-17A-5. Outline of coverage delivered at time of application for insurance.To provide for full and fair disclosure in the sale of medicare supplement policies, no medicare supplement policy or certificate may be delivered or issued for delivery in this state and no certificate may be delivered pursuant to a group medicare supplement policy delivered or issued for delivery in this state unless an outline of coverage is delivered to the applicant at the time application is made. The director shall prescribe the format and content of the outline of coverage required by this section. For purposes of this section, "format" means style, arrangements, and overall appearance, including such items as size, color, and prominence of type and the arrangement of text and captions. The outline of coverage shall include:(1)A description of the principal benefits and coverage provided in the policy;(2)A statement of the exceptions, reductions and limitations contained in the policy;(3)A statement of the renewal provisions, including any reservation by the issuer of a right to change premiums and disclosure of the existence of any automatic renewal premium increases based on the policyholder's age; and(4)A statement that the outline of coverage is a summary of the policy issued or applied for and that the policy should be consulted to determine governing contractual provisions. Source: SL 1982, ch 360, 5; SL 1992, ch 347, 6.
58-17A-6. Informational brochures.The director may prescribe by regulation a standard form and the contents of an informational brochure for persons eligible for medicare which is intended to improve the buyer's ability to select the most appropriate coverage and improve the buyer's understanding of medicare. Except in the case of direct response insurance policies or certificates, the director may require by regulation that the information brochure be provided to any prospective insureds eligible for medicare concurrently with delivery of the outline of coverage. With respect to direct response insurance policies or certificates, the director may require by regulation that the prescribed brochure be provided upon request to any prospective insureds eligible for medicare but in no event later than the time of policy delivery. Source: SL 1982, ch 360, 6; SL 1992, ch 347, 7.
58-17A-7. Health insurance policies--Requirements for information regarding medicare coverage.The director may promulgate rules pursuant to chapter 1-26 for captions or notice requirements determined to be in the public interest and designed to inform prospective insureds that particular insurance coverages are not medicare supplement coverages, for all health insurance policies sold to persons eligible for medicare other than medicare supplement policies and disability income policies.The director may promulgate rules pursuant to chapter 1-26 to govern the full and fair disclosure of information, marketing, and conduct of insurance producers in connection with the replacement of health insurance policies, subscriber contracts, and certificates by persons eligible for medicare. Source: SL 1982, ch 360, 7; SL 1989, ch 431, 7; SL 1992, ch 347, 8; SL 1996, ch 293, 2; SL 1997, ch 291, 1; SL 2001, ch 286, 119.
58-17A-8.1. Issuance of policies by insurance company, nonprofit hospital service plan, medical service corporation, or fraternal benefit society--Delivery receipts--Certificates of mailing--Term of retention.An issuer shall issue policies in this state for which an examination period is required in accordance with one of the following methods:(1)If the policy is delivered by an insurance producer, a receipt shall be signed by the policyowner acknowledging delivery of the policy. The receipt shall include the policy number and the date of the delivery;(2)If the policy is delivered by mail, it shall be sent by registered or certified mail, return receipt requested, or a certificate of mailing shall be obtained showing the date the policy was mailed to the policyowner. For policy issuances verified by a certificate of mailing, it is presumed that the policy is received by the policyowner ten days from the date of mailing.The receipts and the certificates of mailing described in this section shall be retained by the issuer for five years. If a producer obtains the delivery receipt, the producer shall forward the signed delivery receipt to the insurer. Source: SL 1982, ch 28, 18; SL 1987, ch 374, 4; SL 1992, ch 347, 10; SL 2001, ch 286, 120; SL 2003, ch 249, 1.
58-17A-8. Notice of right to return and right to premium refund printed in medicare supplement policies and certificates--Payment of refund.Medicare supplement policies and certificates shall have a notice prominently printed on the first page of the policy or attached thereto stating in substance that the applicant shall have the right to return the policy or certificate within thirty days of its delivery and to have the premium refunded if, after examination of the policy or certificate, the applicant is not satisfied for any reason.Any refund made pursuant to this section shall be paid directly to the applicant by the issuer within thirty days of receipt of the returned policy. Source: SL 1982, ch 360, 8; SL 1989, ch 431, 8; SL 1992, ch 347, 9.
58-17A-9. Regulations subject to Administrative Procedures Act.Regulations promulgated pursuant to this chapter shall be subject to the provisions of chapter 1-26. Source: SL 1982, ch 360, 9.
58-17B-1. Scope.This chapter applies to policies delivered or issued for delivery in this state on or after July 1, 1989. This law does not supersede the obligations of entities subject to this chapter to comply with other applicable insurance laws insofar as they do not conflict with this chapter. Laws and rules designed and intended to apply to medicare supplement insurance policies may not be applied to long-term care insurance. A policy which is not advertised, marketed, or offered as long-term care insurance or nursing facility insurance need not meet the requirements of this chapter. Source: SL 1989, ch 440, 1.
58-17B-10. Delivery of outline of coverage--Contents.An outline of coverage shall be delivered to an applicant for an individual long-term care insurance policy at the time of application for an individual policy. In the case of direct response solicitations, the insurer shall deliver the outline of coverage upon the applicant's request, but regardless of request shall make delivery no later than at the time of policy delivery. Such outline of coverage shall include:(1)A description of the principal benefits and coverage provided in the policy;(2)A statement of the principal exclusions, reductions and limitations contained in the policy;(3)A statement of the renewal provisions, including any reservation in the policy of a right to change premiums; and(4)A statement that the outline of coverage is a summary of the policy issued or applied for, and that the policy should be consulted to determine governing contractual provisions. Source: SL 1989, ch 440, 11.
58-17B-11. Contents of certificate.A certificate issued pursuant to a group long-term care insurance policy which policy is delivered or issued for delivery in this state shall include:(1)A description of the principal benefits and coverage provided in the policy;(2)A statement of the principal exclusions, reductions and limitations contained in the policy; and(3)A statement that the group master policy determines governing contractual provision. Source: SL 1989, ch 440, 12.
58-17B-12. Compliance with chapter prerequisite to advertisement, marketing, offer.No policy may be advertised, marketed, or offered as long-term care or nursing facility insurance unless it complies with the provisions of this chapter. Source: SL 1989, ch 440, 13.
58-17B-13.1. Establishment of standards and requirements for cost-of-living adjustment.The director may promulgate rules pursuant to chapter 1-26 to establish specific standards and requirements for a cost-of-living adjustment to long-term care policies. The standards or requirements may cover:(1)Types and duration of adjustments;(2)Underwriting; and(3)Amount of adjustment. Source: SL 1990, ch 398, 4.
58-17B-13. Endorsement required--Cost-of-living adjustment not required.Any long-term care policy offered for sale in this state shall offer as an endorsement an annual cost-of-living adjustment in daily benefits paid.Nothing in this section requires an insurer that offers a long-term care policy which pays benefits on an expense-incurred basis or which is a life insurance policy with long-term care benefits as a part of the life policy or a rider to the life policy to offer a cost-of-living adjustment. Source: SL 1989, ch 440, 14; SL 1990, ch 398, 3.
58-17B-14. Coverage offered to resident under group policy issued in other state--Requirements.No group long-term care insurance coverage may be offered to a resident of this state under a group policy issued in another state to a group described in subdivisions 58-17B-2(4)(a) and (4)(d) unless this state or another state having statutory and regulatory long-term care insurance requirements substantially similar to those adopted in this state has made a determination that such requirements have been met. Source: SL 1989, ch 440, 16.
58-17B-15. Rules in accordance with chapter 1-26.Rules adopted pursuant to this chapter shall be in accordance with the provisions of chapter 1-26. Source: SL 1989, ch 440, 17.
58-17B-16. Temporary absence from nursing home or assisted living facility--Effect on benefits for long-term care charges and other requirements--Application.If an insured is receiving benefits for long-term care services in a nursing home or assisted living facility under a long-term care policy or certificate subject to this chapter, and temporarily leaves the nursing home or assisted living facility for a period not to exceed fourteen days annually, the insurer may not reduce or limit benefits for long-term care charges incurred by the insured during that temporary absence unless otherwise provided in the policy or certificate. The insurer may not consider that absence in determining whether the insured qualifies or continues to qualify for a waiver of premium or other policy or certificate benefits or eligibility requirements. This section applies to all policies or certificates that are issued after June30, 2005. Source: SL 2005, ch 268, 1. 
58-17B-2. Definition of terms.Terms used in this chapter mean:(1)"Applicant,"(a)In the case of an individual long-term care insurance policy, the person who seeks to contract for benefits; and(b)In the case of a group long-term care insurance policy, the proposed certificate holder;(2)"Certificate," any certificate issued under a group long-term care insurance policy, which policy has been delivered or issued for delivery in this state;(3)"Director," the director of the Division of Insurance in this state;(4)"Group long-term care insurance," a long-term care insurance policy which is delivered or issued for delivery in this state and issued to:(a)One or more employers or labor organizations, or to a trust or to the trustees of a fund established by one or more employers or labor organizations, or a combination thereof, for employees or former employees or a combination thereof or for members or former members or a combination thereof, of the labor organizations; or(b)Any professional, trade, or occupational association for its members or former or retired members, or combination thereof, if such association:(i)Is composed of individuals all of whom are or were actively engaged in the same profession, trade or occupation; and(ii)Has been maintained in good faith for purposes other than obtaining insurance; or(c)An association or a trust or the trustee of a fund established, created, or maintained for the benefit of members of one or more associations. Prior to advertising, marketing, or offering such policy within this state, the association or associations, or the insurer of the association or associations, shall file evidence with the director that the association or associations have at the outset a minimum of one hundred persons and have been organized and maintained in good faith for purposes other than that of obtaining insurance; have been in active existence for at least one year; and have a constitution and bylaws which provide that:(i)The association or associations hold regular meetings not less than annually to further purposes of the members;(ii)Except for credit unions, the association or associations collect dues or solicit contributions from members; and(iii)The members have voting privileges and representation on the governing board and committees.Thirty days after such filing the association or associations will be considered to have satisfied such organizational requirements, unless the director makes a finding that the association or associations have not satisfied those organizational requirements.(d)A group other than as described in this section subject to a finding by the director that:(i)The issuance of the group policy is not contrary to the best interest of the public;(ii)The issuance of the group policy would result in economies of acquisition or administration; and(iii)The benefits are reasonable in relation to the premiums charged;(5)"Guaranteed renewable,"(a)The insured has the right to continue the long-term care insurance in force by the timely payment of premiums; and (b)The insurer has no unilateral right to make any change in provisions of the policy or rider while the insurance is in force and cannot decline to renew the policy. However, rates may be revised by the insurer on a class basis subject to approval by the Division of Insurance;(6)"Long-term care insurance," any insurance policy or rider advertised, marketed, offered, or designed to provide coverage for not less than twelve consecutive months for each covered person on an expense incurred, indemnity, prepaid, or other basis; for one or more necessary or medically necessary diagnostic, preventive, therapeutic, rehabilitative, maintenance or personal care services, provided in a setting other than an acute care unit of a hospital. Such term includes group and individual policies or riders whether issued by insurers; fraternal benefit societies; nonprofit health, hospital and medical service corporations; prepaid health plans; health maintenance organizations or any similar organization. Long-term care insurance does not include any insurance policy which is offered primarily to provide basic medicare supplement coverage, basic hospital expense coverage, basic medical-surgical expense coverage, hospital confinement, accident only coverage, specified disease or specified accident coverage or limited benefit health coverage;(7)"Mental or nervous disorder," may not be defined more restrictively than including neurosis, psychoneurosis, psychopathy, psychosis, or mental or emotional disease or disorder. However, no policy, contract or rider may exclude or limit benefits on the basis of organic brain disease, including alzheimer's disease or senile dementia;(8)"Policy," any policy, contract, subscriber agreement, rider, or endorsement delivered or issued for delivery in this state by an insurer; fraternal benefit society; nonprofit health, hospital, or medical service corporation; prepaid health plan; health maintenance organization or any similar organization. Source: SL 1989, ch 440, 2; SL 2007, ch 289, 1.
58-17B-3. Minimum requirements for individual policy.An individual policy delivered or issued for delivery may not contain provisions less favorable to the insured than "guaranteed renewable" for life. Source: SL 1989, ch 440, 3.
58-17B-4. Adoption of rules--Standards for disclosure.The director may adopt rules, pursuant to chapter 1-26, that include standards for full and fair disclosure setting forth the manner, content, and required disclosures for the sale of long-term care insurance policies, terms of renewability, initial and subsequent conditions of eligibility, nonduplication of coverage provisions, coverage of dependents, preexisting conditions, termination of insurance, continuation or conversion, probationary periods, limitations, exceptions, reductions, elimination periods, requirements for replacement, recurrent conditions, marketing, and definitions of terms.The director shall develop minimum standards for benefits contained in the marketing and sale of long-term care coverage or other coverages containing long-term care benefits which do not provide institutional care benefits. The standards shall be established by rules promulgated pursuant to chapter 1-26. The standards shall take into consideration the special status of persons in the long-term care insurance market and be designed to afford protection of the public through disclosure and other informational requirements, minimum requirements for coverages and exclusions contained in such policies or certificates, prohibition or prescription of marketing or sales practices, financial and solvency requirements, disclosure and requirements relating to incontestability, and requirements for the continuity of coverage through continuation, conversion, or reinstatement. The director shall design standards to prohibit unjust, unfair, or discriminatory treatment of any person insured or proposed for coverage under this chapter. The director may adopt nationally developed standards to the extent that those standards are appropriate for the state considering the impact on the availability and cost of the insurance and the health care delivery system existing in South Dakota. The standards may include minimum amounts of coverage not otherwise specified in this chapter; the definitions; type, number, and use of benefit triggers such as activities of daily living, the types of facilities, and criteria for reimbursement for assisted living centers; requirements for home health care and home health agencies; the content and use of application forms; when and how coverage must be extended; and reports from insurers and others engaged in the business of long-term care insurance relating to how insureds have been treated and how compliance with this chapter has been achieved. Source: SL 1989, ch 440, 4; SL 1996, ch 294.
58-17B-5.1. Replacement of policy--Waiver of time periods.If a long-term care policy replaces another long-term care policy issued by the company or by an affiliated company, the insurer shall waive any time period applicable to preexisting conditions, waiting periods, elimination periods, and probationary periods in the new long-term care policy for similar benefits to the extent such time was spent under the original policy. Source: SL 1990, ch 398, 2.
58-17B-5. Grounds for termination and certain provisions prohibited.No long-term care insurance policy may:(1)Be cancelled, nonrenewed, or otherwise terminated on the grounds of the age or the deterioration of the mental or physical health of the insured individual or certificate holder; or(2)Contain a provision establishing a new waiting period in the event existing coverage is converted to or replaced by a new or other form within the same company, except with respect to an increase in benefits voluntarily selected by the insured individual or group policyholder; or(3)Provide coverage for skilled nursing care only or provide significantly more coverage for skilled care in a facility than coverage for lower levels of care. Source: SL 1989, ch 440, 5; SL 1990, ch 398, 1.
58-17B-6. Defining "preexisting conditions"--Requirements--Exclusions for loss or confinement--Extending limitation periods.No long-term care insurance policy or certificate other than a policy or certificate thereunder issued to a group as defined in subdivision 58-17B-2(4)(a):(1)Shall use a definition of "preexisting condition" which is more restrictive than the following: Preexisting condition means a condition for which medical advice or treatment was recommended by, or received from a provider of health care services, within six months preceding the effective date of coverage of an insured person;(2)May exclude coverage for a loss or confinement which is the result of a preexisting condition unless such loss or confinement begins within six months following the effective date of coverage of an insured person.The director may extend the limitation periods set forth herein as to specific age group categories in specific policy forms upon findings that the extension is in the best interest of the public. The definition of "preexisting condition" does not prohibit an insurer from using an application form designed to elicit the complete health history of an applicant, and, on the basis of the answers on that application, from underwriting in accordance with that insurer's established underwriting standards. Unless otherwise provided in the policy or certificate, a preexisting condition, regardless of whether it is disclosed on the application, need not be covered until the waiting period described in subdivision (2) of this section expires. No long-term care insurance policy or certificates may exclude or use waivers or riders of any kind to exclude, limit or reduce coverage or benefits for specifically named or described preexisting diseases or physical conditions beyond the waiting period described in subdivision (2) of this section. Source: SL 1989, ch 440, 6.
58-17B-7. Requirements for long-term care insurance policies--Post-confinement, post-acute care, or recuperative benefits.No long-term care insurance policy may be delivered or issued for delivery in this state if the policy:(1)Conditions eligibility for any benefits on a prior hospitalization requirement;(2)Conditions eligibility for benefits provided in an institutional care setting on the receipt of a higher level of institutional care; or(3)Conditions eligibility for any benefits other than waiver of premium, post-confinement, post-acute care or recuperative benefits on a prior institutionalization requirement.Post-confinement, post-acute care, or recuperative benefits do not include home health care, adult day care, or any other benefit based on treatment or services received.A long-term care insurance policy, continuing post-confinement, post-acute care, or recuperative benefits, shall clearly label, in a separate paragraph of the policy or certificate entitled "Limitations or Conditions on Eligibility for Benefits," such limitations or conditions, including any required number of days of confinement.A long-term care insurance policy or rider which conditions eligibility of non-institutional benefits on the prior receipt of institutional care may not require a prior institutional stay of more than thirty days, except waiver of premium which may not require a prior institutional stay of more than ninety days. Source: SL 1989, ch 440, 7; SL 1991, ch 401.
58-17B-8. Adoption of rules to establish loss ratio standards.The director may adopt rules, pursuant to chapter 1-26, establishing loss ratio standards for long-term care insurance policies provided that a specific reference to long-term insurance policies is contained in the regulation. Source: SL 1989, ch 440, 9.
58-17B-9. Policyholder's right to return--Notice.Long-term care insurance policyholders shall have the right to return the policy within thirty days of its delivery and to have the premium refunded if, after examination of the policy, the policyholder is not satisfied for any reason. Long-term care insurance policies shall have a notice prominently printed on the first page of the policy or attached thereto stating in substance that the policyholder shall have the right to return the policy within thirty days of its delivery and to have the premium refunded if, after examination of the policy, the policyholder is not satisfied for any reason. Source: SL 1989, ch 440, 10.
58-17D-1. Definitions.Terms used in this chapter mean:(1)"Utilization review," a review of health care services provided or to be provided to an individual to assist in the determination of the nature of the injury or condition, or the appropriateness of the treatment provided or to be provided;(2)"Utilization review organization," any entity that provides utilization review services as defined in this chapter. Source: SL 2002, ch 231, 1.
58-17D-2. Certain utilization review organizations exempt from managed health care provisions.A utilization review organization that conducts utilization reviews solely for property and casualty insurers in this state pursuant to policies issued in this state is not subject to chapters 58-17F, 58-17G, 58-17H, and 58-17I except that any such utilization review organization shall register in the same manner as prescribed for utilization review organizations pursuant to 58-17H-35 to 58-17H-39, inclusive. (SL 2012, ch 239, 1 provides: "The provisions of chapter 219 of the 2011 Session Laws shall be deemed repealed if the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010) is found to be unconstitutional in its entirety by a final decision of a federal court of competent jurisdiction and all appeals exhausted or time for appeals elapsed.") Source: SL 2002, ch 231, 2; SL 2011, ch 219, 97.
58-17D-3. Property and casualty insurers to use registered utilization review organizations.Any property and casualty insurer seeking utilization review with respect to an insurance contract issued in this state may only use a utilization review organization registered pursuant to this chapter. Source: SL 2002, ch 231, 3.
58-17D-4. Utilization review to be administered by qualified professional.Any utilization review pursuant to this chapter shall be administered by a qualified licensed health care professional. Any adverse determination shall be evaluated by an appropriately licensed and clinically qualified health care professional. Any utilization review evaluation shall use generally accepted standards for treatment of the illness, injury, or condition reviewed. Any utilization review opinion shall be signed by the professional who performed the review. Source: SL 2002, ch 231, 4.
58-17D-5. Certain basis for fees prohibited.No utilization review organization may base its fees or charges on any recommendation for reduction in payment under an insurance contract or on a percentage of claim savings. Source: SL 2002, ch 231, 5.
58-17D-6. Insurer denying policyholder's claim to provide for reconsideration.An insurer that denies, in whole or in part, a policyholder's claim after consideration of a utilization review shall provide the policyholder with an opportunity to request reconsideration and to submit additional information relating to the claim. Source: SL 2002, ch 231, 6.
58-17D-7. No cause of action created or abrogated.Nothing in this chapter is intended to create or abrogate any cause of action as a result of a violation of the standards in this chapter. Source: SL 2002, ch 231, 7.
58-17E-1. Affiliate defined.For the purposes of this chapter, the term, affiliate, means a person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, the person specified. For the purposes of this section, the term, control, or controlled by, or under common control with, means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract other than a commercial contract for goods or nonmanagement services, or otherwise, unless the power is the result of an official position with or corporate office held by the person. Control is presumed to exist if any person, directly or indirectly, owns, controls, holds with the power to vote, or holds proxies representing ten percent or more of the voting securities of any other person. This presumption may be rebutted by a showing made in the manner provided by 58-5A-29. Source: SL 2006, ch 257, 1.
58-17E-10. Review of application.After the receipt of an application filed pursuant to 58-17E-9, the director shall review the application and notify the applicant of any deficiencies in the application. Source: SL 2006, ch 257, 9.
58-17E-11. Internet website to be established.Prior to registration by the director, each discount medical plan organization shall establish an internet website in order to conform to the requirements of 58-17E-31. Source: SL 2006, ch 257, 10.
58-17E-12. Duration of registration--Renewal applications.Any registration is effective for one year, unless prior to its expiration the registration is renewed in accordance with this section or suspended or revoked in accordance with 58-17E-14. At least forty-five days before a registration expires, the discount medical plan organization shall submit a renewal application form. Source: SL 2006, ch 257, 11; SL 2008, ch 265, 1.
58-17E-13. Renewal of registration.The director shall renew the registration of each holder that meets the requirements of this chapter. Source: SL 2006, ch 257, 12.
58-17E-14. Nonrenewal, suspension, or revocation of registration.The director may suspend the authority of a discount medical plan organization to enroll new members or refuse to renew or revoke a discount medical plan organization's registration if the director finds that any of the following conditions exist:(1)The discount medical plan organization is not operating in compliance with this chapter;(2)The discount medical plan organization has advertised, merchandised, or attempted to merchandise its services in such a manner as to misrepresent its services or capacity for service or has engaged in deceptive, misleading, or unfair practices with respect to advertising or merchandising;(3)The discount medical plan organization is not fulfilling its obligations as a discount medical plan organization; or(4)The continued operation of the discount medical plan organization would be hazardous to its members. Source: SL 2006, ch 257, 13.
58-17E-15. Notice of grounds for nonrenewal, suspension, or revocation--Hearing.If the director has cause to believe that grounds for the nonrenewal, suspension, or revocation of a registration exists, the director shall notify the discount medical plan organization in writing specifically stating the grounds for the refusal to renew or suspension or revocation and may pursue a hearing on the matter in accordance with the provisions of the chapter 1-26. Source: SL 2006, ch 257, 14.
58-17E-16. Winding up of affairs.If the registration of a discount medical plan organization is surrendered, revoked, or not renewed, the discount medical plan organization shall proceed, immediately following the effective date of the order of revocation or, in the case of a nonrenewal, the date of expiration of the registration, to wind up its affairs transacted under the registration. The discount medical plan organization may not engage in any further advertising, solicitation, collecting of fees or renewal of contracts. Source: SL 2006, ch 257, 15.
58-17E-17. Duration of suspension--Conditions for reinstatement.The director shall, in its order suspending the authority of the discount medical plan organization to enroll new members, specify the period during which the suspension is to be in effect and the conditions, if any, that shall be met by the discount medical plan organization prior to reinstatement of its registration to enroll members. The director may rescind or modify the order of suspension prior to the expiration of the suspension period. No registration of a discount medical plan organization may be reinstated unless requested by the discount medical plan organization. The director may not grant the request for reinstatement if the director finds that the circumstances for which the suspension occurred still exist or are likely to recur. Source: SL 2006, ch 257, 16.
58-17E-18. Consent orders.In lieu of suspending or revoking a discount medical plan organization's registration pursuant to 58-17E-14, if the discount medical plan organization has been found to have violated any provision of this chapter, the director may enter into a consent order pursuant to 58-4-28.1. Source: SL 2006, ch 257, 17.
58-17E-19. Registration exception for providers giving discounts to own patients.A provider who provides discounts to the provider's own patients without any cost or fee of any kind to the patient is not required to obtain and maintain a registration under this chapter as a discount medical plan organization. Source: SL 2006, ch 257, 18.
58-17E-2. Discount medical plan defined.For the purposes of this chapter, the term, discount medical plan, means a business arrangement or contract in which a person, in exchange for fees, dues, charges, or other consideration, offers access for its members to providers of medical or ancillary services and the right to receive discounts on medical or ancillary services provided under the discount medical plan from those providers. The term includes a prescription drug discount plan.The term does not include:(1)A plan that does not charge a membership or other fee to use the discount medical plan;(2)Any product otherwise regulated under Title 58;(3)A patient access program; or(4)A medicare prescription drug plan. Source: SL 2006, ch 257, 2.
58-17E-20. Surety bond.Each registered discount medical plan organization shall maintain in force a surety bond in its own name in an amount not less than twenty thousand dollars and shall be in favor of any person and the director of the Division of Insurance for the benefit of any person who is damaged by any violation of 58-17E-9, 58-17E-39, 58-17E-41, and 58-17E-45, inclusive, including any violation by the supplier or by any other person that markets, promotes, advertises, or otherwise distributes a discount card on behalf of the supplier. The bond shall cover any violation occurring during the time period during which the bond is in effect. The bond shall be issued by an insurance company licensed to do business in this state. A copy of the bond or a statement identifying the depository, trustee, and account number of the surety account, and thereafter proof of annual renewal of the bond or maintenance of the surety account, shall be filed with the director. Source: SL 2006, ch 257, 20.
58-17E-21. Deposit in lieu of surety bond.In lieu of the bond required by 58-17E-20, a registered discount medical plan organization may deposit and maintain deposited with the director, or at the discretion of the director, with any organization or trustee acceptable to the director through which a custodial or controlled account is utilized, cash, securities, or any combination of these or other measures that are acceptable to the director which at all times have a market value of not less than thirty-five thousand dollars. All income from the deposit is an asset of the discount medical plan organization. Source: SL 2006, ch 257, 21.
58-17E-22. Surety bonds and deposits not subject to levy by claimants.Except for the director, the assets or securities held in this state as a deposit pursuant to 58-17E-20 and 58-17E-21 are not subject to levy by a judgment creditor or other claimant of the discount medical plan organization. Source: SL 2006, ch 257, 22.
58-17E-23. Examination or investigation of discount medical organization--Expenses.The director may examine or investigate the business and affairs of any discount medical plan organization to protect the interests of the residents of this state based on the following reasons, including complaint indices, recent complaints, information from other states, or as the director deems necessary. An examination or investigation shall be performed in accordance with the provisions of chapter 58-3. The discount medical plan organization that is the subject of the examination or investigation shall pay the expenses incurred in conducting the examination or investigation. Failure by the discount medical plan organization to pay the expenses is grounds for denial of a registration to operate as a discount medical plan organization or revocation of a registration to operate as a discount medical plan organization.The discount medical plan organization is subject to the provisions of 58-33-66. Source: SL 2006, ch 257, 23.
58-17E-24. Pro rata reimbursement of charges upon cancellation of membership.If the discount medical plan organization cancels a membership for any reason other than nonpayment of fees by the member, the discount medical plan organization shall make a pro rata reimbursement of all periodic charges to the member. Source: SL 2006, ch 257, 24.
58-17E-25. Written materials on member benefits.A discount medical plan organization shall prepare written materials for its members that specifies the benefits a member is to receive under the discount medical plan and that complies with 58-17E-38, 58-17E-40, and 58-17E-42 to 58-17E-44, inclusive. Source: SL 2006, ch 257, 25.
58-17E-26. Services to be provided in accordance with written agreement.Any provider offering medical or ancillary services to members shall provide the services in accordance with a written agreement entered into directly by the provider or indirectly by a provider network to which the provider belongs. Source: SL 2006, ch 257, 26.
58-17E-27. Contents of provider agreement.A provider agreement between a discount medical plan organization and a provider shall provide the following:(1)A list of the medical or ancillary services and products to be provided at a discount;(2)The amount or amounts of the discounts or, alternatively, a fee schedule that reflects the provider's discounted rates; and(3)That the provider will not charge members more than the discounted rates. Source: SL 2006, ch 257, 27.
58-17E-28. Contents of provider network agreement.A provider agreement between a discount medical plan organization and a provider network shall require that the provider network have written agreements with its providers that:(1)Contain the provisions described in 58-17E-27;(2)Authorize the provider network to contract with the discount medical plan organization on behalf of the provider; and(3)Require the provider network to maintain an up-to-date list of its contracted providers and to provide the list on a monthly basis to the discount medical plan organization. Source: SL 2006, ch 257, 28.
58-17E-29. Agreements with entity contracting with provider network.A provider agreement between a discount medical plan organization and an entity that contracts with a provider network shall require that the entity, in its contracts with the provider network, require the provider network to have written agreements with its providers that comply with the provisions of 58-17E-28. Source: SL 2006, ch 257, 29.
58-17E-3. Discount prescription drug plan defined.For the purposes of this chapter, the term, discount prescription drug plan, means a business arrangement or contract in which a person, in exchange for fees, dues, charges, or other consideration provides access for its plan members to providers of pharmacy services and the right to receive discounts on pharmacy services provided under the discount prescription drug plan from those providers. Source: SL 2006, ch 257, 3.
58-17E-30. Copies of agreements to be maintained.The discount medical plan organization shall maintain a copy of each active provider agreement into which it has entered. Source: SL 2006, ch 257, 30.
58-17E-31. Internet website requirements.Each discount medical plan organization shall maintain on an internet website page an up-to-date list of the names and addresses of the providers with which it has contracted directly or through a provider network. The internet website address shall be prominently displayed on all of its advertisements, marketing materials, brochures, and discount medical plan cards. Source: SL 2006, ch 257, 31.
58-17E-32. Application of provider agreement requirements.The provisions of 58-17E-26 to 58-17E-31, inclusive, apply to those providers with which the discount medical plan organization has contracted with directly or indirectly as well as those providers that are members of a provider network with which the discount medical plan organization has contracted directly or indirectly. Source: SL 2006, ch 257, 32.
58-17E-33. Marketing of product--Agreement.A discount medical plan organization may market directly or contract with other marketers for the distribution of its product. The discount medical plan organization shall have an executed written agreement with a marketer prior to the marketer's marketing, promoting, selling, or distributing the discount medical plan. Source: SL 2006, ch 257, 33.
58-17E-34. Contents of marketing agreement.The agreement between the discount medical plan organization and the marketer shall prohibit the marketer from using advertising, marketing materials, brochures, and discount medical plan cards without the discount medical plan organization's approval in writing. Source: SL 2006, ch 257, 34.
58-17E-35. Liability for conduct of marketer.The discount medical plan organization shall be bound by and is responsible for the activities of a marketer that are within the scope of the marketer's contract with the organization, or are otherwise approved by or under the direction and control of the organization. Source: SL 2006, ch 257, 35.
58-17E-36. Approval of advertisements and marketing materials.A discount medical plan organization shall approve in writing any advertisement, marketing material, brochure, or discount card used by marketers to market, promote, sell, or distribute the discount medical plan prior to their use. Source: SL 2006, ch 257, 36.
58-17E-37. Submission of advertising and marketing materials to director.Upon request, a discount medical plan organization shall submit to the director any advertising, marketing material, or brochure regarding a discount medical plan. Source: SL 2006, ch 257, 37.
58-17E-38. Advertisements to be truthful and not misleading.Any advertisement of a discount medical plan organization shall be truthful and not misleading in fact or in implication. An advertisement is misleading if it has a capacity or tendency to mislead or deceive based on the overall impression that the advertisement is reasonably expected to create within the segment of the public to which it is directed. Source: SL 2006, ch 257, 38.
58-17E-39. Disclosure that product is not insurance--Advertisements--Rules--Revocation of registration--Agents.Any person subject to registration pursuant to 58-17E-9 shall prominently and boldly disclose that the product is not insurance. Any advertisements or solicitations made by such a person are subject to the provisions of 58-33A-2 to 58-33A-4, inclusive, and 58-33A-7 to 58-33A-8, inclusive, and 58-33A-10 to 58-33A-12, inclusive. Any administrative rule promulgated pursuant to 58-33A-7 does not apply to those registered pursuant to the provisions of 58-17E-9, 58-17E-39, 58-17E-41, and 58-17E-45, inclusive, unless specifically referenced in the rule. If any person fails to comply with these provisions or the provisions of 58-17E-9, 58-17E-39, 58-17E-41, and 58-17E-45, inclusive, the director may issue an order to cease and desist pursuant to the provisions of chapter 58-4 and may revoke the registration. Any such action by the director is subject to notice and hearing as provided pursuant to chapter 1-26 and 58-4-7. A person acting as an agent as defined in chapter 58-30 who sells, solicits, or negotiates a plan or program containing insurance benefits shall meet the licensing and appointment requirements of that chapter if the person is otherwise required to be licensed pursuant to the provisions of chapter 58-30. Source: SL 2005, ch 269, 2; SDCL 58-17C-105; SL 2015, ch 260, 7.
58-17E-4. Discount medical plan organization defined.For the purposes of this chapter, discount medical plan organization, means an entity that, in exchange for fees, dues, charges, or other consideration, provides access for discount medical plan members to providers of medical or ancillary services and the right to receive medical or speciality services from those providers at a discount. It is the organization that contracts with providers, provider networks, or other discount medical plan organizations to offer access to medical or speciality services at a discount and determines the charge to discount medical plan members. Source: SL 2006, ch 257, 4.
58-17E-40. Prohibited conduct.No discount medical plan organization may:(1)Except as otherwise provided in this chapter or as a disclaimer of any relationship between discount medical plan benefits and insurance, or as a description of an insurance product connected with a discount medical plan, use the term, insurance, in any advertisement, marketing material, brochure, or discount medical plan cards;(2)Use in any advertisement, marketing material, brochure, or discount medical plan card, the terms, health plan, coverage, co-pay, co-payments, deductible, preexisting conditions, guaranteed issue, premium, PPO, preferred provider organization, or other term in a manner that could reasonably mislead an individual into believing that the discount medical plan is health insurance;(3)Use language in any advertisement, marketing material, brochure, or discount medical plan card with respect to being licensed or registered by the Division of Insurance in a manner that could reasonably mislead an individual into believing that the discount medical plan is insurance or has been endorsed by the state;(4)Make misleading, deceptive, or fraudulent representations regarding the discount or range of discounts offered by the discount medical plan or the access to any range of discounts offered by the discount medical plan;(5)Have restrictions on access to discount medical plan providers, including, except for hospital services, waiting periods and notification periods; or(6)Pay providers any fees for medical or ancillary services or collect or accept money from a member to pay a provider for medical or ancillary services provided under the discount medical plan, unless the discount medical plan organization has an active certificate of authority to act as a third party administrator in accordance with chapter 58-29D. Source: SL 2006, ch 257, 39.
58-17E-41. Signature on contract required prior to receipt of consideration--Disclosure of information--Exception.No person subject to registration pursuant to 58-17E-9 may receive personal information, money, or other consideration for enrollment in a plan or program until the consumer has signed a contract or agreement with the person and no later than at the time the contract is signed, provides, at a minimum, the following information, disclosed in a clear and conspicuous manner:(1)The name, true address, telephone number, and website address of the registered person who is responsible for customer service;(2)A detailed description of the plan or program, including the goods and services covered and all exemptions and discounts that apply to each category thereof;(3)All costs associated with the plan or program, including any sign-up fee and any recurring costs;(4)An internet website that is updated regularly or a paper copy where the consumer can access the names and addresses of all current participating providers in the consumer's area;(5)A statement of the consumer's right to return the plan or program within thirty days of its delivery to the person or agent through whom it was purchased and to have all costs of the plan or program, excluding a nominal process fee refunded if, after examination of the plan or program, the purchaser is not satisfied with it for any reason;(6)A statement of the consumer's right to terminate the plan or program at any time by providing written notice or other notice, the form to be used for the termination notice, and the address where the notice is to be sent if different than the address provided in subdivision (1); and(7)Notice that the consumer is not obligated to make any further payments under the plan or program, nor is the consumer entitled to any benefits under the plan or program for any period of time after the last month for which payment has been made;(8)That the plan is not insurance;(9)That the range of discounts for medical or ancillary services provided under the plan will vary depending on the type of provider and medical or ancillary service received;(10)That the plan does not make payments to providers for the medical or ancillary services received under the discount medical plan;(11)That the plan member is obligated to pay for all medical or ancillary services, but will receive discount from those providers that have contracted with the discount medical plan organization.The requirement that the contract or agreement be signed prior to any money or consideration being obtained does not apply to a transaction in which payment by the consumer is made by credit card or by means of a telephonic transaction so long as the disclosures required by this section are provided to the consumer by way of postal mail, facsimile, or electronic mail within ten business days of the consumer's enrollment. Source: SL 2005, ch 269, 3; SDCL, 58-17C-106; SL 2006, ch 257, 45.
58-17E-42. Disclosures required for telephone contacts.If the initial contact with a prospective member is by telephone, the disclosures required by 58-17E-41 shall be made orally and included in the initial written materials that describe the benefits under the discount medical plan provided to the prospective or new member. Source: SL 2006, ch 257, 40.
58-17E-43. Member to be provided written copy of terms of plan.In addition to the general disclosures required by 58-17E-41, each discount medical plan organization shall provide to each new member a copy of the terms of the discount medical plan in written materials. Source: SL 2006, ch 257, 41.
58-17E-44. Contents of written materials.The written materials required under this chapter shall be clear and include information on:(1)The name of the member;(2)The benefits to be provided under the discount medical plan;(3)Any processing fees and periodic charges associated with the discount medical plan;(4)The mode of payment of any processing fees and periodic charges, such as monthly, quarterly, or otherwise, and procedures for changing the mode of payment;(5)Any limitations, exclusions, or exceptions regarding the receipt of discount medical plan benefits;(6)Any waiting periods for certain medical or ancillary services under the discount medical plan;(7)Procedures for obtaining discounts under the discount medical plan, such as requiring members to contact the discount medical plan organization to make an appointment with a provider on the member's behalf;(8)Cancellation procedures, including information on the member's thirty-day cancellation rights and refund requirements and procedures for obtaining refunds;(9)Renewal, termination, and cancellation terms and conditions;(10)Procedures for adding new members to a family discount medical plan, if applicable;(11)Procedures for filing complaints under the discount medical plan organization's complaint system and information that, if the member remains dissatisfied after completing the organization's complaint system, the plan member may contact the local insurance department in the member's state; and(12)The name and mailing address of the registered discount medical plan organization or other entity where the member can make inquiries about the plan, send cancellation notices, and file complaints. Source: SL 2006, ch 257, 42.
58-17E-45. Consumer's right to return plan or program--Refund.Any plan or program offered by a person subject to registration pursuant to 58-17E-9 shall provide thirty days from the date of the signed consumer contract or agreement, or thirty days from the receipt of the disclosures required by 58-17E-41 if the consumer purchased the plan or program over the telephone, in which the consumer may return the plan or program to the person or agent through whom it was purchased and have all costs of the plan or program, excluding a nominal processing fee as prescribed by the director by rules promulgated pursuant to chapter 1-26, refunded in full. Source: SL 2005, ch 269, 4; SDCL, 58-17C-107.
58-17E-46. Notice to director of change in plan.Each discount medical plan organization shall provide the director at least thirty days advance notice of any change in the discount medical plan organization's name, principal business address, mailing address, or internet website address. Source: SL 2006, ch 257, 43.
 58-17E-47. Construction with trade practices statute.Nothing in this chapter may be construed to discharge any requirements imposed by subdivision 37-24-6(12). Source: SL 2006, ch 257, 46.
58-17E-5. Definitions.Terms used in this chapter mean:(1)"Ancillary services," includes audiology, dental, vision, mental health, substance abuse, chiropractic, and podiatry services;(2)"Facility," an institution providing medical or ancillary services or a health care setting. The term includes:(a)A hospital or other licensed inpatient center;(b)An ambulatory surgical or treatment center;(c)A skilled nursing center;(d)A residential treatment center;(e)A rehabilitation center; and(f)A diagnostic, laboratory or imaging center;(3)"Health care professional," a physician, pharmacist, or other health care practitioner who is licensed, accredited, or certified to perform specified medical or ancillary services within the scope of his or her license, accreditation, certification, or other appropriate authority consistent with state law;(4)"Marketer," a person or entity that markets, promotes, sells, or distributes a discount medical plan, including a private label entity that places its name on and markets or distributes a discount medical plan pursuant to a marketing agreement with a discount medical plan organization;(5)"Medical services," any maintenance care of, or preventive care for, the human body, or care, service, or treatment of an illness or dysfunction of, or injury to, the human body. The term includes physician care, inpatient care, hospital surgical services, emergency services, ambulance services, dental care services, vision care services, mental health services, substance abuse services, chiropractic services, podiatric services, laboratory services, medical equipment and supplies, pharmacy services or ancillary services;(6)"Medicare prescription drug plan," a plan that provides Medicare Part D prescription drug benefit in accordance with the requirements of the federal Medicare Prescription Drug, Improvement and Modernization Act of 2003;(7)"Member," any individual who pays fees, dues, charges, or other consideration for the right to receive the benefits of a discount medical plan. Member does not include any individual who enrolls in a patient access program;(8)"Patient access program," a voluntary program sponsored by a pharmaceutical manufacturer or a consortium of pharmaceutical manufacturers, that provide free or discounted health care products directly to low-income or uninsured individuals either through a discount card or direct shipment;(9)"Provider," any health care professional or facility that has contracted, directly or indirectly, with a discount medical plan organization to provide medical or ancillary services to members;(10)"Provider network," an entity that negotiates directly or indirectly with a discount medical plan organization on behalf of more than one provider to provide medical or ancillary services to members. Source: SL 2006, ch 257, 5.
58-17E-6. Application of chapter.This chapter applies to all discount medical plan organizations doing business in South Dakota. Source: SL 2006, ch 257, 6.
58-17E-7. Registration exception and compliance requirements for otherwise registered health carriers.A discount medical plan organization that is a health carrier registered pursuant to Title 58:(1)Is not required to register as a discount medical plan organization. However, any of its affiliates that operate as a discount medical plan organization in this state shall comply with all provisions of this chapter and shall register as a discount medical plan organization;(2)Is required to comply with 58-17E-24 to 58-17E-38, inclusive, 58-17E-40, and 58-17E-42 to 58-17E-44, inclusive. Source: SL 2006, ch 257, 7.
58-17E-8. Notification of director required where discount medical plan organization loses registration or is subject to disciplinary proceeding in another state.If a discount medical plan organization loses its registration, or other form of authority to operate as a discount medical plan organization in another state, or is the subject of any disciplinary administrative proceeding related to the organization's operating as a discount medical plan organization in another state, the discount medical plan organization shall immediately notify the director. Source: SL 2006, ch 257, 8.
58-17E-9. Registration of discount medical plan organization.Any discount medical plan organization that is not offered directly by a health carrier as provided by this chapter, shall register in a format as prescribed by the director and shall file reports and conduct business under the same standards as required of utilization review organizations in accordance with provisions of 58-17H-36 and 58-17H-37. No health carrier may offer or provide coverage through a person not registered but required to be registered pursuant to 58-17E-9, 58-17E-39, 58-17E-41, and 58-17E-45, inclusive. Any plan or program that is registered pursuant to 58-17F-16 is not required to maintain a separate registration pursuant to 58-17E-9, 58-17E-39, 58-17E-41, and 58-17E-45, inclusive. Any plan or program of discounted goods or services that is offered by a health carrier in conjunction with a health benefit plan, as defined in 58-18-42 and 58-17-66(9), a medicare supplement policy as defined in 58-17A-1, or other insurance product that is offered by an authorized insurer and that is subject to the jurisdiction of the director is not required to be registered pursuant to 58-17E-9, 58-17E-39, 58-17E-41, and 58-17E-45, inclusive. (SL 2012, ch 239, 1 provides: "The provisions of chapter 219 of the 2011 Session Laws shall be deemed repealed if the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010) is found to be unconstitutional in its entirety by a final decision of a federal court of competent jurisdiction and all appeals exhausted or time for appeals elapsed.") Source: SL 2005, ch 269, 1; SDCL 58-17C-104; SL 2006, ch 257, 44; SL 2011, ch 219, 98.
58-17F-1. Definitions.Terms used in this chapter mean:(1)"Closed plan," a managed care plan or health carrier that requires covered persons to use participating providers under the terms of the managed care plan or health carrier and does not provide any benefits for out-of-network services except for emergency services;(2)"Covered benefits" or "benefits," those health care services to which a covered person is entitled under the terms of a health benefit plan;(3)"Covered person," a policyholder, subscriber, enrollee, or other individual participating in a health benefit plan;(4)"Director," the director of the Division of Insurance;(5)"Emergency medical condition," a medical condition manifesting itself by acute symptoms of sufficient severity, including severe pain, such that a prudent layperson, who possesses an average knowledge of health and medicine, could reasonably expect that the absence of immediate medical attention would result in serious impairment to bodily functions or serious dysfunction of a bodily organ or part, or would place the person's health or, with respect to a pregnant woman, the health of the woman or her unborn child, in serious jeopardy;(6)"Emergency services," with respect to an emergency medical condition:(a)A medical screening examination that is within the capability of the emergency department of a hospital, including ancillary services routinely available to the emergency department to evaluate such emergency condition; and(b)Such further medical examination and treatment, to the extent they are within the capability of the staff and facilities at a hospital to stabilize a patient;(7)"Facility," an institution providing health care services or a health care setting, including hospitals and other licensed inpatient centers, ambulatory surgical or treatment centers, skilled nursing centers, residential treatment centers, diagnostic, laboratory, and imaging centers, and rehabilitation, and other therapeutic health settings;(8)"Health care professional," a physician or other health care practitioner licensed, accredited, or certified to perform specified health services consistent with state law;(9)"Health care provider" or "provider," a health care professional or a facility;(10)"Health care services," services for the diagnosis, prevention, treatment, cure, or relief of a health condition, illness, injury, or disease;(11)"Health carrier," an entity subject to the insurance laws and regulations of this state, or subject to the jurisdiction of the director, that contracts or offers to contract, or enters into an agreement to provide, deliver, arrange for, pay for, or reimburse any of the costs of health care services, including a sickness and accident insurance company, a health maintenance organization, a nonprofit hospital and health service corporation, or any other entity providing a plan of health insurance, health benefits, or health services;(12)"Health indemnity plan," a health benefit plan that is not a managed care plan;(13)"Intermediary," a person authorized to negotiate and execute provider contracts with health carriers on behalf of health care providers or on behalf of a network;(14)"Managed care contractor," a person who establishes, operates, or maintains a network of participating providers; or contracts with an insurance company, a hospital or medical service plan, an employer, an employee organization, or any other entity providing coverage for health care services to operate a managed care plan or health carrier;(15)"Managed care entity," a licensed insurance company, hospital or medical service plan, health maintenance organization, or an employer or employee organization, that operates a managed care plan or a managed care contractor. The term does not include a licensed insurance company unless it contracts with other entities to provide a network of participating providers; (16)"Managed care plan," a plan operated by a managed care entity that provides for the financing or delivery of health care services, or both, to persons enrolled in the plan through any of the following:(a)Arrangements with selected providers to furnish health care services;(b)Explicit standards for the selection of participating providers; or(c)Financial incentives for persons enrolled in the plan to use the participating providers and procedures provided for by the plan;(17)"Network," the group of participating providers providing services to a health carrier;(18)"Open plan," a managed care plan or health carrier other than a closed plan that provides incentives, including financial incentives, for covered persons to use participating providers under the terms of the managed care plan or health carrier;(19)"Participating provider," a provider who, under a contract with the health carrier or with its contractor or subcontractor, has agreed to provide health care services to covered persons with an expectation of receiving payment, other than coinsurance, copayments, or deductibles, directly or indirectly, from the health carrier;(20)"Primary care professional," a participating health care professional designated by a health carrier to supervise, coordinate or provide initial care or continuing care to a covered person, and who may be required by the health carrier to initiate a referral for specialty care and maintain supervision of health care services rendered to the covered person; and(21)"Secretary," the secretary of the Department of Health. (SL 2012, ch 239, 1 provides: "The provisions of chapter 219 of the 2011 Session Laws shall be deemed repealed if the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010) is found to be unconstitutional in its entirety by a final decision of a federal court of competent jurisdiction and all appeals exhausted or time for appeals elapsed.") Source: SL 2011, ch 219, 2.
58-17F-10. Access plan required for managed care plans--Annual update--Contents--Exemptions for discounted fee-for-service networks.The health carrier shall file with the director, in a manner and form defined by rules promulgated pursuant to chapter 1-26 by the director, an access plan meeting the requirements of this chapter, for each of the managed care plans that the carrier offers in this state. The carrier shall prepare an access plan prior to offering a new managed care plan, and shall annually update an existing access plan. The access plan shall describe or contain at least the following:(1)The health carrier's network;(2)The health carrier's procedures for making referrals within and outside its network;(3)The health carrier's process for monitoring and assuring on an ongoing basis the sufficiency of the network to meet the health care needs of populations that enroll in managed care plans;(4)The health carrier's methods for assessing the health care needs of covered persons and their satisfaction with services;(5)The health carrier's method of informing covered persons of the plan's services and features, including the plan's grievance procedures and its procedures for providing and approving emergency and specialty care;(6)The health carrier's system for ensuring the coordination and continuity of care for covered persons referred to specialty physicians, for covered persons using ancillary services, including social services and other community resources, and for ensuring appropriate discharge planning;(7)The health carrier's process for enabling covered persons to change primary care professionals;(8)The health carrier's proposed plan for providing continuity of care in the event of contract termination between the health carrier and any of its participating providers, or in the event of the health carrier's insolvency or other inability to continue operations. The description shall explain how covered persons will be notified of the contract termination, or the health carrier's insolvency or other cessation of operations, and transferred to other providers in a timely manner; and(9)Any other information required by the director to determine compliance with the provisions of this chapter.The provisions of subdivisions (2), (4), (6), (7), and (8), of this section, and the provisions regarding primary care provider-covered person ratios and hours of operation in 58-17F-5 do not apply to discounted fee-for-service only networks. (SL 2012, ch 239, 1 provides: "The provisions of chapter 219 of the 2011 Session Laws shall be deemed repealed if the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010) is found to be unconstitutional in its entirety by a final decision of a federal court of competent jurisdiction and all appeals exhausted or time for appeals elapsed.") Source: SL 2011, ch 219, 10.
58-17F-11. Requirements for health carrier and providers in managed care plans.Any health carrier offering a managed care plan shall satisfy all the following requirements:(1)The health carrier shall establish a mechanism by which the participating provider will be notified on an ongoing basis of the specific covered health services for which the provider will be responsible, including any limitations or conditions on services;(2)In no event may a participating provider collect or attempt to collect from a covered person any money owed to the provider by the health carrier nor may the provider have any recourse against covered persons for any covered charges in excess of the copayment, coinsurance, or deductible amounts specified in the coverage, including covered persons who have a health savings account;(3)The provisions of this chapter do not require the health carrier, its intermediaries or the provider networks with which they contract, to employ specific providers or types of providers that may meet their selection criteria, or to contract with or retain more providers or types of providers than are necessary to maintain an adequate network;(4)The health carrier shall notify participating providers of the providers' responsibilities with respect to the health carrier's applicable administrative policies and programs, including payment terms, utilization review, quality assessment, and improvement programs, grievance procedures, data reporting requirements, confidentiality requirements, and any applicable federal or state programs;(5)The health carrier may not prohibit or penalize a participating provider from discussing treatment options with covered persons irrespective of the health carrier's position on the treatment options, from advocating on behalf of covered persons within the utilization review or grievance processes established by the carrier or a person contracting with the carrier or from, in good faith, reporting to state or federal authorities any act or practice by the health carrier that jeopardizes patient health or welfare;(6)The health carrier shall contractually require a provider to make health records available to the carrier upon request but only those health records necessary to process claims, perform necessary quality assurance or quality improvement programs, or to comply with any lawful request for information from appropriate state authorities. Any person that is provided records pursuant to this section shall maintain the confidentiality of such records and may not make such records available to any other person who is not legally entitled to the records;(7)The health carrier and participating provider shall provide at least sixty days written notice to each other before terminating the contract without cause. If a provider is terminated without cause or chooses to leave the network, upon request by the provider or the covered person and upon agreement by the provider to follow all applicable network requirements, the carrier shall permit the covered person to continue an ongoing course of treatment for ninety days following the effective date of contract termination. If a covered person that has entered a second trimester of pregnancy at the time of contract termination as specified in this section, the continuation of network coverage through that provider shall extend to the provision of postpartum care directly related to the delivery;(8)The health carrier shall notify the participating providers of their obligations, if any, to collect applicable coinsurance, copayments, or deductibles from covered persons pursuant to the evidence of coverage, or of the providers' obligations, if any, to notify covered persons of their personal financial obligations for noncovered services; and (9)The health carrier shall establish a mechanism by which the participating providers may determine in a timely manner whether or not a person is covered by the carrier. (SL 2012, ch 239, 1 provides: "The provisions of chapter 219 of the 2011 Session Laws shall be deemed repealed if the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010) is found to be unconstitutional in its entirety by a final decision of a federal court of competent jurisdiction and all appeals exhausted or time for appeals elapsed.") Source: SL 2011, ch 219, 11.
58-17F-12. Provisions governing contractual arrangements between health carriers and intermediaries.In any contractual arrangement between a health carrier and an intermediary, the following shall apply:(1)The health carrier's ultimate statutory responsibility to monitor the offering of covered benefits to covered persons shall be maintained whether or not any functions or duties are contractually delegated or assigned to the intermediary;(2)The health carrier may approve or disapprove participation status of a subcontracted provider in its own or a contracted network for the purpose of delivering covered benefits to the carrier's covered persons;(3)The health carrier shall maintain copies of all intermediary health care subcontracts at its principal place of business in the state, or ensure that it has access to all intermediary subcontracts, including the right to make copies to facilitate regulatory review, upon twenty days prior written notice from the health carrier;(4)If applicable, an intermediary shall transmit utilization documentation and claims paid documentation to the health carrier. The carrier shall monitor the timeliness and appropriateness of payments made to providers and health care services received by covered persons;(5)An intermediary shall maintain the books, records, financial information, and documentation of services provided to covered persons and preserve them for examination pursuant to chapter 58-3;(6)An intermediary shall allow the director access to the intermediary's books, records, financial information, and any documentation of services provided to covered persons, as necessary to determine compliance with this chapter; and(7)The health carrier may, in the event of the intermediary's insolvency, require the assignment to the health carrier of the provisions of a provider's contract addressing the provider's obligation to furnish covered services. (SL 2012, ch 239, 1 provides: "The provisions of chapter 219 of the 2011 Session Laws shall be deemed repealed if the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010) is found to be unconstitutional in its entirety by a final decision of a federal court of competent jurisdiction and all appeals exhausted or time for appeals elapsed.") Source: SL 2011, ch 219, 12.
58-17F-13. Sample contract forms to be filed with director--Material changes to be submitted--Certain changes not material--Director's inaction within certain time deemed approval--Contract copies to be provided upon request.Any health carrier shall file with the director sample contract forms proposed for use with its participating providers and intermediaries. Any health carrier shall submit material changes to a sample contract that would affect a provision required by this chapter, or any rules promulgated pursuant to this chapter, to the director for approval thirty days prior to use. Changes in provider payment rates, coinsurance, copayments, or deductibles, or other plan benefit modifications are not considered material changes for the purpose of this section. If the director takes no action within sixty days after submission of a material change to a contract by a health carrier, the change is deemed approved. The health carrier shall maintain provider and intermediary contracts and provide copies to the division or department upon request. (SL 2012, ch 239, 1 provides: "The provisions of chapter 219 of the 2011 Session Laws shall be deemed repealed if the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010) is found to be unconstitutional in its entirety by a final decision of a federal court of competent jurisdiction and all appeals exhausted or time for appeals elapsed.") Source: SL 2011, ch 219, 13.
58-17F-14. Contract does not relieve health carrier of liability.The execution of a contract by a health carrier does not relieve the health carrier of its liability to any person with whom it has contracted for the provision of services, nor of its responsibility for compliance with the law or applicable regulations. Any contract shall be in writing and subject to review by the director, if requested. (SL 2012, ch 239, 1 provides: "The provisions of chapter 219 of the 2011 Session Laws shall be deemed repealed if the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010) is found to be unconstitutional in its entirety by a final decision of a federal court of competent jurisdiction and all appeals exhausted or time for appeals elapsed.") Source: SL 2011, ch 219, 14.
58-17F-15. Remedies available to director against health carrier found not in compliance.In addition to any other remedies permitted by law, if the director determines that a health carrier has not contracted with enough participating providers to assure that covered persons have accessible health care services in a geographic area, that a health carrier's access plan does not assure reasonable access to covered benefits, that a health carrier has entered into a contract that does not comply with this chapter, or that a health carrier has not complied with a provision of this chapter, the director may institute a corrective action that shall be followed by the health carrier or may use any of the director's other enforcement powers to obtain the health carrier's compliance with this chapter.A covered person shall have access to emergency services twenty-four hours a day, seven days a week to treat emergency medical conditions that require immediate medical attention. (SL 2012, ch 239, 1 provides: "The provisions of chapter 219 of the 2011 Session Laws shall be deemed repealed if the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010) is found to be unconstitutional in its entirety by a final decision of a federal court of competent jurisdiction and all appeals exhausted or time for appeals elapsed.") Source: SL 2011, ch 219, 15.
58-17F-16. Managed care contractor to register with director.Each managed care contractor, as defined in 58-17F-1, shall register with the director prior to engaging in any managed care business in this state. The registration shall be in a format prescribed by the director. In prescribing the form or in carrying out other functions required by 58-17F-16 to 58-17F-20, inclusive, the director shall consult with the secretary if applicable. The director or the secretary may require that the following information be submitted:(1)Information relating to its actual or anticipated activities in this state;(2)The status of any accreditation designation it holds or has sought;(3)Information pertaining to its place of business, officers, and directors;(4)Qualifications of review staff; and(5)Any other information reasonable and necessary to monitor its activities in this state. (SL 2012, ch 239, 1 provides: "The provisions of chapter 219 of the 2011 Session Laws shall be deemed repealed if the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010) is found to be unconstitutional in its entirety by a final decision of a federal court of competent jurisdiction and all appeals exhausted or time for appeals elapsed.") Source: SL 2011, ch 219, 16.
58-17F-17. Filing changes in registration information.Any managed care contractor which has previously registered in this state shall, on or before July first of each year, file with the Division of Insurance any changes to the initial or subsequent annual registration for the managed care contractor. (SL 2012, ch 239, 1 provides: "The provisions of chapter 219 of the 2011 Session Laws shall be deemed repealed if the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010) is found to be unconstitutional in its entirety by a final decision of a federal court of competent jurisdiction and all appeals exhausted or time for appeals elapsed.") Source: SL 2011, ch 219, 17.
58-17F-18. Request for information from managed care contractor.The director or the secretary may request information from any managed care contractor at any time pertaining to its activities in this state. The managed care contractor shall respond to all requests for information within twenty days. (SL 2012, ch 239, 1 provides: "The provisions of chapter 219 of the 2011 Session Laws shall be deemed repealed if the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010) is found to be unconstitutional in its entirety by a final decision of a federal court of competent jurisdiction and all appeals exhausted or time for appeals elapsed.") Source: SL 2011, ch 219, 18.
58-17F-19. Activities of nonregistered managed care contractor prohibited.No managed care contractor may engage in managed care activities in this state unless the managed care contractor is properly registered. The director may issue a cease and desist order against any managed care contractor which fails to comply with the requirements of 58-17F-16 to 58-17F-20, inclusive, prohibiting the managed care contractor from engaging in managed care activities in this state. (SL 2012, ch 239, 1 provides: "The provisions of chapter 219 of the 2011 Session Laws shall be deemed repealed if the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010) is found to be unconstitutional in its entirety by a final decision of a federal court of competent jurisdiction and all appeals exhausted or time for appeals elapsed.") Source: SL 2011, ch 219, 19.
58-17F-2. Health benefit plan defined. For the purposes of this chapter, the term, health benefit plan, means a policy, contract, certificate, or agreement entered into, offered, or issued by a health carrier to provide, deliver, arrange for, pay for, or reimburse any of the costs of health care services. The term includes short-term and catastrophic health insurance policies, and a policy that pays on a cost-incurred basis, except as otherwise specifically exempted in this definition.The term does not include coverage only for accident, or disability income insurance, or any combination thereof; coverage issued as a supplement to liability insurance; liability insurance, including general liability insurance and automobile liability insurance; workers' compensation or similar insurance; automobile medical payment insurance; credit-only insurance; coverage for on-site medical clinics; and other similar insurance coverage, specified in federal regulations issued pursuant to Public Law No. 104-191, as amended to January 1, 2011, under which benefits for medical care are secondary or incidental to other insurance benefits.The term does not include the following benefits if they are provided under a separate policy, certificate, or contract of insurance or are otherwise not an integral part of the plan: limited scope dental or vision benefits; benefits for long-term care, nursing home care, home health care, community-based care, or any combination thereof; or other similar, limited benefits specified in federal regulations issued pursuant to Public Law No. 104-191, as amended to January 1, 2011.The term does not include the following benefits if the benefits are provided under a separate policy, certificate, or contract of insurance, there is no coordination between the provision of the benefits and any exclusion of benefits under any group health plan maintained by the same plan sponsor, and the benefits are paid with respect to an event without regard to whether benefits are provided with respect to such an event under any group health plan maintained by the same plan sponsor: coverage only for a specified disease or illness; or hospital indemnity or other fixed indemnity insurance.The term does not include the following if offered as a separate policy, certificate, or contract of insurance: medicare supplemental health insurance as defined under Section 1882(g)(1) of the Social Security Act, as amended to January 1, 2011; coverage supplemental to the coverage provided under Chapter 55 of Title 10, United States Code (Civilian Health and Medical Program of the Uniformed Services (CHAMPUS)), as amended to January 1, 2011; or similar supplemental coverage provided to coverage under a group health plan. (SL 2012, ch 239, 1 provides: "The provisions of chapter 219 of the 2011 Session Laws shall be deemed repealed if the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010) is found to be unconstitutional in its entirety by a final decision of a federal court of competent jurisdiction and all appeals exhausted or time for appeals elapsed.") Source: SL 2011, ch 219, 89; SL 2021, ch 210,  12.
58-17F-20. Registration fee for managed care contractor.The director may require the payment of a fee in conjunction with the initial or annual registration of a managed care contractor not to exceed two hundred fifty dollars per registration. The fee shall be established by rules promulgated pursuant to chapter 1-26. (SL 2012, ch 239, 1 provides: "The provisions of chapter 219 of the 2011 Session Laws shall be deemed repealed if the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010) is found to be unconstitutional in its entirety by a final decision of a federal court of competent jurisdiction and all appeals exhausted or time for appeals elapsed.") Source: SL 2011, ch 219, 20.
58-17F-21. Promulgation of rules.The director may, after consultation with the secretary, promulgate, pursuant to chapter 1-26, reasonable rules to protect the public in its purchase of network health insurance products and to achieve the goals of this chapter, by ensuring adequate networks and by assuring quality of health care to the public that purchases network products. The rules may include:(1)Definition of terms;(2)Provider/covered person ratios;(3)Geographic access requirements;(4)Accessibility of care;(5)Contents of reports and filings;(6)Notification requirements;(7)Selection criteria; and(8)Record keeping. (SL 2012, ch 239, 1 provides: "The provisions of chapter 219 of the 2011 Session Laws shall be deemed repealed if the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010) is found to be unconstitutional in its entirety by a final decision of a federal court of competent jurisdiction and all appeals exhausted or time for appeals elapsed.") Source: SL 2011, ch 219, 21.
58-17F-3. Medical director required for managed care plans.Any managed care plan shall provide for the appointment of a medical director who has an unrestricted license to practice medicine. However, a managed care plan that specializes in a specific healing art shall provide for the appointment of a director who has an unrestricted license to practice in that healing art. The director is responsible for oversight of treatment policies, protocols, quality assurance activities, and utilization management decisions of the managed care plan. (SL 2012, ch 239, 1 provides: "The provisions of chapter 219 of the 2011 Session Laws shall be deemed repealed if the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010) is found to be unconstitutional in its entirety by a final decision of a federal court of competent jurisdiction and all appeals exhausted or time for appeals elapsed.") Source: SL 2011, ch 219, 3.
58-17F-4. Health carrier to provide written information to prospective enrollees--Specific information required.Any health carrier shall provide to any prospective enrollee written information describing the terms and conditions of the plan. If the plan is described orally, easily understood, truthful, objective terms shall be used. The written information need not be provided to any prospective enrollee who makes inquiries of a general nature directly to a carrier. In the solicitation of group coverage to an employer, a carrier is not required to provide the written information required by this section to individual employees or their dependents and if no solicitation is made directly to the employees or dependents and if no request to provide the written information to the employees or dependents is made by the employer. All written plan descriptions shall be readable, easily understood, truthful, and in an objective format. The format shall be standardized among each plan that a health carrier offers so that comparison of the attributes of the plans is facilitated. The following specific information shall be communicated:(1)Coverage provisions, benefits, and any exclusions by category of service, provider, and if applicable, by specific service, including prescription drugs and drugs administered in a physician office or clinic;(2)Any and all authorization or other review requirements, including preauthorization review, and any procedures that may lead the patient to be denied coverage for or not be provided a particular service;(3)The existence of any financial arrangements or contractual provisions with review companies or providers of health care services that would directly or indirectly limit the services offered, restrict referral, or treatment options;(4)Explanation of how plan limitations impact enrollees, including information on enrollee financial responsibility for payment of coinsurance or other non-covered or out-of-plan services;(5)A description of the accessibility and availability of services and an easily accessible online list of providers and facilities, including a list of providers participating in the managed care network and of the providers in the network who are accepting new patients, the addresses of primary care physicians and participating hospitals, and the specialty of each provider in the network. The list of providers and facilities must be updated at least once every six months; (6)A description of any drug formulary provisions in the plan and the process for obtaining a copy of the current formulary upon request and the method by which an enrollee or prospective enrollee may determine whether a specific drug is available on the current formulary. There shall be a process for requesting an exception to the formulary and instructions as to how to request an exception to the formulary and a description of an easily accessible method to obtain a prior authorization or step edit requirement for each specific drug included on the formulary; and(7)The description of the drug formularies in subdivision (6) shall be promptly updated with any adverse change.The provisions of this section do not apply to plans that are not actively marketed by a carrier. Source: SL 2011, ch 219, 4; SL 2015, ch 251, 1, eff. Jan. 1, 2016.
58-17F-5. Health carrier to maintain provider network sufficient to assure services without unreasonable delay--Emergency services--Determination of sufficiency.A health carrier providing a managed care plan shall maintain a network that is sufficient in numbers and types of providers to assure that all services to covered persons will be accessible without unreasonable delay. In the case of emergency services, covered persons shall have access twenty-four hours a day, seven days a week. Sufficiency shall be determined in accordance with the requirements of this section, and may be established by reference to any reasonable criteria used by the carrier, including: provider-covered person ratios by specialty; primary care provider-covered person ratios; geographic accessibility; waiting times for appointments with participating providers; hours of operation; and the volume of technological and specialty services available to serve the needs of covered persons requiring technologically advanced or specialty care. (SL 2012, ch 239, 1 provides: "The provisions of chapter 219 of the 2011 Session Laws shall be deemed repealed if the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010) is found to be unconstitutional in its entirety by a final decision of a federal court of competent jurisdiction and all appeals exhausted or time for appeals elapsed.") Source: SL 2011, ch 219, 5.
58-17F-6. Where provider network is insufficient, covered benefit to be made available at no greater cost.In any case where the health carrier has an insufficient number or type of participating provider to provide a covered benefit, the health carrier shall ensure that the covered person obtains the covered benefit at no greater cost to the covered person than if the benefit were obtained from participating providers, or shall make other arrangements acceptable to the director. (SL 2012, ch 239, 1 provides: "The provisions of chapter 219 of the 2011 Session Laws shall be deemed repealed if the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010) is found to be unconstitutional in its entirety by a final decision of a federal court of competent jurisdiction and all appeals exhausted or time for appeals elapsed.") Source: SL 2011, ch 219, 6.
58-17F-7. Health carrier to ensure provider proximity to covered persons.The health carrier shall establish and maintain adequate arrangements to ensure reasonable proximity of participating providers to the business or personal residence of covered persons. (SL 2012, ch 239, 1 provides: "The provisions of chapter 219 of the 2011 Session Laws shall be deemed repealed if the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010) is found to be unconstitutional in its entirety by a final decision of a federal court of competent jurisdiction and all appeals exhausted or time for appeals elapsed.") Source: SL 2011, ch 219, 7.
58-17F-8. Health carrier to monitor provider ability, capacity, and authority--Financial capability to be monitored in capitated plans.The health carrier shall monitor, on an ongoing basis, the ability, clinical capacity, and legal authority of its providers to furnish all contracted benefits to covered persons. In the case of capitated plans, the health carrier shall also monitor the financial capability of the provider. (SL 2012, ch 239, 1 provides: "The provisions of chapter 219 of the 2011 Session Laws shall be deemed repealed if the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010) is found to be unconstitutional in its entirety by a final decision of a federal court of competent jurisdiction and all appeals exhausted or time for appeals elapsed.") Source: SL 2011, ch 219, 8.
58-17F-9. Factors to consider in determining network adequacy.In determining whether a health carrier has complied with any network adequacy provision of this chapter, the director shall give due consideration to the relative availability of healthcare providers in the service area and to the willingness of providers to join a network. (SL 2012, ch 239, 1 provides: "The provisions of chapter 219 of the 2011 Session Laws shall be deemed repealed if the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010) is found to be unconstitutional in its entirety by a final decision of a federal court of competent jurisdiction and all appeals exhausted or time for appeals elapsed.") Source: SL 2011, ch 219, 9.
58-17G-1. Definitions.Terms used in this chapter mean:(1)"Closed plan," a managed care plan or health carrier that requires covered persons to use participating providers under the terms of the managed care plan or health carrier and does not provide any benefits for out-of-network services except for emergency services;(2)"Consumer," someone in the general public who may or may not be a covered person or a purchaser of health care, including employers;(3)"Covered benefits" or "benefits," those health care services to which a covered person is entitled under the terms of a health benefit plan;(4)"Covered person," a policyholder, subscriber, enrollee, or other individual participating in a health benefit plan;(5)"Director," the director of the Division of Insurance;(6)"Discounted fee for service," a contractual arrangement between a health carrier and a provider or network of providers under which the provider is compensated in a discounted fashion based upon each service performed and under which there is no contractual responsibility on the part of the provider to manage care, to serve as a gatekeeper or primary care provider, or to provide or assure quality of care. A contract between a provider or network of providers and a health maintenance organization is not a discounted fee for service arrangement;(7)"Facility," an institution providing health care services or a health care setting, including hospitals and other licensed inpatient centers, ambulatory surgical or treatment centers, skilled nursing centers, residential treatment centers, diagnostic, laboratory, and imaging centers, and rehabilitation, and other therapeutic health settings;(8)"Health care professional," a physician or other health care practitioner licensed, accredited, or certified to perform specified health services consistent with state law;(9)"Health care provider" or "provider," a health care professional or a facility;(10)"Health care services," services for the diagnosis, prevention, treatment, cure, or relief of a health condition, illness, injury, or disease;(11)"Health carrier," an entity subject to the insurance laws and regulations of this state, or subject to the jurisdiction of the director, that contracts or offers to contract, or enters into an agreement to provide, deliver, arrange for, pay for, or reimburse any of the costs of health care services, including a sickness and accident insurance company, a health maintenance organization, a nonprofit hospital and health service corporation, or any other entity providing a plan of health insurance, health benefits, or health services;(12)"Health indemnity plan," a health benefit plan that is not a managed care plan;(13)"Managed care contractor," a person who establishes, operates, or maintains a network of participating providers; or contracts with an insurance company, a hospital or medical service plan, an employer, an employee organization, or any other entity providing coverage for health care services to operate a managed care plan or health carrier;(14)"Managed care entity," a licensed insurance company, hospital or medical service plan, health maintenance organization, or an employer or employee organization, that operates a managed care plan or a managed care contractor. The term does not include a licensed insurance company unless it contracts with other entities to provide a network of participating providers;(15)"Managed care plan," a plan operated by a managed care entity that provides for the financing or delivery of health care services, or both, to persons enrolled in the plan through any of the following:(a)Arrangements with selected providers to furnish health care services;(b)Explicit standards for the selection of participating providers; or(c)Financial incentives for persons enrolled in the plan to use the participating providers and procedures provided for by the plan; (16)"Open plan," a managed care plan or health carrier other than a closed plan that provides incentives, including financial incentives, for covered persons to use participating providers under the terms of the managed care plan or health carrier;(17)"Participating provider," a provider who, under a contract with the health carrier or with its contractor or subcontractor, has agreed to provide health care services to covered persons with an expectation of receiving payment, other than coinsurance, copayments, or deductibles, directly or indirectly, from the health carrier;(18)"Quality assessment," the measurement and evaluation of the quality and outcomes of medical care provided to individuals, groups, or populations;(19)"Quality improvement," the effort to improve the processes and outcomes related to the provision of care within the health plan; and(20)"Secretary," the secretary of the Department of Health. (SL 2012, ch 239, 1 provides: "The provisions of chapter 219 of the 2011 Session Laws shall be deemed repealed if the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010) is found to be unconstitutional in its entirety by a final decision of a federal court of competent jurisdiction and all appeals exhausted or time for appeals elapsed.") Source: SL 2011, ch 219, 22.
58-17G-2. Health benefit plan defined. For the purposes of this chapter, the term, health benefit plan, means a policy, contract, certificate, or agreement entered into, offered, or issued by a health carrier to provide, deliver, arrange for, pay for, or reimburse any of the costs of health care services. The term includes short-term and catastrophic health insurance policies, and a policy that pays on a cost-incurred basis, except as otherwise specifically exempted in this definition.The term does not include coverage only for accident, or disability income insurance, or any combination thereof; coverage issued as a supplement to liability insurance; liability insurance, including general liability insurance and automobile liability insurance; workers' compensation or similar insurance; automobile medical payment insurance; credit-only insurance; coverage for on-site medical clinics; and other similar insurance coverage, specified in federal regulations issued pursuant to Public Law No. 104-191, as amended to January 1, 2011, under which benefits for medical care are secondary or incidental to other insurance benefits.The term does not include the following benefits if they are provided under a separate policy, certificate, or contract of insurance or are otherwise not an integral part of the plan: limited scope dental or vision benefits; benefits for long-term care, nursing home care, home health care, community-based care, or any combination thereof; or other similar, limited benefits specified in federal regulations issued pursuant to Public Law No. 104-191, as amended to January 1, 2011.The term does not include the following benefits if the benefits are provided under a separate policy, certificate, or contract of insurance, there is no coordination between the provision of the benefits and any exclusion of benefits under any group health plan maintained by the same plan sponsor, and the benefits are paid with respect to an event without regard to whether benefits are provided with respect to such an event under any group health plan maintained by the same plan sponsor: coverage only for a specified disease or illness; or hospital indemnity or other fixed indemnity insurance.The term does not include the following if offered as a separate policy, certificate, or contract of insurance: medicare supplemental health insurance as defined under Section 1882(g)(1) of the Social Security Act, as amended to January 1, 2011; coverage supplemental to the coverage provided under Chapter 55 of Title 10, United States Code (Civilian Health and Medical Program of the Uniformed Services (CHAMPUS)), as amended to January 1, 2011; or similar supplemental coverage provided to coverage under a group health plan. (SL 2012, ch 239, 1 provides: "The provisions of chapter 219 of the 2011 Session Laws shall be deemed repealed if the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010) is found to be unconstitutional in its entirety by a final decision of a federal court of competent jurisdiction and all appeals exhausted or time for appeals elapsed.") Source: SL 2011, ch 219, 90; SL 2021, ch 210,  13.
58-17G-3. Health carrier to develop and maintain systems to measure quality of services--System requirements--Description of quality assessment program to be filed with director.Any health carrier that provides managed care plans shall develop and maintain the infrastructure and disclosure systems necessary to measure the quality of health care services provided to covered persons on a regular basis and appropriate to the types of plans offered by the health carrier. A health carrier shall:(1)Utilize a system designed to assess the quality of health care provided to covered persons and appropriate to the types of plans offered by the health carrier. The system shall include systematic collection, analysis, and reporting of relevant data in accordance with statutory and regulatory requirements. The level of quality assessment activities undertaken by a health plan may vary based on the plan's structure with the least amount of quality assessment activities required being those plans which are open and the provider network is simply a discounted fee for service preferred provider organization; and(2)File a written description of the quality assessment program with the director in the prescribed general format, which shall include a signed certification by a corporate officer of the health carrier that the filing meets the requirements of this chapter. (SL 2012, ch 239, 1 provides: "The provisions of chapter 219 of the 2011 Session Laws shall be deemed repealed if the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010) is found to be unconstitutional in its entirety by a final decision of a federal court of competent jurisdiction and all appeals exhausted or time for appeals elapsed.") Source: SL 2011, ch 219, 23.
58-17G-4. Health carrier issuing closed plan to develop quality improvement activities--Minimum requirements of quality improvement activities.Any health carrier that issues a closed plan, or a combination plan having a closed component, shall, in addition to complying with the requirements of 58-17G-3, develop and maintain the internal structures and activities necessary to improve the quality of care being provided. Quality improvement activities for a health carrier subject to the requirements of this section shall involve:(1)Developing a written quality improvement plan designed to analyze both the processes and outcomes of the health care delivered to covered persons;(2)Establishing an internal system to implement the quality improvement plan and to specifically identify opportunities to improve care and using the findings of the system to improve the health care delivered to covered persons; and(3)Assuring that participating providers have the opportunity to participate in developing, implementing, and evaluating the quality improvement system.The health carrier shall provide a copy of the quality improvement plan to the director or secretary, if requested. (SL 2012, ch 239, 1 provides: "The provisions of chapter 219 of the 2011 Session Laws shall be deemed repealed if the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010) is found to be unconstitutional in its entirety by a final decision of a federal court of competent jurisdiction and all appeals exhausted or time for appeals elapsed.") Source: SL 2011, ch 219, 24.
58-17G-5. Carrier may be deemed in compliance if private accrediting body meets requirements.If the director and secretary find that the requirements of any private accrediting body meet the requirements of network adequacy, quality assurance, or quality improvement as set forth in this chapter, the carrier may, at the discretion of the director and secretary, be deemed to have met the applicable requirements. (SL 2012, ch 239, 1 provides: "The provisions of chapter 219 of the 2011 Session Laws shall be deemed repealed if the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010) is found to be unconstitutional in its entirety by a final decision of a federal court of competent jurisdiction and all appeals exhausted or time for appeals elapsed.") Source: SL 2011, ch 219, 25.
58-17G-6. Division to monitor complaints regarding managed care policies.The Division of Insurance shall separately monitor complaints regarding managed care policies. (SL 2012, ch 239, 1 provides: "The provisions of chapter 219 of the 2011 Session Laws shall be deemed repealed if the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010) is found to be unconstitutional in its entirety by a final decision of a federal court of competent jurisdiction and all appeals exhausted or time for appeals elapsed.") Source: SL 2011, ch 219, 26.
58-17G-7. Promulgation of rules.The director may, after consultation with the secretary, promulgate, pursuant to chapter 1-26, reasonable rules to protect the public in its purchase of network health insurance products and to achieve the goals of this chapter, by assuring quality of health care to the public that purchases network products. The rules may include:(1)Definition of terms;(2)Contents of reports and filings;(3)Record keeping;(4)Setting of quality criteria based upon type of network; and(5)Quality assurance plans or quality improvement plans or both. (SL 2012, ch 239, 1 provides: "The provisions of chapter 219 of the 2011 Session Laws shall be deemed repealed if the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010) is found to be unconstitutional in its entirety by a final decision of a federal court of competent jurisdiction and all appeals exhausted or time for appeals elapsed.") Source: SL 2011, ch 219, 27.
58-17H-1. Definitions.Terms used in this chapter mean:(1)"Adverse determination," any of the following:(a)A determination by a health carrier or the carrier's designee utilization review organization that, based upon the information provided, a request by a covered person for a benefit under the health carrier's health benefit plan upon application of any utilization review technique does not meet the health carrier's requirements for medical necessity, appropriateness, health care setting, level of care or effectiveness or is determined to be experimental or investigational and the requested benefit is therefore denied, reduced, or terminated or payment is not provided or made, in whole or in part, for the benefit;(b)The denial, reduction, termination, or failure to provide or make payment in whole or in part, for a benefit based on a determination by a health carrier or the carrier's designee utilization review organization of a covered person's eligibility to participate in the health carrier's health benefit plan;(c)Any prospective review or retrospective review determination that denies, reduces, terminates, or fails to provide or make payment, in whole or in part, for a benefit; or(d)A rescission of coverage determination;(2)"Ambulatory review," utilization review of health care services performed or provided in an outpatient setting;(3)"Authorized representative," a person to whom a covered person has given express written consent to represent the covered person for purposes of this chapter, a person authorized by law to provide substituted consent for a covered person, a family member of the covered person or the covered person's treating health care professional if the covered person is unable to provide consent, or a health care professional if the covered person's health benefit plan requires that a request for a benefit under the plan be initiated by the health care professional. For any urgent care request, the term includes a health care professional with knowledge of the covered person's medical condition;(4)"Case management," a coordinated set of activities conducted for individual patient management of serious, complicated, protracted, or other health conditions;(5)"Certification," a determination by a health carrier or the carrier's designee utilization review organization that a request for a benefit under the health carrier's health benefit plan has been reviewed and, based on the information provided, satisfies the health carrier's requirements for medical necessity, appropriateness, health care setting, level of care, and effectiveness;(6)"Clinical practice guidelines," a systematically developed statement to assist decision making by health care professionals and patient decisions about appropriate health care for specific clinical circumstances and conditions;(7)"Clinical peer," a physician or other health care professional who holds a nonrestricted license in a state of the United States and in the same or similar specialty as typically manages the medical condition, procedure, or treatment under review;(8)"Clinical review criteria," the written screening procedures, decision abstracts, clinical protocols, and practice guidelines used by the health carrier to determine the medical necessity and appropriateness of health care services;(9)"Concurrent review," utilization review conducted during a patient's hospital stay or course of treatment in a facility or other inpatient or outpatient health care setting;(10)"Covered benefits" or "benefits," those health care services to which a covered person is entitled under the terms of a health benefit plan;(11)"Covered person," a policyholder, subscriber, enrollee, or other individual participating in a health benefit plan;(12)"Director," the director of the Division of Insurance;(13)"Discharge planning," the formal process for determining, prior to discharge from a facility, the coordination and management of the care that a patient receives following discharge from a facility;(14)"Emergency medical condition," a medical condition manifesting itself by acute symptoms of sufficient severity, including severe pain, such that a prudent layperson, who possesses an average knowledge of health and medicine, could reasonably expect that the absence of immediate medical attention, would result in serious impairment to bodily functions or serious dysfunction of a bodily organ or part, or would place the person's health or, with respect to a pregnant woman, the health of the woman or her unborn child, in serious jeopardy;(15)"Emergency services," with respect to an emergency medical condition:(a)A medical screening examination that is within the capability of the emergency department of a hospital, including ancillary services routinely available to the emergency department to evaluate such emergency condition; and(b)Such further medical examination and treatment, to the extent they are within the capability of the staff and facilities at a hospital to stabilize a patient;(16)"Facility," an institution providing health care services or a health care setting, including hospitals and other licensed inpatient centers, ambulatory surgical or treatment centers, skilled nursing centers, residential treatment centers, diagnostic, laboratory, and imaging centers, and rehabilitation, and other therapeutic health settings;(17)"Health care professional," a physician or other health care practitioner licensed, accredited, or certified to perform specified health services consistent with state law;(18)"Health care provider" or "provider," a health care professional or a facility;(19)"Health care services," services for the diagnosis, prevention, treatment, cure, or relief of a health condition, illness, injury, or disease;(20)"Health carrier," an entity subject to the insurance laws and regulations of this state, or subject to the jurisdiction of the director, that contracts or offers to contract, or enters into an agreement to provide, deliver, arrange for, pay for, or reimburse any of the costs of health care services, including a sickness and accident insurance company, a health maintenance organization, a nonprofit hospital and health service corporation, or any other entity providing a plan of health insurance, health benefits, or health services;(21)"Managed care contractor," a person who establishes, operates, or maintains a network of participating providers; or contracts with an insurance company, a hospital or medical service plan, an employer, an employee organization, or any other entity providing coverage for health care services to operate a managed care plan or health carrier;(22)"Managed care entity," a licensed insurance company, hospital or medical service plan, health maintenance organization, or an employer or employee organization, that operates a managed care plan or a managed care contractor. The term does not include a licensed insurance company unless it contracts with other entities to provide a network of participating providers;(23)"Managed care plan," a plan operated by a managed care entity that provides for the financing or delivery of health care services, or both, to persons enrolled in the plan through any of the following:(a)Arrangements with selected providers to furnish health care services;(b)Explicit standards for the selection of participating providers; or(c)Financial incentives for persons enrolled in the plan to use the participating providers and procedures provided for by the plan;(24)"Network," the group of participating providers providing services to a health carrier;(25)"Participating provider," a provider who, under a contract with the health carrier or with its contractor or subcontractor, has agreed to provide health care services to covered persons with an expectation of receiving payment, other than coinsurance, copayments, or deductibles, directly or indirectly, from the health carrier;(26)"Pharmaceutical sample," a unit of a prescription drug that is not intended to be sold and is intended to promote the sale of the drug;(27)"Prospective review," utilization review conducted prior to an admission or the provision of a health care service or a course of treatment in accordance with a health carrier's requirement that the health care service or course of treatment, in whole or in part, be approved prior to its provision;(28)"Rescission," a cancellation or discontinuance of coverage under a health benefit plan that has a retroactive effect. The term does not include a cancellation or discontinuance of coverage under a health benefit plan if:(a)The cancellation or discontinuance of coverage has only a prospective effect; or(b)The cancellation or discontinuance of coverage is effective retroactively to the extent it is attributable to a failure to timely pay required premiums or contributions towards the cost of coverage;(29)"Retrospective review," any review of a request for a benefit that is not a prospective review request, which does not include the review of a claim that is limited to veracity of documentation, or accuracy of coding, or adjudication for payment;(30)"Second opinion," an opportunity or requirement to obtain a clinical evaluation by a provider other than the one originally making a recommendation for a proposed health care service to assess the medical necessity and appropriateness of the initial proposed health care service;(31)"Secretary," the secretary of the Department of Health;(32)"Stabilized," with respect to an emergency medical condition, that no material deterioration of the condition is likely, with reasonable medical probability, to result from or occur during the transfer of the individual from a facility or, with respect to a pregnant woman, the woman has delivered, including the placenta;(33)"Utilization review," a set of formal techniques used by a managed care plan or utilization review organization to monitor and evaluate the medical necessity, appropriateness, and efficiency of health care services and procedures including techniques such as ambulatory review, prospective review, second opinion, certification, concurrent review, case management, discharge planning, and retrospective review; (34)"Step therapy override exception," a step therapy protocol should be overridden in favor of coverage of the prescription drug selected by a health care professional within the applicable time frames in 58-17H-55 and in compliance with chapter 58-17H. This determination is based on a review of the covered person's or health care professional's request for an override, along with supporting rationale and documentation;(35)"Step therapy protocol," a protocol or program that establishes a specific sequence in which prescription drugs are covered under a pharmacy or medical benefit by a health carrier, a health benefit plan, or a utilization review organization for a specified medical condition and medically appropriate for a health carrier, a health benefit plan, or utilization review organization, including self-administered drugs and drugs administered by a health care professional; and(36)"Utilization review organization," an entity that conducts utilization review other than a health carrier performing utilization review for its own health benefit plans. Source: SL 2011, ch 219,  28; SL 2020, ch 209,  1.
58-17H-10. Negotiated amounts for in-network providers for a particular emergency service.If a health benefit plan has more than one negotiated amount for in-network providers for a particular emergency service, the amount in subdivision 58-17H-8(1) is the median of these negotiated amounts. (SL 2012, ch 239, 1 provides: "The provisions of chapter 219 of the 2011 Session Laws shall be deemed repealed if the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010) is found to be unconstitutional in its entirety by a final decision of a federal court of competent jurisdiction and all appeals exhausted or time for appeals elapsed.") Source: SL 2011, ch 219, 35.
58-17H-11. General cost-sharing requirements allowed.Any cost-sharing requirement other than a copayment or coinsurance requirement, such as a deductible or out-of-pocket maximum, may be imposed with respect to emergency services provided out-of-network if the cost-sharing requirement generally applies to out-of-network benefits. A deductible may be imposed with respect to out-of-network emergency services only as part of a deductible that generally applies to out-of-network benefits. If an out-of-pocket maximum generally applies to out-of-network benefits, that out-of-network maximum applies to out-of-network emergency services. (SL 2012, ch 239, 1 provides: "The provisions of chapter 219 of the 2011 Session Laws shall be deemed repealed if the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010) is found to be unconstitutional in its entirety by a final decision of a federal court of competent jurisdiction and all appeals exhausted or time for appeals elapsed.") Source: SL 2011, ch 219, 36.
58-17H-12. Access to representative for post-evaluation or post-stabilization services.For immediately required post-evaluation or post-stabilization services, a health carrier shall provide access to a designated representative twenty-four hours a day, seven days a week, to facilitate review, or otherwise provide coverage with no financial penalty to the covered person. (SL 2012, ch 239, 1 provides: "The provisions of chapter 219 of the 2011 Session Laws shall be deemed repealed if the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010) is found to be unconstitutional in its entirety by a final decision of a federal court of competent jurisdiction and all appeals exhausted or time for appeals elapsed.") Source: SL 2011, ch 219, 37.
58-17H-13. Health carrier may be deemed to meet emergency medical coverage requirements if met by private accrediting body.If the director and the secretary find that the requirements of any private accrediting body meet the requirements of coverage of emergency medical services as set forth in 58-17H-4 to 58-17H-12, inclusive, the health carrier may, at the discretion of the director and secretary, be deemed to have met the applicable requirements. (SL 2012, ch 239, 1 provides: "The provisions of chapter 219 of the 2011 Session Laws shall be deemed repealed if the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010) is found to be unconstitutional in its entirety by a final decision of a federal court of competent jurisdiction and all appeals exhausted or time for appeals elapsed.") Source: SL 2011, ch 219, 38.
58-17H-14. Health carrier responsibility for utilization review activities.A health carrier is responsible for monitoring all utilization review activities carried out by, or on behalf of, the health carrier and for ensuring that all requirements of this chapter and applicable rules are met. The health carrier shall also ensure that appropriate personnel have operational responsibility for the conduct of the health carrier's utilization review program. (SL 2012, ch 239, 1 provides: "The provisions of chapter 219 of the 2011 Session Laws shall be deemed repealed if the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010) is found to be unconstitutional in its entirety by a final decision of a federal court of competent jurisdiction and all appeals exhausted or time for appeals elapsed.") Source: SL 2011, ch 219, 39.
58-17H-15. Director to hold health carrier responsible for utilization review performance of contractor.If a health carrier contracts to have a utilization review organization or other entity perform the utilization review functions required by this chapter, or applicable rules, the director shall hold the health carrier responsible for monitoring the activities of the utilization review organization or entity with which the health carrier contracts and for ensuring that the requirements of this chapter, and applicable rules, are met. (SL 2012, ch 239, 1 provides: "The provisions of chapter 219 of the 2011 Session Laws shall be deemed repealed if the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010) is found to be unconstitutional in its entirety by a final decision of a federal court of competent jurisdiction and all appeals exhausted or time for appeals elapsed.") Source: SL 2011, ch 219, 40.
58-17H-16. Written utilization review program required--Contents of program document.A health carrier that requires a request for benefits under the covered person's health plan to be subjected to utilization review shall implement a written utilization review program that describes all review activities, both delegated and nondelegated for the filing of benefit requests, the notification of utilization review and benefit determinations, and the review of adverse determinations in accordance with chapter 58-17I.The program document shall describe the following:(1)Procedures to evaluate the medical necessity, appropriateness, efficacy, or efficiency of health care services;(2)Data sources and clinical review criteria used in decision-making;(3)Mechanisms to ensure consistent application of review criteria and compatible decisions;(4)Data collection processes and analytical methods used in assessing utilization of health care services;(5)Provisions for assuring confidentiality of clinical and proprietary information;(6)The organizational structure that periodically assesses utilization review activities and reports to the health carrier's governing body; and(7)The staff position functionally responsible for day-to-day program management.A health carrier shall prepare an annual summary report in the format specified of its utilization review program activities and file the report, if requested, with the director and the secretary. A health carrier shall maintain records for a minimum of six years of all benefit requests and claims and notices associated with utilization review and benefit determinations made in accordance with 58-17H-27 to 58-17H-32, inclusive, and 58-17H-40 to 58-17H-48, inclusive. The health carrier shall make the records available for examination by covered persons and the director upon request. (SL 2012, ch 239, 1 provides: "The provisions of chapter 219 of the 2011 Session Laws shall be deemed repealed if the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010) is found to be unconstitutional in its entirety by a final decision of a federal court of competent jurisdiction and all appeals exhausted or time for appeals elapsed.") Source: SL 2011, ch 219, 41.
58-17H-17. Utilization review program to use documented clinical review criteria--Criteria to be available to authorized agencies upon request.A utilization review program shall use documented clinical review criteria that are based on sound clinical evidence and are evaluated periodically to assure ongoing efficacy. A health carrier may develop its own clinical review criteria, or it may purchase or license clinical review criteria from qualified vendors. A health carrier shall make available its clinical review criteria upon request to authorized government agencies including the Division of Insurance and the Department of Health. (SL 2012, ch 239, 1 provides: "The provisions of chapter 219 of the 2011 Session Laws shall be deemed repealed if the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010) is found to be unconstitutional in its entirety by a final decision of a federal court of competent jurisdiction and all appeals exhausted or time for appeals elapsed.") Source: SL 2011, ch 219, 42.
58-17H-18. Program to be administered by qualified licensed health care professionals.Qualified licensed health care professionals shall administer the utilization review program and oversee review decisions. Any adverse determination shall be evaluated by an appropriately licensed and clinically qualified health care provider. (SL 2012, ch 239, 1 provides: "The provisions of chapter 219 of the 2011 Session Laws shall be deemed repealed if the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010) is found to be unconstitutional in its entirety by a final decision of a federal court of competent jurisdiction and all appeals exhausted or time for appeals elapsed.") Source: SL 2011, ch 219, 43.
58-17H-19. Determinations to be issued in timely manner--Process to ensure consistency.A health carrier shall issue utilization review and benefit determinations in a timely manner pursuant to the requirements of 58-17H-27 to 58-17H-32, inclusive, and 58-17H-40 to 58-17H-48, inclusive. A health carrier shall have a process to ensure that utilization reviewers apply clinical review criteria in conducting utilization review consistently.If a health carrier fails to strictly adhere to the requirements of 58-17H-27 to 58-17H-32, inclusive, and 58-17H-40 to 58-17H-48, inclusive, with respect to making utilization review and benefit determinations of a benefit request or claim, the covered person shall be deemed to have exhausted the provisions of chapters 58-17G and 58-17H, and may take action regardless of whether the health carrier asserts that the carrier substantially complied with the requirements of 58-17H-27 to 58-17H-32, inclusive, and 58-17H-40 to 58-17H-48, inclusive, as applicable, or that any error it committed was de minimus.Any covered person may file a request for external review in accordance with rules promulgated by the director. In addition to the external review rights a covered person is entitled to pursue any available remedies under state or federal law on the basis that the health carrier failed to provide a reasonable internal claims and appeals process that would yield a decision on the merits of the claim. (SL 2012, ch 239, 1 provides: "The provisions of chapter 219 of the 2011 Session Laws shall be deemed repealed if the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010) is found to be unconstitutional in its entirety by a final decision of a federal court of competent jurisdiction and all appeals exhausted or time for appeals elapsed.") Source: SL 2011, ch 219, 44.
58-17H-2. Health benefit plan defined. For the purposes of this chapter, the term, health benefit plan, means a policy, contract, certificate, or agreement entered into, offered, or issued by a health carrier to provide, deliver, arrange for, pay for, or reimburse any of the costs of health care services. The term includes short-term and catastrophic health insurance policies, and a policy that pays on a cost-incurred basis, except as otherwise specifically exempted in this definition.The term does not include coverage only for accident, or disability income insurance, or any combination thereof; coverage issued as a supplement to liability insurance; liability insurance, including general liability insurance and automobile liability insurance; workers' compensation or similar insurance; automobile medical payment insurance; credit-only insurance; coverage for on-site medical clinics; and other similar insurance coverage, specified in federal regulations issued pursuant to Public Law No. 104-191, as amended to January 1, 2011, under which benefits for medical care are secondary or incidental to other insurance benefits.The term does not include the following benefits if they are provided under a separate policy, certificate, or contract of insurance or are otherwise not an integral part of the plan: limited scope dental or vision benefits; benefits for long-term care, nursing home care, home health care, community-based care, or any combination thereof; or other similar, limited benefits specified in federal regulations issued pursuant to Public Law No. 104-191, as amended to January 1, 2011.The term does not include the following benefits if the benefits are provided under a separate policy, certificate, or contract of insurance, there is no coordination between the provision of the benefits and any exclusion of benefits under any group health plan maintained by the same plan sponsor, and the benefits are paid with respect to an event without regard to whether benefits are provided with respect to such an event under any group health plan maintained by the same plan sponsor: coverage only for a specified disease or illness; or hospital indemnity or other fixed indemnity insurance.The term does not include the following if offered as a separate policy, certificate, or contract of insurance: medicare supplemental health insurance as defined under Section 1882(g)(1) of the Social Security Act, as amended to January 1, 2011; coverage supplemental to the coverage provided under Chapter 55 of Title 10, United States Code (Civilian Health and Medical Program of the Uniformed Services (CHAMPUS)), as amended to January 1, 2011; or similar supplemental coverage provided to coverage under a group health plan. (SL 2012, ch 239, 1 provides: "The provisions of chapter 219 of the 2011 Session Laws shall be deemed repealed if the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010) is found to be unconstitutional in its entirety by a final decision of a federal court of competent jurisdiction and all appeals exhausted or time for appeals elapsed.") Source: SL 2011, ch 219, 91; SL 2021, ch 210,  14.
58-17H-20. Effectiveness and efficiency of program to be routinely reviewed.Any health carrier shall routinely assess the effectiveness and efficiency of its utilization review program. (SL 2012, ch 239, 1 provides: "The provisions of chapter 219 of the 2011 Session Laws shall be deemed repealed if the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010) is found to be unconstitutional in its entirety by a final decision of a federal court of competent jurisdiction and all appeals exhausted or time for appeals elapsed.") Source: SL 2011, ch 219, 45.
58-17H-21. Data systems to support program activities and generate management reports.Any health carrier's data system shall be sufficient to support utilization review program activities and to generate management reports to enable the health carrier to monitor and manage health care services effectively. (SL 2012, ch 239, 1 provides: "The provisions of chapter 219 of the 2011 Session Laws shall be deemed repealed if the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010) is found to be unconstitutional in its entirety by a final decision of a federal court of competent jurisdiction and all appeals exhausted or time for appeals elapsed.") Source: SL 2011, ch 219, 46.
58-17H-22. Health carrier oversight of delegated activities--Requirements.If a health carrier delegates any utilization review activities to a utilization review organization, the health carrier shall maintain adequate oversight, which shall include:(1)A written description of the utilization review organization's activities and responsibilities, including reporting requirements;(2)Evidence of formal approval of the utilization review organization program by the health carrier; and(3)A process by which the health carrier evaluates the performance of the utilization review organization. (SL 2012, ch 239, 1 provides: "The provisions of chapter 219 of the 2011 Session Laws shall be deemed repealed if the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010) is found to be unconstitutional in its entirety by a final decision of a federal court of competent jurisdiction and all appeals exhausted or time for appeals elapsed.") Source: SL 2011, ch 219, 47.
58-17H-23. Utilization review to be coordinated with other medical management activity of health carrier.Each health carrier shall coordinate the utilization review program with other medical management activity conducted by the carrier, such as quality assurance, credentialing, provider contracting data reporting, grievance procedures, processes for assessing member satisfaction, and risk management. (SL 2012, ch 239, 1 provides: "The provisions of chapter 219 of the 2011 Session Laws shall be deemed repealed if the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010) is found to be unconstitutional in its entirety by a final decision of a federal court of competent jurisdiction and all appeals exhausted or time for appeals elapsed.") Source: SL 2011, ch 219, 48.
58-17H-24. Health carrier to provide free access to review staff.Each health carrier shall provide covered persons and participating providers with access to its review staff by a toll-free number or collect call telephone line. (SL 2012, ch 239, 1 provides: "The provisions of chapter 219 of the 2011 Session Laws shall be deemed repealed if the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010) is found to be unconstitutional in its entirety by a final decision of a federal court of competent jurisdiction and all appeals exhausted or time for appeals elapsed.") Source: SL 2011, ch 219, 49.
58-17H-25. Only information necessary for review or determination to be collected.If conducting a utilization review, the health carrier shall collect only the information necessary, including pertinent clinical information, to make the utilization review or benefit determination. (SL 2012, ch 239, 1 provides: "The provisions of chapter 219 of the 2011 Session Laws shall be deemed repealed if the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010) is found to be unconstitutional in its entirety by a final decision of a federal court of competent jurisdiction and all appeals exhausted or time for appeals elapsed.") Source: SL 2011, ch 219, 50.
58-17H-26. Independence and impartiality required for utilization review.In conducting utilization review, the health carrier shall ensure that the review is conducted in a manner to ensure the independence and impartiality of the individuals involved in making the utilization review or benefit determination.In ensuring the independence and impartially of individuals involved in making the utilization review or benefit determination, no health carrier may make decisions regarding hiring, compensation, termination, promotion, or other similar matters based upon the likelihood that the individual will support the denial of benefits. (SL 2012, ch 239, 1 provides: "The provisions of chapter 219 of the 2011 Session Laws shall be deemed repealed if the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010) is found to be unconstitutional in its entirety by a final decision of a federal court of competent jurisdiction and all appeals exhausted or time for appeals elapsed.") Source: SL 2011, ch 219, 51.
58-17H-27. Written procedures required for making determinations--Notification.A health carrier shall maintain written procedures pursuant to this chapter, for making standard utilization review and benefit determinations on requests submitted to the health carrier by covered persons or their authorized representatives for benefits and for notifying covered persons and their authorized representatives of its determinations with respect to these requests within the specified time frames required under this chapter. If a period of time is extended as permitted by this chapter due to a claimant's failure to submit information necessary to decide a prospective, retrospective, or disability claim, the period for making the benefit determination shall be tolled from the date on which the notification of the extension is sent to the claimant until the date on which the claimant responds to the request for additional information. (SL 2012, ch 239, 1 provides: "The provisions of chapter 219 of the 2011 Session Laws shall be deemed repealed if the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010) is found to be unconstitutional in its entirety by a final decision of a federal court of competent jurisdiction and all appeals exhausted or time for appeals elapsed.") Source: SL 2011, ch 219, 52.
58-17H-28. Prospective review determinations--Timing--Notification of requirements--Extension of time.For any prospective review determination, other than allowed by this section, a health carrier shall make the determination and notify the covered person or, if applicable, the covered person's authorized representative of the determination, whether the carrier certifies the provision of the benefit or not, within a reasonable period of time appropriate to the covered person's medical condition, but in no event later than fifteen days after the date the health carrier receives the request. If the determination is an adverse determination, the health carrier shall make the notification of the adverse determination in accordance with 58-17H-32.The time period for making a determination and notifying the covered person or, if applicable, the covered person's authorized representative, of the determination pursuant to this section may be extended once by the health carrier for up to fifteen days, if the health carrier:(1)Determines that an extension is necessary due to matters beyond the health carrier's control; and(2)Notifies the covered person or, if applicable, the covered person's authorized representative, prior to the expiration of the initial fifteen-day time period, of the circumstances requiring the extension of time and the date by which the health carrier expects to make a determination.If the extension is necessary due to the failure of the covered person or the covered person's authorized representative to submit information necessary to reach a determination on the request, the notice of extension shall specifically describe the required information necessary to complete the request and give the covered person or, if applicable, the covered person's authorized representative at least forty-five days from the date of receipt of the notice to provide the specified information.If the health carrier receives a prospective review request from a covered person or the covered person's authorized representative that fails to meet the health carrier's filing procedures, the health carrier shall notify the covered person or, if applicable, the covered person's authorized representative of this failure and provide in the notice information on the proper procedures to be followed for filing a request. This notice shall be provided as soon as possible, but in no event later than five days following the date of the failure. The health carrier may provide the notice orally or, if requested by the covered person or the covered person's authorized representative, in writing. The provisions only apply in a case of failure that is a communication by a covered person or the covered person's authorized representative that is received by a person or organizational unit of the health carrier responsible for handling benefit matters and is a communication that refers to a specific covered person, a specific medical condition or symptom, and a specific health care service, treatment, or provider for which certification is being requested. (SL 2012, ch 239, 1 provides: "The provisions of chapter 219 of the 2011 Session Laws shall be deemed repealed if the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010) is found to be unconstitutional in its entirety by a final decision of a federal court of competent jurisdiction and all appeals exhausted or time for appeals elapsed.") Source: SL 2011, ch 219, 53.
58-17H-29. Concurrent review determinations--Timing--Notification requirements.For concurrent review determinations, if a health carrier has certified an ongoing course of treatment to be provided over a period of time or number of treatments:(1)Any reduction or termination by the health carrier during the course of treatment before the end of the period or number treatments, other than by health benefit plan amendment or termination of the health benefit plan, shall constitute an adverse determination; and(2)The health carrier shall notify the covered person of the adverse determination in accordance with 58-17H-32 at a time sufficiently in advance of the reduction or termination to allow the covered person or, if applicable, the covered person's authorized representative, to file a grievance to request a review of the adverse determination pursuant to chapter 58-17I, and obtain a determination with respect to that review of the adverse determination before the benefit is reduced or terminated.The health care service or treatment that is the subject of the adverse determination shall be continued without liability to the covered person until the covered person has been notified of the determination by the health carrier with respect to the internal review request made pursuant to chapter 58-17I. (SL 2012, ch 239, 1 provides: "The provisions of chapter 219 of the 2011 Session Laws shall be deemed repealed if the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010) is found to be unconstitutional in its entirety by a final decision of a federal court of competent jurisdiction and all appeals exhausted or time for appeals elapsed.") Source: SL 2011, ch 219, 54.
58-17H-3. Urgent care request defined.For the purposes of this chapter, the term, urgent care request means a request for a health care service or course of treatment with respect to which the time periods for making a nonurgent care request determination:(1)Could seriously jeopardize the life or health of the covered person or the ability of the covered person to regain maximum function; or(2)In the opinion of a physician with knowledge of the covered person's medical condition, would subject the covered person to severe pain that cannot be adequately managed without the health care service or treatment that is the subject of the request.Except as provided in subdivision (1) of this section, in determining whether a request is to be treated as an urgent care request, an individual acting on behalf of the health carrier shall apply the judgment of a prudent layperson who possesses an average knowledge of health and medicine. Any request that a physician with knowledge of the covered person's medical condition determines is an urgent care request within the meaning of subdivisions (1) and (2) of this section shall be treated as an urgent care request. (SL 2012, ch 239, 1 provides: "The provisions of chapter 219 of the 2011 Session Laws shall be deemed repealed if the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010) is found to be unconstitutional in its entirety by a final decision of a federal court of competent jurisdiction and all appeals exhausted or time for appeals elapsed.") Source: SL 2011, ch 219, 92.
58-17H-30. Retrospective review determinations--Timing--Notification requirements.For retrospective review determinations, the health carrier shall make the determination within a reasonable period of time, but in no event later than thirty days after the date of receiving the benefit request.In the case of a certification, the health carrier may notify in writing the covered person and the provider rendering the service.If the determination is an adverse determination, the health carrier shall provide notice of the adverse determination to the covered person or, if applicable, the covered person's authorized representative, in accordance with 58-17H-32. The time period for making a determination and notifying the covered person or, if applicable, the covered person's authorized representative, of the determination pursuant to this section may be extended once by the health carrier for up to fifteen days, if the health carrier:(1)Determines that an extension is necessary due to matters beyond the health carrier's control; and(2)Notifies the covered person or, if applicable, the covered person's authorized representative, prior to the expiration of the initial thirty-day time period, of the circumstances requiring the extension of time and the date by which the health carrier expects to make a determination.If the extension under this section is necessary due to the failure of the covered person or, if applicable, the covered person's authorized representative to submit information necessary to reach a determination on the request, the notice of extension shall specifically describe the required information necessary to complete the request and give the covered person or, if applicable, the covered person's authorized representative at least forty-five days from the date of receipt of the notice to provide the specified information. (SL 2012, ch 239, 1 provides: "The provisions of chapter 219 of the 2011 Session Laws shall be deemed repealed if the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010) is found to be unconstitutional in its entirety by a final decision of a federal court of competent jurisdiction and all appeals exhausted or time for appeals elapsed.") Source: SL 2011, ch 219, 55.
58-17H-31. Calculation of time period for determination for prospective and retrospective reviews.For purposes of calculating the time periods within which a determination is required to be made for prospective and retrospective reviews, the time period within which the determination is required to be made begins on the date the request is received by the health carrier in accordance with the health carrier's procedures established pursuant to 58-17H-16. If the time period for making the determination for a prospective or retrospective review is extended due to the covered person or, if applicable, the covered person's authorized representative's failure to submit the information necessary to make the determination, the time period for making the determination shall be tolled from the date on which the health carrier sends the notification of the extension to the covered person or, if applicable, the covered person's authorized representative, until the earlier of: the date on which the covered person or, if applicable, the covered person's authorized representative, responds to the request for additional information or the date on which the specified information was to have been submitted. If the covered person or the covered person's authorized representative fails to submit the information before the end of the period of the extension, as specified in 58-17H-28 and 58-17H-30, the health carrier may deny the certification of the requested benefit. (SL 2012, ch 239, 1 provides: "The provisions of chapter 219 of the 2011 Session Laws shall be deemed repealed if the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010) is found to be unconstitutional in its entirety by a final decision of a federal court of competent jurisdiction and all appeals exhausted or time for appeals elapsed.") Source: SL 2011, ch 219, 56.
58-17H-32. Notification of adverse determination--Contents.Any notification of an adverse determination under this section shall, in a manner which is designed to be understood by the covered person, set forth:(1)Information sufficient to identify the benefit request or claim involved, including the date of service, if applicable, the health care provider, the claim amount, if applicable, the diagnosis code and its corresponding meaning, and the treatment code and its corresponding meaning;(2)The specific reason or reasons for the adverse determination, including the denial code and its corresponding meaning, as well as a description of the health carrier's standard, if any, that was used in denying the benefit request or claim;(3)A reference to the specific plan provision on which the determination is based;(4)A description of additional material or information necessary for the covered person to complete the benefit request, including an explanation of why the material or information is necessary to complete the request;(5)A description of the health carrier's grievance procedures established pursuant to chapter 58-17I, including time limits applicable to those procedures;(6)If the health carrier relied upon an internal rule, guideline, protocol, or other similar criterion to make the adverse determination, either the specific rule, guideline, protocol, or other similar criterion or a statement that a specific rule, guideline, protocol, or other similar criterion was relied upon to make the adverse determination and that a copy of the rule, guideline, protocol, or other similar criterion will be provided free of charge to the covered person upon request;(7)If the adverse determination is based on a medical necessity or experimental or investigational treatment or similar exclusion or limit, either an explanation of the scientific or clinical judgment for making the determination, applying the terms of the health benefit plan to the covered person's medical circumstances or a statement that an explanation will be provided to the covered person free of charge upon request;(8)If applicable, instructions for requesting:(a)A copy of the rule, guideline, protocol, or other similar criterion relied upon in making the adverse determination, as provided in subdivision (6) of this section; or(b)The written statement of the scientific or clinical rationale for the adverse determination, as provided in subdivision (7) of this section; and(9)A statement explaining the availability of and the right of the covered person, as appropriate, to contact the Division of Insurance at any time for assistance or, upon completion of the health carrier's grievance procedure process as provided under chapter 58-17I, to file a civil suit in a court of competent jurisdiction.If the adverse determination is a rescission, the health carrier shall provide, in addition to any applicable disclosures required under 58-17H-32, clear identification of the alleged fraudulent practice or omission or the intentional misrepresentation of material fact, an explanation as to why the act, practice, or omission was fraudulent or was an intentional misrepresentation of a material fact, and the effective date of the rescission.A health carrier may provide the notice required under this section in writing or electronically.If the adverse determination is a rescission, the health carrier shall provide advance notice of the rescission determination required by rules promulgated by the director, in addition to any applicable disclosures required under this section.The health carrier shall provide clear identification of the alleged fraudulent act, practice, or omission or the intentional misrepresentation of material fact.The health carrier shall provide an explanation as to why the act, practice, or omission was fraudulent or was an intentional misrepresentation of a material fact. The health carrier shall provide notice that the covered person or the covered person's authorized representative, prior to the date the advance notice of the proposed rescission ends, may immediately file a grievance to request a review of the adverse determination to rescind coverage pursuant to chapter 58-17I.The health carrier shall provide a description of the health carrier's grievance procedures established pursuant to chapter 58-17I, including any time limits applicable to those procedures.The health carrier shall provide the date when the advance notice ends and the date back to which the coverage will be retroactively rescinded. (SL 2012, ch 239, 1 provides: "The provisions of chapter 219 of the 2011 Session Laws shall be deemed repealed if the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010) is found to be unconstitutional in its entirety by a final decision of a federal court of competent jurisdiction and all appeals exhausted or time for appeals elapsed.") Source: SL 2011, ch 219, 57.
58-17H-33. Information required to be provided to covered persons and prospective covered persons.In the certificate of coverage or member handbook provided to covered persons, a health carrier shall include a clear and comprehensive description of its utilization review procedures, including the procedures for obtaining review of adverse determinations, and a statement of rights and responsibilities of covered persons with respect to those procedures. A health carrier shall include a summary of its utilization review and benefit determination procedures in materials intended for prospective covered persons. A health carrier shall print on its membership cards a toll-free telephone number to call for utilization review and benefit decisions. (SL 2012, ch 239, 1 provides: "The provisions of chapter 219 of the 2011 Session Laws shall be deemed repealed if the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010) is found to be unconstitutional in its entirety by a final decision of a federal court of competent jurisdiction and all appeals exhausted or time for appeals elapsed.") Source: SL 2011, ch 219, 58.
58-17H-34. Health carrier may be deemed to meet utilization review requirements if met by private accrediting body.If the director and the secretary find that the requirements of any private accrediting body meet the requirements of utilization review as set forth in this chapter, the health carrier may, at the discretion of the director and secretary, be deemed to have met the applicable requirements. (SL 2012, ch 239, 1 provides: "The provisions of chapter 219 of the 2011 Session Laws shall be deemed repealed if the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010) is found to be unconstitutional in its entirety by a final decision of a federal court of competent jurisdiction and all appeals exhausted or time for appeals elapsed.") Source: SL 2011, ch 219, 59.
58-17H-35. Registration of utilization review organizations--Required information.Any utilization review organization which engages in utilization review activities in this state shall register with the Division of Insurance prior to conducting business in this state. The registration shall be in a format prescribed by the director. In prescribing the form or in carrying out other functions required by 58-17H-35 to 58-17H-39, inclusive, the director shall consult with the secretary if applicable. The director or the secretary may require that the following information be submitted:(1)Information relating to its actual or anticipated activities in this state;(2)The status of any accreditation designation it holds or has sought;(3)Information pertaining to its place of business, officers, and directors;(4)Qualifications of review staff; and(5)Any other information reasonable and necessary to monitor its activities in this state. (SL 2012, ch 239, 1 provides: "The provisions of chapter 219 of the 2011 Session Laws shall be deemed repealed if the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010) is found to be unconstitutional in its entirety by a final decision of a federal court of competent jurisdiction and all appeals exhausted or time for appeals elapsed.") Source: SL 2011, ch 219, 60.
58-17H-36. Filing changes in registration information.Any utilization review organization which has previously registered in this state shall, on or before July first of each year, file with the Division of Insurance any changes to the initial or subsequent annual registration for the utilization review organization. (SL 2012, ch 239, 1 provides: "The provisions of chapter 219 of the 2011 Session Laws shall be deemed repealed if the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010) is found to be unconstitutional in its entirety by a final decision of a federal court of competent jurisdiction and all appeals exhausted or time for appeals elapsed.") Source: SL 2011, ch 219, 61.
58-17H-37. Requests for information from utilization review organizations.The director or the secretary may request information from any utilization review organization at any time pertaining to its activities in this state. The utilization review organization shall respond to all requests for information within twenty days. (SL 2012, ch 239, 1 provides: "The provisions of chapter 219 of the 2011 Session Laws shall be deemed repealed if the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010) is found to be unconstitutional in its entirety by a final decision of a federal court of competent jurisdiction and all appeals exhausted or time for appeals elapsed.") Source: SL 2011, ch 219, 62.
58-17H-38. Activities of nonregistered utilization review organizations prohibited.A utilization review organization may not engage in utilization review in this state unless the utilization review organization is properly registered. The director may issue a cease and desist order against any utilization review organization which fails to comply with the requirements of 58-17H-35 to 58-17H-39, inclusive, prohibiting the utilization review organization from engaging in utilization review activities in this state. (SL 2012, ch 239, 1 provides: "The provisions of chapter 219 of the 2011 Session Laws shall be deemed repealed if the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010) is found to be unconstitutional in its entirety by a final decision of a federal court of competent jurisdiction and all appeals exhausted or time for appeals elapsed.") Source: SL 2011, ch 219, 63.
58-17H-39. Registration fee for utilization review organizations.The director may require the payment of a fee in conjunction with the initial or annual registration of a utilization review organization not to exceed two hundred fifty dollars per registration. The fee shall be established by rules promulgated pursuant to chapter 1-26. (SL 2012, ch 239, 1 provides: "The provisions of chapter 219 of the 2011 Session Laws shall be deemed repealed if the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010) is found to be unconstitutional in its entirety by a final decision of a federal court of competent jurisdiction and all appeals exhausted or time for appeals elapsed.") Source: SL 2011, ch 219, 64.
58-17H-4. Applicability of chapter.The provisions of this chapter apply to any health carrier that provides or performs utilization review services. The requirements of this chapter also apply to any designee of the health carrier or utilization review organization that performs utilization review functions on the carrier's behalf. (SL 2012, ch 239, 1 provides: "The provisions of chapter 219 of the 2011 Session Laws shall be deemed repealed if the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010) is found to be unconstitutional in its entirety by a final decision of a federal court of competent jurisdiction and all appeals exhausted or time for appeals elapsed.") Source: SL 2011, ch 219, 29.
58-17H-40. Urgent care requests--Written procedures required for receipt and determination of requests.Each health carrier shall establish written procedures, in accordance with 58-17H-40 to 58-17H-48, inclusive, for receiving benefit requests from covered persons or their authorized representatives and for making and notifying covered persons or their authorized representatives of expedited utilization review and benefit determinations with respect to urgent care requests and concurrent review urgent care requests. (SL 2012, ch 239, 1 provides: "The provisions of chapter 219 of the 2011 Session Laws shall be deemed repealed if the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010) is found to be unconstitutional in its entirety by a final decision of a federal court of competent jurisdiction and all appeals exhausted or time for appeals elapsed.") Source: SL 2011, ch 219, 65.
58-17H-41. Insufficient information for determination--Notice and statement of necessary information.If the covered person or, if applicable, the covered person's authorized representative has failed to provide sufficient information for the health carrier to make a determination, the health carrier shall notify the covered person or, if applicable, the covered person's authorized representative, either orally or, if requested by the covered person or the covered person's authorized representative, in writing of this failure and state what specific information is needed as soon as possible, but in no event later than twenty-four hours after receipt of the request. (SL 2012, ch 239, 1 provides: "The provisions of chapter 219 of the 2011 Session Laws shall be deemed repealed if the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010) is found to be unconstitutional in its entirety by a final decision of a federal court of competent jurisdiction and all appeals exhausted or time for appeals elapsed.") Source: SL 2011, ch 219, 66.
58-17H-42. Insufficient information for determination of prospective urgent care requests.If the benefit request involves a prospective review urgent care request, the provisions of 58-17H-41 apply only in the case of a failure that:(1)Is a communication by a covered person or, if applicable, the covered person's authorized representative, that is received by a person or organizational unit of the health carrier responsible for handling benefit matters; and(2)Is a communication that refers to a specific covered person, a specific medical condition or symptom, and a specific health care service, treatment, or provider for which approval is being requested. (SL 2012, ch 239, 1 provides: "The provisions of chapter 219 of the 2011 Session Laws shall be deemed repealed if the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010) is found to be unconstitutional in its entirety by a final decision of a federal court of competent jurisdiction and all appeals exhausted or time for appeals elapsed.") Source: SL 2011, ch 219, 67.
58-17H-43. Urgent care requests--Timely notification of determination.For an urgent care request, unless the covered person or the covered person's authorized representative has failed to provide sufficient information for the health carrier to determine whether, or to what extent, the benefits requested are covered benefits or payable under the health carrier's health benefit plan, the health carrier shall notify the covered person or, if applicable, the covered person's authorized representative of the health carrier's determination with respect to the request, whether or not the determination is an adverse determination, as soon as possible, taking into account the medical condition of the covered person, but in no event later than twenty-fours hours after the date of the receipt of the request by the health carrier. If the health carrier's determination is an adverse determination, the health carrier shall provide notice of the adverse determination in accordance with 58-17H-48. (SL 2012, ch 239, 1 provides: "The provisions of chapter 219 of the 2011 Session Laws shall be deemed repealed if the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010) is found to be unconstitutional in its entirety by a final decision of a federal court of competent jurisdiction and all appeals exhausted or time for appeals elapsed.") Source: SL 2011, ch 219, 68.
58-17H-44. Time within which to submit necessary information.The health carrier shall provide the covered person or, if applicable, the covered person's authorized representative, a reasonable period of time to submit the necessary information, taking into account the circumstances, but in no event less than forty-eight hours after the date of notifying the covered person or the covered person's authorized representative of the failure to submit sufficient information, as provided in 58-17H-41 and 58-17H-42. (SL 2012, ch 239, 1 provides: "The provisions of chapter 219 of the 2011 Session Laws shall be deemed repealed if the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010) is found to be unconstitutional in its entirety by a final decision of a federal court of competent jurisdiction and all appeals exhausted or time for appeals elapsed.") Source: SL 2011, ch 219, 69.
58-17H-45. Urgent care requests--Notice of determination--Failure to submit necessary information as grounds for denial of certification.The health carrier shall notify the covered person or, if applicable, the covered person's authorized representative, of its determination with respect to the urgent care request as soon as possible, but in no event more than forty-eight hours after the earlier of:(1)The health carrier's receipt of the requested specified information; or(2)The end of the period provided for the covered person or, if applicable, the covered person's authorized representative, to submit the requested specified information.If the covered person or the covered person's authorized representative fails to submit the information before the end of the period of the extension, as specified in 58-17H-44, the health carrier may deny the certification of the requested benefit. If the health carrier's determination is an adverse determination, the health carrier shall provide notice of the adverse determination in accordance with 58-17H-32. (SL 2012, ch 239, 1 provides: "The provisions of chapter 219 of the 2011 Session Laws shall be deemed repealed if the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010) is found to be unconstitutional in its entirety by a final decision of a federal court of competent jurisdiction and all appeals exhausted or time for appeals elapsed.") Source: SL 2011, ch 219, 70.
58-17H-46. Concurrent review urgent care requests--Extended care requests--Time for determination and notice.For concurrent review urgent care requests involving a request by the covered person or the covered person's authorized representative to extend the course of treatment beyond the initial period of time or the number of treatments, if the request is made at least twenty-four hours prior to the expiration of the prescribed period of time or number of treatments, the health carrier shall make a determination with respect to the request and notify the covered person or, if applicable, the covered person's authorized representative, of the determination, whether it is an adverse determination or not, as soon as possible, taking into account the covered person's medical condition but in no event more than twenty-four hours after the date of the health carrier's receipt of the request. If the health carrier's determination is an adverse determination, the health carrier shall provide notice of the adverse determination in accordance with 58-17H-48. (SL 2012, ch 239, 1 provides: "The provisions of chapter 219 of the 2011 Session Laws shall be deemed repealed if the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010) is found to be unconstitutional in its entirety by a final decision of a federal court of competent jurisdiction and all appeals exhausted or time for appeals elapsed.") Source: SL 2011, ch 219, 71.
58-17H-47. Calculation of time periods for determination.For purposes of calculating the time periods within which a determination is required to be made under 58-17H-43 to 58-17H-45, inclusive, the time period within which the determination is required to be made shall begin on the date the request is filed with the health carrier in accordance with the health carrier's procedures established pursuant to 58-17H-16 for filing a request without regard to whether all of the information necessary to make the determination accompanies the filing. (SL 2012, ch 239, 1 provides: "The provisions of chapter 219 of the 2011 Session Laws shall be deemed repealed if the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010) is found to be unconstitutional in its entirety by a final decision of a federal court of competent jurisdiction and all appeals exhausted or time for appeals elapsed.") Source: SL 2011, ch 219, 72.
58-17H-48. Notification of adverse determination--Requirements.If a health carrier's determination with respect to 58-17H-40 to 58-17H-47, inclusive, is an adverse determination, the health carrier shall provide notice of the adverse determination in accordance with this section. A notification of an adverse determination under this section shall, in a manner calculated to be understood by the covered person, set forth:(1)Information sufficient to identify the benefit request or claim involved, including the date of service, if applicable, the health care provider, the claim amount, if applicable, the diagnosis code and its corresponding meaning and the treatment code and its corresponding meaning;(2)The specific reason or reasons for the adverse determination, including the denial code and its corresponding meaning, as well as a description of the health carrier's standard, if any, that was used in denying the benefit request or claim;(3)A reference to the specific plan provisions on which the determination is based;(4)A description of any additional material or information necessary for the covered person to complete the request, including an explanation of why the material or information is necessary to complete the request;(5)A description of the health carrier's internal review procedures established pursuant to chapter 58-17I, including any time limits applicable to those procedures;(6)A description of the health carrier's expedited review procedures established pursuant to 58-17I-12 to 58-17I-16, inclusive;(7)If the health carrier relied upon an internal rule, guideline, protocol, or other similar criterion to make the adverse determination, either the specific rule, guideline, protocol, or other similar criterion or a statement that a specific rule, guideline, protocol, or other similar criterion was relied upon to make the adverse determination and that a copy of the rule, guideline, protocol, or other similar criterion will be provided free of charge to the covered person upon request;(8)If the adverse determination is based on a medical necessity or experimental or investigation treatment or similar exclusion or limit, either an explanation of the scientific or clinical judgment for making the determination, applying the terms of the health benefit plan to the covered person's medical circumstances, or a statement that an explanation will be provided to the covered person free of charge upon request;(9)If applicable, instructions for requesting:(a)A copy of the rule, guideline, protocol, or other similar criterion relied upon in making the adverse determination in accordance with subdivision (7) of this section; or(b)The written statement of the scientific or clinical rationale for the adverse determination in accordance with subdivision (8) of this section; and(10)A statement explaining the availability of and the right of the covered person, as appropriate, to contact the Division of Insurance at any time for assistance or, upon completion of the health carrier's grievance procedure process as provided under chapter 58-17I, to file a civil suit in a court of competent jurisdiction.A health carrier may provide the notice required under this section orally, in writing or electronically. If notice of the adverse determination is provided orally, the health carrier shall provide written or electronic notice of the adverse determination within three days following the oral notification. (SL 2012, ch 239, 1 provides: "The provisions of chapter 219 of the 2011 Session Laws shall be deemed repealed if the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010) is found to be unconstitutional in its entirety by a final decision of a federal court of competent jurisdiction and all appeals exhausted or time for appeals elapsed.") Source: SL 2011, ch 219, 73.
58-17H-49. Promulgation of rules.The director may, after consultation with the secretary, promulgate rules, pursuant to chapter 1-26, to carry out the provisions of this chapter. The rules shall provide for a timely administration of utilization review by the public and assure that utilization review decisions are made in a fair and clinically acceptable manner. The rules may include the following:(1)Definition of terms;(2)Timing, form, and content of reports;(3)Application of clinical criteria as it relates to utilization review;(4)Written determinations; and(5)Utilization review procedures.The director may promulgate rules, pursuant to chapter 1-26, pertaining to claims for group disability income plans. The rules shall be consistent with applicable federal requirements included in 29 CFR Part 2560 as amended to January 1, 2011. (SL 2012, ch 239, 1 provides: "The provisions of chapter 219 of the 2011 Session Laws shall be deemed repealed if the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010) is found to be unconstitutional in its entirety by a final decision of a federal court of competent jurisdiction and all appeals exhausted or time for appeals elapsed.") Source: SL 2011, ch 219, 74.
58-17H-5. Health carrier to provide emergency services coverage without requiring prior authorization--Standards for coverage of emergency services.If conducting utilization review or making a benefit determination for emergency services, a health carrier that provides benefits for services in an emergency department of a hospital shall comply with the provisions of 58-17H-5 to 58-17H-13, inclusive. A health carrier shall cover emergency services necessary to screen and stabilize a covered person and may not require prior authorization of such services if a prudent layperson would have reasonably believed that an emergency medical condition existed even if the emergency services are provided on an out of-network basis. A health carrier shall cover emergency services whether the health care provider furnishing the services is a participating provider with respect to such services. If the emergency services are provided out-of-network, the services shall be covered without imposing any administrative requirement or limitation on coverage that is more restrictive than the requirements or limitations that apply to emergency services received from network providers. Emergency services are provided out-of-network by complying with the cost sharing requirements set forth in 58-17H-7 to 58-17H-10, inclusive, and without regard to any other term or condition of coverage other than the exclusion of or coordination of benefits, an affiliation or waiting periods as permitted under section 2704 of the Public Health Service Act, as amended to January 1, 2011, or cost sharing requirements as set forth in 58-17H-6 to 58-17H-10, inclusive. (SL 2012, ch 239, 1 provides: "The provisions of chapter 219 of the 2011 Session Laws shall be deemed repealed if the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010) is found to be unconstitutional in its entirety by a final decision of a federal court of competent jurisdiction and all appeals exhausted or time for appeals elapsed.") Source: SL 2011, ch 219, 30.
58-17H-50. Coverage for cancer treatment medication.Any health benefit plan as defined in 58-17H-2 that provides benefits for injected or intravenously administered cancer treatment medication used to kill or slow the growth of cancerous cells shall provide no less favorable benefits for prescribed, orally administered anticancer medication covered by the plan, regardless of the formulation or benefit category determination by the health plan. Source: SL 2015, ch 252, 1, eff. Jan. 1, 2016.
58-17H-51. Reclassification of benefits with respect to cancer treatment medications.A health carrier may not reclassify benefits with respect to cancer treatment medications or increase a copayment, deductible, or coinsurance amount for covered cancer treatment medications that are injected or intravenously administered unless:(1)The increase is applied generally to other medical or pharmaceutical benefits covered under the plan and is not done to circumvent 58-17H-50;(2)The reclassification of benefits with respect to cancer treatment medications is done in a manner that is consistent with 58-17H-50 to 58-17H-52, inclusive; or(3)A health carrier is applying cost-sharing increases consistent with the annual increases in the cost of health care. Source: SL 2015, ch 252, 2, eff. Jan. 1, 2016.
58-17H-52. Medical management practices complying with chapter.Nothing in 58-17H-50 and 58-17H-51 prohibits a health carrier from performing medical management practices that comply with the provisions of this chapter. Source: SL 2015, ch 252, 3, eff. Jan. 1, 2016.
  58-17H-53  .  Step therapy protocols.   A health carrier, health benefit plan, or utilization review organization shall consider available recognized evidence-based and peer-reviewed clinical practice guidelines when establishing a step therapy protocol. Upon written request of a covered person, a health carrier, health benefit plan, or utilization review organization shall provide any clinical review criteria applicable to a specific prescription drug covered by the health carrier, health benefit plan, or utilization review organization.     Source:  SL 2020, ch 209,  2. 
  58-17H-54  .  Step therapy protocols--Process--Transparency.   When coverage of a prescription drug for the treatment of any medical condition is restricted for use by a health carrier, health benefit plan, or utilization review organization through the use of a step therapy protocol, the covered person and the prescribing health care professional shall have access to a clear, readily accessible, and convenient process to request a step therapy override exception. A health carrier, health benefit plan, or utilization review organization may use its existing medical exceptions process to satisfy this requirement. The process used shall be easily accessible on the internet site of the health carrier, health benefit plan, or utilization review organization.     Source:  SL 2020, ch 209,  3. 
  58-17H-55  .  Step therapy override exceptions.   A step therapy override exception shall be approved by a health carrier, health benefit plan, or utilization review organization if any of the following circumstances apply:   (1) The prescription drug required under the step therapy protocol is contraindicated pursuant to the drug manufacturer's prescribing information for the drug or, due to a documented adverse event with a previous use or a documented medical condition, including a comorbid condition, is likely to do any of the following:   (a) Cause an adverse reaction to a covered person;   (b) Decrease the ability of a covered person to achieve or maintain reasonable functional ability in performing daily activities;   (c) Cause physical or mental harm to a covered person;   (2) The prescription drug required under the step therapy protocol is expected to be ineffective based on the known clinical characteristics of the covered person, such as the covered person's adherence to or compliance with the covered person's individual plan of care, and any of the following:   (a) The known characteristics of the prescription drug regimen as described in peer-reviewed literature or in the manufacturer's prescribing information for the drug;   (b) The health care professional's medical judgment based on clinical practice guidelines or peer-reviewed journals;   (c) The covered person's documented experience with the prescription drug regimen;   (3) The covered person has had a trial of a therapeutically equivalent dose of the prescription drug under the step therapy protocol while under the covered person's current or previous health benefit plan for a period of time to allow for a positive treatment outcome, and such prescription drug was discontinued by the covered person's health care professional due to lack of effectiveness;   (4) The covered person is currently receiving a positive therapeutic outcome on a prescription drug selected by the covered person's health care professional for the medical condition under consideration while under the covered person's current or previous health benefit plan. This subdivision may not be construed to encourage the use of a pharmaceutical sample for the sole purpose of meeting the requirements for a step therapy override exception.   Upon approval of a step therapy override exception, the health carrier, health benefit plan, or utilization review organization shall authorize coverage for the prescription drug selected by the covered person's prescribing health care professional if the prescription drug is a covered prescription drug under the covered person's health benefit plan.   Except in the case of an urgent care request, a health carrier, health benefit plan, or utilization review organization shall make a determination to approve or deny a request for a step therapy override exception within five calendar days after receipt of complete, clinically relevant written documentation supporting a step therapy override exception under subdivisions (1) through (4) of this section. In the case of an urgent care request, a health carrier, health benefit plan, or utilization review organization shall approve or deny a request for a step therapy override exception within seventy-two hours after receipt of such documentation. If a request for a step therapy override exception is incomplete or additional clinically relevant information is required, the health carrier, health benefit plan, or utilization review organization may request such information within the applicable time period provided in this section. Once the information is submitted, the applicable time period for approval or denial shall begin again. If a health carrier, health plan, or utilization review organization fails to respond to the request for a step override exception within the applicable time, the step therapy override exception shall be deemed granted.   If a nonurgent care request for a step therapy override exception is denied, the denial is an adverse determination and the health carrier, health benefit plan, or utilization review organization shall provide notification of adverse determination pursuant to   58-17H-32  . If an urgent care request is denied, the health carrier, health benefit plan, or utilization review organization shall provide notification of adverse determination pursuant to   58-17H-48  . Any denial of a request for a step therapy override exception is subject to the grievance procedures under chapter   58-17I  .     Source:  SL 2020, ch 209,  4. 
  58-17H-56  .  Limitations.   Nothing in   58-17H-53   to 55-17H-56 shall be construed to prevent:   (1) A health carrier, health benefit plan, or utilization review organization from requiring a covered person to try a prescription drug with the same generic name and demonstrated bioavailability or biological product that is an interchangeable biological product pursuant to   36-11-46.1   and   36-11-46.9   before providing coverage for the equivalent branded prescription drug;   (2) A health care professional from prescribing a prescription drug that is determined to be medically appropriate.     Source:  SL 2020, ch 209,  5. 
58-17H-6. In-network emergency services.Coverage of in-network emergency services are subject to applicable copayments, coinsurance, and deductibles. (SL 2012, ch 239, 1 provides: "The provisions of chapter 219 of the 2011 Session Laws shall be deemed repealed if the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010) is found to be unconstitutional in its entirety by a final decision of a federal court of competent jurisdiction and all appeals exhausted or time for appeals elapsed.") Source: SL 2011, ch 219, 31.
58-17H-7. Cost-sharing requirements for out-of-network emergency services.Cost-sharing requirements for out-of-network emergency services expressed as a copayment amount or coinsurance rate imposed with respect to a covered person cannot exceed the cost-sharing requirement imposed with respect to a covered person if the services were provided in-network. (SL 2012, ch 239, 1 provides: "The provisions of chapter 219 of the 2011 Session Laws shall be deemed repealed if the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010) is found to be unconstitutional in its entirety by a final decision of a federal court of competent jurisdiction and all appeals exhausted or time for appeals elapsed.") Source: SL 2011, ch 219, 32.
58-17H-8. Cost-sharing requirements for covered persons--Payments to out-of-network providers.Notwithstanding 58-17H-7, a covered person may be required to pay, in addition to the in-network cost-sharing, the excess of the amount the out-of-network provider charges over the amount the health carrier is required to pay pursuant to this section.A health carrier complies with the requirements of this section if it provides payment of emergency services provided by an out-of-network provider in an amount not less than the greatest of the following:(1)The amount negotiated with in-network providers for emergency services, excluding any in-network copayment or coinsurance imposed with respect to the covered person;(2)The amount of the emergency service calculated using the same method the plan uses to determine payments for out-of-network services, but using the in-network cost-sharing provisions instead of the out-of-network cost-sharing provisions; or(3)The amount that would be paid under Medicare for the emergency services, excluding any in-network copayment or coinsurance requirements. (SL 2012, ch 239, 1 provides: "The provisions of chapter 219 of the 2011 Session Laws shall be deemed repealed if the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010) is found to be unconstitutional in its entirety by a final decision of a federal court of competent jurisdiction and all appeals exhausted or time for appeals elapsed.") Source: SL 2011, ch 219, 33.
58-17H-9. Exceptions for payments by capitated and other plans without negotiated fees.For capitated or other health benefit plans that do not have a negotiated per-service amount for in-network providers, subdivision 58-17H-8(1) does not apply. (SL 2012, ch 239, 1 provides: "The provisions of chapter 219 of the 2011 Session Laws shall be deemed repealed if the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010) is found to be unconstitutional in its entirety by a final decision of a federal court of competent jurisdiction and all appeals exhausted or time for appeals elapsed.") Source: SL 2011, ch 219, 34.
58-17I-1. Definitions.Terms used in this chapter mean:(1)"Adverse determination," any of the following:(a)A determination by a health carrier or the carrier's designee utilization review organization that, based upon the information provided, a request by a covered person for a benefit under the health carrier's health benefit plan upon application of any utilization review technique does not meet the health carrier's requirements for medical necessity, appropriateness, health care setting, level of care or effectiveness or is determined to be experimental or investigational and the requested benefit is therefore denied, reduced, or terminated or payment is not provided or made, in whole or in part, for the benefit;(b)The denial, reduction, termination, or failure to provide or make payment in whole or in part, for a benefit based on a determination by a health carrier or the carrier's designee utilization review organization of a covered person's eligibility to participate in the health carrier's health benefit plan;(c)Any prospective review or retrospective review determination that denies, reduces, terminates, or fails to provide or make payment, in whole or in part, for a benefit; or(d)A rescission of coverage determination;(2)"Ambulatory review," utilization review of health care services performed or provided in an outpatient setting;(3)"Authorized representative," a person to whom a covered person has given express written consent to represent the covered person for purposes of this chapter, a person authorized by law to provide substituted consent for a covered person, a family member of the covered person or the covered person's treating health care professional if the covered person is unable to provide consent, or a health care professional if the covered person's health benefit plan requires that a request for a benefit under the plan be initiated by the health care professional. For any urgent care request, the term includes a health care professional with knowledge of the covered person's medical condition;(4)"Case management," a coordinated set of activities conducted for individual patient management of serious, complicated, protracted, or other health conditions;(5)"Certification," a determination by a health carrier or the carrier's designee utilization review organization that a request for a benefit under the health carrier's health benefit plan has been reviewed and, based on the information provided, satisfies the health carrier's requirements for medical necessity, appropriateness, health care setting, level of care, and effectiveness;(6)"Clinical peer," a physician or other health care professional who holds a non-restricted license in a state of the United States and in the same or similar specialty as typically manages the medical condition, procedure, or treatment under review;(7)"Clinical review criteria," written screening procedures, decision abstracts, clinical protocols, and practice guidelines used by the health carrier to determine the medical necessity and appropriateness of health care services;(8)"Closed plan," a managed care plan or health carrier that requires covered persons to use participating providers under the terms of the managed care plan or health carrier and does not provide any benefits for out-of-network services except for emergency services;(9)"Concurrent review," utilization review conducted during a patient's hospital stay or course of treatment in a facility or other inpatient or outpatient health care setting;(10)"Covered benefits" or "benefits," those health care services to which a covered person is entitled under the terms of a health benefit plan;(11)"Covered person," a policyholder, subscriber, enrollee, or other individual participating in a health benefit plan; (12)"Director," the director of the Division of Insurance;(13)"Discharge planning," the formal process for determining, prior to discharge from a facility, the coordination and management of the care that a patient receives following discharge from a facility;(14)"Discounted fee for service," a contractual arrangement between a health carrier and a provider or network of providers under which the provider is compensated in a discounted fashion based upon each service performed and under which there is no contractual responsibility on the part of the provider to manage care, to serve as a gatekeeper or primary care provider, or to provide or assure quality of care. A contract between a provider or network of providers and a health maintenance organization is not a discounted fee for service arrangement;(15)"Emergency medical condition," a medical condition manifesting itself by acute symptoms of sufficient severity, including severe pain, such that a prudent layperson, who possesses an average knowledge of health and medicine, could reasonably expect that the absence of immediate medical attention would result in serious impairment to bodily functions or serious dysfunction of a bodily organ or part, or would place the person's health or, with respect to a pregnant woman, the health of the woman or her unborn child, in serious jeopardy;(16)"Emergency services," with respect to an emergency medical condition:(a)A medical screening examination that is within the capability of the emergency department of a hospital, including ancillary services routinely available to the emergency department to evaluate such emergency condition; and(b)Such further medical examination and treatment, to the extent they are within the capability of the staff and facilities at a hospital to stabilize a patient;(17)"Facility," an institution providing health care services or a health care setting, including hospitals and other licensed inpatient centers, ambulatory surgical or treatment centers, skilled nursing centers, residential treatment centers, diagnostic, laboratory, and imaging centers, and rehabilitation, and other therapeutic health settings;(18)"Final adverse determination," an adverse determination that as been upheld by the health carrier at the completion of the internal appeals process applicable pursuant to 58-17I-7 to 58-17I-15, inclusive, or an adverse determination that with respect to which the internal appeals process has been deemed exhausted in accordance with 58-17I-6;(19)"Grievance," a written complaint, or oral complaint if the complaint involves an urgent care request, submitted by or on behalf of a covered person regarding:(a)Availability, delivery, or quality of health care services;(b)Claims payment, handling, or reimbursement for health care services; or(c)Any other matter pertaining to the contractual relationship between a covered person and the health carrier.A request for an expedited review need not be in writing;(20)"Health care professional," a physician or other health care practitioner licensed, accredited, or certified to perform specified health services consistent with state law;(21)"Health care provider" or "provider," a health care professional or a facility;(22)"Health care services," services for the diagnosis, prevention, treatment, cure, or relief of a health condition, illness, injury, or disease;(23)"Health carrier," an entity subject to the insurance laws and regulations of this state, or subject to the jurisdiction of the director, that contracts or offers to contract, or enters into an agreement to provide, deliver, arrange for, pay for, or reimburse any of the costs of health care services, including a sickness and accident insurance company, a health maintenance organization, a nonprofit hospital and health service corporation, or any other entity providing a plan of health insurance, health benefits, or health services; (24)"Health indemnity plan," a health benefit plan that is not a managed care plan;(25)"Managed care contractor," a person who establishes, operates, or maintains a network of participating providers; or contracts with an insurance company, a hospital or medical service plan, an employer, an employee organization, or any other entity providing coverage for health care services to operate a managed care plan or health carrier;(26)"Managed care entity," a licensed insurance company, hospital or medical service plan, health maintenance organization, or an employer or employee organization, that operates a managed care plan or a managed care contractor. The term does not include a licensed insurance company unless it contracts with other entities to provide a network of participating providers;(27)"Managed care plan," a plan operated by a managed care entity that provides for the financing or delivery of health care services, or both, to persons enrolled in the plan through any of the following:(a)Arrangements with selected providers to furnish health care services;(b)Explicit standards for the selection of participating providers; or(c)Financial incentives for persons enrolled in the plan to use the participating providers and procedures provided for by the plan;(28)"Network," the group of participating providers providing services to a health carrier;(29)"Open plan," a managed care plan or health carrier other than a closed plan that provides incentives, including financial incentives, for covered persons to use participating providers under the terms of the managed care plan or health carrier;(30)"Participating provider," a provider who, under a contract with the health carrier or with its contractor or subcontractor, has agreed to provide health care services to covered persons with an expectation of receiving payment, other than coinsurance, copayments, or deductibles, directly or indirectly, from the health carrier;(31)"Prospective review," utilization review conducted prior to an admission or the provision of a health care service or a course of treatment in accordance with a health carrier's requirement that the health care service or course of treatment, in whole or in part, be approved prior to its provision;(32)"Rescission," a cancellation or discontinuance of coverage under a health benefit plan that has a retroactive effect. The term does not include a cancellation or discontinuance of coverage under a health benefit plan if:(a)The cancellation or discontinuance of coverage has only a prospective effect; or(b)The cancellation or discontinuance of coverage is effective retroactively to the extent it is attributable to a failure to timely pay required premiums or contributions towards the cost of coverage;(33)"Retrospective review," any review of a request for a benefit that is not a prospective review request, which does not include the review of a claim that is limited to veracity of documentation, or accuracy of coding, or adjudication for payment;(34)"Second opinion," an opportunity or requirement to obtain a clinical evaluation by a provider other than the one originally making a recommendation for a proposed health care service to assess the medical necessity and appropriateness of the initial proposed health care service;(35)"Secretary," the secretary of the Department of Health;(36)"Stabilized," with respect to an emergency medical condition, that no material deterioration of the condition is likely, with reasonable medical probability, to result from or occur during the transfer of the individual from a facility or, with respect to a pregnant woman, the woman has delivered, including the placenta; (37)"Utilization review," a set of formal techniques used by a managed care plan or utilization review organization to monitor and evaluate the medical necessity, appropriateness, and efficiency of health care services and procedures including techniques such as ambulatory review, prospective review, second opinion, certification, concurrent review, case management, discharge planning, and retrospective review; and(38)"Utilization review organization," an entity that conducts utilization review other than a health carrier performing utilization review for its own health benefit plans. (SL 2012, ch 239, 1 provides: "The provisions of chapter 219 of the 2011 Session Laws shall be deemed repealed if the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010) is found to be unconstitutional in its entirety by a final decision of a federal court of competent jurisdiction and all appeals exhausted or time for appeals elapsed.") Source: SL 2011, ch 219, 75.
58-17I-10. Procedures for providing new or additional evidence.Prior to issuing a decision in accordance with the timeframes provided in 58-17I-9, the health carrier shall provide free of charge to covered person, or the covered person's authorized representative, any new or additional evidence, relied upon or generated by the health carrier, or at the direction of the health carrier, in connection with the grievance sufficiently in advance of the date the decision is required to be provided to permit the covered person, or the covered person's authorized representative, a reasonable opportunity to respond prior to that date.Before the health carrier issues or provides notice of a final adverse determination in accordance with the timeframes provided in 58-17I-9 that is based on new or additional rationale, the health carrier shall provide the new or additional rationale to the covered person, or the covered person's authorized representative, free of charge as soon as possible and sufficiently in advance of the date the notice of final adverse determination is to be provided to permit the covered person, or the covered person's authorized representative a reasonable opportunity to respond prior to that date. (SL 2012, ch 239, 1 provides: "The provisions of chapter 219 of the 2011 Session Laws shall be deemed repealed if the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010) is found to be unconstitutional in its entirety by a final decision of a federal court of competent jurisdiction and all appeals exhausted or time for appeals elapsed.") Source: SL 2011, ch 219, 82.
58-17I-11. Issuance of decision--Required contents.The decision issued pursuant to 58-17I-9 shall set forth in a manner calculated to be understood by the covered person or, if applicable, the covered person's authorized representative and include the following:(1)The titles and qualifying credentials of any person participating in the first level review process (the reviewer);(2)Information sufficient to identify the claim involved with respect to the grievance, including the date of service, the health care provider, if applicable, the claim amount, the diagnosis code and its corresponding meaning, and the treatment code and its corresponding meaning;(3)A statement of the reviewer's understanding of the covered person's grievance;(4)The reviewer's decision in clear terms and the contract basis or medical rationale in sufficient detail for the covered person to respond further to the health carrier's position;(5)A reference to the evidence or documentation used as the basis for the decision;(6)For a first level review decision issued pursuant to 58-17I-9 that upholds the grievance denial:(a)The specific reason or reasons for the final internal adverse determination, including the denial code and its corresponding meaning, as well as a description of the health carrier's standard, if any, that was used in reaching the denial;(b)The reference to the specific plan provisions on which the determination is based;(c)A statement that the covered person is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant, as the term relevant is defined in 58-17I-8 to the covered person's benefit request;(d)If the health carrier relied upon an internal rule, guideline, protocol, or other similar criterion to make the final adverse determination, either the specific rule, guideline, protocol or other similar criterion or a statement that a specific rule, guideline, protocol, or other similar criterion was relied upon to make the final adverse determination and that a copy of the rule, guideline, protocol or other similar criterion will be provided free of charge to the covered person upon request;(e)If the final adverse determination is based on a medical necessity or experimental or investigational treatment or similar exclusion or limit, either an explanation of the scientific or clinical judgment for making the determination, applying the terms of the health benefit plan to the covered person's medical circumstances or a statement that an explanation will be provided to the covered person free of charge upon request; and(f)If applicable, instructions for requesting:(i)A copy of the rule, guideline, protocol, or other similar criterion relied upon in making the final adverse determination, as provided in subsection (d) of this section; or(ii)The written statement of the scientific or clinical rationale for the determination, as provided in subsection (e) of this section;(7)If applicable, a statement indicating:(a)A description of the procedures for obtaining an independent external review of the final adverse determination pursuant to rules promulgated by the director; and(b)The covered person's right to bring a civil action in a court of competent jurisdiction;(8)If applicable, the following statement: "You and your plan may have other voluntary alternative dispute resolution options, such as mediation. One way to find out what may be available is to contact your state insurance director."; (9)Notice of the covered person's right to contact the Division of Insurance for assistance at any time, including the telephone number and address of the Division of Insurance. (SL 2012, ch 239, 1 provides: "The provisions of chapter 219 of the 2011 Session Laws shall be deemed repealed if the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010) is found to be unconstitutional in its entirety by a final decision of a federal court of competent jurisdiction and all appeals exhausted or time for appeals elapsed.") Source: SL 2011, ch 219, 83.
58-17I-12. Expedited review for adverse determinations involving urgent care requests--Appointment of peers for review.Each health carrier shall establish written procedures for the expedited review of urgent care requests of grievances involving an adverse determination. In addition, a health carrier shall provide expedited review of a grievance involving an adverse determination with respect to concurrent review urgent care requests involving an admission, availability of care, continued stay, or health care service for a covered person who has received emergency services, but has not been discharged from a facility. The procedures shall allow a covered person or the covered person's authorized representative to request an expedited review under this section orally or in writing.Each health carrier shall appoint at least one appropriate clinical peer in the same or similar specialty as would typically manage the case being reviewed to review the adverse determination. The clinical peer may not have been involved in making the initial adverse determination. (SL 2012, ch 239, 1 provides: "The provisions of chapter 219 of the 2011 Session Laws shall be deemed repealed if the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010) is found to be unconstitutional in its entirety by a final decision of a federal court of competent jurisdiction and all appeals exhausted or time for appeals elapsed.") Source: SL 2011, ch 219, 84.
58-17I-13. Transmission of necessary information for certain expedited reviews.In an expedited review that is not an initial determination for benefits, all necessary information, including the health carrier's decision, shall be transmitted between the health carrier and the covered person or, if applicable, the covered person's authorized representative, by telephone, facsimile, or the most expeditious method available. (SL 2012, ch 239, 1 provides: "The provisions of chapter 219 of the 2011 Session Laws shall be deemed repealed if the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010) is found to be unconstitutional in its entirety by a final decision of a federal court of competent jurisdiction and all appeals exhausted or time for appeals elapsed.") Source: SL 2011, ch 219, 85.
58-17I-14. Expedited review decision not initial determination for benefits--Notification--Time periods--Continuation of service involving concurrent review urgent care requests.An expedited review decision, that is not an initial determination for benefits, shall be made and the covered person or, if applicable, the covered person's authorized representative, shall be notified of the decision in accordance with 58-17I-15 as expeditiously as the covered person's medical condition requires, but in no event more than seventy-two hours after the date of receipt of the request for the expedited review. If the expedited review is of a grievance involving an adverse determination with respect to a concurrent review urgent care request, the service shall be continued without liability to the covered person until the covered person has been notified of the determination.For purposes of calculating the time periods within which a decision is required to be made under this section, the time period within which the decision is required to be made shall begin on the date the request is filed with the health carrier in accordance with the health carrier's procedures established pursuant to 58-17I-6 for filing a request, without regard to whether all of the information necessary to make the determination accompanies the filing. (SL 2012, ch 239, 1 provides: "The provisions of chapter 219 of the 2011 Session Laws shall be deemed repealed if the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010) is found to be unconstitutional in its entirety by a final decision of a federal court of competent jurisdiction and all appeals exhausted or time for appeals elapsed.") Source: SL 2011, ch 219, 86.
58-17I-15. Expedited review decision--Notification--Required contents.A notification of a decision under 58-17I-12 to 58-17I-15, inclusive, shall, in a manner calculated to be understood by the covered person or, if applicable, the covered person's authorized representative, set forth the following:(1)The titles and qualifying credentials of any person participating in the expedited review process (the reviewer);(2)Information sufficient to identify the claim involved with respect to the grievance, including the date of service, the health care provider, if applicable, the claim amount, the diagnosis code and its corresponding meaning, and the treatment code and its corresponding meaning;(3)A statement of the reviewer's understanding of the covered person's grievance;(4)The reviewer's decision in clear terms and the contract basis or medical rationale in sufficient detail for the covered person to respond further to the health carrier's position;(5)A reference to the evidence or documentation used as the basis for the decision;(6)If the decision involves a final adverse determination, the notice shall provide:(a)The specific reason or reasons for the final adverse determination, including the denial code and its corresponding meaning, as well as a description of the health carrier's standard, if any, that was used in reaching the denial;(b)A reference to the specific plan provisions on which the determination is based;(c)A description of any additional material or information necessary for the covered person to complete the request, including an explanation of why the material or information is necessary to complete the request;(d)If the health carrier relied upon an internal rule, guideline, protocol, or other similar criterion to make the adverse determination, either the specific rule, guideline, protocol, or other similar criterion or a statement that a specific rule, guideline, protocol, or other similar criterion was relied upon to make the adverse determination and that a copy of the rule, guideline, protocol, or other similar criterion will be provided free of charge to the covered person upon request;(e)If the final adverse determination is based on a medical necessity or experimental or investigational treatment or similar exclusion or limit, either an explanation of the scientific or clinical judgment for making the determination, applying the terms of the health benefit plan to the covered person's medical circumstances or a statement that an explanation will be provided to the covered person free of charge upon request;(f)If applicable, instructions for requesting:(i)A copy of the rule, guideline, protocol, or other similar criterion relied upon in making the adverse determination as provided in subsection (d) of this section; or(ii)The written statement of the scientific or clinical rationale for the adverse determination as provided in subsection (e) of this section;(g)A statement describing the procedures for obtaining an independent external review of the adverse determination pursuant to rules promulgated by the director;(h)A statement indicating the covered person's right to bring a civil action in a court of competent jurisdiction;(i)The following statement: "You and your plan may have other voluntary alternative dispute resolution options, such as mediation. One way to find out what may be available is to contact your state insurance director."; and(j)A notice of the covered person's right to contact the Division of Insurance for assistance at any time, including the telephone number and address of the Division of Insurance. A health carrier may provide the notice required under this section orally, in writing, or electronically. If notice of the adverse determination is provided orally, the health carrier shall provide written or electronic notice of the adverse determination within three days following the date of the oral notification. (SL 2012, ch 239, 1 provides: "The provisions of chapter 219 of the 2011 Session Laws shall be deemed repealed if the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010) is found to be unconstitutional in its entirety by a final decision of a federal court of competent jurisdiction and all appeals exhausted or time for appeals elapsed.") Source: SL 2011, ch 219, 87.
58-17I-16. Promulgation of rules.The director, in consultation with the secretary, shall promulgate rules, pursuant to chapter 1-26, to establish time frames relative to the filing of grievances, the disposition of grievances, and the response to the aggrieved person. Rules may also be promulgated covering definition of terms, grievance procedures, and content of reports. (SL 2012, ch 239, 1 provides: "The provisions of chapter 219 of the 2011 Session Laws shall be deemed repealed if the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010) is found to be unconstitutional in its entirety by a final decision of a federal court of competent jurisdiction and all appeals exhausted or time for appeals elapsed.") Source: SL 2011, ch 219, 88.
58-17I-2. Health benefit plan defined. For the purposes of this chapter, the term, health benefit plan, means a policy, contract, certificate, or agreement entered into, offered, or issued by a health carrier to provide, deliver, arrange for, pay for, or reimburse any of the costs of health care services. The term includes short-term and catastrophic health insurance policies, and a policy that pays on a cost-incurred basis, except as otherwise specifically exempted in this definition.The term does not include coverage only for accident, or disability income insurance, or any combination thereof; coverage issued as a supplement to liability insurance; liability insurance, including general liability insurance and automobile liability insurance; workers' compensation or similar insurance; automobile medical payment insurance; credit-only insurance; coverage for on-site medical clinics; and other similar insurance coverage, specified in federal regulations issued pursuant to Public Law No. 104-191, as amended to January 1, 2011, under which benefits for medical care are secondary or incidental to other insurance benefits.The term does not include the following benefits if they are provided under a separate policy, certificate, or contract of insurance or are otherwise not an integral part of the plan: limited scope dental or vision benefits; benefits for long-term care, nursing home care, home health care, community-based care, or any combination thereof; or other similar, limited benefits specified in federal regulations issued pursuant to Public Law No. 104-191, as amended to January 1, 2011.The term does not include the following benefits if the benefits are provided under a separate policy, certificate, or contract of insurance, there is no coordination between the provision of the benefits and any exclusion of benefits under any group health plan maintained by the same plan sponsor, and the benefits are paid with respect to an event without regard to whether benefits are provided with respect to such an event under any group health plan maintained by the same plan sponsor: coverage only for a specified disease or illness; or hospital indemnity or other fixed indemnity insurance.The term does not include the following if offered as a separate policy, certificate, or contract of insurance: medicare supplemental health insurance as defined under Section 1882(g)(1) of the Social Security Act, as amended to January 1, 2011; coverage supplemental to the coverage provided under Chapter 55 of Title 10, United States Code (Civilian Health and Medical Program of the Uniformed Services (CHAMPUS)), as amended to January 1, 2011; or similar supplemental coverage provided to coverage under a group health plan. (SL 2012, ch 239, 1 provides: "The provisions of chapter 219 of the 2011 Session Laws shall be deemed repealed if the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010) is found to be unconstitutional in its entirety by a final decision of a federal court of competent jurisdiction and all appeals exhausted or time for appeals elapsed.") Source: SL 2011, ch 219, 93; SL 2021, ch 210,  15.
58-17I-3. Urgent care request defined.For the purposes of this chapter, the term, urgent care request means a request for a health care service or course of treatment with respect to which the time periods for making a nonurgent care request determination:(1)Could seriously jeopardize the life or health of the covered person or the ability of the covered person to regain maximum function; or(2)In the opinion of a physician with knowledge of the covered person's medical condition, would subject the covered person to severe pain that cannot be adequately managed without the health care service or treatment that is the subject of the request.Except as provided in subdivision (1) of this section, in determining whether a request is to be treated as an urgent care request, an individual acting on behalf of the health carrier shall apply the judgment of a prudent layperson who possesses an average knowledge of health and medicine. Any request that a physician with knowledge of the covered person's medical condition determines is an urgent care request within the meaning of subdivisions (1) and (2) of this section shall be treated as an urgent care request. (SL 2012, ch 239, 1 provides: "The provisions of chapter 219 of the 2011 Session Laws shall be deemed repealed if the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010) is found to be unconstitutional in its entirety by a final decision of a federal court of competent jurisdiction and all appeals exhausted or time for appeals elapsed.") Source: SL 2011, ch 219, 94.
58-17I-4. Register of grievances required--Information to be compiled--Maintenance.Each health carrier shall maintain in a register written records to document all grievances received including the notices and claims associated with the grievances during a calendar year. A request for a first level review of a grievance involving an adverse determination shall be processed in compliance with 58-17I-7 to 58-17I-11, inclusive, and is required to be included in the register. For each grievance the register shall contain the following information:(1)A general description of the reason for the grievance;(2)The date received;(3)The date of each review or, if applicable, review meeting;(4)Resolution at each level of the grievance, if applicable;(5)Date of resolution at each level, if applicable; and(6)Name of the covered person for whom the grievance was filed.The register shall be maintained in a manner that is reasonably clear and accessible to the director. A health carrier shall retain the register compiled for a calendar year for five years. (SL 2012, ch 239, 1 provides: "The provisions of chapter 219 of the 2011 Session Laws shall be deemed repealed if the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010) is found to be unconstitutional in its entirety by a final decision of a federal court of competent jurisdiction and all appeals exhausted or time for appeals elapsed.") Source: SL 2011, ch 219, 76.
58-17I-5. Report to director required--Contents.Each health carrier shall submit to the director, at least annually, a report in the format specified by the director. The report shall include for each type of health benefit plan offered by the health carrier:(1)The certificate of compliance required by 58-17I-6;(2)The number of covered lives;(3)The total number of grievances;(4)The number of grievances resolved at each level, if applicable, and their resolution;(5)The number of grievances appealed to the director of which the health carrier has been informed;(6)The number of grievances referred to alternative dispute resolution procedures or resulting in litigation; and(7)A synopsis of actions being taken to correct problems identified. (SL 2012, ch 239, 1 provides: "The provisions of chapter 219 of the 2011 Session Laws shall be deemed repealed if the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010) is found to be unconstitutional in its entirety by a final decision of a federal court of competent jurisdiction and all appeals exhausted or time for appeals elapsed.") Source: SL 2011, ch 219, 77.
58-17I-6. Grievance procedures--Filing--Certificate of compliance--Contact information.Except as specified in this chapter, each health carrier shall use written procedures for receiving and resolving grievances from covered persons, as provided in 58-17I-7 to 58-17I-11, inclusive. If a health carrier fails to strictly adhere to the requirements of 58-17I-7 to 58-17I-10, inclusive, or 58-17I-12 to 58-17I-15, inclusive, with respect to receiving and resolving grievances involving an adverse determination, the covered person shall be deemed to have exhausted the provisions of this chapter, and may take action regardless of whether the health carrier asserts that the carrier substantially complied with the requirements of 58-17I-7 to 58-17I-10, inclusive, or 58-17I-12 to 58-17I-15, inclusive, or that any error the carrier committed was de minimus.A covered person may file a request for external review in accordance with rules promulgated by the director. In addition a covered person is entitled to pursue any available remedies under state or federal law on the basis that the health carrier failed to provide a reasonable internal claims and appeals process that would yield a decision on the merits of the claim.A health carrier shall file with the director a copy of the procedures required under this section, including all forms used to process requests made pursuant to 58-17I-7 to 58-17I-11, inclusive. Any subsequent material modifications to the documents also shall be filed. The director may disapprove a filing received in accordance with this section that fails to comply with this chapter, or applicable rules. In addition, a health carrier shall file annually with the director, as part of its annual report required by 58-17I-4 and 58-17I-5, a certificate of compliance stating that the health carrier has established and maintains, for each of its health benefit plans, grievance procedures that fully comply with the provisions of this chapter. A description of the grievance procedures required under this section shall be set forth in or attached to the policy, certificate, membership booklet, outline of coverage, or other evidence of coverage provided to covered persons. The grievance procedure documents shall include a statement of a covered person's right to contact the Division of Insurance for assistance at any time. The statement shall include the telephone number and address of the Division of Insurance. (SL 2012, ch 239, 1 provides: "The provisions of chapter 219 of the 2011 Session Laws shall be deemed repealed if the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010) is found to be unconstitutional in its entirety by a final decision of a federal court of competent jurisdiction and all appeals exhausted or time for appeals elapsed.") Source: SL 2011, ch 219, 78.
58-17I-7. Review of adverse determination--Time for filing--Designation and notice of reviewers--Scope of review.Within one hundred eighty days after the date of receipt of a notice of an adverse determination sent pursuant to chapter 58-17H, any covered person or the covered person's authorized representative may file a grievance with the health carrier requesting a first level review of the adverse determination. The health carrier shall provide the covered person with the name, address, and telephone number of a person or organizational unit designated to coordinate the first level review on behalf of the health carrier. In providing for a first level review under this section, the health carrier shall ensure that the review conducted in a manner under this section to ensure the independence and impartiality of the individuals involved in making the first level review decision. In ensuring the independence and impartiality of individuals involved in making the first level review decision, no health carrier may make decisions related to such individuals regarding hiring, compensation, termination, promotion or other similar matters based upon the likelihood that the individual will support the denial of benefits.The health carrier shall designate one or more health care providers who have appropriate training and experience in the field of medicine involved in the medical judgment to evaluate the adverse determination. No health care provider may have been involved in the initial adverse determination. In conducting the review, a reviewer shall take into consideration all comments, documents, records, and other information regarding the request for services submitted by the covered person or the covered person's authorized representative, without regard to whether the information was submitted or considered in making the initial adverse determination. (SL 2012, ch 239, 1 provides: "The provisions of chapter 219 of the 2011 Session Laws shall be deemed repealed if the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010) is found to be unconstitutional in its entirety by a final decision of a federal court of competent jurisdiction and all appeals exhausted or time for appeals elapsed.") Source: SL 2011, ch 219, 79.
58-17I-8. Rights of covered person or authorized representative on review--Access to documentation.No covered person has the right to attend, or to have a representative in attendance, at the first level review. However, the covered person or, if applicable, the covered person's authorized representative may:(1)Submit written comments, documents, records, and other material relating to the request for benefits for the review or reviewers to consider when conducting the review; and(2)Receive from the health carrier, upon request and free of charge, reasonable access to, and copies of all documents, records and other information relevant to the covered person's request for benefits. A document, record, or other information shall be considered relevant to a covered person's request for benefits if the document, record, or other information:(a)Was relied upon in making the benefit determination;(b)Was submitted, considered, or generated in the course of making the adverse determination, without regard to whether the document, record, or other information was relied upon in making the benefit determination;(c)Demonstrates that, in making the benefit determination, the health carrier, or its designated representatives consistently applied required administrative procedures and safeguards with respect to the covered person as other similarly situated covered persons; or(d)Constitutes a statement of policy or guidance with respect to the health benefit plan concerning the denied health care service or treatment for the covered person's diagnosis, without regard to whether the advice or statement was relied upon in making the benefit determination.The health carrier shall make the provisions of this section known to the covered person or, if applicable, the covered person's authorized representative within three working days after the date of receipt of the grievance. (SL 2012, ch 239, 1 provides: "The provisions of chapter 219 of the 2011 Session Laws shall be deemed repealed if the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010) is found to be unconstitutional in its entirety by a final decision of a federal court of competent jurisdiction and all appeals exhausted or time for appeals elapsed.") Source: SL 2011, ch 219, 80.
58-17I-9. Time for decision and notice--Calculation of time periods.A health carrier shall notify and issue a decision in writing or electronically to the covered person or, if applicable, the covered person's authorized representative, within the following time frames:(1)With respect to a grievance requesting a first level review of an adverse determination involving a prospective review request, the health carrier shall notify and issue a decision within a reasonable period of time that is appropriate given the covered person's medical condition, but no later than thirty days after the date of the health carrier's receipt of the grievance requesting the first level review made pursuant to 58-17I-7; or(2)With respect to a grievance requesting a first level review of an adverse determination involving a retrospective review request, the health carrier shall notify and issue a decision within a reasonable period of time, but no later than sixty days after the date of the health carrier's receipt of the grievance requesting the first level review made pursuant to 58-17I-7.For purposes of calculating the time periods within which a determination is required to be made and notice provided under this section, the time period shall begin on the date the grievance requesting the review is filed with the health carrier in accordance with the health carrier's procedures established pursuant to 58-17I-6 for filing a request, without regard to whether all of the information necessary to make the determination accompanies the filing. (SL 2012, ch 239, 1 provides: "The provisions of chapter 219 of the 2011 Session Laws shall be deemed repealed if the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010) is found to be unconstitutional in its entirety by a final decision of a federal court of competent jurisdiction and all appeals exhausted or time for appeals elapsed.") Source: SL 2011, ch 219, 81.
58-17J-1. Definitions.Terms used in this chapter mean:(1)"Health benefit plan," any hospital or medical expense policy or certificate, hospital or medical service plan, nonprofit hospital, medical-surgical health service corporation contract or certificate, provider sponsored integrated health delivery network, self-insured plan or plan provided by multiple employer welfare arrangements, health maintenance organization subscriber contract of more than six-month duration, or any health benefit plan that affects the rights of a South Dakota insured and bears a reasonable relation to South Dakota, whether delivered or issued for delivery in South Dakota. The term does not include specified disease, hospital indemnity, fixed indemnity, accident only, credit, dental, vision, Medicare supplement, long-term care or disability income insurance, coverage issued as a supplement to liability insurance, workers' compensation or similar insurance, automobile medical payment insurance, or any plan or coverage exempted from state regulation by the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. 18;(2)"Health insurer," any entity within the definitions set forth in subdivisions 58-17F-1(11), (12), and (15), any entity offering a health benefit plan as defined by 58-17F-2, all self-insurers or multiple employer welfare arrangements, and self-insured employer-organized associations. The term does not include any entity exempted from state regulation by the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. 18;(3)"Health care provider," any individual or entity within the scope of the definition of health care provider as defined by subdivision 58-17F-1(9). Source: SL 2015, ch 278 (Initiated Measure 17), 2, eff. Nov. 13, 2014.
58-17J-2. Patient choice--Health care provider participation.No health insurer, including the South Dakota Medicaid program, may obstruct patient choice by excluding a health care provider licensed under the laws of this state from participating on the health insurer's panel of providers if the provider is located within the geographic coverage area of the health benefit plan and is willing and fully qualified to meet the terms and conditions of participation as established by the health insurer. Source: SL 2015, ch 278 (Initiated Measure 17), 1, eff. Nov. 13, 2014.
58-17K-1. Definitions. Terms used in this chapter mean:(1)"Accumulated amount," the amount of financial responsibility an enrollee has incurred at the time a request for cost-sharing information is made, with respect to a deductible or out-of-pocket limit as calculated under rules promulgated by the director;(2)"Billed charge," the total charges for an item or service billed to a health insurer by a provider;(3)"Billing code," the code used by a health insurer or provider to identify a health care item or service for purposes of billing, adjudicating, and paying a claim for a covered item or service, including current procedural terminology (CPT) code, health care common procedure coding system (HCPCS) code, diagnosis-related group (DRG) code, national drug code (NDC), or other common payer identifier;(4)"Bundled payment arrangement," a payment model under which a provider is paid a single payment for all covered items and services provided to an enrollee for a specific treatment or procedure;(5)"Cost-sharing liability," the amount an enrollee is responsible for paying for a covered item or service under the terms of the health insurance coverage;(6)"Cost-sharing information," information related to any expenditure required by or on behalf of an enrollee with respect to health care benefits that are relevant to a determination of the enrollee's cost-sharing liability for a particular covered item or service;(7)"Covered item or service," an item or service, including a prescription drug, the cost for which is payable, in whole or in part, under the terms of the health insurance coverage;(8)"Derived amount," the price that a health insurer assigns to an item or service for the purpose of internal accounting, reconciliation with providers, or submitting data;(9)"Enrollee," an individual receiving health insurance coverage from a health insurer;(10)"Historical net price," the retrospective average amount a health insurer paid for a prescription drug, inclusive of any reasonably allocated rebates, discounts, chargebacks, fees, and any additional price concessions received by the health insurer with respect to the prescription drug as calculated under rules promulgated by the director;(11)"In-network provider," any provider of any item or service with which a health insurer or a third party for the insurer has a contract setting forth the terms and conditions on which a relevant item or service is provided to an enrollee;(12)"Item or service," any encounters, procedures, medical tests, supplies, prescription drugs, durable medical equipment, and fees, including facility fees, provided or assessed in connection with the provision of health care;(13)"Machine-readable file," a digital representation of data or information in a file that can be imported or read by a computer system for further processing without human intervention, while ensuring no semantic meaning is lost;(14)"Negotiated rate," the amount a health insurer has contractually agreed to pay an in-network provider, including an in-network pharmacy or other prescription drug dispenser, for covered items and services, whether directly or indirectly, including through a third-party administrator or pharmacy benefit manager;(15)"Out-of-network allowed amount," the maximum amount a health insurer will pay for a covered item or service furnished by an out-of-network provider;(16)"Out-of-network provider," a provider of any item or service that does not have a contract under an enrollee's health insurance coverage to provide items or services;(17)"Out-of-pocket limit," the maximum amount that an enrollee is required to pay during a coverage period for the enrollee's share of the costs of covered items and services under the enrollee's health insurance coverage, including for self-only and other than self-only coverage, as applicable;(18)"Prerequisite," concurrent review, prior authorization, and step-therapy or fail-first protocols related to a covered item or service that must be satisfied before a health insurer will cover the item or service. The term does not include a medical necessity determination generally or other forms of medical management techniques; and(19)"Underlying fee schedule rate," the rate for a covered item or service from a particular in-network provider, or a provider that a health insurer uses to determine an enrollee's cost-sharing liability for the item or service, if that rate is different from the negotiated rate or derived amount. Source: SL 2021, ch 213,  1.
58-17K-10. Rules and regulations. The director shall promulgate rules, pursuant to chapter 1-26, for the following:(1)The definition of terms;(2)Required cost-sharing liability disclosures;(3)The method and format requirements for disclosures;(4)Calculations pertaining to information, disclosure, and historical net prices under this chapter;(5)Required information, including bundled payment arrangements, preventive services, and accumulated amounts;(6)The applicability of this chapter to certain plans; and(7)If any federal standards are in place which would require additional steps to meet those standards beyond what is required by this chapter, additional rules to require the price transparency in this state to minimally meet the federal standards. Source: SL 2021, ch 213,  10.
58-17K-11. Plan years effective. The provisions of  58-17K-5 are effective for plan years beginning on or after January 1, 2022. The provisions of  58-17K-2 to 58-17K-4, inclusive, are effective for plan years beginning on or after January 1, 2024. Source: SL 2021, ch 213,  11.
58-17K-2. Cost-sharing information described--Required disclosure to enrollees. At the request of an enrollee, the health insurer shall provide:(1)An estimate, which is accurate at the time of the request, of the enrollee's cost-sharing liability for a requested covered item or service furnished by a provider reflecting any cost-sharing reductions the enrollee would receive that is calculated based on:(a)Accumulated amounts;(b)In-network negotiated rate, reflected as a dollar amount, or underlying fee schedule rate, reflected as a dollar amount, to the extent it is different from the negotiated rate; and(c)Out-of-network allowed amount or any other rate that provides a more accurate estimate of an amount the health insurer will pay for the requested covered item or service, reflected as a dollar amount. In circumstances in which a health insurer reimburses an out-of-network provider a percentage of the billed charge for a covered item or service, the out-of-network allowed amount will be that percentage;(2)Information for an item or service subject to a bundled payment arrangement and a list of the items and services included in the bundled payment arrangement for which cost-sharing information is being disclosed;(3)If applicable, notification that coverage of a specific item or service is subject to a prerequisite; and(4)Further information and consumer notices required for compliance with federal standards as provided under rules promulgated pursuant to chapter 1-26 by the director. Source: SL 2021, ch 213,  2.
58-17K-3. Cost-sharing information disclosed--Required internet method and format. The cost-sharing information to be provided under this chapter shall be made available without a subscription or other fee through a self-service tool on a website that provides real-time responses based on cost-sharing information that is accurate at the time of request. A health insurer shall ensure the self-service tool allows enrollees to:(1)Search for cost-sharing information for a covered item or service by an in-network provider by inputting:(a)A billing code or a descriptive term;(b)The name of an in-network provider; and(c)Other factors utilized by the health insurer that are relevant for determining the applicable cost-sharing information;(2)Search for an out-of-network allowed amount, percentage of billed charges, or other rate for a covered item or service by an out-of-network provider by inputting:(a)A billing code or a descriptive term; and(b)Other factors utilized by the health insurer that are relevant for determining the applicable out-of-network allowed amount or other rate; and(3)Refine and reorder search results based on geographic proximity of in-network providers and the amount of the enrollee's estimated cost-sharing liability. Source: SL 2021, ch 213,  3.
58-17K-4. Cost-sharing information disclosed--Paper or other method on request--Limit on providers per request. An enrollee may request, in accordance with  58-17K-3, the required cost-sharing information be provided in a paper form. In responding to such a request, a health insurer may limit the number of providers to no fewer than twenty providers per request. A health insurer shall disclose the applicable provider-per-request limit to the enrollee, provide the cost-sharing information in paper form, and mail the cost-sharing information no later than two business days after receiving a request without a subscription or other fee.An enrollee may request to receive cost-sharing information through other methods, including phone or e-mail, as long as the enrollee agrees to the disclosure method and the required cost-sharing information request is fulfilled at least as rapidly as required by the paper method. Source: SL 2021, ch 213,  4.
58-17K-5. Prescription drug file--Required public disclosure--Method, format, and updates. A health insurer shall make available to the public on a website a machine-readable prescription drug file that includes:(1)A health insurance oversight identifier or employer identification number;(2)The NDC and the proprietary and nonproprietary name assigned to the NDC by the Food and Drug Administration;(3)A negotiated rate that is:(a)Reflected as a dollar amount by an in-network provider, including an in-network pharmacy or other prescription drug dispenser;(b)Associated with the national provider identifier, tax identification number, or place of service code; and(c)Associated with the last date of the contract term; and(4)Historical net prices that are:(a)Reflected as a dollar amount by an in-network provider, including an in-network pharmacy or other prescription drug dispenser;(b)Associated with the national provider identifier, tax identification number, or place of service code; and(c)Associated with the ninety-day time period that begins one hundred eighty days prior to publication date of the machine-readable file for each provider-specific historical net price that applies to each NDC, unless a health insurer must omit data in relation to a particular NDC and provider when compliance with this subsection would require the health insurer to report payment of historical net prices calculated using fewer than twenty different claims for payments.The prescription drug file shall be available in the method and format as promulgated by the director in rule pursuant to chapter 1-26. The prescription drug file shall be publicly available and accessible to any person free of charge and without conditions, including the establishment of a user account, password, or other credentials, or submission of personally identifiable information to access the file.A health insurer shall update the prescription drug file monthly and indicate the date the file was most recently updated. Source: SL 2021, ch 213,  5.
58-17K-6. Cost-sharing information or prescription drug file--Third party contract to provide information--Health insurer responsible. A health insurer may enter into a written agreement with a third-party administrator, health care claims clearinghouse, pharmacy benefit manager, or other third party to provide the required cost-sharing information or prescription drug file in compliance with this chapter. If a health insurer chooses to enter into an agreement and the contracted party fails to provide the information or file, the health insurer is in violation of this chapter. Source: SL 2021, ch 213,  6.
58-17K-7. Acting in good faith--Error or omission--Reliance on other entity. A health insurer acting in good faith and with reasonable diligence is not in violation of this chapter solely because the health insurer:(1)Makes an error or omission in a disclosure required in this chapter, provided the health insurer corrects the information as soon as practicable; or(2)Maintains an internet website that is temporarily inaccessible, provided the health insurer makes the information available as soon as practicable.To the extent this chapter requires a health insurer to obtain information from any other entity, the health insurer does not fail to comply with this chapter if the health insurer relies in good faith on the information from the other entity, unless the health insurer knows, or reasonably should know, the information is incomplete or inaccurate. Source: SL 2021, ch 213,  7.
58-17K-8. Compliance with applicable laws required. Nothing in this chapter alters or affects a health insurer's duty to comply with requirements under applicable state and federal laws, including those governing accessibility, privacy, or security of information required to be disclosed under this chapter, or those governing the ability of properly authorized representatives to access enrollee information held by a health insurer. Source: SL 2021, ch 213,  8.
58-17K-9. Applicability to certain plans. Nothing in this chapter applies to:(1)A grandfathered health plan;(2)A health reimbursement arrangement or other account-based group health plan as defined in 29 CFR 2590.715-2711(d)(6) as of January 1, 2020;(3)A short term limited duration plan;(4)Accident insurance;(5)Credit insurance;(6)Disability income insurance;(7)Specified disease insurance;(8)Dental insurance;(9)Vision insurance;(10)Coverage issued as a supplement to liability insurance;(11)A medical payment under automobile or homeowner's insurance;(12)Insurance under which benefits are payable with or without regard to fault and that is statutorily required to be contained in any liability policy or equivalent self-insurance;(13)Hospital income or indemnity insurance;(14)Long-term care insurance; and(15)Medicare supplement insurance. Source: SL 2021, ch 213,  9.
58-18-1. Group health insurance defined.Group health insurance is that form of health insurance covering groups of persons as defined in 58-18-2 to 58-18-6, inclusive, with or without one or more members of their families or one or more of their dependents, or covering one or more members of the families or one or more dependents of such groups of persons, and issued upon the basis set forth in 58-18-2 to 58-18-7, inclusive. Insurance issued on a blanket basis pursuant to 58-18-12 is a form of group health insurance. Source: SL 1966, ch 111, ch 26, 1; SL 2000, ch 250, 1.
58-18-10. Additions to group originally insured.Each such group health insurance policy shall contain in substance a provision that to the group originally insured may be added from time to time eligible new employees or members or dependents, as the case may be, in accordance with the terms of the policy. Source: SL 1966, ch 111, ch 26, 2 (3).
58-18-11.1. Reduction of benefits because of increase in statutory disability benefits prohibited.No group insurance policy for loss of time or disability benefits issued, amended, renewed or delivered in this state shall contain any provision offsetting, or in any other manner reducing, any benefit under the policy by the amount of, or in proportion to, any increase in disability benefits received or receivable under the federal Social Security Act, the Railroad Retirement Act, any veteran's disability compensation and survivor benefits act, worker's compensation, or any similar federal or state law, as amended subsequent to the date of commencement of such benefit. Source: SL 1976, ch 312.
58-18-11. Direct payment for hospital, medical, or surgical services--Option of insurer.Any group health policy may on request by the group policyholder provide that all or any portion of any indemnities provided by any such policy on account of hospital, nursing, medical, or surgical services may, at the insurer's option, be paid directly to the hospital or person rendering such services; but the policy may not require that the service be rendered by a particular hospital or person. Payment so made shall discharge the insurer's obligation with respect to the amount of insurance so paid. Source: SL 1966, ch 111, ch 26, 3.
58-18-12. Blanket health insurance defined.Blanket health insurance is hereby declared to be that form of health insurance covering groups of persons as enumerated in one of 58-18-13 to 58-18-19, inclusive. Source: SL 1966, ch 111, ch 26, 4.
58-18-13. Blanket health insurance for passengers on common carrier.Blanket health insurance may be under a policy or contract issued to any common carrier or to any operator, owner, or lessee of a means of transportation, who or which shall be deemed the policyholder, covering a group defined as all persons or all persons of a class who may become passengers on such common carrier or such means of transportation. Source: SL 1966, ch 111, ch 26, 4 (1).
58-18-14. Blanket health insurance for employees, dependents, or guests with reference to hazardous activities.Blanket health insurance may be under a policy or contract issued to an employer, who shall be deemed the policyholder, covering all employees, dependents, or guests, defined by reference to specified hazards incident to the activities or operations of the employer or any class of employees, dependents, or guests similarly defined. Source: SL 1966, ch 111, ch 26, 4 (2).
58-18-15. Blanket health insurance for institutions of learning, camps, or sponsors.Blanket health insurance may be under a policy or contract issued to a school, or other institution of learning, camp or sponsor thereof; or to the head or principal thereof, who or which shall be deemed the policyholder, covering students or campers. Supervisors and employees may be included. Source: SL 1966, ch 111, ch 26, 4 (3).
58-18-16. Blanket health insurance for religious, charitable, recreational, educational, or civic organizations.Blanket health insurance may be under a policy or contract issued in the name of any religious, charitable, recreational, educational, or civic organization, which shall be deemed the policyholder, covering participants in activities sponsored by the organization. Source: SL 1966, ch 111, ch 26, 4 (4).
58-18-17. Blanket health insurance for sports team or sponsors.Blanket health insurance may be under a policy or contract issued to a sports team or sponsors thereof which shall be deemed the policyholder, covering members, officials, and supervisors. Source: SL 1966, ch 111, ch 26, 4 (5).
58-18-18. Blanket health insurance for volunteer group or agency.Blanket health insurance may be under a policy or contract issued in the name of any volunteer fire department, first aid, or other such volunteer group, or agency having jurisdiction thereof, which shall be deemed the policyholder, covering all of the members of such fire department or group. Source: SL 1966, ch 111, ch 26, 4 (6).
58-18-19. Blanket health insurance for other risks approved by director.Blanket health insurance may be under a policy or contract issued to cover any other risk or class of risks which, in the discretion of the director may be properly eligible for blanket health insurance. The discretion of the director may be exercised on an individual risk basis or class of risks, or both. Source: SL 1966, ch 111, ch 26, 4 (7).
58-18-2. Employee group insurance authorized--Employees defined.Group health insurance may be under a policy issued to an employer or trustees of a fund established by an employer, who shall be deemed the policyholder, insuring employees of such employer for the benefit of persons other than the employer. The term "employees" as used herein shall be deemed to include the officers, managers, and employees of the employer, the individual proprietor or partner if the employer is an individual proprietor or partnership, the officers, managers, and employees of subsidiary or affiliated corporations, the individual proprietor or partners and employees of individuals and firms, if the business of the employer and such individual or firm is under common control through stock ownership, contract, or otherwise. The term "employees" as used herein may include retired employees. No director of a corporate employer shall be eligible for insurance under the policy unless such person is otherwise eligible as a bona fide employee of the corporation, by performing services other than the usual duties of a director. A policy issued to insure employees of a public body may provide that the term "employees" shall include elected or appointed officials. The policy may provide that the term "employees" shall include the trustees or their employees, or both, if their duties are principally with such trusteeship. Source: SL 1966, ch 111, ch 26, 1 (1).
58-18-20. Authority to issue blanket health insurance--Filing of copy of form--Required provisions.Any insurer authorized to write health insurance in this state may issue blanket health insurance. No such blanket policy or certificate may be issued or delivered, or coverage solicited, in this state unless a copy of the form thereof has been filed in accordance with 58-11-12. Every such blanket policy or certificate shall contain provisions, which in the opinion of the director, are at least as favorable to the policyholder and the individual insured as those set forth in 58-18-21 to 58-18-27, inclusive. Source: SL 1966, ch 111, ch 26, 5; SL 2005, ch 269, 5. 
58-18-21. Policy and application constitute entire contract--Statements by policyholder not warranties--Written statement required for use in defense of claim.Subject to 58-18-20, every blanket health insurance policy shall contain a provision that the policy and the application shall constitute the entire contract between the parties, and that all statements made by the policyholder shall, in absence of fraud, be deemed representations and not warranties, and that no such statements shall be used in defense to a claim under the policy, unless it is contained in a written application. Source: SL 1966, ch 111, ch 26, 5 (1).
58-18-22. Sickness or injury--Provision for notice to insurer.Subject to 58-18-20, every blanket health insurance policy shall contain a provision that written notice of sickness or of injury must be given to the insurer within thirty days after the date when such sickness or injury occurred. Failure to give notice within such time shall not invalidate nor reduce any claim if it shall be shown not to have been reasonably possible to give such notice and that notice was given as soon as was reasonably possible. Source: SL 1966, ch 111, ch 26, 5 (2).
58-18-23. Forms for filing proof of loss--Failure of insurer to furnish, submission of written proof.Subject to 58-18-20, every blanket health insurance policy shall contain a provision that the insurer will furnish to the policyholder such forms as are usually furnished by it for filing proof of loss. If such forms are not furnished before the expiration of fifteen days after the giving of such notice, the claimant shall be deemed to have complied with the requirements of the policy as to proof of loss upon submitting within the time fixed in the policy for filing proof of loss, written proof covering the occurrence, character and extent of the loss for which claim is made. Source: SL 1966, ch 111, ch 26, 5 (3).
58-18-24. Claim for loss of time--Time for furnishing proof of loss--Notice of continuance of disability.Subject to 58-18-20, every blanket health insurance policy shall contain a provision that in the case of claim for loss of time for disability, written proof of such loss must be furnished to the insurer within thirty days after the commencement of the period for which the insurer is liable, and that subsequent written proofs of the continuance of such disability must be furnished to the insurer at such intervals as the insurer may reasonably require, and that in the case of claim for any other loss, written proof of such loss must be furnished to the insurer within ninety days after the date of such loss. Failure to furnish such proof within such time shall not invalidate nor reduce any claim if it shall be shown not to have been reasonably possible to furnish such proof and that such proof was furnished as soon as was reasonably possible. Source: SL 1966, ch 111, ch 26, 5 (4).
58-18-25. Time for payment of benefits.Subject to 58-18-20, every blanket health insurance policy shall contain a provision that all benefits payable under the policy other than benefits for loss of time will be payable immediately upon receipt of due written proof of such loss, and that, subject to due proof of loss, all accrued benefits payable under the policy for loss of time will be paid not later than at the expiration of each period of thirty days during the continuance of the period for which the insurer is liable, and that any balance remaining unpaid at the termination of such period will be paid immediately upon receipt of such proof. Source: SL 1966, ch 111, ch 26, 5 (5).
58-18-26. Physical examination of insured--Autopsy in death claims.Subject to 58-18-20, every blanket health insurance policy shall contain a provision that the insurer at its own expense, shall have the right and opportunity to examine the person of the insured when and so often as it may reasonably require during the pendency of claim under the policy and also the right and opportunity to make an autopsy in case of death where it is not prohibited by law. Source: SL 1966, ch 111, ch 26, 5 (6).
58-18-27. Time for commencement of action to recover under policy.Subject to 58-18-20, every blanket health insurance policy shall contain a provision that no action at law or in equity shall be brought to recover under the policy prior to the expiration of sixty days after written proof of loss has been furnished in accordance with the requirements of the policy and that no such action shall be brought after the expiration of three years after the time written proof of loss is required to be furnished. Source: SL 1966, ch 111, ch 26, 5 (7).
58-18-28. Individual application and certificate not required under blanket policy.An individual application shall not be required from a person covered under a blanket health policy or contract, nor shall it be necessary for the insurer to furnish each person a certificate. Source: SL 1966, ch 111, ch 26, 6.
58-18-29. Persons to whom benefits payable under blanket health policy.All benefits under any blanket health policy shall be payable to the person insured, or to his designated beneficiary or beneficiaries, or to his estate; except, that if the person insured be a minor or mentally incompetent, such benefits may be made payable to his parents, guardian, conservator, or other person actually supporting him, or if the entire cost of the insurance has been borne by the employer such benefits may be made payable to the employer. The policy may provide that all or any portion of any indemnities provided by such policy on account of hospital, nursing, medical, or surgical services may, at the insurer's option, be paid directly to the hospital or person rendering such services; but the policy may not require that the service be rendered by a particular hospital or person. Payment so made shall discharge the insurer's obligation with respect to the amount of insurance so paid. Source: SL 1966, ch 111, ch 26, 7; SL 1993, ch 213, 260.
58-18-3. Employer association group health insurance authorized--Employees defined.Group health insurance may be under a policy issued to a bona fide association of employers, including a labor union, that has a constitution and bylaws and that has been organized and is maintained in good faith with at least one substantial business purpose unrelated to obtaining insurance, insuring members, employees, or employees of members of the association for the benefit of persons other than the association or its officers or trustees. For the purposes of this section, the term, employees, may include retired employees, and the term, employers, includes working owners without employees who qualify as both an employer and employee. Source: SL 1966, ch 111, ch 26, 1 (2); SL 2019, ch 212, 1.
58-18-30. Chapter inapplicable to prior policies.The provisions of this chapter shall not apply to any contracts or policies entered into or issued prior to February 8, 1966, nor to any extensions, renewals, or modifications thereof or amendments thereto whenever made. Source: SL 1966, ch 111, ch 26, 8.
58-18-31.1. Dependent coverage termination--Age--Full-time student.No insurer or health carrier issuing health insurance coverage, other than excepted benefits, that provides dependent coverage for any qualifying child, as defined by rules promulgated pursuant to 58-18-79, may terminate coverage due to attainment of a limiting age below age twenty-six. If the dependent remains a full-time student upon attaining the age of twenty-six but not exceeding the age of twenty-nine, the insurer shall provide for the continuation of coverage for that dependent at the insured's option. Nothing in this section requires the employer to contribute any portion of the premium for dependents that are full-time students and have attained the age of twenty-six. However, the provisions of this section do not apply to any qualifying relative, as defined by rules promulgated pursuant to 58-18-79, whose gross income is less than the exemption amount as prescribed by the director by rules promulgated pursuant to chapter 1-26. Continuation of coverage for full-time students attaining the age of twenty-four is not required if the dependent has other creditable coverage in force nor required for any full-time students who attained the age of twenty-four prior to July 1, 2007. (SL 2011, ch 216, 19 provides: "The provisions of this Act are repealed if the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010) is found to be unconstitutional in its entirety by a final decision of a federal court of competent jurisdiction and all appeals exhausted or time for appeals elapsed.") Source: SL 2005, ch 265, 2; SL 2007, ch 288, 2; SL 2011, ch 216, 8.
58-18-31. Continuation of coverage for child with intellectual or physical disability--Proof of dependency.A group or blanket health insurance policy, which is delivered or issued for delivery in this state and which provides that coverage of a dependent child shall terminate upon attainment of the limiting age for dependent children specified in the policy, shall also provide that attainment of such limiting age shall not operate to terminate the coverage of such child while the child is and continues to be both (a) incapable of self-sustaining employment by reason of intellectual disability or physical disability and (b) chiefly dependent upon the policyholder for support and maintenance, provided proof of such incapacity and dependency is furnished to the insurer by the policyholder within thirty-one days of the child's attainment of the limiting age and subsequently as may be required by the insurer but not more frequently than annually after the two-year period following the child's attainment of the limiting age. Source: SL 1969, ch 140; SDCL Supp, 58-17-30.1; SL 2013, ch 125, 19.
58-18-32. Family coverage to include newborn and newly adopted children.Any group health insurance policy and group service or indemnity type contract issued by a nonprofit corporation which offers coverage for a family member of an insured or subscriber shall provide that the health insurance benefits applicable for children are payable with respect to a newly born child of the insured or subscriber from the moment of birth or to a newly adopted child of the insured or subscriber from the beginning of the six-month adoption bonding period. The newly born or newly adopted child shall be added to the policy without underwriting and without the imposition of any preexisting waiting period. Any policy or contract issued before July 1, 1984, shall, upon its next anniversary date, also provide that the health insurance benefits applicable for children shall be payable with respect to a newly born child of the insured or subscriber from the moment of birth or to a newly adopted child of the insured or subscriber from the beginning of the six-month adoption bonding period. Source: SL 1974, ch 322; SDCL Supp, 58-17-30.2; SL 1976, ch 313, 1; SL 1977, ch 408; SL 1984, ch 327, 1; SL 1994, ch 387, 7.
58-18-33. Premature birth, congenital defects, and birth abnormalities covered--Applicability.The coverage for a newly born child from the moment of birth or for a newly adopted child, from the beginning of the six-month adoption bonding period, shall consist of coverage of injury or sickness including the necessary care and treatment of premature birth and medically diagnosed congenital defects and birth abnormalities. The coverage required by this section applies to any subsequent health benefit plan that is purchased providing coverage for that newly born or newly adopted child. If there is a break in coverage that exceeds sixty-three days, the health benefit plan may apply preexisting exclusion limitations as permitted by 58-18-45. The provisions of  58-18-32 to 58-18-34, inclusive, apply to any group health benefit plan issued or renewed by any health insurer, health carrier, health maintenance organization, fraternal benefit society, nonprofit medical and surgical plan, nonprofit hospital service plan, or other entity providing coverage through a health benefit plan subject to the provisions of this title. Source: SL 1974, ch 322; SDCL Supp, 58-17-30.3; SL 1976, ch 313, 2; SL 1984, ch 327, 2; SL 2001, ch 274, 2; SL 2006, ch 258, 1.
58-18-34. Notice of birth or adoption required for continued coverage.An insurer may require notice that a newly born or newly adopted child is to be added to the policy or that coverage is to be changed from single or spousal coverage to family coverage. However, the insurer may not require notification sooner than the birth of the child or the start of the adoption bonding period. If the child is added or coverage changed to family coverage before the birth of the child or the start of the adoption bonding period, no additional premium may be charged by the insurer until the birth of the child or the start of the adoption bonding period. The insurer shall take reasonable steps to provide adequate notice to insureds of the need to alter coverage to ensure newborn or adopted children are covered and of the lack of premium adjustment until the birth of the child or the start of the adoption bonding period. An insurer is considered to have taken reasonable steps if prominent disclosure of the requirements of this section are included in a certificate, subscriber contract, evidence of coverage, or employee handbook if such are provided to all insureds.If payment of a specific premium or subscription fee is required to provide coverage for a child, the policy or contract may require that notification of birth of a newly born child or notification of the start of the six-month adoption bonding period for an adopted child or start of the bonding period and payment of the required premium or fees be furnished to the insurer or nonprofit service or indemnity corporation within thirty-one days after the date of birth or notification of the start of the six-month adoption bonding period for an adopted child or start of the bonding period in order to have the coverage continued beyond the thirty-one day period. Source: SL 1974, ch 322; SDCL Supp, 58-17-30.4; SL 1984, ch 327, 3; SL 1994, ch 387, 8.
58-18-35. Notice required for rate increase by group health insurance company.Forty-five days before a premium rate increase is effective, the group health insurance company shall notify the policy holder in writing that the premium rate for the group health insurance will be increased. Source: SL 1989, ch 434, 1.
58-18-36.1.Policies required to cover occult breast cancer screening.Each group health insurance policy that covers a female and that is delivered, issued for delivery, or renewed in this state, except for a policy that provides coverage for specified disease or other limited benefit coverage, shall provide coverage for screening for the presence of occult breast cancer.The provisions of this section apply only to plans that are not grandfathered pursuant to 75 Fed. Reg. 116 (2010) to be codified at 26 C.F.R. 54 and 602, 29 C.F.R. 2590, and 45 C.F. R. 147. (SL 2011, ch 216, 19 provides: "The provisions of this Act are repealed if the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010) is found to be unconstitutional in its entirety by a final decision of a federal court of competent jurisdiction and all appeals exhausted or time for appeals elapsed.") Source: SL 2011, ch 216, 15.
58-18-36. Grandfathered plans required to cover low-dose mammography--Extent of coverage.Each group health insurance policy that covers a female and that is delivered, issued for delivery, or renewed in this state, except for a policy that provides coverage for specified disease or other limited benefit coverage, shall provide coverage for screening by low-dose mammography for the presence of occult breast cancer that is subject to the same dollar limits, deductibles and coinsurance factors as for other radiological examinations. Coverage for the screening shall be provided as follows: ages thirty-five to thirty-nine, one baseline mammography; ages forty to forty-nine, a mammography every other year; and age fifty and older, a mammography every year.As used in this section, "low-dose mammography" means the X ray examination of the breast using equipment dedicated specifically for mammography, including the X ray tube, filter, compression device, screens, films, and cassettes, with an average radiation exposure delivery of less than one rad midbreast, with two views for each breast and with interpretation by a qualified radiologist.The provisions of this section apply only to grandfathered plans pursuant to 75 Fed. Reg. 116 (2010) to be codified at 26 C.F.R. 54 and 602, 29 C.F.R. 2590, and 45 C.F.R. 147. (SL 2011, ch 216, 19 provides: "The provisions of this Act are repealed if the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010) is found to be unconstitutional in its entirety by a final decision of a federal court of competent jurisdiction and all appeals exhausted or time for appeals elapsed.") Source: SL 1990, ch 397, 1, 4; SL 1991, ch 400, 4; SL 2011, ch 216, 9.
58-18-37. Freedom of choice for pharmacy services.No policy of group health insurance providing benefits for hospital and medical expenses delivered in this state that is offered by a commercial health insurance company, by a nonprofit medical and surgical plan corporation, by a nonprofit hospital service plan corporation, by a health maintenance organization, by a preferred provider organization, by an individual practice association or by a similar mechanism may:(1)Deny any licensed pharmacy or licensed pharmacist as defined in 36-11-2 the right to participate as a participating provider for any policy or plan on the same terms and conditions as are offered to any other provider of pharmacy services under the policy or plan;(2)Prevent any person who is a party to or beneficiary of any health insurance policy from selecting a licensed pharmacy of his choice to furnish the pharmaceutical services offered under any policy or plan, provided that the pharmacy is a participating provider under the same terms and conditions of the policy or plan as those offered to any other provider of pharmacy services; or(3)Permit or mandate any difference in coverage for or impose any different conditions, including copayment fees, whether the prescription benefits are provided through direct contact with a pharmacy or by use of an out-of-state mail order service so long as the provider selected is a participant in the plan involved. Source: SL 1990, ch 395, 1.
58-18-38. Annual period of enrollment for licensed pharmacies--Actual notice of enrollment period not required.All health benefit programs, as defined in 58-18-37, shall provide an annual period of enrollment of at least thirty days during which period any pharmacy licensed under chapter 36-11 may elect to participate in the plan under the terms and conditions then offered unless the pharmacy has lost its status as a participating provider due to its failure to comply with the terms and conditions of its participating provider agreement. Health benefit programs are not required to provide actual notice of the period of open enrollment to the pharmacy. Source: SL 1990, ch 395, 2.
58-18-39. Provisions denying choice for pharmacy services as void.Any provision in a health insurance policy offered in this state which violates the provisions in 58-18-37 is void. Source: SL 1990, ch 395, 3.
58-18-4.1. Restrictions on issuance of group health insurance policy to association.A group health insurance policy may not be issued to an association under 58-18-3 and 58-18-4 that is formed, owned, or controlled by any of the following, other than to the extent the entities participate in the group or association in their capacity as employer members of the group or association:(1)A health insurance issuer;(2)A subsidiary or affiliate of a health insurance issuer;(3)A health care organization or network provider that is part of the health care delivery system; or(4)An insurance producer, broker, or consultant. Source: SL 2019, ch 212, 2.
58-18-4.2. Required duration of participation by employer member in association plan.An employer member that participates in an association under 58-18-3 and 58-18-4 shall participate in the association plan for a period of not less than three consecutive calendar years. Any contract issued to an association shall contain reasonable enforcement provisions including reasonable fees or assessments for early departure or for enrollment in another multiple employer plan during the early departure date. Source: SL 2019, ch 212, 3.
58-18-4.3. Association plan covering state residents to comply with state law.An association plan based in this state or any other state shall follow all applicable South Dakota laws and administrative rules if the association plan covers South Dakota residents. Source: SL 2019, ch 212, 4.
58-18-4.4. Requirements for insurer offering fully insured health benefit plan through association.A health insurer offering a fully insured health benefit plan through an association shall:(1)Guarantee acceptance of all eligible individuals under the employer members' association or fully insured multiple employer arrangement and, if coverage is offered to spouses and dependents, to all of the spouses and dependents;(2)Provide a bronze health plan that has an actuarial value of sixty percent;(3)Comply with all applicable state mandates; and(4)Have premium rates that meet a minimum loss ratio of eighty-five percent. Source: SL 2019, ch 212, 5.
58-18-4. Industry fund group insurance authorized--Employees defined.Group health insurance may be under a policy issued to the trustees of a fund established by two or more employers in the same or related industry or by one or more labor unions or by one or more employers and one or more labor unions or by an association as defined in 58-18-3, which trustees shall be deemed the policyholder, to insure employees of the employers or members of the unions or of such association, or employees of members of such association, for the benefit of persons other than the employers or the unions or such association. The term "employees" as used herein may include the officers, managers and employees of the employer, and the individual proprietor or partners if the employer is an individual proprietor or partnership. The term "employees" as used herein may include retired employees. The policy may provide that the term "employees" shall include the trustees or their employees, or both, if their duties are principally connected with such trusteeship. Source: SL 1966, ch 111, ch 26, 1 (3).
58-18-40. Enforcement of provisions permitting choice for pharmacy services.The Division of Insurance shall enforce the provisions of 58-18-37 to 58-18-39, inclusive. Source: SL 1990, ch 395, 4.
58-18-41. Coverage for phenylketonuria.Every group health insurance policy that is delivered, issued for delivery, or renewed in this state, except for policies that provide coverage for specified disease or other limited benefit coverage, shall offer coverage for testing, diagnosis and treatment of phenylketonuria including dietary management, formulas, case management, intake and screening, assessment, comprehensive care planning and service referral. Source: SL 1992, ch 348, 3.
58-18-42. Health benefit plan defined.For the purposes of this chapter, a health benefit plan is any hospital or medical expense incurred policy or certificate, hospital or medical service plan, contract, or health maintenance organization subscriber contract. The term does not include specified disease, hospital indemnity, fixed indemnity, accident-only, credit, dental, vision, medicare supplement, long-term care, or disability income insurance, coverage issued as a supplement to liability insurance, workers' compensation or similar insurance, or automobile medical payment insurance. Source: SL 1994, ch 383, 1.
58-18-43. Late enrollee determined.For the purposes of this chapter, a late enrollee is an eligible employee or dependent who requests enrollment in a health benefit plan of an employer following the initial enrollment period during which the individual is entitled to enroll under the terms of the health benefit plan, if the initial enrollment period is a period of at least thirty days. However, no eligible employee or dependent may be considered a late enrollee if:(1)The individual:(a)Was covered under creditable coverage at the time of the initial enrollment;(b)Lost coverage under creditable coverage as a result of termination of employment or eligibility, reduction of hours, the involuntary termination of the creditable coverage, death of a spouse, legal separation, or divorce; and(c)Requests enrollment within sixty-three days after termination of the creditable coverage;(2)The individual is employed by an employer that offers multiple health benefit plans and the individual elects a different plan during an open enrollment period;(3)A court has ordered coverage be provided for a spouse or minor or dependent child under a covered employee's health benefit plan and request for enrollment is made within thirty days after issuance of the court order; or(4)Child custody has changed by agreement of the parties to a child custody agreement or to a child custody order which agreement has not yet been included in a court order. Source: SL 1994, ch 383, 2; SL 1997, ch 289, 7.
58-18-44. Creditable coverage determined.For the purposes of this chapter, creditable coverage are benefits or coverage provided under:(1)Medicare or medicaid;(2)An employer-based health insurance plan or health benefit arrangement that provides benefits similar to or exceeding benefits provided under a health benefit plan;(3)An individual health insurance policy including coverage issued by a health maintenance organization, a fraternal benefit society, a nonprofit medical and surgical plan, a nonprofit hospital service plan that provides benefits similar to or exceeding the benefits provided under the basic plan pursuant to chapter 58-18B, or an employee welfare benefit plan as defined in section 3(1) of the Employee Retirement Income Security Act of 1974 as adopted by the director pursuant to chapter 1-26, to the extent that the plan provides directly or through insurance, reimbursement or otherwise to employees or their dependents medical care for the diagnosis, cure, mitigation, treatment, or prevention of disease, or amounts paid for the purpose of affecting any structure or function of the body and amounts paid for the transportation primarily for and essential to medical care;(4)Chapter 55 of Title 10, United States Code;(5)A medical care program of the Indian Health Service or of a tribal organization;(6)A state health benefits risk pool;(7)A health plan offered under Chapter 89 of Title 5, United States Code;(8)A public health plan;(9)A health benefit plan under section 5(e) of the Peace Corps Act (22 U.S.C. 2504(e));(10)A short-term limited-duration policy; or(11)A college plan. Source: SL 1994, ch 383, 3; SL 1997, ch 289, 8; SL 1998, ch 289, 5.
58-18-45.1.(Text of section effective until the first plan year, policy year, or renewal date on or after January 1, 2019) Anesthesia and hospitalization for dental care to be provided certain covered persons.Any health benefit plan as defined by 58-18-42 shall cover anesthesia and hospital charges for dental care provided to a covered person who:(1)Is a child under age five; or(2)Is severely disabled or otherwise suffers from a developmental disability as determined by a licensed physician which places such person at serious risk.Such coverage applies regardless of whether the services are provided in a hospital or a dental office. A health carrier may require prior authorization of hospitalization for dental care procedures in the same manner that prior authorization is required for hospitalization for other covered diseases or conditions.(Text of section effective the first plan year, policy year, or renewal date on or after January 1, 2019) Anesthesia and hospital or ambulatory surgery center charges for dental care to be covered for certain persons. Any health benefit plan as defined by 58-18-42 shall cover anesthesia and hospital or ambulatory surgery center charges for dental care provided to a covered person who:(1)Is a child under age five; or(2)If determined by a licensed physician, is severely disabled, has a developmental disability, or otherwise has a medical condition that places the person at serious medical risk.The coverage applies regardless of whether the services are provided in a hospital, ambulatory surgery center, or a dental office. A health carrier may require prior authorization in the same manner that prior authorization is required for other covered diseases or conditions. Source: SL 1999, ch 248, 3; SL 2018, ch 279, 2, eff. Jan. 1, 2019.
58-18-45. Preexisting conditions--Limitation of waiting periods.Any health carrier providing group coverage, other than excepted benefits, shall comply with the following provisions:(1)No policy may deny, exclude, or limit benefits for a covered individual for claims incurred more than twelve months following the effective date of the individual's coverage due to a preexisting condition. No policy may define a preexisting condition more restrictively than a condition for which medical advice, diagnosis, care, or treatment was recommended or received during the six months immediately preceding the effective date of coverage;(2)A policy shall waive any time period applicable to a preexisting condition exclusion or limitation period for the aggregate period of time an individual was previously covered by creditable coverage that provided benefits with respect to such services, if the creditable coverage was continuous to a date not more than sixty-three days prior to the effective date of the new coverage. The waiver for prior creditable coverage also applies to late enrollees. A period of time a person was previously covered may not be aggregated if there was a break in coverage of sixty-three days or more. The policy shall count a period of creditable coverage, without regard to the specific benefits covered under the policy, unless the policy elects to credit it based on coverage of benefits within several classes or categories of benefits specified in rules adopted by the director. A condition may not be defined or considered as preexisting if the condition arose after a person began creditable coverage and if there was not a break in coverage which exceeded sixty-three days;(3)A policy may exclude coverage for late enrollees for the greater of eighteen months or for an eighteen-month preexisting condition exclusion. However, if both a period of exclusion from coverage and a preexisting condition exclusion are applicable to a late enrollee, the combined period may not exceed eighteen months from the date the individual enrolls for coverage under the policy;(4)Genetic information may not be treated as a condition for which a preexisting condition exclusion may be imposed in the absence of a diagnosis of the condition related to such information;(5)A health maintenance organization which does not utilize a preexisting waiting period may use an affiliation period in lieu of a preexisting waiting period. No affiliation period may exceed two months in length. No premium may be charged for any portion of the affiliation period. If the health maintenance organization utilizes neither a preexisting waiting period nor an affiliation period, the health maintenance organization may use other criteria designed to avoid adverse selection provided that those criteria are approved by the director. In the case of a late enrollee who is subject to an affiliation period, the affiliation period may not exceed three months.For purposes of this section, the effective date of coverage is the first day the person became covered for either accidents or sicknesses. No covered person under the age of nineteen is subject to a preexisting condition limitation or exclusion for any plan year beginning on or after September 23, 2010. (SL 2011, ch 216, 19 provides: "The provisions of this Act are repealed if the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010) is found to be unconstitutional in its entirety by a final decision of a federal court of competent jurisdiction and all appeals exhausted or time for appeals elapsed.") Source: SL 1994, ch 383, 4; SL 1997, ch 289, 9; SL 1998, ch 289, 6; SL 2001, ch 275, 7; SL 2003, ch 248, 3; SL 2011, ch 216, 10.
58-18-46. Renewability of health benefit plans--Employer's election--Exceptions.Except as provided in 58-18-42 to 58-18-49, inclusive, a health benefit plan subject to this chapter is renewable to all eligible employees and dependents at the option of the employer, except for the following reasons:(1)The employer has failed to pay premiums or contributions in accordance with the terms of the health insurance coverage or the insurer has not received timely premium payments;(2)Fraud or intentional misrepresentation of material fact by the employer;(3)Noncompliance with the carrier's employer contribution or participation requirements;(4)The number of individuals covered under the plan is less than the number or percentage of eligible individuals required under the plan;(5)In the case of a health insurance issuer that offers health insurance coverage in the market through a network plan, there is no longer any enrollees in connection with the plan who live, reside, or work in the service area of the issuer or in the area for which the issuer is authorized to do business and the issuer would deny enrollment with respect to the plan as provided for in 58-18B-37;(6)The employer carrier elects to nonrenew all of its health benefit plans delivered or issued for delivery to employers in this state;(7)In the case of health insurance coverage that is made available only through one or more bona fide associations, the membership of an employer in the association (on the basis of which the coverage is provided) ceases but only if the coverage is terminated uniformly without regard to any health status-related factor relating to any covered individual; or(8)If the issuer decides to discontinue offering a particular type of group health insurance offered in the group market, coverage of such type may be discontinued if:(a)The issuer provides notice to each employer provided coverage of this type in such market (and any participant and beneficiary covered under such coverage) of the discontinuation at least ninety days prior to the date of the discontinuation of the coverage;(b)The issuer offers to each employer provided coverage of this type in such market, the option to purchase all other health insurance coverage currently being offered by the issuer to a group health plan in such market;(c)In exercising the option to discontinue coverage of this type and in offering the option of coverage under subsection (b), the issuer acts uniformly without regard to the claims experience of those employers or any health status-related factor relating to any participant or beneficiary covered or any new participant or beneficiary who may become eligible for such coverage.If a carrier nonrenews a health benefit plan pursuant to this section, the director shall assist affected employers in finding replacement coverage.  Source: SL 1994, ch 383, 5; SL 1997, ch 289, 10; SL 2001, ch 275, 5.
58-18-47. Nonrenewal of health benefit plans by an employer carrier.If an employer carrier elects not to renew all of its health benefit plans delivered or issued for delivery to employers in this state, the carrier shall:(1)Be prohibited from writing new business in the employer market in this state for a period of five years from the date of notice to the director;(2)Provide advance notice of the decision not to renew to the director in each state in which it is licensed; and(3)Provide notice of the decision not to renew coverage to all affected employers and to the director in each state in which an affected insured individual is known to reside at least one hundred eighty days prior to the nonrenewal of any health benefit plans by the carrier.Notice to the director under this section shall be provided at least three working days prior to the notice to the affected employers. In the case of an employer carrier doing business in one established geographic service area of the state, this section applies only to the carrier's operations in that service area. Source: SL 1994, ch 383, 6.
58-18-48. Acceptance of new employees for coverage under employer's existing health benefit plan.If an employer has an existing health benefit plan, the carrier shall accept for coverage under the health benefit plan new employees and the dependents of new employees, if the new employee had creditable coverage within the prior sixty-three days from the date the new employee is eligible for coverage. The coverage shall be issued without exclusionary riders. The carrier is not required to provide coverage for new employees or dependents who are late enrollees or who have not had creditable coverage within sixty-three days before applying for coverage. The exception allowing late enrollees to be excluded is limited to the time frames required by subdivisions 58-18-45(3) and (5). Policies may not exclude children, as set forth in subdivision 58-18-43(4), from the definition of eligible dependents. No person may be excluded from coverage based upon discriminatory criteria as defined by the director in rules promulgated pursuant to chapter 1-26. Source: SL 1994, ch 383, 8; SL 1996, ch 295; SL 1997, ch 289, 11; SL 1998, ch 289, 7.
58-18-49. Carrier's offer of coverage to employer--Coverage of all eligible employees.If an employer carrier offers coverage to an employer, the employer carrier shall offer coverage to all of the eligible employees of an employer and their dependents. An employer carrier may not offer coverage to only certain individuals in an employer group or to only part of the group, except in the case of late enrollees. Source: SL 1994, ch 383, 9; SL 1995, ch 281, 21.
58-18-5. Issuance to person or organization to which group life insurance policy may be issued.Group health insurance may be under a policy issued to any person or organization to which a policy of group life insurance may be issued or delivered in this state to insure any class or classes of individuals that could be insured under such group life policy. Source: SL 1966, ch 111, ch 26, 1 (4).
58-18-51.1. Application of 58-18-42 to 58-18-49, inclusive.The provisions of 58-18-42 to 58-18-49, inclusive, apply to health benefit plans which provide health coverage on a self-funded basis through nonfederal government employers, college plans issued on a blanket basis, and church plans. Any self-funded nonfederal government employer plan is subject to the provisions of 58-18-42 to 58-18-49, inclusive, whether or not it is a single employer plan, a pooled arrangement, a cooperative, through a joint powers agreement, or other similar mechanism for providing health coverage. Source: SL 1997, ch 289, 24; SL 2000, ch 250, 2.
58-18-52.1. Political subdivisions permitted to join with health insurance purchasing organizations.Any political subdivision of the state may join with other organizations which are not political subdivisions of the state to operate as an organization formed under 58-18-52 for the purpose of purchasing health insurance pursuant to the provisions in 58-18-52 to 58-18-62, inclusive, and reducing costs to local government. Source: SL 2012, ch 246, 1.
58-18-52. Formation of voluntary health insurance purchasing organizations. Notwithstanding the provisions of chapter 47-34A and  47-15-2 and 47-22-4, any organization may form for the purposes of purchasing group health insurance on a voluntary basis. For purposes of 58-18-52 to 58-18-62, inclusive, an organization means any nonprofit organization or nonprofit corporation formed under South Dakota law. Stop loss or excess insurance may be purchased in the same manner as group health insurance is purchased pursuant to 58-18-52 to 58-18-62, inclusive. Source: SL 1994, ch 382, 1; SL 1998, ch 293, 2; SL 2021, ch 210,  16.
58-18-53. Membership of voluntary health insurance purchasing organizations.Any organization may have a group health insurance policy issued to that organization on behalf of its members who would be insured under such policy. Members may join the organization, for the purpose of obtaining group health insurance, as individuals, employers, labor unions, associations, or substantially similar groups. Source: SL 1994, ch 382, 2.
58-18-54. Purchasing organization's responsibility for negotiating terms and conditions.The organization shall be responsible for negotiating the terms and conditions of insurance contracts, collection of premiums, and providing notice to members. Source: SL 1994, ch 382, 3.
58-18-55. Purchasing organization's notice of premium charge.The organization may provide not less than forty-five days advance notice of any benefit or premium change to its members. Source: SL 1994, ch 382, 4.
58-18-56. Additional chapters applicable to purchasing organization.Any organization is subject to all applicable provisions of chapter 58-3 and chapter 58-33. Source: SL 1994, ch 382, 5.
58-18-57. Approval of purchasing organization by Division of Insurance.Any organization shall, prior to its engaging in the business of insurance, obtain approval from the Division of Insurance. The division may deny approval or withdraw approval of an organization to engage in the business of insurance for any of the following reasons:(1)Any of the grounds specified in 58-6-8;(2)Insufficient membership control of the organization;(3)Unreasonable compensation to officers, directors, or employees of the organization;(4)Misuse of premiums; or(5)Refusal to be examined or to cooperate in an examination. Source: SL 1994, ch 382, 6.
58-18-58. Premiums held in trust by purchasing organization.The organization shall hold all premiums received in trust and promptly remit premiums to the person entitled thereto. Source: SL 1994, ch 382, 7.
58-18-59. Rates for group health insurance issued to purchasing organizations.Any insurer issuing group health insurance pursuant to 58-18-52 to 58-18-62, inclusive, is subject to all of the provisions of chapter 58-18B relating to rates. Source: SL 1994, ch 382, 8.
58-18-6.1. Coverage of proprietors, partners and executive corporate officer employees.Group health insurance, as defined in 58-18-1, is required to offer to extend health insurance coverage to proprietors, partners, and executive corporate officer employees who are participating in such group insurance in their place of employment if such proprietor, partner, or executive officer elects not to be covered under workers' compensation. Source: SL 1981, ch 361.
58-18-6. Issuance to cover similar group subject to discretion of director.Group health insurance may be under a policy issued to cover any other substantially similar group which, in the discretion of the director, may be subject to the issuance of a group health policy or contract. Source: SL 1966, ch 111, ch 26, 1 (5).
58-18-60. Reasonable participation requirements for group members of purchasing organizations.An insurer may as a condition of offering coverage or continuing coverage require reasonable participation requirements of groups who become members of an organization. Source: SL 1994, ch 382, 9.
58-18-61. Purchasing organizations exempt from antitrust provisions.Any organization formed pursuant to 58-18-52 to 58-18-62, inclusive, is exempt from the antitrust provisions under chapter 37-1. Source: SL 1994, ch 382, 10.
58-18-62. Promulgation of rules for purchasing organizations.The director may promulgate rules pursuant to chapter 1-26 to further the provisions of 58-18-52 to 58-18-62, inclusive, and for purposes of carrying out the provisions of 58-18-1 to 58-18-6, inclusive, and to ensure that group health insurance coverage is issued to eligible groups and that organizations are formed and operated to further the purpose of providing economical group health insurance for its members. The rules may include:(1)Definition of terms;(2)Criteria for determining groups, associations, organizations, and trusts and their eligibility for coverage;(3)Criteria for determining substantially similar groups or for determining related industries;(4)Application requirements and procedures;(5)Reasonable compensation; and(6)Organizational structure. Source: SL 1994, ch 382, 11.
58-18-63. Minimum loss ratio for employer health benefit plans--Application of section.Premium rates for employer health benefit plans shall produce a minimum lifetime loss ratio of not less than seventy-five percent. The director may promulgate rules pursuant to chapter 1-26 which modify the minimum loss ratio required based upon the specific plan design or other objective and pertinent criteria. An insurer is not required to meet the minimum loss ratio on each policy issued. An insurer which does not make a filing specifying the blocks of business for which it will meet the minimum loss ratio requirements of this section will be required to meet the minimum loss ratio requirement in the aggregate on its entire employer block of business in this state. This section does not apply to any insurer which is required to comply with 58-17-64. Source: SL 1994, ch 381, 1; SL 1995, ch 280.
58-18-7.1. Coverage for inpatient treatment of alcoholism to be offered in group policies--Treatment within state included.Any insurer which delivers or issues for delivery in this state group accident and sickness insurance policies which provide coverage on an expense incurred basis shall offer, in writing, to include in such group policies or contracts issued or renewed on or after July 1, 1977, coverage for the inpatient treatment of alcoholism in licensed hospitals and residential primary treatment facilities approved by the State of South Dakota which are carrying out an approved program pursuant to diagnosis and recommendation of a doctor of medicine. However, when coverage for inpatient treatment of alcoholism is included in any group policy, such coverage shall include inpatient treatment at any South Dakota approved inpatient alcoholism treatment facility. Source: SL 1975, ch 314, 1; SL 1976, ch 314, 1; SL 1977, ch 411, 1; SL 1978, ch 362, 1.
58-18-7.11. Continuation or conversion policy not required under certain circumstances.No insurer may be required to offer or renew a continuation or conversion policy covering any person if:(1)The person is covered for similar benefits by another individual or group policy;(2)Similar benefits are provided for or available to such person, by reason of any state or federal law, except any person who becomes entitled to Medicare on or before continuation is elected or who is covered under another group plan on or before continuation is elected;(3)The benefits under sources of the kind referred to in subdivision (1) for such person or benefits provided or available under sources of the kind referred to in subdivision (2) for such person, together with the continued or converted policy's benefits, would result in overinsurance according to the insurer's standards for overinsurance;(4)There has been fraud or material misrepresentation in applying for any benefits under continued or converted policy;(5)The person failed to pay any required contribution;(6)There has been cancellation of all similar insurance policies in the entire state;(7)For cause on the same basis, the plan could terminate the coverage of a similarly situated active employee;(8)The person was terminated from employment for gross misconduct; or(9)The group health insurance policy is terminated by an insurer as a result of the group not meeting an insurer's participation or eligibility requirements. Source: SL 1984, ch 326, 7; SL 1989, ch 433, 9; SL 2001, ch 280, 12; SL 2009, ch 265, 1; SL 2015, ch 249, 31.
58-18-7.12. Conditions for continuation.Subject to the conditions set forth for continuation in 58-18-7 to 58-18-7.11, inclusive, a qualified beneficiary may continue coverage for a total of thirty-six months under the following conditions:(1)If at the death of the employee or member, the qualified beneficiary's coverage under the group policy terminates by reason of such death;(2)If a qualified beneficiary ceases to be a qualified family member under the group policy, while the employee or member remains insured under the policy;(3)Any medicare ineligible qualified beneficiary of a current employee;(4)The qualified beneficiary of an employee who is eligible for medicare; or(5)Divorce or legal separation of employee. Source: SL 1984, ch 326, 8; SL 1988, ch 400, 2; SL 1989, ch 433, 10; SL 2001, ch 280, 13.
58-18-7.13. Premium for conversion policy and continuation policy.The premium for the conversion policy shall be determined in accordance with the insurer's table of premium rates applicable to the age and class of risk for each person to be covered under that policy and to the type and amount of insurance provided. The premium for a continuation policy may not be greater than one hundred two percent of the group rate under which a person is covered. For any month after the eighteenth month, the premium amount may not exceed one hundred fifty percent of the applicable premium. Source: SL 1984, ch 326, 9; SL 1987, ch 378, 1; SL 1988, ch 400, 3; SL 1989, ch 433, 11; SL 2001, ch 280, 14.
58-18-7.14. Notification of continuation and conversion rights.A notification of the continuation and conversion rights shall be included in each certificate of coverage. Source: SL 1984, ch 326, 10.
58-18-7.15. Group insurance coverage in lieu of converted individual policies.The insurer may elect to provide group insurance coverage in lieu of the issuance of a converted individual policy. Source: SL 1984, ch 326, 11; SL 1987, ch 378, 2; SL 1988, ch 400, 4.
58-18-7.17. Exclusion of benefits for injury while under the influence of alcohol or drugs prohibited--Exception for sickness or injury caused in commission of felony.A group health insurance policy or certificate that is delivered, issued for delivery, or renewed in this state may not exclude the payment of benefits for injuries sustained by an insured person because the insured was under the influence of alcohol or drugs, as defined by 32-23-1.Nothing in this section precludes a health insurer from excluding coverage for an insured for any sickness or injury caused in the commission of a felony. Source: SL 1997, ch 290, 2, 7.
58-18-7.18. Continuation coverage to be same as that available to similarly situated beneficiaries--Option to decrease benefits.Continuation coverage shall be the same coverage as is available to any similarly situated beneficiary under the plan with respect to whom a qualifying event has not occurred. If coverage is modified under the plan for any group of similarly situated beneficiaries who are not under continuation, such coverage shall also be modified for those continuing coverage in the same manner as for all individuals who are qualified beneficiaries under the plan pursuant to the continuation requirements of this chapter in connection with such group.Any insurer providing continuation coverage pursuant to 58-18-7.5 or pursuant to any federal requirement applicable to employer group plans shall offer to all beneficiaries who are eligible to elect to continue coverage the option to decrease benefits of the continued coverage. The options shall include, at a minimum, those coverage options available to beneficiaries who initially enroll into the coverage if the options decrease coverage or a carrier may offer a standardized plan to all those eligible for continuation that contains similar benefits to the beneficiaries prior coverage but at a higher deductible or other reduced benefit features. Source: SL 2001, ch 280, 3; SL 2008, ch 266, 1.
58-18-7.19. Probationary period for continuation or conversion coverage prohibited.No new probationary or waiting period may be applied to the continuation or conversion coverage. Source: SL 2001, ch 280, 4.
58-18-7.2. Benefits provided under alcoholism coverage--Maximum treatment periods permitted.The alcoholism coverage shall provide benefits on the same basis as benefits provided for the treatment of other sicknesses covered under the group policy; provided, however, that the coverage by the insurance carrier need not exceed thirty days' care in any six-month period, and further provided that the total days' care per recipient need not exceed ninety days during the life of the contract. Source: SL 1975, ch 314, 2; SL 1977, ch 411, 2; SL 1978, ch 362, 2.
58-18-7.20. Construction with chapter 58-18C.Nothing in 58-18-7.4, 58-18-7.5, 58-18-7.11, 58-18-7.12, 58-18-7.13, 58-18-7.18, 58-18-7.19, 58-18-7.20, or 58-18-79 applies to or qualifies any person for any continuation or conversion right available in chapter 58-18C. Source: SL 2001, ch 280, 5.
58-18-7.21. Continued coverage--Insurer's use of experience for rating purposes not limited--Options unavailable in market not required.Nothing in 58-18-7.18 or 58-18C-5 may be construed to limit an insurer's ability to use the experience from those persons who have continued coverage pursuant to 58-18-7.18 or 58-18C-5 for rating purposes for the employer group from which coverage was continued. An insurer is not required to offer an option that is not available in the market for the policy form or forms from which continuation is being offered. This section and 58-18-7.18 and 58-18C-5 apply to any person electing continuation coverage on or after July 1, 2008. Source: SL 2008, ch 266, 3.
58-18-7.3. Policies not within alcoholism coverage requirement.Sections 58-18-7.1 and 58-18-7.2 do not apply to accident only, or limited or specified disease policies. Source: SL 1975, ch 314, 3; SL 1999, ch 249, 2.
58-18-7.4. Coverage upon application by employee or beneficiary with right to convert following notice of termination.An employee or qualified beneficiary who has the right under the group policy to convert the group accident or health insurance plan shall be issued, without evidence of insurability, upon application to the company during the one hundred eighty days prior to expiration of coverage under continuation and upon payment of the appropriate premium, a policy of accident or health insurance. The conversion coverage shall provide the benefits which are available to others qualified for conversion under the policy. Source: SL 1980, ch 354; SL 1989, ch 433, 3; SL 2001, ch 280, 2.
58-18-7.5. Continuation of coverage upon leaving employment or termination of coverage by insurer--Duration.Every health benefit program that is self-insured, and every policy of group health insurance providing benefits for hospital or medical expenses delivered or issued for delivery in this state, by a commercial health insurance company, by a nonprofit medical and surgical service plan corporation, by a nonprofit hospital service plan corporation, by a health maintenance organization or by any other similar mechanism shall, in addition to the provisions required by law, include that employees have a right upon leaving employment or the termination of the coverage by the insurer, other than the termination of the policy or contract itself and the replacement thereof by similar coverage, to have the coverage continue for themselves and their eligible dependents for a period of eighteen months for which the employee shall be financially responsible. In the case of a qualified beneficiary who is determined under title II or XVI of the Social Security Act (42 U.S.C. 401) to have been disabled at any time during the first sixty days of continuation coverage, coverage can be continued for twenty-nine months. Nonpayment of the premium by the employer is termination by the employer. Source: SL 1984, ch 326, 1; SL 1988, ch 400, 1; SL 1989, ch 433, 4; SL 2001, ch 280, 6.
58-18-7. Continuation without evidence of insurability--Application.Any group health policy which contains provisions for the payment by the insurer of benefits for expenses incurred on account of hospital, nursing, medical, or surgical services shall provide for the continuation of benefit provisions, or any part or parts thereof, without evidence of insurability. The provisions of 58-18-7.4 to 58-18-7.15, inclusive, apply to employers that have fewer than twenty employees employed. Source: SL 1966, ch 111, ch 26, 1 (6); SL 1989, ch 433, 2; SL 2005, ch 270, 1. 
58-18-76. Minimum inpatient care coverage following delivery.If a group health insurance policy that is issued or renewed on or after July 1, 1996, provides maternity coverage, the policy shall provide coverage for a minimum of forty-eight hours of inpatient care following a vaginal delivery and a minimum of ninety-six hours of inpatient care following delivery by cesarean section for a mother and her newborn child in a health care facility licensed pursuant to chapter 34-12, except as otherwise provided in 58-18-77. Any policy issued to employers with less than fifteen employees that provides coverage for complications of pregnancy, and does not provide other maternity benefits, is not required to comply with this section. Source: SL 1996, ch 292, 4; SL 1998, ch 290, 2.
58-18-77. Shorter hospital stay permitted--Follow-up within forty-eight hours required.If the treating physician determines that the mother and the newborn meet medical criteria contained in Guidelines for Perinatal Care, Third Edition, of the American Academy of Pediatrics and the American College of Obstetricians and Gynecologists as in effect on January 1, 1996, a group health insurance policy may provide coverage for a shorter length of hospital inpatient stay for services related to maternity and newborn care than is required in 58-18-76 if the coverage includes one follow-up visit in the first forty-eight hours after discharge to verify the condition of the mother and newborn. Source: SL 1996, ch 292, 5.
58-18-78. Notice to employees or members--Disclosures.The group health insurer shall provide notice to employees or members regarding the coverage required by 58-18-76 and 58-18-77 in accordance with rules adopted by the director of the Division of Insurance pursuant to chapter 1-26. The notice shall be in writing and prominently positioned in any literature or correspondence. The notice shall be transmitted to employees or members in the next mailing to employees or members, in the yearly informational packet sent to employees or members, or by January 1, 1997, whichever is earliest. Source: SL 1996, ch 292, 6.
58-18-79. Promulgation of rules to minimally meet federal standards--Additional rules--Scope.If any federal standards are in place which require additional steps to meet those standards beyond what is required by this chapter, the director may promulgate rules, pursuant to chapter 1-26, to require the offering of health insurance plans, the underwriting criteria that may be utilized for such health insurance plans, the type and scope of preexisting waiting periods and creditable coverage, the standards for nonrenewability of coverage, and other requirements related to the availability of health insurance to employers and their employees and dependents in this state in order to minimally meet the federal standards.The director may also promulgate rules, pursuant to chapter 1-26, pertaining to employer health benefit plans in the areas of:(1)Definition of terms;(2)The issuance of certificates of coverage upon loss of health insurance coverage;(3)Determinations relative to the application of waiting periods;(4)Special enrollment periods;(5)Treatment of late enrollees;(6)Preexisting condition and other waiting periods;(7)Breaks in coverage;(8)Affiliation periods;(9)Nondiscrimination standards;(10)Notices;(11)Renewal rights;(12)Dates of enrollment;(13)Creditable coverages including methods of crediting coverage;(14)Risk spreading mechanisms;(15)Requirements pertaining to mental health benefit levels in employer group plans other than small employer group plans;(16)Continuation and conversion requirements; and(17)Claims, provided the rules are consistent with applicable federal requirements for claims procedures, administration, and enforcement, including 29 CFR Part 2560. Source: SL 1997, ch 289, 25; SL 1998, ch 289, 22; SL 2001, ch 280, 16; SL 2002, ch 236, 1.
58-18-8. Representations by applicant not warranties--Written statement required to avoid insurance or reduce benefits.Each such group health insurance policy shall contain in substance a provision that, in the absence of fraud, all statements made by applicants or the policyholder or by an insured person shall be deemed representations and not warranties, and that no statement made for the purpose of effecting insurance shall avoid such insurance or reduce benefits unless contained in a written instrument signed by the policyholder or the insured person, a copy of which has been furnished to such policyholder or to such person or his beneficiary. Source: SL 1966, ch 111, ch 26, 2 (1).
58-18-80. Health insurance policies to provide coverage for biologically-based mental illnesses.Every group health insurance policy, including a certificate that is subject to approval pursuant to 58-11-12, that is delivered, issued for delivery, or renewed in this state, except for policies that provide coverage for specified disease or other limited benefit coverage, shall provide, in writing, coverage for the treatment and diagnosis of biologically-based mental illnesses with the same dollar limits, deductibles, coinsurance factors, and restrictions as for other covered illnesses.The term, biologically-based mental illness, means schizophrenia and other psychotic disorders, bipolar disorder, major depression, and obsessive-compulsive disorder. Source: SL 1998, ch 291, 2; SL 1999, ch 251, 2; SL 2000, ch 244, 1.
58-18-81. Application--Exemptions.The provisions of 58-18-80 do not apply to any plan, policy, or contract that provides coverage only for:(1)Specified disease;(2)Hospital indemnity;(3)Fixed indemnity;(4)Accident-only;(5)Credit;(6)Dental;(7)Vision;(8)Prescription drug;(9)Medicare supplement;(10)Long-term care;(11)Disability income insurance;(12)Coverage issued as a supplement to liability insurance;(13)Workers' compensation or similar insurance;(14)Automobile medical payment insurance; or(15)Individual health benefit plans of six-months duration or less that are not renewable. Source: SL 1998, ch 291, 7.
58-18-82. Carrier to provide annual report--Time frame--Information.Any carrier who is or has provided coverage to an employer shall provide, at the written request of the employer, annual reports of the claims experience of that employer for the immediate past policy period and for any time frames which are not in excess of three years prior to the policy period for which the request was made. A carrier is not required to provide any claims information that pertains to a prior carrier's experience with that employer. The claims report shall be in sufficient detail so as to provide the employer with data necessary to realistically assess the employer's future health insurance needs. Source: SL 1998, ch 289, 8.
58-18-83. Policies to provide coverage for diabetes supplies, equipment and education--Exceptions--Conditions and limitations.Every group health insurance policy, including a certificate that is subject to approval pursuant to 58-11-12, delivered, issued for delivery, or renewed in this state, except for policies that provide coverage for special disease or other limited benefit coverage, shall provide, in writing, coverage for equipment, supplies, and self-management training and education, including medical nutrition therapy, for treatment of persons diagnosed with diabetes if prescribed by a physician or other licensed health care provider legally authorized to prescribe such treatment . Medical nutrition therapy does not include any food items or nonprescription drugs.Coverage for medically necessary equipment and supplies shall include blood glucose monitors, blood glucose monitors for the legally blind, test strips for glucose monitors, urine testing strips, insulin, injection aids, lancets, lancet devices, syringes, insulin pumps and all supplies for the pump, insulin infusion devices, prescribed oral agents for controlling blood sugars, glucose agents, glucagon kits, insulin measurement and administration aids for the visually impaired, and other medical devices for treatment of diabetes.Diabetes self-management training and education shall be covered if: (a) the service is provided by a physician, nurse, dietitian, pharmacist, or other licensed health care provider who satisfies the current academic eligibility requirements of the National Certification Board for Diabetic Educators and has completed a course in diabetes education and training or has been certified as a diabetes educator; and (b) the training and education is based upon a diabetes program recognized by the American Diabetes Association or a diabetes program with a curriculum approved by the American Diabetes Association or the South Dakota Department of Health.Coverage of diabetes self-management training is limited to (a) persons who are newly diagnosed with diabetes or have received no prior diabetes education; (b) persons who require a change in current therapy; (c) persons who have a co-morbid condition such as heart disease or renal failure; or (d) persons whose diabetes condition is unstable. Under these circumstances, no more than two comprehensive education programs per lifetime and up to eight follow-up visits per year need be covered. Coverage is limited to the closest available qualified education program that provides the necessary management training to accomplish the prescribed treatment.The benefits provided in this section are subject to the same dollar limits, deductibles, coinsurance, and other restrictions established for all other benefits covered in the policy. Source: SL 1999, ch 252, 3; SL 2000, ch 244, 2.
58-18-84. Diabetes coverage not required of certain plans and policies.The provisions of 58-18-83 do not apply to any plan, policy, or contract that provides coverage only for:(1)Specified disease;(2)Hospital indemnity;(3)Fixed indemnity;(4)Accident-only;(5)Credit;(6)Dental;(7)Vision;(8)Prescription drug;(9)Medicare supplement;(10)Long-term care;(11)Disability income insurance;(12)Coverage issued as a supplement to liability insurance;(13)Workers' compensation or similar insurance;(14)Automobile medical payment insurance;(15)Individual health benefit plans of six-months duration or less that are not renewable; or(16)Individual nonmajor medical insurance. Source: SL 1999, ch 252, 4.
58-18-85. Policies to provide coverage for prostate cancer screening.Every group health insurance policy that covers a male and that is delivered, issued for delivery, or renewed in this state, except for policies that provide coverage for specified disease or other limited benefit coverage, shall provide the following coverage for diagnostic screening for prostate cancer:(1)An annual medically recognized diagnostic examination, including a digital rectal examination and a prostate-specific antigen test, as follows:(a)For asymptomatic men aged fifty and over; and(b)For men aged forty-five and over at high risk for prostate cancer; and(2)For males of any age who have a prior history of prostate cancer, medically indicated diagnostic testing at intervals recommended by a physician, including the digital rectal examination, prostate-specific antigen test, and bone scan. Source: SL 2001, ch 277, 2.
58-18-86. Plans subject to 58-18-45--Exceptions.Any accident and sickness plan or certificate other than credit health insurance as defined in subdivision 58-19-2(1) and a health benefit plan is subject to subdivision 58-18-45(1). Source: SL 2001, ch 275, 6; SL 2013, ch 248, 2.
58-18-87. Director to promulgate rules governing use of genetic information.The director may promulgate rules pursuant to chapter 1-26 pertaining to the use of genetic information, whether the genetic information was derived from a genetic test or from another source, as it relates to group health benefit plans. Source: SL 2001, ch 267, 3.
58-18-88.1. Request for waiver by association formed in another state.An association not formed in this state may request a waiver of subdivisions 58-18-88(3) and (5) regarding organization in South Dakota to sponsor a multiple employer trust in this state if the association provides sufficient evidence a waiver is in the best interests of the insurance-buying public. An association not formed in this state shall be in full compliance with the laws of all states where the association does business. Source: SL 2019, ch 212, 7.
58-18-88. Authorization of self-funded multiple employer trust sponsored by association--Conditions.A self-funded multiple employer trust, as defined in section 3 of the federal Employee Retirement Income Security Act of 1974, 29 U.S.C. 1002, paragraph 40, that is sponsored by an association, may be authorized by the director if the multiple employer trust meets all of the following conditions:(1)The multiple employer trust is administered by an authorized insurer or a licensed or registered third-party administrator;(2)The multiple employer trust is sponsored and maintained by a bona fide association of employers eligible to procure coverage under 58-18-3 and 58-18-4;(3)The association sponsoring the multiple employer trust is established by employers in a homogenous trade, industry, line of business, or profession with commonality of interest. The association has a constitution or bylaws, and is organized under the laws of South Dakota;(4)The association sponsoring the multiple employer trust has a substantial business purpose other than sponsorship of an employer welfare benefit plan;(5)The association sponsoring the multiple employer trust is a nonprofit entity organized under applicable South Dakota law;(6)The multiple employer trust's board of trustees shall assess participating employers in an amount necessary to remedy deficiencies at any time the assets and stop loss insurance policies of the multiple employer trust are insufficient to:(a)Pay claims made against the multiple employer trust;(b)Discharge liabilities and obligations relating to health benefit plan claims; or(c)Maintain adequate reserves and surpluses;(7)The multiple employer trust:(a)Meets the capital and surplus requirements of 58-6-23;(b)Meets the risk based capital requirements of 58-4-48;(c)Is subject to the hazardous financial condition requirements of 58-4-39 to 58-4-42, inclusive;(d)Invests its assets pursuant to the requirements of chapters 58-26 and 58-27;(e)Is subject to chapter 58-3 on the same basis as insurers;(f)Is subject to the insurers supervision, rehabilitation, and liquidation provisions of chapter 58-29B;(g)Maintains a minimum loss ratio of eighty-five percent or be community rated; and(h)Complies with all coverage mandates that are applicable to group health insurance under this title;(8)Each sponsoring association is comprised of and controlled by employer members, consists of five hundred or more covered employees, and has been in existence for a period of three continuous years; (9)Any solicitation or sales materials to prospective members discloses the provisions regarding fees and assessments for participation in the multiple employer trust; and(10)The director, after consideration of the impact on the insurance-buying public, determines that the arrangement is in the best interests of the public.  Source: SL 2005, ch 272, 2; SL 2014, ch 238, 1; SL 2019, ch 212, 6.
58-18-89. Promulgation of rules pertaining to multiple employer trusts.The director shall promulgate rules, pursuant to chapter 1-26, pertaining to multiple employer trusts in the following areas:(1)Consumer protection issues including minimum coverage standards for health policies; claims processing and payment practices; resolution of consumer complaints; compliance with federal HIPAA standards; plan termination processes and managed care protections; financial and market conduct record keeping and reporting; and unfair trade practices; and(2)Financial and plan solvency issues including investment capital requirements; surplus and deposit requirements; claims reserves, stop loss coverage, and standards for entry and exit of plan members including a nonrefundable minimum deposit of not less than two thousand five hundred dollars plus two percent of first year contributions on an annual basis; and production of financial statements, audited financial statements, and actuarial opinions. Source: SL 2005, ch 272, 3.  
58-18-9. Summary statement of coverage for delivery to member of insured group.Each such group health insurance policy shall contain in substance a provision that the insurer will furnish to the policyholder for delivery to each employee or member of the insured group, a statement in summary form of the essential features of the insurance coverage of such employee or member and to whom benefits thereunder are payable. If dependents are included in the coverage, only one statement need be issued for each family unit. Source: SL 1966, ch 111, ch 26, 2 (2).
58-18-90. Multiple employer trust not insurance company or association or subject to specified provisions--Exception.Except as otherwise provided in this chapter, an authorized multiple employer trust may not be determined to be or considered to be an insurance company or association of any kind or character under this title, or subject to the provisions of 58-8-6 to 58-8-19, inclusive. Source: SL 2005, ch 272, 4; SL 2019, ch 212, 8.
58-18-91. Suspension or revocation of authorization of multiple employer trust--Action in lieu of suspension or revocation.A multiple employer trust authorized under this chapter may have its authorization suspended or revoked by the director for violating any applicable provision of this title. The director may take action in lieu of suspension or revocation as though the trust were an insurer as provided by 58-4-28.1. Source: SL 2005, ch 272, 5; SL 2019, ch 212, 9.
58-18-92. Payment of premium taxes.If not otherwise provided, a multiple employer trust doing business in this state on a self-funded basis shall pay premium taxes as required in chapter 10-44 based upon the amount each participating employer contributes, including any amounts contributed by employees and dependents, to the plan on an annual basis. If a multiple employer trust purchases excess or stop loss coverage, the multiple employer trust may not be taxed additionally for that coverage. Source: SL 2005, ch 272, 6. 
58-18-93. Agent licensing requirements.No agent may sell, solicit, or negotiate a self-funded multiple employer trust authorized under this chapter unless the agent is licensed to sell life and health insurance pursuant to chapter 58-30. Source: SL 2005, ch 272, 7; SL 2019, ch 212, 10.
58-18-94. Application of provisions regarding multiple employer trusts--Inclusion of large and small employers.The provisions of this chapter regarding multiple employer trusts do not apply to any single employer self-funded plan as preempted by Employee Retirement Income Security Act of 1974, 29 U.S.C. 1144 or any arrangement exempted pursuant to 1-24-17. An authorized self-funded multiple employer trust may include as participating employers both small employers and large employers. Source: SL 2005, ch 272, 8; SL 2019, ch 212, 11.
58-18-95. Coverage for treatment of hearing impairment for persons under age nineteen.Any qualified health plan issued on or after January 1, 2015, that offers coverage for professional audiology services shall include coverage for medically necessary physician services appropriate for the treatment of hearing impairment to a person under the age of nineteen. This shall include professional services rendered by an audiologist licensed pursuant to chapter 36-24.The benefits provided shall be subject to the same dollar limits, deductibles, coinsurance and other limitations provided for other covered benefits in the policy.Nothing in this section requires the payment by the health plan of hearing aids, devices, or equipment to correct hearing impairment or loss. Source: SL 2014, ch 237, 2.
58-18A-53. Definitions.Terms used in this chapter mean:(1)"Birthday," refers only to a month and day in a calendar year and does not include the year in which the person was born;(2)"Claim," a request that benefits of a plan be provided or paid. The benefits claimed may be in the form of:(a)Services (including supplies);(b)Payment for all or a portion of the expenses incurred; and(c)An indemnification.(3)"Closed panel plan," a plan that provides health benefits to covered persons primarily in the form of services through a panel of providers that have contracted with or are employed by the plan and that excludes benefits for services provided by other providers, except in cases of emergency or referral by a panel member;(4)"Consolidated Omnibus Budget Reconciliation Act of 1985" or "COBRA," coverage provided under a right of continuation pursuant to federal law;(5)"Coordination of benefits" or " COB," a provision establishing an order in which plans pay their claims, and permitting secondary plans to reduce their benefits so that the combined benefits of all plans do not exceed total allowable expenses;(6)"Custodial parent," the parent awarded custody of a child by a court decree, or in the absence of a court decree, the parent with whom the child resides more than one half of the calendar year without regard to any temporary visitation;(7)"Group-type contract," a contract that is not available to the general public and is obtained and maintained only because of membership in or a connection with a particular organization or group, including blanket coverage. The term does not include an individually underwritten and issued guaranteed renewable policy even if the policy is purchased through payroll deduction at a premium savings to the insured since the insured would have the right to maintain or renew the policy independently of continued employment with the employer;(8)"High-deductible health plan," the meaning given the term under section 223 of the Internal Revenue Code of 1986, as amended by the Medicare Prescription Drug, Improvement and Modernization Act of 2003;(9)"Hospital indemnity benefits," benefits not related to expenses incurred. The term does not include reimbursement-type benefits even if they are designed or administered to give the insured the right to elect indemnity-type benefits at the time of claim;(10)"Policyholder," the primary insured named in a nongroup insurance policy;(11)"Primary plan," a plan whose benefits for a person' s health care coverage must be determined without taking the existence of any other plan into consideration. A plan is a primary plan if the plan either has no order of benefit determination rules, or its rules differ from those permitted by 58-18A-53 to 58-18A-83, inclusive; or all plans that cover the person use the order of benefit determination rules required by 58-18A-53 to 58-18A-83, inclusive, and under those rules the plan determines its benefits first;(12)"Secondary plan," a plan that is not a primary plan. Source: SL 2006, ch 259, 1.
58-18A-54. Allowable expenses defined.For the purposes of this chapter, the term, allowable expense, means any health care expense, including coinsurance or copayments and without reduction for any applicable deductible, that is covered in full or in part by any of the plans covering the person.If a plan is advised by a covered person that all plans covering the person are high-deductible health plans and the person intends to contribute to a health savings account established in accordance with section 223 of the Internal Revenue Code of 1986, the primary high-deductible health plan's deductible is not an allowable expense, except for any health care expense incurred that may not be subject to the deductible as described in section 223(c)(2)(C) of the Internal Revenue Code of 1986.An expense or a portion of an expense that is not covered by any of the plans is not an allowable expense.Any expense that a provider by law or in accordance with a contractual agreement is prohibited from charging a covered person is not an allowable expense. Source: SL 2006, ch 259, 2.
58-18A-55. Expenses that are not allowable.The following are examples of expenses that are not allowable expenses:(1)If a person is confined in a private hospital room, the difference between the cost of a semi-private room in the hospital and the private room is not an allowable expense, unless one of the plans provides coverage for private hospital room expenses;(2)If a person is covered by two or more plans that compute their benefit payments on the basis of usual and customary fees or relative value schedule reimbursement or other similar reimbursement methodology, any amount charged by the provider in excess of the highest reimbursement amount for a specified benefit is not an allowable expense;(3)If a person is covered by two or more plans that provide benefits or services on the basis of negotiated fees, any amount in excess of the highest of the negotiated fees is not an allowable expense; and(4)If a person is covered by one plan that calculates its benefits or services on the basis of usual and customary fees or relative value schedule reimbursement or other similar reimbursement methodology and another plan that provides its benefits or services on the basis of negotiated fees, the primary plan's payment arrangement shall be the allowable expense for all plans. However, if the provider has contracted with the secondary plan to provide the benefit or service for a specific negotiated fee or payment amount that is different than the primary plan's payment arrangement and if the provider's contract permits, that negotiated fee or payment shall be the allowable expense used by the secondary plan to determine its benefits. Source: SL 2006, ch 259, 3.
58-18A-56. Exclusion of certain expenses.For the purposes of this chapter, the term, allowable expense, may exclude certain types of coverage or benefits such as dental care, vision care, prescription drugs, or hearing aids. A plan that limits the application of COB to certain coverages or benefits may limit the definition of allowable expense in its contract to expenses that are similar to the expenses that it provides. If COB is restricted to specific coverages or benefits in a contract, the definition of allowable expense shall include similar expenses to which COB applies.If a plan provides benefits in the form of services, the reasonable cash value of each service shall be considered an allowable expense and a benefit paid.The amount of the reduction may be excluded from allowable expense if a covered person's benefits are reduced under a primary plan because the covered person does not comply with the plan provisions concerning second surgical opinions or pre-certification of admissions or services, or because the covered person has a lower benefit because the covered person did not use a preferred provider. Source: SL 2006, ch 259, 4.
58-18A-57. Plan defined--Types of coverage considered in coordination of benefits to be stated.For the purposes of this chapter, the term, plan, means a form of coverage with which coordination is allowed. Separate parts of a plan for members of a group that are provided through alternative contracts that are intended to be part of a coordinated package of benefits are considered one plan and there is no COB among the separate parts of the plan.If a plan coordinates benefits, its contract shall state the types of coverage that will be considered in applying the COB provision of that contract. Whether the contract uses the term, plan, or some other term such as program, the contractual definition may be no broader than the definition of plan in this section. Source: SL 2006, ch 259, 5.
58-18A-58. Contracts and coverages included within definition of plan.For the purposes of this chapter, the term, plan, includes:(1)Group and nongroup insurance contracts and subscriber contracts;(2)Uninsured arrangements of group or group-type coverage;(3)Group and nongroup coverage through closed panel plans;(4)Group-type contracts;(5)The medical care components of long-term care contracts, such as skilled nursing care;(6)The medical benefits coverage in automobile no fault and traditional automobile fault type contracts;(7)Medicare or other governmental benefits, as permitted by law, except for the medical assistance program. That part of the definition of plan may be limited to the hospital, medical, and surgical benefits of the governmental program; and(8)Group and nongroup insurance contracts and subscriber contracts that pay or reimburse for the cost of dental care. Source: SL 2006, ch 259, 6; SL 2007, ch 290, 1; SL 2015, ch 253, 1.
58-18A-59. Contracts and coverages not included within definition of plan.For the purposes of this chapter, the term, plan, does not include:(1)Hospital indemnity coverage benefits or other fixed indemnity coverage;(2)Accident only coverage;(3)Specified disease or specified accident coverage;(4)Limited benefit health coverage;(5)School accident-type coverages that cover students for accidents only, including athletic injuries, either on a twenty-four-hour basis or on a to-and-from-school basis;(6)Medicare supplement policies;(7)A state plan under the medical assistance program;(8)A governmental plan, which, by law, provides benefits that are in excess of those of any private insurance plan or other nongovernmental plan ; or(9)Benefits provided in long-term care insurance policies for nonmedical services including personal care, adult day care, homemaker services, assistance with activities of daily living, respite care and custodial care, or for contracts that pay a fixed daily benefit without regard to expenses incurred or the receipt of services. Source: SL 2006, ch 259, 7; SL 2007, ch 290, 2.
58-18A-60. Application date.Sections 58-18A-53 to 58-18A-83, inclusive, apply to all plans that are issued on or after January 1, 2007. Source: SL 2006, ch 259, 8.
58-18A-61. Promulgation of rules concerning coordination of health plan benefits.The director shall promulgate rules pursuant to chapter 1-26 to carry out the provisions of 58-18A-53 to 58-18A-83, inclusive. In promulgating any rules, the director shall give great weight to any national standards that may exist for the coordination of benefits for plans. The rules are limited to:(1)Definition of terms;(2)Sample policy provisions; and(3)Disclosure requirements. Source: SL 2006, ch 259, 9.
58-18A-62. Prohibited grounds for reduction of benefits.No COB provision may be used that permits a plan to reduce its benefits on the basis that:(1)Another plan exists and the covered person did not enroll in that plan;(2)A person is or could have been covered under another plan, except with respect to Part B of Medicare; or(3)A person has elected an option under another plan providing a lower level of benefits than another option that could have been elected. Source: SL 2006, ch 259, 10.
58-18A-63. Restriction on excess or secondary benefits provisions.No plan may contain a provision that its benefits are always excess or always secondary except in accordance with the rules permitted by 58-18A-53 to 58-18A-83, inclusive. No plan is required to coordinate benefits provided that it pays benefits as a primary plan; but if the plan coordinates benefits, it shall do so in compliance with the provisions of this chapter. Source: SL 2006, ch 259, 11.
58-18A-64. Closed panel plans.Under the terms of a closed panel plan, no benefits are payable if the covered person does not use the services of a closed panel provider. No COB occurs if a covered person is enrolled in two or more closed panel plans and obtains services from a provider in one of the closed panel plans because the other closed panel plan (the one whose providers were not used) has no liability. However, COB may occur during the plan year if the covered person receives emergency services that would have been covered by both plans. In such a case, the secondary plan shall use the provisions of 58-18A-75 to determine the amount it should pay for the benefit. Source: SL 2006, ch 259, 12.
58-18A-65. Prohibition on reduction of benefits for coverage not qualifying as plan.No plan may use a COB provision, or any other provision, that allows it to reduce its benefits with respect to any other coverage its insured may have that does not meet the definition of a plan as provided by 58-18A-53 to 58-18A-83, inclusive. Source: SL 2006, ch 259, 13.
58-18A-66. Order of benefit payments.If a person is covered by two or more plans, the provisions for determining the order of benefit payments are as follows:(1)The primary plan shall pay or provide its benefits as if any secondary plan did not exist;(2)If the primary plan is a closed panel plan and the secondary plan is not a closed panel plan, the secondary plan shall pay or provide benefits as if it were the primary plan when a covered person uses a nonpanel provider, except for emergency services or authorized referrals that are paid or provided by the primary plan;(3)If multiple contracts providing coordinated coverage are treated as a single plan under 58-18A-53 to 58-18A-83, inclusive, this section applies only to the plan as a whole, and coordination among the component contracts is governed by the terms of the contracts. If more than one carrier pays or provides benefits under the plan, the carrier designated as primary within the plan shall be responsible for the plan's compliance with 58-18A-53 to 58-18A-83, inclusive;(4)If a person is covered by more than one secondary plan, the order of benefit determination provisions of 58-18A-53 to 58-18A-83, inclusive, decide the order in which secondary plans benefits are determined in relation to each other. Each secondary plan shall take into consideration the benefits of any primary plan and the benefits of any other plan, which, under the provisions of 58-18A-53 to 58-18A-83, inclusive, has its benefits determined before those of that secondary plan;(5)Except as provided in subdivision (2) of this section, a plan that does not contain order of benefit determination provisions that are consistent with 58-18A-53 to 58-18A-83, inclusive, is always the primary plan unless the provisions of both plans, regardless of the provisions of this section, state that the complying plan is primary;(6)Coverage that is obtained by virtue of membership in a group and designed to supplement a part of a basic package of benefits may provide that the supplementary coverage shall be excess to any other parts of the plan provided by the contract holder. Examples of these types of situations are major medical coverages that are superimposed over base plan hospital and surgical benefits, and insurance type coverages that are written in connection with a closed panel plan to provide out-of-network benefits. Source: SL 2006, ch 259, 14.
58-18A-67. Coordination of benefits only available to secondary plans.A plan may take into consideration the benefits paid or provided by another plan only if, under the provisions of 58-18A-53 to 58-18A-83, inclusive, it is secondary to that other plan. Source: SL 2006, ch 259, 15.
58-18A-68. Order of benefits determined under 58-18A-69 to 58-18A-74.Each plan shall determine its order of benefits using the first section of 58-18A-69 to 58-18A-74, inclusive, that applies. Source: SL 2006, ch 259, 16.
58-18A-69.Plan covering person other than as dependent.The plan that covers the person other than as a dependent, for example as an employee, member, subscriber, policyholder, or retiree, is the primary plan and the plan that covers the person as a dependent is the secondary plan.However, if the person is a medicare beneficiary, and, as a result of the provisions of Title XVIII of the Social Security Act and implementing regulations, medicare is:(1)Secondary to the plan covering the person as a dependent; and(2)Primary to the plan covering the person as other than a dependent (e. g. a retired employee);then the order of benefits is reversed so that the plan covering the person as an employee, member, subscriber, policyholder, or retiree is the secondary plan and the other plan covering the person as a dependent is the primary plan. Source: SL 2006, ch 259, 17.
58-18A-70. Plan covering dependent child.Unless there is a court decree stating otherwise, plans covering a dependent child shall determine the order of benefits as follows:(1)For a dependent child whose parents are married or are living together, whether or not they have ever been married:(a)The plan of the parent whose birthday falls earlier in the calendar year is the primary plan; or(b)If both parents have the same birthday, the plan that has covered the parent longest is the primary plan;(2)For a dependent child whose parents are divorced or separated or are not living together, whether or not they have ever been married:(a)If a court decree states that one of the parents is responsible for the dependent child's health care expenses or health care coverage and the plan of that parent has actual knowledge of those terms, that plan is primary. If the parent with responsibility has no health care coverage for the dependent child's health care expenses, but that parent's spouse does, that parent's spouse's plan is the primary plan. This item does not apply with respect to any plan year during which benefits are paid or provided before the entity has actual knowledge of the court decree provision;(b)If a court decree states that both parents are responsible for the dependent child's health care expenses or health care coverage, the provisions of subdivision (1) of this section shall determine the order of benefits;(c)If a court decree states that the parents have joint custody without specifying that one parent has responsibility for the health care expenses or health care coverage of the dependent child, the provisions of subdivision (1) of this section shall determine the order of benefits; or(d)If there is no court decree allocating responsibility for the child's health care expenses or health care coverage, the order of benefits for the child are as follows:(i)The plan covering the custodial parent;(ii)The plan covering the custodial parent's spouse;(iii)The plan covering the noncustodial parent; and then(iv)The plan covering the noncustodial parent's spouse;(3)For a dependent child covered under more than one plan of individuals who are not the parents of the child, the order of benefits shall be determined, as applicable, pursuant to subdivision (1) or (2) of this section as if those individuals were parents of the child; and(4)For a dependent child who has coverage under either or both parents' plans and also has his or her own coverage as a dependent under a spouse's plan, the provisions of 58-18A-73 apply. If the dependent child's coverage under the spouse's plan began on the same date as the dependent child's coverage under either or both parents' plans, the order of benefits shall be determined, as applicable, pursuant to the provisions of subdivision (1) of this section to the dependent child's parent or parents and the dependent's spouse. Source: SL 2006, ch 259, 18; SL 2015, ch 253, 2.
58-18A-71. Plan covering person as active employee.The plan that covers a person as an active employee that is, an employee who is neither laid off nor retired or as a dependent of an active employee is the primary plan. The plan covering that same person as a retired or laid-off employee or as a dependent of a retired or laid-off employee is the secondary plan.If the other plan does not have the provisions of this section, and as a result, the plans do not agree on the order of benefits, the provisions of this section do not apply.This section does not apply if the provisions in 58-18A-69 can determine the order of benefits. Source: SL 2006, ch 259, 19.
58-18A-72. Coverage under COBRA or right of continuation.If a person whose coverage is provided pursuant to COBRA or under a right of continuation pursuant to state or other federal law is covered under another plan, the plan covering the person as an employee, member, subscriber, or retiree or covering the person as a dependent of an employee, member, subscriber, or retiree is the primary plan and the plan covering that same person pursuant to COBRA or under a right of continuation pursuant to state or other federal law is the secondary plan.If the other plan does not have these provisions, and if, as a result, the plans do not agree on the order of benefits, these provisions do not apply.This section does not apply if the provisions in 58-18A-69 determine the order of benefits. Source: SL 2006, ch 259, 20.
58-18A-73. Plan covering person for longer period of time.If the preceding provisions in 58-18A-69 to 58-18A-72, inclusive, do not determine the order of benefits, the plan that covered the person for the longer period of time is the primary plan and the plan that covered the person for the shorter period of time is the secondary plan.To determine the length of time a person has been covered under a plan, two successive plans shall be treated as one if the covered person was eligible under the second plan within twenty-four hours after coverage under the first plan ended.The start of a new plan does not include:(1)A change in the amount or scope of a plan's benefits;(2)A change in the entity that pays, provides, or administers the plan's benefits; or(3)A change from one type of plan to another, such as, from a single employer plan to a multiple employer plan.The person's length of time covered under a plan is measured from the person's first date of coverage under that plan. If that date is not readily available for a group plan, the date the person first became a member of the group shall be used as the date from which to determine the length of time the person's coverage under the present plan has been in force. Source: SL 2006, ch 259, 21.
58-18A-74. Sharing of allowable expenses equally.If the preceding provisions of 58-18A-69 to 58-18A-73, inclusive, do not determine the order of benefits, the allowable expenses shall be shared equally between the plans. Source: SL 2006, ch 259, 22.
58-18A-75. Calculation of amount to be paid by secondary plan.In determining the amount to be paid by the secondary plan on a claim, if the plan wishes to coordinate benefits, the secondary plan shall calculate the benefits it would have paid on the claim in the absence of other health care coverage and apply that calculated amount to any allowable expense under its plan that is unpaid by the primary plan. The secondary plan may reduce its payment by the amount so that, when combined with the amount paid by the primary plan, the total benefits paid or provided by all plans for the claim do not exceed one hundred percent of the total allowable expense for that claim. In addition, the secondary plan shall credit to its plan deductible any amounts it would have credited to its deductible in the absence of other health care coverage. Source: SL 2006, ch 259, 23.
58-18A-76. Plan providing benefits as services.A secondary plan that provides benefits in the form of services may recover the reasonable cash value of the services from the primary plan, to the extent that benefits for the services are covered by the primary plan and have not already been paid or provided by the primary plan. Nothing in this section requires a plan to reimburse a covered person in cash for the value of services provided by a plan that provides benefits in the form of services. Source: SL 2006, ch 259, 24.
58-18A-77. Coordination of benefits of complying and noncomplying plans.A plan with order of benefit determination provisions that comply with 58-18A-53 to 58-18A-83, inclusive, may coordinate its benefits with a plan that is excess or always secondary or that uses order of benefit determination provisions that are inconsistent with those contained in 58-18A-53 to 58-18A-83, inclusive, on the following basis:(1)If the complying plan is the primary plan, it shall pay or provide its benefits first;(2)If the complying plan is the secondary plan, it shall pay or provide its benefits first, but the amount of the benefits payable shall be determined as if the complying plan were the secondary plan. In such a situation, the payment shall be the limit of the complying plan's liability; and(3)If the noncomplying plan does not provide the information needed by the complying plan to determine its benefits within a reasonable time after it is requested to do so, the complying plan shall assume that the benefits of the noncomplying plan are identical to its own, and shall pay its benefits accordingly. If, within two years of payment, the complying plan receives information as to the actual benefits of the noncomplying plan, it shall adjust payments accordingly. Source: SL 2006, ch 259, 25.
58-18A-78. Noncomplying secondary plan to advance difference covered person would have received if complying plan had been secondary plan.If the noncomplying plan reduces its benefits so that the covered person receives less in benefits than the covered person would have received had the complying plan paid or provided its benefits as the secondary plan and the noncomplying plan paid or provided its benefits as the primary plan, then the complying plan shall advance to the covered person or on behalf of the covered person an amount equal to the difference.In no event may the complying plan advance more than the complying plan would have paid had it been the primary plan less any amount it previously paid for the same expense or service. In consideration of the advance, the complying plan shall be subrogated to all rights of the covered person against the noncomplying plan. The advance by the complying plan shall also be without prejudice to any claim it may have against a noncomplying plan in the absence of subrogation. Source: SL 2006, ch 259, 26.
58-18A-79. Subrogation distinguished.COB differs from subrogation. Provisions for one may be included in health care benefits contracts without compelling the inclusion or exclusion of the other. Source: SL 2006, ch 259, 27.
58-18A-80. Paying of claim where plans disagree on order of benefits.If the plans cannot agree on the order of benefits within thirty calendar days after the plans have received all of the information needed to pay the claim, the plans shall immediately pay the claim in equal shares and determine their relative liabilities following payment. However, no plan is required to pay more than it would have paid had it been the primary plan. Source: SL 2006, ch 259, 28.
58-18A-81. Time for bringing existing contract into compliance with statutory requirements.A contract that provides health care benefits and that was issued before July 1, 2006, shall be brought into compliance with 58-18A-53 to 58-18A-83, inclusive, by the later of:(1)The next anniversary date or renewal date of the contract;(2)Twelve months following July 1, 2006; or(3)The expiration of any applicable collectively bargained contract pursuant to which it was written.For the transition period between the adoption of 58-18A-53 to 58-18A-83, inclusive, and the timeframe for which plans are to be in compliance pursuant to this section, no plan that is subject to the prior COB requirements may be considered a noncomplying plan by a plan subject to the new COB requirements. If there is a conflict between the prior COB requirements under the prior act and the new COB requirements under 58-18A-53 to 58-18A-83, inclusive, the prior COB requirements shall apply. Source: SL 2006, ch 259, 29.
58-18A-82. Proceedings not subject to statutory requirements.Sections 58-18A-53 to 58-18A-83, inclusive, do not affect an action or proceeding commenced before July 1, 2006. Source: SL 2006, ch 259, 30.
58-18A-83. Duties, rights accrued, and offenses committed prior to July 1, 2007.Sections 58-18A-53 to 58-18A-83, inclusive, do not impair or affect any duty or act done, offense committed or right accruing, accrued or acquired or liability, penalty, forfeiture or punishment incurred prior to the date on or after July 1, 2007, but the same may be employed, asserted, enforced, prosecuted or inflicted, as fully and to the same extent as if this enactment had not been passed. Source: SL 2006, ch 259, 33.
58-18B-1. Definition of terms.Terms used in this chapter mean:(1)"Actuarial certification," a written statement by a member of the American Academy of Actuaries or other individual approved by the director that a small employer carrier is in compliance with the provisions of this chapter, based upon the person's examination, including a review of the appropriate records and of the actuarial assumptions and methods used by the carrier in establishing premium rates for applicable health benefit plans;(2)"Base premium rate," the lowest premium rate charged or which could have been charged for each class of business for a rating period under a rating system for that class of business, by the small employer carrier to small employers with similar case characteristics for health benefit plans with the same or similar coverage;(3)"Carrier," any person who provides health insurance in this state. In this chapter, carrier includes a licensed insurance company, a prepaid hospital or medical service plan, a health maintenance organization, a multiple employer welfare arrangement, or any person providing a plan of health insurance subject to state insurance regulation;(4)"Case characteristics," demographic or other relevant characteristics of a small employer, as determined by a small employer carrier, which are considered by the carrier for the determination of premium rates. Claim experience, health status, and duration of coverage since issue are not case characteristics in this chapter;(5)"Class of business," all or a distinct grouping of small employers as shown on the records of the small employer carrier;(a)A distinct grouping may only be established by a small employer carrier on the basis that the applicable health benefit plans:(i)Are marketed and sold through individuals and organizations which are not participating in the marketing or sale of other distinct groupings of small employers for such small employer carrier;(ii)Have been acquired from another small employer carrier as a distinct grouping of plans;(iii)Are provided through an association with membership of not less than twenty-five small employers which has been formed for purposes other than obtaining insurance; or(iv)Are in a class of business that meets the requirements for exception to the restrictions related to premium rates provided in subsection 58-18B-3(1)(a);(b)A small employer carrier may establish no more than two additional groupings under each of the subparagraphs in subsection (a) on the basis of underwriting criteria which are expected to produce substantial variation in the health care costs;(c)The director may approve the establishment of additional distinct groupings upon application to, and a finding by, the director that such action would enhance the efficiency and fairness of the small employer insurance marketplace;(6)"Director," the director of the Division of Insurance;(7)"Division," the Division of Insurance of the Department of Labor and Regulation;(8)"Index rate," the arithmetic average of the applicable base premium rate and the corresponding highest premium rate for each class of business for small employers with similar case characteristics;(9)"New business premium rate," the premium rate charged or offered by a small employer carrier to small employers with similar case characteristics for newly issued health benefit plans with the same or similar coverage for each class of business for a rating period;(10)"Rating period," the calendar period for which premium rates established by a small employer carrier are assumed to be in effect, as determined by the small employer carrier; (11)"Small employer," any person, firm, corporation, partnership, or association actively engaged in business which on an average of its working days during the preceding year, employed no more than fifty and no less than two employees and who employs at least two employees on the first day of the plan year. In determining the number of employees, companies which are affiliated companies or which are eligible to file a combined tax return for purposes of state taxation are considered to be one employer;(12)"Small employer carrier," any carrier which offers health benefit plans covering the employees of a small employer;(13)"Affiliate" or "affiliated," any person who, directly or indirectly, through one or more intermediaries, controls or is controlled by, or is under common control with, any other specified person;(14)"Dependent," except as otherwise required by this title, any spouse, any unmarried child under the age of nineteen years, any unmarried child who is a full-time student under the age of twenty-three and who is financially dependent upon the parent, and any unmarried child of any age who is medically certified as disabled and dependent upon the parent;(15)"Eligible employee," any employee who works on a permanent basis and has a normal work week of thirty or more hours. The term includes any sole proprietor, any partner, and any independent contractor, if the sole proprietor, partner, or independent contractor is included as an employee under a health benefit plan of a small employer, but does not include any employee who works less than thirty hours or on a temporary or substitute basis;(16)"Employee," has the meaning given such term under Section 3(6) of Title I of the Employee Retirement Income Security Act of 1974 (ERISA) as amended to January 1, 2001;(17)"Health benefit plan," any hospital or medical policy or certificate, hospital or medical service plan, or health maintenance organization subscriber contract. The term does not include specified disease, hospital indemnity, fixed indemnity, accident-only, credit, dental, vision, prescription drug, medicare supplement, long-term care, or disability income insurance, coverage issued as a supplement to liability insurance, worker's compensation or similar insurance, or automobile medical payment insurance;(18)"Restricted network provision," any provision of a health benefit plan that conditions the payment of benefits, in whole or in part, on the use of health care providers that have entered into a contractual arrangement with the carrier to provide health care services to covered individuals. Source: SL 1991, ch 402, 1; SL 1995, ch 281, 1; SL 1997, ch 289, 14; SL 2001, ch 279, 1; SL 2003, ch 272 (Ex. Ord. 03-1), 27; SL 2011, ch 1 (Ex. Ord. 11-1), 162, eff. Apr. 12, 2011.
58-18B-11. Health maintenance organization considered separate carrier.An affiliated carrier that is a health maintenance organization having a certificate of authority under chapter 58-41 may be considered to be a separate carrier for the purposes of this chapter. Source: SL 1995, ch 281, 4.
58-18B-12. Ceding arrangements resulting in less than fifty percent of obligation or risk retained by carrier prohibited.Unless otherwise authorized by the director, no small employer carrier may enter into one or more ceding arrangements with respect to health benefit plans delivered or issued for delivery to small employers in the state if the arrangements would result in less than fifty percent of the insurance obligation or risk for such health benefit plans being retained by the ceding carrier. Source: SL 1995, ch 281, 5.
58-18B-13. Transition period when acquiring additional class of business.The director may promulgate rules pursuant to chapter 1-26 to provide for a period of transition in order for a small employer carrier to come into compliance with subdivision 58-18B-1(5) when the carrier acquires an additional class of business from another small employer carrier. Source: SL 1995, ch 281, 6.
58-18B-14. Rate changes only for small employer business.Unless otherwise specified, nothing in this chapter requires a carrier to change any of its rates or rating methodologies for any business other than the small employer business subject to the provisions of this chapter. Source: SL 1995, ch 281, 7.
58-18B-15. Provisions for premium rates.Premium rates for health benefit plans subject to this chapter are subject to the following provisions:(1)Adjustments in rates for claim experience, health status, and duration of coverage may not be charged to individual employees or dependents. Any such adjustments shall be applied uniformly to the rates charged for all employees and dependents of the small employer;(2)A small employer carrier may utilize industry as a case characteristic in establishing premium rates, if the highest rate factor associated with any industry classification does not exceed the lowest rate factor associated with any industry classification by more than fifteen percent;(3)Small employer carriers shall apply rating factors, including case characteristics, consistently with respect to all small employers in a class of business;(4)For the purposes of this section, a health benefit plan that utilizes a restricted provider network is not considered similar coverage to a health benefit plan that does not utilize such a network, if utilization of the restricted provider network results in substantial differences in claims costs; and(5)No small employer carrier may use case characteristics, other than age, gender, industry, family composition, and group size without prior approval of the director. Source: SL 1995, ch 281, 8.
58-18B-17. Limit on premium rates.The premium rates for an individual covered in a small employer plan may not exceed the premium rate for any other individual covered under the same small employer carrier because of age alone by a factor of 3:1. A small employer carrier may not require any individual to pay any premium or contribution that is greater than that for a similarly situated individual enrolled in the plan. Nothing in this section prohibits a group health plan, and a health insurance issuer offering group health insurance coverage, from establishing premium discounts or rebates or modifying otherwise applicable copayments or deductibles in return for adherence to programs of health promotion or disease prevention. Source: SL 1995, ch 281, 10; SL 1997, ch 289, 15; SL 2001, ch 279, 2.
58-18B-18. Promulgation of rules for rating practices.The director may promulgate rules pursuant to chapter 1-26 to implement the provisions of 58-18B-1 to 58-18B-3, inclusive, 58-18B-7, 58-18B-15 to 58-18B-18, inclusive, and to assure that rating practices used by small employer carriers are consistent with the purposes of this chapter, including rules that:(1)Assure that differences in rates charged for health benefit plans by small employer carriers are reasonable and reflect objective differences in plan design not including differences due to the nature of the groups assumed to select particular health benefit plans; and(2)Prescribe the manner in which case characteristics may be used by small employer carriers. Source: SL 1995, ch 281, 11.
58-18B-2. Chapter applicable to small employer benefit plans.This chapter is applicable to any health benefit plan which provides coverage to two or more employees of a small employer and policies which meet the following criteria:(1)Any portion of the premium or benefits is paid by or on behalf of the small employer; or(2)The health benefit plan is treated by the employer or any of the eligible employees or dependents as part of a plan or program for the purposes of section 125 or section 106 of the United States Internal Revenue Code as of January 1, 1995.This chapter does not apply to any employer plan with only one employee. Any employer plan with only one employee, even if the employer pays a portion or all of the premium, may be sold as individual policies subject to the provisions of chapter 58-17. If a plan covering one employee is sold as an individual plan and new employees are added which brings the number of employees to at least two but not more than fifty, then the individual carrier may nonrenew the coverage or accept those new employees and bring the plan into compliance with the applicable provisions of chapters 58-18 and 58-18B. Source: SL 1991, ch 402, 2; SL 1995, ch 281, 2; SL 1996, ch 298; SL 1998, ch 292, 1.
58-18B-20. Small employer carrier to issue plan to any small employer--Criteria--Exceptions--Two percent earned premium threshold.A small employer carrier shall issue health benefit plans to any small employer that applies for a plan and agrees to make the required premium payments and to satisfy the other reasonable provisions of the health benefit plan not inconsistent with this chapter. If, on the first day of the plan year, a small employer plan has fewer than two participants who are current employees, the carrier is not required to issue a policy to the small employer. A small employer carrier may apply reasonable criteria in determining whether to accept a small employer into a particular class of business if:(1)The criteria are not related to the health status or claim experience of the small employer;(2)The criteria are applied consistently to all small employers applying for coverage in the class of business; and(3)The small employer carrier provides for the acceptance of all eligible small employers into one or more classes of business.The provisions of this section do not apply to a class of business into which the small employer carrier is no longer enrolling new small businesses. If the director determines that all carriers in the small employer market have met the two percent threshold, the threshold shall, upon order of the director, be expanded an additional two percent. The threshold shall be expanded in additional two percent increments if all small employer carriers meet the previous threshold. No small employer carrier is required to issue coverage to any small employer if the small employers who are at high-risk constitute two percent of that carrier's earned premium on an annual basis from small employer health benefit plans. The director may promulgate rules pursuant to chapter 1-26 to determine which policies may be used to determine the two percent threshold, the procedures involved, and the applicable time frames. In making that determination, the director shall develop a method designed to limit the number of high risk groups to which any one carrier may be required to issue coverage. Source: SL 1995, ch 281, 14; SL 1997, ch 289, 16; SL 1998, ch 289, 14; SL 2001, ch 279, 3.
58-18B-23. Uniform application of requirements used to determine eligibility of employers.Except as provided in 58-18B-26, requirements used by a small employer carrier in determining whether to provide coverage to a small employer, including requirements for minimum participation of eligible employees and minimum employer contributions, shall be applied uniformly among all small employers with the same number of eligible employees applying for coverage or receiving coverage from the small employer carrier. An association of small employer plans may require, as a condition of obtaining or continuing coverage, membership in the association. Source: SL 1995, ch 281, 17.
58-18B-24. Application of minimum participation and minimum employer contribution requirements.A small employer carrier may vary application of minimum participation requirements and minimum employer contribution requirements only by the size of the small employer group or by the class of business. Source: SL 1995, ch 281, 18.
58-18B-25. Considerations in applying minimum participation requirements--Premium discounts.In applying minimum participation requirements with respect to a small employer, a small employer carrier may consider employees or dependents who have creditable coverage in determining whether the applicable percentage of participation is met. If any employee or dependent with other creditable coverage is to be considered towards calculating the applicable percentage of participation, the employee or dependent shall be counted as participating in the plan.A carrier may provide up to a twenty percent discount for any small employer who achieves a one hundred percent participation rate in the prior year. The discount may be less than the base rate by a factor up to twenty percent. However, no discount below the base rate may be used in determining the index rate for that class of business. Source: SL 1995, ch 281, 19; SL 1997, ch 289, 17; SL 2001, ch 279, 4; SL 2005, ch 271, 1. 
58-18B-26. Increase in minimum requirements for employee participation or employer contribution prohibited after acceptance for coverage.No small employer carrier may increase any requirement for minimum employee participation or any requirement for minimum employer contribution applicable to a small employer at any time after the small employer has been accepted for coverage. Source: SL 1995, ch 281, 20.
58-18B-27.1. Exclusion of benefits for injury while under the influence of alcohol or drugs prohibited--Exception for sickness or injury caused in commission of felony.A health benefit plan of a small employer carrier that is delivered, issued for delivery, or renewed in this state may not exclude the payment of benefits for injuries sustained by an insured person because the insured was under the influence of alcohol or drugs, as defined by 32-23-1.Nothing in this section precludes a hospital or medical service plan from excluding coverage for an insured for any sickness or injury caused in the commission of a felony. Source: SL 1997, ch 290, 3, 7.
58-18B-27. Modification to exclude certain diseases prohibited.No small employer carrier may modify a health benefit plan with respect to a small employer or any eligible employee or dependent through riders, endorsements, or otherwise, to restrict or exclude coverage for certain diseases or medical conditions otherwise covered by the health benefit plan. A small employer carrier may not establish rules for eligibility for any individual to enroll under a plan, including continued eligibility, based on health status-related factors which include health status, medical condition, claims experience, receipt of health care, medical history, genetic information, evidence of insurability, including conditions arising out of acts of domestic violence, and disability. Source: SL 1995, ch 281, 22; SL 1997, ch 289, 18; SL 1998, ch 289, 17.
58-18B-28. Requirements lifted from small employer carrier in financially impaired condition.No small employer carrier may be required to provide coverage to small employers pursuant to 58-18B-20, for any period of time for which the director determines that requiring the acceptance of small employers in accordance with the provisions of 58-18B-20, would place the small employer carrier in a financially impaired condition. Source: SL 1995, ch 281, 23.
58-18B-3.1. Base rate increase to be filed with director--Approval or disapproval.No small employer carrier may increase its small employer base rates unless the small employer carrier has filed the base rate increase with the director for review at least thirty days prior to the implementation of the rate increase. The base rates are deemed approved at the expiration of thirty days after the filing thereof unless disapproved by the director within thirty days after the date of filing. The filing of the base rate increase shall include documentation sufficient to actuarially justify the increase and a history of the earned premiums and incurred claims on the policy forms applicable to the rate increase. The base rates shall be reasonable in relation to the benefits. (SL 2011, ch 216, 19 provides: "The provisions of this Act are repealed if the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010) is found to be unconstitutional in its entirety by a final decision of a federal court of competent jurisdiction and all appeals exhausted or time for appeals elapsed.") Source: SL 2011, ch 216, 18.
58-18B-3. Regulations on premium rates.Premium rates for health benefit plans subject to this chapter are subject to the following provisions:(1)The index rate for a rating period for any class of business may not exceed the index rate for any other class of business by more than twenty percent unless:(a)The class of business is one for which the carrier does not reject, and never has rejected, small employers included within the definition of employers eligible for the class of business or otherwise eligible employees and dependents who enroll on a timely basis, based upon their claim experience or health status;(b)The carrier does not involuntarily transfer, and never has involuntarily transferred, a health benefit plan into or out of the class of business; or(c)The class of business is currently available for purchase;(2)For a class of business, the premium rates charged during a rating period to small employers with similar case characteristics for the same or similar coverage, or the rates which could be charged to such employers under the rating system for that class of business, may not vary from the index rate by more than twenty-five percent of the index rate;(3)The percentage increase in the premium rate charged to a small employer for a new rating period may not exceed the sum of the following:(a)The percentage change in the new business premium rate measured from the first day of the prior rating period to the first day of the new rating period. In the case of a class of business for which the small employer carrier is not issuing new policies, the carrier shall use the percentage change in the base premium rate;(b)An adjustment, not to exceed fifteen percent annually and adjusted pro rata for rating periods of less than one year, due to the claim experience, health status or duration of coverage of the employees or dependents of the small employer as determined from the carrier's rate manual for the class of business; and(c)Any adjustment due to change in coverage or change in the case characteristics of the small employer as determined from the carrier's rate manual for the class of business;(4)For health benefit plans issued prior to July 1, 1991, a premium rate for a rating period may exceed the ranges described in subdivision (1) or (2) of this section for a period of five years from July 1, 1991. In that case, the percentage increase in the premium rate charged to a small employer in such a class of business for a new rating period may not exceed the sum of the following:(a)The percentage change in the new business premium rate measured from the first day of the prior rating period to the first day of the new rating period. In the case of a class of business for which the small employer carrier is not issuing new policies, the carrier shall use the percentage change in the base premium rate; and(b)Any adjustment due to change in coverage or change in the case characteristics of the small employer as determined from the carrier's rate manual for the class of business.This section does not affect the use by a small employer carrier of legitimate rating factors other than claim experience, health status or duration of coverage in the determination of premium rates. Small employer carriers shall apply rating factors, including case characteristics, consistently with respect to all small employers in a class of business.A small employer carrier may not involuntarily transfer a small employer into or out of a class of business. A small employer carrier may not offer to transfer a small employer into or out of a class of business unless the offer is made to transfer all small employers in the class of business without regard to case characteristics, claim experience, health status, or duration since issue. Source: SL 1991, ch 402, 3.
58-18B-35. Director to promulgate rules regulating sale of multiple employer trusts and welfare arrangements--Scope of rules.The director shall promulgate rules pursuant to chapter 1-26 regulating the solicitation and sale of multiple employer trusts and multiple employer welfare arrangements. In considering the promulgation of rules pursuant to this section, the director shall take into consideration, the status of the small employer market, the impact such rules would have on the availability of health insurance and the impact such rules may have on the fair marketing of health insurance in this state. Rules promulgated pursuant to this section may not directly or indirectly affect stop loss or excess insurance covering health claims of employees arising from self-funded employee health programs. The rules may cover:(1)Suitability and eligibility of insureds for coverage;(2)Method of premium payments;(3)Contractual obligations and policy provisions of carriers;(4)Form filing requirements, including those for approval and disapproval;(5)Reporting and recordkeeping requirements;(6)Definition of terms; and(7)Eligibility of insurers. Source: SL 1995, ch 281, 30; SL 1997, ch 289, 20; SL 1998, ch 293, 1.
58-18B-36. Rules governing implementation and administration of this chapter.The director shall promulgate rules pursuant to chapter 1-26 to provide for the implementation and administration of this chapter. The rules shall cover:(1)Terms of renewability;(2)Initial and subsequent conditions of eligibility;(3)Probationary periods;(4)Benefit limitations, exceptions and reductions;(5)Requirements for replacement;(6)Participation and contribution requirements;(7)Definition of terms;(8)Marketing practices;(9)Reporting and disclosure practices or requirements;(10)Compensation arrangements between insurers or other entities and their agents, representatives, or producers;(11)Guaranteed acceptance of small groups by small group carriers;(12)Continuation and conversion rights; and(13)Group discontinuance and replacement.The director may promulgate rules pursuant to chapter 1-26 that specify prohibited policy or certificate provisions not otherwise specifically authorized by statute which, in the opinion of the director, are unjust, unfair, or unfairly discriminatory to any person insured or proposed for coverage under a policy or certificate. If any federal standards are in place which would require additional steps to meet those standards beyond what is required by this chapter, the director may promulgate rules to require the offering of health insurance plans, in addition to those specifically required by 58-18B-20, the underwriting criteria that may be utilized for such health insurance plans, and other requirements related to the availability of health insurance to individuals in this state in order to minimally meet the federal standards. Source: SL 1995, ch 281, 31; SL 1997, ch 289, 21; SL 1998, ch 289, 19.
58-18B-37. Marketing health benefit plans--Denial of coverage to employer.Each small employer carrier shall actively market health benefit plan coverage, to eligible small employers in the state. A small employer carrier may not deny coverage to a small employer on the basis of the health status or claims experience of the small employer or its employees or dependents. A network plan is not required to offer coverage to an employer whose employees do no work or reside within the carrier's established geographic service. A network plan may deny coverage to employers if it demonstrates it does not have the capacity to deliver services adequately to enrollees of any additional groups because of its obligations to existing group contract holders and enrollees, and if it is applying this denial of coverage uniformly to all employers without regard to the claims experience of those employers, and their employees and their dependents, or any health status-related factor relating to the employees and dependents. Source: SL 1995, ch 281, 32; SL 1997, ch 289, 22; SL 1998, ch 289, 20.
58-18B-38. Prohibited activities of small employer carriers or insurance producers.No small employer carrier or insurance producer may, directly or indirectly, engage in the following activities:(1)Encouraging or directing small employers to refrain from filing an application for coverage with the small employer carrier because of the health status, claims experience, industry, occupation, or geographic location of the small employer; or(2)Encouraging or directing small employers to seek coverage from another carrier because of the health status, claims experience, industry, occupation, or geographic location of the small employer. Source: SL 1995, ch 281, 33; SL 2001, ch 286, 123.
58-18B-39. Information regarding restricted network provision of carrier.The provisions of 58-18B-38 do not apply with respect to information provided by a small employer carrier or insurance producer to a small employer regarding a restricted network provision of a small employer carrier. Source: SL 1995, ch 281, 34; SL 2001, ch 286, 124.
58-18B-40. Agent compensation based on characteristics of small employer prohibited--Commission on sale of health insurance plan through exchange.No small employer carrier may, directly or indirectly, enter into any contract, agreement, or arrangement with an insurance producer that provides for or results in the compensation paid to an agent for the sale of a health benefit plan to be varied because of the health status, claims experience, industry, occupation, or geographic location of the small employer.Any qualified health plan sold in South Dakota through a health care exchange, as mandated by the Patient Protection and Affordable Care Act of 2010, shall provide for placement through a licensed insurance producer upon enrollment. Any commission paid by a health insurance carrier for the sale of a health insurance plan through a health exchange shall be the same as commission paid by the same health insurance carrier outside the exchange for a similar plan. Source: SL 1995, ch 281, 35; SL 2001, ch 286, 125; SL 2013, ch 249, 2.
58-18B-41. Compensation of insurance producer based on percentage of premium.The provisions of 58-18B-40 do not apply with respect to a compensation arrangement that provides compensation to an insurance producer on the basis of percentage of premium, if the percentage does not vary because of the health status, claims experience, industry, occupation, or geographic area of the small employer. Source: SL 1995, ch 281, 36; SL 2001, ch 286, 126.
58-18B-43. Status of insurance producer's employment may not be affected by health status, claims experience, occupation, or location of small employer placed with carrier.No small employer carrier may terminate, fail to renew, or limit its contract or agreement of representation with an insurance producer for any reason related to the health status, claims experience, occupation, or geographic location of the small employers placed by the agent with the small employer carrier. Source: SL 1995, ch 281, 38; SL 2001, ch 286, 128.
58-18B-44. Carrier or agent not to induce or encourage employer to exclude employee from coverage.No small employer carrier or agent may induce or otherwise encourage a small employer to separate or otherwise exclude an employee from health coverage or benefits provided in connection with the employee's employment. Source: SL 1995, ch 281, 39.
58-18B-45. Reasons for denial of coverage to be in writing.If a small employer carrier denies an application for coverage from a small employer, the denial shall be in writing and shall state the reason or reasons for the denial. Source: SL 1995, ch 281, 40.
58-18B-46. Rules for additional standards for fair marketing and broad availability of benefit plans to small employers--Penalties.The director may promulgate rules pursuant to chapter 1-26 setting forth additional standards to provide for the fair marketing and broad availability of health benefit plans to small employers in the state. Any violation of 58-18B-37 to 58-18B-48, inclusive, by a small employer carrier or an insurance producer constitutes an unfair trade practice under chapter 58-33. Nothing in this section limits or excludes other penalties which are otherwise authorized by law. Source: SL 1995, ch 281, 41; SL 2001, ch 286, 129.
58-18B-47. Third-party administrator treated as small employer carrier.If a small employer carrier enters into a contract, agreement, or other arrangement with a third-party administrator to provide administrative, marketing, or other services related to the offering of health benefit plans to small employers in the state, the third-party administrator is subject to 58-18B-37 to 58-18B-48, inclusive, as if it were a small employer carrier. Source: SL 1995, ch 281, 42.
58-18B-48. Chapter not applicable to certain group health insurance plans.Unless the carrier otherwise subjects itself to this chapter, this chapter does not apply to any bona fide association insurance plan or to the insurance carrier underwriting the group plan if the bona fide association meets the following criteria:(1)The association has been actively in existence for at least five years;(2)The association has been formed and maintained in good faith for purposes other than obtaining insurance;(3)The association does not condition membership in the association on any health status- related factor relating to an individual, including an employee of an employer or a dependent of an employee;(4)Health insurance coverage offered through the association is available to all members regardless of any health status-related factor relating to such members or individual eligible for coverage through a member;(5)The association does not make health insurance coverage offered through the association available other than in connection with a member of the association;(6)The association and any plan issued through the association are complying with any applicable provisions of Title 47 and 58-18-42 to 58-18-62, inclusive. Source: SL 1995, ch 281, 43; SL 1997, ch 289, 23.
58-18B-49. Establishing risk adjusters.The director may establish a payment mechanism to adjust for the amount of risk covered by each small employer carrier. The director may appoint an advisory committee composed of individuals that have risk adjustment and actuarial expertise to help establish the risk adjusters. Source: SL 1995, ch 281, 44.
58-18B-50. Minimum inpatient care coverage following delivery.If a health benefit plan of a small employer carrier that is issued or renewed on or after July 1, 1996, provides maternity coverage, the plan shall provide coverage for a minimum of forty-eight hours of inpatient care following a vaginal delivery and a minimum of ninety-six hours of inpatient care following delivery by cesarean section for a mother and her newborn child in a health care facility licensed pursuant to chapter 34-12, except as otherwise provided in 58-18B-51. Any policy issued to employers with less than fifteen employees that provides coverage for complications of pregnancy, and does not provide other maternity benefits, is not required to comply with this section. Source: SL 1996, ch 292, 7; SL 1998, ch 290, 3.
58-18B-51. Shorter hospital stay permitted--Follow-up visit within forty-eight hours required.If the treating physician determines that the mother and the newborn meet medical criteria contained in Guidelines for Perinatal Care, Third Edition, of the American Academy of Pediatrics and the American College of Obstetricians and Gynecologists as in effect on January 1, 1996, a health benefit plan may provide coverage for a shorter length of hospital inpatient stay for services related to maternity and newborn care than is required in 58-18B-50 if the coverage includes one follow-up visit in the first forty-eight hours after discharge to verify the condition of the mother and newborn. Source: SL 1996, ch 292, 8.
58-18B-52. Notice to employees--Disclosures.The small employer carrier shall provide notice to employees regarding the coverage required by 58-18B-50 and 58-18B-51 in accordance with rules adopted by the director of the Division of Insurance pursuant to chapter 1-26. The notice shall be in writing and prominently positioned in any literature or correspondence. The notice shall be transmitted to employees in the next mailing to employees, in the yearly informational packet sent to employees, or by January 1, 1997, whichever is earliest. Source: SL 1996, ch 292, 9.
58-18B-53. Health insurance policies to provide coverage for biologically-based mental illnesses.Every small employer health benefit plan that is delivered, issued for delivery, or renewed in this state, except for policies that provide coverage for specified disease or other limited benefit coverage, shall provide, in writing, coverage for the treatment and diagnosis of biologically-based mental illnesses with the same dollar limits, deductibles, coinsurance factors, and restrictions as for other covered illnesses.The term, biologically-based mental illness, means schizophrenia and other psychotic disorders, bipolar disorder, major depression, and obsessive-compulsive disorder. Source: SL 1998, ch 291, 3; SL 1999, ch 251, 3.
58-18B-54. Application--Exemptions.The provisions of 58-18B-53 do not apply to any plan, policy, or contract that provides coverage only for:(1)Specified disease;(2)Hospital indemnity;(3)Fixed indemnity;(4)Accident-only;(5)Credit;(6)Dental;(7)Vision;(8)Prescription drug;(9)Medicare supplement;(10)Long-term care;(11)Disability income insurance;(12)Coverage issued as a supplement to liability insurance;(13)Workers' compensation or similar insurance;(14)Automobile medical payment insurance; or(15)Individual health benefit plans of six-months duration or less that are not renewable. Source: SL 1998, ch 291, 7.
58-18B-55. Supplemental or short term individual health benefit plans exempt from provisions of chapter--Conditions.Any policy or certificate of specified disease, short-term hospital-surgical care of six months or less duration, hospital confinement indemnity, limited benefit health insurance, or other policy or certificate that provide benefits less than that of a major medical plan that is offered to a small employer in this state is exempt from the provisions of this chapter only if the carrier offering the policy or certificate at the time of filing for policy form approval, submits a statement certifying that policies or certificates described in this section are being offered and marketed as supplemental health insurance or as individual health benefit plans of six-month duration or less and not renewable, and not as a substitute for hospital or medical expense insurance or major medical insurance. For policy forms approved prior to July 1, 1998, the carrier shall submit such a statement with the director.For purposes of this section a major medical policy is any policy which provides benefits which are actuarially equivalent to or exceed the basic plan as was approved and adopted by rule by the director pursuant to chapter 1-26. Policies which are not certified pursuant to this section and which are not major medical policies may not be used as a substitute for major medical policies and must provide for adequate disclosure of the scope of the benefits contained therein. Source: SL 1998, ch 289, 21; SL 2001, ch 279, 8.
58-18B-56. Policies to provide coverage for diabetes supplies, equipment and education--Exceptions--Conditions and limitations.Every small employer health benefit plan delivered, issued for delivery, or renewed in this state, except for policies that provide coverage for specified disease or other limited benefit coverage, shall provide, in writing, coverage for equipment, supplies, and self-management training and education, including medical nutrition therapy, for treatment of persons diagnosed with diabetes if prescribed by a physician or other licensed health care provider legally authorized to prescribe such treatment. Medical nutrition therapy does not include any food items or nonprescription drugs.Coverage for medically necessary equipment and supplies shall include blood glucose monitors, blood glucose monitors for the legally blind, test strips for glucose monitors, urine testing strips, insulin, injection aids, lancets, lancet devices, syringes, insulin pumps and all supplies for the pump, insulin infusion devices, prescribed oral agents for controlling blood sugars, glucose agents, glucagon kits, insulin measurement and administration aids for the visually impaired, and other medical devices for treatment of diabetes.Diabetes self-management training and education shall be covered if: (a) the service is provided by a physician, nurse, dietitian, pharmacist, or other licensed health care provider who satisfies the current academic eligibility requirements of the National Certification Board for Diabetic Educators and has completed a course in diabetes education and training or has been certified as a diabetes educator; and (b) the training and education is based upon a diabetes program recognized by the American Diabetes Association or a diabetes program with a curriculum approved by the American Diabetes Association or the South Dakota Department of Health.Coverage of diabetes self-management training is limited to (a) persons who are newly diagnosed with diabetes or have received no prior diabetes education; (b) persons who require a change in current therapy; (c) persons who have a co-morbid condition such as heart disease or renal failure; or (d) persons whose diabetes condition is unstable. Under these circumstances, no more than two comprehensive education programs per lifetime and up to eight follow-up visits per year need be covered. Coverage is limited to the closest available qualified education program that provides the necessary management training to accomplish the prescribed treatment.The benefits provided in this section are subject to the same dollar limits, deductibles, coinsurance, and other restrictions established for all other benefits covered in the plan. Source: SL 1999, ch 252, 5.
58-18B-57. Diabetes coverage not required of certain plans.The provisions of 58-18B-56 do not apply to any plan, policy, or contract that provides coverage only for:(1)Specified disease;(2)Hospital indemnity;(3)Fixed indemnity;(4)Accident-only;(5)Credit;(6)Dental;(7)Vision;(8)Prescription drug;(9)Medicare supplement;(10)Long-term care;(11)Disability income insurance;(12)Coverage issued as a supplement to liability insurance;(13)Workers' compensation or similar insurance;(14)Automobile medical payment insurance;(15)Individual health benefit plans of six-months duration or less that are not renewable; or(16)Individual nonmajor medical insurance. Source: SL 1999, ch 252, 6.
58-18B-58. Health benefit plans to provide coverage for prostate cancer screening.Every health benefit plan of a small employer carrier that covers a male and that is delivered, issued for delivery, or renewed in this state shall provide the following coverage for diagnostic screening for prostate cancer:(1)An annual medically recognized diagnostic examination, including a digital rectal examination and a prostate-specific antigen test, as follows:(a)For asymptomatic men aged fifty and over; and(b)For men aged forty-five and over at high risk for prostate cancer; and(2)For males of any age who have a prior history of prostate cancer, medically indicated diagnostic testing at intervals recommended by a physician, including the digital rectal examination, prostate-specific antigen test, and bone scan. Source: SL 2001, ch 277, 3.
58-18B-6. Disclosure in solicitation and sales materials.Each small employer carrier shall make reasonable disclosure in solicitation and sales materials provided to small employers of the following:(1)The extent to which premium rates for a specific small employer are established or adjusted due to the claim experience, health status or duration of coverage of the employees or dependents of the small employer;(2)The provisions concerning the carrier's right to change premium rates and the factors, including case characteristics, which affect changes in premium rates;(3)A description of the class of business in which the small employer is or will be included, including the applicable grouping of plans; and(4)The provisions relating to renewability of coverage. Source: SL 1991, ch 402, 6.
58-18B-60. Coverage for treatment of hearing impairment for persons under age nineteen.Any qualified health plan issued on or after January 1, 2015, that offers coverage for professional audiology services shall include coverage for medically necessary physician services appropriate for the treatment of hearing impairment to a person under the age of nineteen. This shall include professional services rendered by an audiologist licensed pursuant to chapter 36-24.The benefits provided shall be subject to the same dollar limits, deductibles, coinsurance and other limitations provided for other covered benefits in the policy.Nothing in this section requires the payment by the health plan of hearing aids, devices, or equipment to correct hearing impairment or loss. Source: SL 2014, ch 237, 3.
58-18B-7. Information and documentation required--Disclosure.Each small employer carrier shall maintain at the carrier's principal place of business a complete and detailed description of the carrier's rating practices and renewal underwriting practices, including information and documentation which demonstrate that the carrier's rating methods and practices are based upon commonly accepted actuarial assumptions and are in accordance with sound actuarial principles.A small employer carrier shall make the information and documentation required by this section available to the director upon request. Except in cases of violations of this chapter, the information shall be considered proprietary and trade secret information and is not subject to disclosure by the director to persons outside of the division except as agreed to by the carrier or by order of a court, or if requested by a law enforcement officer or another state insurance agency. Source: SL 1991, ch 402, 7; SL 1995, ch 281, 12; SL 2009, ch 262, 2.
58-18B-8. Suspension of rate requirements.The director may suspend all or any part of the premium rate requirements of 58-18B-3 applicable to one or more small employers for one or more rating periods upon a filing by the small employer carrier and a finding by the director that either the suspension is reasonable in light of the financial condition of the carrier or that the suspension would enhance the efficiency and fairness of the marketplace for small employer health insurance. Source: SL 1991, ch 402, 8.
58-18B-9. Application of chapter.The provisions of this chapter apply to each health benefit plan for a small employer that is delivered, issued for delivery, renewed or continued in this state after July 1, 1992. The date a plan is continued is the first rating period which commences after July 1, 1992. Source: SL 1991, ch 402, 9.
58-18C-1. Continuation of coverage after employer ceases operations, fails to pay premiums, or cancels coverage--Persons covered--Time.Every policy of group health insurance providing benefits for hospital or medical expenses delivered or issued for delivery in this state, by a commercial health insurance company, by a nonprofit medical and surgical service plan corporation, by a nonprofit hospital service plan corporation, by a health maintenance organization, or by any other similar mechanism shall, in addition to the provisions required by law, include the right of each employee, upon their employer ceasing operations and the termination of the policy or contract, to have the coverage continue for themselves and their eligible dependents, effective as of the date of loss of the previous group coverage, for a period of twelve months for which the employee shall be financially responsible. In addition, if an employer either fails to submit premium payment to the insurance company resulting in loss of coverage to its employees or cancels the coverage and does not notify the employees of such loss of coverage, the employees and their dependents are then eligible for continuation pursuant to this section if election is made within sixty days of the date of their being notified of the loss of coverage. The employer shall provide notice of any nonpayment of premiums or cancellation of coverage to employees as soon as reasonably possible but no later than ten days after the date of cancellation. If the employer fails to notify the employees and their dependents of the termination of coverage within ten days, the employees and dependents may not be denied coverage by the insurer provided timely election is made after actual receipt of notice. Whether notice is provided or not, the election period for continuation of coverage may expire ninety days from the date the group coverage terminated. Any premiums due for the continuation of coverage may be required to be paid by the employee or dependent as a condition of providing continuation coverage.Any former employee who is under continuation coverage at the time an employer ceases operation and terminates the policy, or fails to make premium payments resulting in loss of coverage, or cancels the insurance without notice, is eligible to remain on continuation coverage for the remainder of the continuation term or twelve months, whichever is less, if timely election is made and continuation payments received.For purposes of this section, the phrase, employer ceasing operations, means that the business has closed or discontinued its business operations or, in the case of a sole proprietorship or an owner-operated business, the sale of such business that results in the purchaser establishing its own taxpayer identification number. Source: SL 1998, ch 294, 1; SL 2001, ch 280, 1; SL 2005, ch 270, 10; SL 2008, ch 267, 1.
58-18C-11. Enforceability of chapter under Employee Retirement Income Security Act.Nothing in this chapter is enforceable to the extent such enforcement violates the Employee Retirement Income Security Act. Source: SL 1998, ch 294, 11.
58-18C-3. Eligibility requirements.Continuation is only available to an employee who has been continuously insured under the group policy or under any creditable coverage which it replaced during the entire six-month period ending with such termination. Source: SL 1998, ch 294, 3; SL 2005, ch 270, 2; SL 2008, ch 268, 1.
58-18C-4. Notice of termination required.Written notice of termination of group coverage shall be provided by the employer to each employee having coverage within ten days of termination. The notice shall contain such information as required by the director. Source: SL 1998, ch 294, 4.
58-18C-5. Exercising continuation rights--Option to decrease benefits.Any employee may exercise the right to continuation within thirty days of receipt of due notice of termination of coverage of the group and upon payment of premiums from the date of termination.Any insurer providing continuation coverage pursuant to 58-18C-1 shall offer to all beneficiaries who are eligible to elect to continue coverage the option to decrease benefits of the continued coverage. The options shall include, at a minimum, those coverage options that would have been otherwise available to employees or dependents who initially enrolled into the coverage if the options decrease coverage or a carrier may offer a standardized plan to all those eligible for continuation that contains similar benefits to the beneficiaries prior coverage but at a higher deductible or other reduced benefit features. Source: SL 1998, ch 294, 5; SL 2005, ch 270, 3; SL 2008, ch 266, 2.
58-18C-7. Continuation policy not required in certain circumstances.No insurer may be required to offer or renew a continuation policy covering any person if:(1)The person is covered for similar benefits by another individual or group policy;(2)Similar benefits are provided for or available to such person, by reason of any state or federal law;(3)The benefits under sources of the kind referred to in subdivision (1) for such person or benefits provided or available under sources of the kind referred to in subdivision (2) for such person, together with the continued policy's benefits, would result in overinsurance according to the insurer's standards for overinsurance;(4)There has been fraud or material misrepresentation in applying for any benefits under continued or converted policy;(5)The person failed to pay any required contribution; or(6)Cancellation of all similar insurance policies in the entire state. Source: SL 1998, ch 294, 7; SL 2005, ch 270, 4.  
58-18C-8. Premiums for continuation policies.The premium for a continuation policy may not be greater than one hundred twenty-five percent of the group rate under which a person is covered. Source: SL 1998, ch 294, 8; SL 2005, ch 270, 5. 
58-18C-9. Notification of continuation rights.A notification of the continuation rights shall be included in each certificate of coverage. Source: SL 1998, ch 294, 9; SL 2005, ch 270, 6. 
58-19-1. Purpose of chapter.The purpose of this chapter is to promote the public welfare by regulating credit life insurance, credit health insurance, credit unemployment insurance, and credit property including group personal property coverages authorized through credit cards. Nothing in this chapter is intended to prohibit or discourage reasonable competition. The provisions of this chapter shall be liberally construed. Source: SL 1966, ch 111, ch 27, 1; SL 1987, ch 380, 9; SL 2001, ch 281, 1.
58-19-10. Commencement of insurance when evidence of insurability required.Where evidence of insurability is required and such evidence is furnished more than thirty days after the date when the debtor becomes obligated to the creditor, the term of credit life insurance or credit health insurance may commence on the date on which the insurance company determines the evidence to be satisfactory, and in such event there shall be an appropriate refund or adjustment of any charge to the debtor for insurance. Source: SL 1966, ch 111, ch 27, 5.
58-19-11. Duration of term of insurance--Extension--Renewal or refinancing.The term of credit life insurance or credit health insurance shall not extend more than fifteen days beyond the scheduled maturity date of the indebtedness except when extended without additional cost to the debtor. If the indebtedness is discharged due to renewal or refinancing prior to the scheduled maturity date, the insurance in force shall be terminated before any new insurance may be issued in connection with the renewed or refinanced indebtedness. In all cases of termination prior to scheduled maturity, a refund shall be paid or credited as provided in 58-19-15. Source: SL 1966, ch 111, ch 27, 5.
58-19-12. Revision of premium schedule--Filing.Any insurer may revise its schedules of premium rates from time to time, and shall file such revised schedules with the director. Source: SL 1966, ch 111, ch 27, 8 (1).
58-19-13. Premium rate not to exceed scheduled rate--Misdemeanor.No insurer shall issue any credit life insurance policy or credit health insurance policy for which the premium rate exceeds that determined by the schedules of such insurer as then on file with the director. Violation of this section is a Class 2 misdemeanor. Source: SL 1966, ch 111, ch 27, 8 (1); SL 1978, ch 359, 2.
58-19-14. Amount charged debtor not to exceed premium charged by insurer--Misdemeanor.The amount charged to a debtor for any credit life or credit health insurance shall not exceed the premiums charged by the insurer, as computed at the time the charge to the debtor is determined. Violation of this section is a Class 2 misdemeanor. Source: SL 1966, ch 111, ch 27, 8 (4); SL 1978, ch 359, 2.
58-19-15. Termination of insurance prior to maturity date--Refund of amount paid by debtor.Each individual policy, or group certificate shall provide that in the event of termination of the insurance prior to the scheduled maturity date of the indebtedness, any refund of an amount paid by the debtor for insurance shall be paid or credited promptly to the person entitled thereto; provided, however, that the director shall prescribe a minimum refund and no refund which would be less than such minimum need be made. The formula to be used in computing such refund shall be promulgated in a rule by the director. Source: SL 1966, ch 111, ch 27, 8 (2); SL 1986, ch 22, 30.
58-19-16. Creditor requiring debtor to pay for insurance--Notice to debtor--Credit to account.If a creditor requires a debtor to make any payment for credit life insurance or credit health insurance and an individual policy or group certificate of insurance is not issued, the creditor shall immediately give written notice to such debtor and shall promptly make an appropriate credit to the account. Source: SL 1966, ch 111, ch 27, 8 (3).
58-19-17. Issuance of policies.All policies of credit life insurance and credit health insurance shall be delivered or issued for delivery in this state only by an insurer authorized to do an insurance business therein, and shall be issued only through holders of licenses or authorizations issued by the director. Source: SL 1966, ch 111, ch 27, 9.
58-19-18. Individual policy or group certificate delivered to debtor.All credit life insurance and credit health insurance sold shall be evidenced by an individual policy, or in the case of group insurance by a certificate of insurance, which individual policy, or group certificate of insurance shall be delivered to the debtor. Source: SL 1966, ch 111, ch 27, 6 (1).
58-19-19. Contents of individual policy or group certificate.Each individual policy or group certificate of credit life insurance, or credit health insurance shall, in addition to other requirements of law, set forth the name and home office address of the insurer, the name or names of the debtor or in the case of a certificate under a group policy, the identity by name or otherwise of the debtor, the premium or amount of payment, if any, by the debtor separately for credit life insurance and credit health insurance, a description of the coverage including the amount and term thereof, and any exceptions, limitations and restrictions, and shall state that the benefits shall be paid to the creditor to reduce or extinguish the unpaid indebtedness and, wherever the amount of insurance may exceed the unpaid indebtedness, that any such excess shall be payable to a beneficiary, other than the creditor, named by the debtor or to his estate. Source: SL 1966, ch 111, ch 27, 6 (2).
58-19-2. Definition of terms.Terms used in this chapter mean:(1)"Credit health insurance," insurance on a debtor to provide indemnity for payments becoming due on a specific loan, lease, or other credit transaction while the debtor is disabled as defined in the policy;(2)"Credit life insurance," insurance on the life of a debtor pursuant to or in connection with a specific loan, lease, or other credit transaction;(3)"Creditor," the lender of money or vendor or lessor of goods, services, or property, rights or privileges, for which payment is arranged through a credit transaction, or any successor to the right, title, or interest of any such lender, vendor, or lessor, and an affiliate, associate, or subsidiary of any of them or any director, officer, or employee of any of them or any other person in any way associated with any of them;(4)"Debtor," a borrower of money or a purchaser or lessee of goods, services, property, rights, or privileges for which payment is arranged through a credit transaction;(5)"Indebtedness," the total amount payable by a debtor to a creditor in connection with a loan, lease, or other credit transaction;(6)"Group property insurance authorized by credit card," forms of property insurance issued on a group basis covering:(a)Loss of or damage to personal property, other than loss of use or loss resulting from a defect in materials or workmanship, where such personal property is purchased using a credit card;(b)Loss of, damage to or loss of use of personal property resulting from a defect in materials or workmanship, where the personal property is purchased using a credit card and is under warranty;(c)Loss of or damage to a lease or rented motor vehicle, that is intended to be rented or leased for a period of ninety consecutive days or less, where the lease or rental fee is paid using a credit card;(d)Loss of, or damage to or loss of use of baggage and its contents while in transit, where the cost of travel or accommodations is paid using a credit card;(e)Loss of damage to or loss of use of personal property occurring in connection with use of a leased or rented motor vehicle, which motor vehicle is intended to be rented or leased for a period of ninety consecutive days or less, where the lease or rental fee is paid using a credit card;(f)Loss incurred in connection with the unauthorized use of a credit card; or(g)Such other forms of property insurance that are authorized by the director of the Division of Insurance by rule promulgated pursuant to chapter 1-26 and determined to be appropriate for issuance on a group basis. Source: SL 1966, ch 111, ch 27, 2 (3); SL 1998, ch 295, 1; SL 2001, ch 281, 2.
58-19-20. Time of delivery of individual policy or group certificate.Each individual policy or group certificate of credit life insurance or credit health insurance shall be delivered to the insured debtor at the time the indebtedness is incurred except as provided in 58-19-21 to 58-19-23, inclusive. Source: SL 1966, ch 111, ch 27, 6 (3).
58-19-21. Application or notice delivered to debtor in lieu of policy or certificate.If said individual policy or group certificate of insurance is not delivered to the debtor at the time the indebtedness is incurred, a copy of the application for such policy or a notice of proposed insurance, signed by the debtor and setting forth the name and home office address of the insurer, the name of the debtor, the premium or amount of payment by the debtor, if any, separately for credit life insurance and credit health insurance, the amount, term and a brief description of the coverage provided, shall be delivered to the debtor at the time such indebtedness is incurred. Said application or notice of proposed insurance shall state that upon acceptance by the insurer, the insurance shall become effective as provided in 58-19-9 and 58-19-10. The copy of the application for, or notice of proposed insurance, shall also refer exclusively to insurance coverage, and shall be separate and apart from the loan, sale, or other credit statement of account, instrument, or agreement, unless the information required by this section is prominently set forth therein. Source: SL 1966, ch 111, ch 27, 6 (4).
58-19-22. Delivery to debtor of policy or certificate after acceptance of insurance.Upon acceptance of the insurance by the insurer and within thirty days of the date upon which the indebtedness is incurred, the insurer shall cause the individual policy or group certificate of insurance to be delivered to the debtor. Source: SL 1966, ch 111, ch 27, 6 (4).
58-19-23. Policy received by debtor on nonacceptance of risk by named insurer--Description of substitute insurance.If the named insurer does not accept the risk, then and in such event the debtor shall receive a policy or certificate of insurance setting forth the name and home office address of the substituted insurer and the amount of the premium to be charged, and if the amount of premium is less than that set forth in the notice of proposed insurance an appropriate refund shall be made. Source: SL 1966, ch 111, ch 27, 6 (5).
58-19-24. Forms--Filing with director.All policies, certificates of insurance, notices of proposed insurance, applications for insurance, endorsements, and riders delivered or issued for delivery in this state and the schedules of premium rates pertaining thereto shall be filed with the director. Source: SL 1966, ch 111, ch 27, 7 (1).
58-19-25. Prior policies--Group certificate and notice of proposed insurance, filing and approval by director--Schedules of premium rates.If a group policy of credit life insurance or credit health insurance has been delivered in this state before July 1, 1966, or has been or is delivered in another state before or after said date, the insurer shall be required to file only the group certificate and notice of proposed insurance delivered or issued for delivery in this state as specified in 58-19-19, 58-19-21, and 58-19-22, and such forms shall be approved by the director if they conform with the requirements specified in said sections and if the schedules of premium rates applicable to the insurance evidenced by such certificate or notice are not in excess of the insurer's schedules of premium rates filed with the director. Source: SL 1966, ch 111, ch 27, 7 (6).
58-19-26. Disapproval of filed forms by director.The director shall within thirty days after the filing of any such policies, certificates of insurance, notices of proposed insurance, applications for insurance, endorsements, and riders, disapprove any such form if the premium rates charged or to be charged are excessive in relation to benefits, or if it contains provisions which are unjust, unfair, inequitable, misleading, deceptive, or encourage misrepresentation of the coverage, or are contrary to any provision of this title or of any rule or regulation promulgated thereunder. Source: SL 1966, ch 111, ch 27, 7 (2).
58-19-27. Use of disapproved forms unlawful--Reason stated in notice--Hearing on request--Use of forms pending approval.If the director notifies the insurer that the form is disapproved, it is unlawful thereafter for such insurer to issue or use such form. In such notice, the director shall specify the reason for his disapproval and state that a hearing will be granted within twenty days after request in writing by the insurer. No such policy, certificate of insurance, notice of proposed insurance, nor any application, endorsement, or rider, shall be issued or used until the expiration of thirty days after it has been so filed, unless the director shall give his prior written approval thereto. Source: SL 1966, ch 111, ch 27, 7 (3).
58-19-28. Withdrawal of approval of form--Notice and hearing.The director may, at any time after a hearing held not less than twenty days after written notice to the insurer, withdraw his approval of any such form on any ground set forth in 58-19-26. The written notice of such hearing shall state the reason for the proposed withdrawal. Source: SL 1966, ch 111, ch 27, 7 (4).
58-19-29. Use of forms unlawful after withdrawal.It is not lawful for the insurer to issue such forms or use them after the effective date of such withdrawal. Source: SL 1966, ch 111, ch 27, 7 (5).
58-19-3. Life and health insurance connected with credit transactions subject to chapter--Exceptions.All life insurance and all health insurance in connection with loans or other credit transactions shall be subject to the provisions of this chapter, except such insurance in connection with a loan or other credit transaction of more than ten years' duration; nor shall insurance be subject to the provisions of this chapter where the issuance of such insurance is an isolated transaction on the part of the insurer not related to an agreement or a plan for insuring debtors of the creditor. Source: SL 1966, ch 111, ch 27, 2 (2); SL 1970, ch 271.
58-19-30. Judicial review of order or final determination of director as to forms.Any order or final determination of the director under the provisions of 58-19-24 to 58-19-29, inclusive, shall be subject to judicial review. Source: SL 1966, ch 111, ch 27, 7 (7).
58-19-31. Claims--Reporting to insurer--Settlement.All claims shall be promptly reported to the insurer or its designated claim representative, and the insurer shall maintain adequate claim files. All claims shall be settled as soon as possible and in accordance with the terms of the insurance contract. Source: SL 1966, ch 111, ch 27, 10 (1).
58-19-32. Settlement or adjustment of claims by person other than insurer prohibited--Creditor not claim representative--Payment by group policyholder.No plan or arrangement shall be used whereby any person, firm or corporation other than the insurer or its designated claim representative shall be authorized to settle or adjust claims. The creditor shall not be designated as claim representative for the insurer in adjusting claims; provided, that a group policyholder may, by arrangement with the group insurer, draw drafts or checks in payment of claims due to the group policyholder subject to audit and review by the insurer. Source: SL 1966, ch 111, ch 27, 10 (3).
58-19-33. Manner of payment of claims.All claims shall be paid either by draft drawn upon the insurer or by check of the insurer to the order of the claimant to whom payment of the claim is due pursuant to the policy provisions, or upon direction of such claimant to one specified. Source: SL 1966, ch 111, ch 27, 10 (2).
58-19-34. Promulgation of rules by director--Purpose and scope.The director may promulgate rules pursuant to chapter 1-26 as deemed appropriate for the supervision of this chapter. The rules may cover any type of credit insurance including credit life, credit health, credit unemployment, and credit property insurance, including guaranteed automobile protection. The rules shall be designed to protect the insurance buying public from discriminatory rating and underwriting and claims practices, from being charged excessive rates, and from requirements to purchase credit insurance when purchasing goods and services. The rules may cover the following areas:(1)Definition of terms;(2)Filing requirements;(3)The setting of loss ratios and prima facie rates;(4)Underwriting criteria;(5)Sales and marketing practices;(6)Minimum benefit standards;(7)Permissible exclusions;(8)Claims practices; and(9)Disclosure requirements. Source: SL 1966, ch 111, ch 27, 12; SL 1986, ch 22, 31; SL 2001, ch 282, 1.
58-19-35. Order for compliance issued by director--Notice and hearing.Whenever the director finds that there has been a violation of this chapter or any rules or regulations issued pursuant thereto, and after written notice thereof and hearing given to the insurer or other person authorized or licensed by the director, he shall set forth the details of his findings together with an order for compliance by a specified date. Such order shall be binding on the insurer and other person authorized or licensed by the director on the date specified unless sooner withdrawn by the director or a stay thereof has been ordered by a court of competent jurisdiction. Source: SL 1966, ch 111, ch 27, 12.
58-19-36. Revocation or suspension of license or certificate for violation--Notice and hearing--Judicial review.The director may revoke or suspend the license or certificate of authority of the person, firm, or corporation guilty of violation of an order of the commissioner after it has become final, and while such order is in effect. Such order for suspension or revocation shall be upon notice and hearing, and shall be subject to judicial review as provided in chapter 1-26. Source: SL 1966, ch 111, ch 27, 13; SL 1978, ch 359, 15.
58-19-37. Civil forfeiture for violations of orders of director.In addition to any other penalty provided by law, any person, firm, or corporation which violates an order of the director after it has become final, and while such order is in effect, shall, upon proof thereof to the satisfaction of the court, forfeit and pay to the State of South Dakota a sum not to exceed two hundred fifty dollars which may be recovered in a civil action, except that if such violation is found to be willful, the amount of such penalty shall be a sum not to exceed one thousand dollars. Source: SL 1966, ch 111, ch 27, 13.
58-19-38. Citation of chapter.This chapter may be cited as "The Model Act for the Regulation of Credit Life Insurance and Credit Health Insurance." Source: SL 1966, ch 111, ch 27, 2 (1).
58-19-39. Credit unemployment insurance sold in connection with loans subject to chapter.Any credit unemployment insurance sold in connection with loans or other credit transactions is subject to the provisions of this chapter to the extent such provisions are not inconsistent with the specific provisions of 58-19-40 to 58-19-46, inclusive. Source: SL 1987, ch 380, 1.
58-19-4. Forms of credit life insurance and credit health insurance.Credit life insurance and credit health insurance shall be issued only in the following forms:(1)Individual policies of life insurance issued to debtors on the term plan;(2)Individual policies of health insurance issued to debtors on a term plan or disability benefit provisions in individual policies of credit life insurance;(3)Group policies of life insurance issued to creditors providing insurance upon the lives of debtors on the term plan;(4)Group policies of health insurance issued to creditors on a term plan insuring debtors or disability benefit provisions in group credit life insurance policies to provide such coverage. Source: SL 1966, ch 111, ch 27, 3.
58-19-40. Credit unemployment insurance not required by lender in consumer transactions.Credit unemployment insurance may be offered but in no event may be required by the lender in consumer transactions. This shall be clearly and conspicuously disclosed to the consumer in the loan agreement. Source: SL 1987, ch 380, 2.
58-19-41. Coverage of credit unemployment insurance to begin first day of unemployment.Credit unemployment insurance shall provide coverage beginning with the first day of unemployment. However, the policy may include a waiting period before the consumer may file a claim. Source: SL 1987, ch 380, 3.
58-19-42. Credit unemployment insurance separately sold and priced--Exception--Not to be required for credit card issuance or renewal.Credit unemployment insurance shall be sold separately and shall be separately priced from any other insurance offered or sold at the same time unless credit unemployment insurance is included as part of an insurance offering by a credit card issuer. However, credit unemployment insurance may not be required as a condition for the issuance or renewal of a credit card. Source: SL 1987, ch 380, 4; SL 1988, ch 403.
58-19-43. Filing of credit unemployment insurance policies, certificates, notices, applications, endorsements, and riders, and premium rate schedules.All credit unemployment insurance policies, certificates of insurance, notices of proposed insurance, applications for insurance, endorsements, and riders delivered or issued for delivery in this state and the schedules of premium rates pertaining thereto shall be filed with the director. Source: SL 1987, ch 380, 5.
58-19-44. Disapproval by director if premium rates excessive or provisions unjust.Within thirty days after the filing of any credit unemployment insurance policy, certificate of insurance, notice of proposed insurance, application for insurance, endorsement, or rider, the director shall disapprove any such form if the premium rates charged or to be charged are excessive in relation to benefits, or if such form contains provisions which are unjust, unfair, inequitable, misleading, deceptive, or encourage misrepresentation of the coverage, or are contrary to any provision of this title. Source: SL 1987, ch 380, 6.
58-19-45. Test of reasonableness of benefits to premium charged--Prima facie evidence--Restriction on commissions.With regard to credit unemployment insurance, the basic test of the reasonableness of the relation of benefits to the premium charged shall be the development of an anticipated loss ratio of claims incurred to premiums earned of at least fifty percent. If the total current expected expenses, including acquisition expenses, exceed fifty percent of the premium dollar, this shall be considered prima facie evidence that a company intends to write credit business at a loss ratio which is not in compliance with this rule. Commissions, including retrospective premium refunds, bonuses, or acquisition expenses, may not exceed forty percent. If any company is not in compliance with this rule, it shall show just cause why the premium rates as filed should not be disapproved. Source: SL 1987, ch 380, 7.
58-19-46. Review of insurance company's actuarial data--Reimbursement of cost.In approving or establishing the premium rates for credit unemployment insurance, the division shall review the insurance company's actuarial data to assure that the rates are fair and reasonable. The insurance director may hire or contract with a qualified actuary to review the data. The insurance division shall obtain reimbursement from the insurance company for the cost of the actuarial review of rates. Source: SL 1987, ch 380, 8; SL 2002, ch 238, 1.
58-19-47. Group property insurance authorized by credit card subject to chapter.Any group property insurance authorized by credit card is subject to the provisions of this chapter to the extent such provisions are not inconsistent with the specific provisions of 58-19-48 to 58-19-50, inclusive. Source: SL 2001, ch 281, 3.
58-19-48. Group property insurance to be sold and priced separately--Exceptions--Insurance not to be condition for issuance or renewal of credit card.Group property insurance authorized by credit card shall be sold separately and shall be separately priced from any other insurance offered or sold at the same time unless it is included as part of an insurance offering provided to the debtor through the use of a credit card purchase of goods or services. Group property insurance authorized by credit card may not be required as a condition for the issuance or renewal of a credit card. Source: SL 2001, ch 281, 4.
58-19-49. All group property insurance policies, certificates, and documentation to be filed with the director.All group property insurance authorized by credit card insurance policies, certificates of insurance, notices of proposed insurance, applications for insurance, endorsements and riders delivered or issued for delivery in this state and the schedules of premium rates pertaining thereto shall be filed with the director. Source: SL 2001, ch 281, 5.
58-19-5.1. Credit insurance not to be required for lease.No lessor may require a lessee to purchase credit insurance as a term or condition of the lease. Source: SL 1998, ch 295, 2.
58-19-5. Existing insurance--Choice of insurer.When credit life insurance or credit health insurance is required as additional security for any indebtedness, the debtor shall, upon request to the creditor, have the option of furnishing the required amount of insurance through existing policies of insurance owned or controlled by him or of procuring and furnishing the required coverage through any insurer authorized to transact an insurance business within this state. Source: SL 1966, ch 111, ch 27, 11.
58-19-50. Disapproval of group property insurance by director--Grounds--Time limit.Within thirty days after the filing of any group property insurance authorized by credit card insurance policy, certificate of insurance, notice of proposed insurance, application for insurance, endorsement or rider, the director shall disapprove any such form if the premium rates charged or to be charged are excessive in relation to benefits, or if such form contains provisions which are unjust, unfair, inequitable, misleading, deceptive, or encourage misrepresentation of the insurance, or are contrary to any provision of this title. If such filing is not disapproved by the director within this thirty-day period, it shall be deemed approved. Source: SL 2001, ch 281, 6.
58-19-6. Maximum amount of credit life insurance.The initial amount of credit life insurance shall not exceed the total amount repayable under the contract of indebtedness and, where an indebtedness is repayable in substantially equal installments, the amount of insurance shall at no time exceed the scheduled or actual amount of unpaid indebtedness, whichever is greater. Source: SL 1966, ch 111, ch 27, 4 (1).
58-19-7. Agricultural credit transaction commitments--Amount of insurance.Notwithstanding the provisions of 58-19-6, insurance on agricultural credit transaction commitments may be written for the amount of the portion of such commitment that has not been advanced by the creditor. Source: SL 1966, ch 111, ch 27, 4 (2).
58-19-8. Indemnity payable by credit health insurance--Maximum amount.The total amount of periodic indemnity payable by credit health insurance in the event of disability, as defined in the policy, shall not exceed the aggregate of the periodic scheduled unpaid installments of the indebtedness; and the amount of each periodic indemnity payment shall not exceed the original indebtedness divided by the number of periodic installments. Source: SL 1966, ch 111, ch 27, 4 (3).
58-19-9. Term of insurance--Commencement.The term of any credit life insurance or credit health insurance shall, subject to acceptance by the insurer, commence on the date when the debtor becomes obligated to the creditor, except that, where a group policy provides coverage with respect to existing obligations, the insurance on a debtor with respect to such indebtedness shall commence on the effective date of the policy. Source: SL 1966, ch 111, ch 27, 5.
58-20-1. Definition of terms.Terms used in this chapter, unless the context otherwise plainly requires, shall mean:(1)"Compensation" shall relate to all insurances effected by virtue of statutes providing compensation to employees for personal injuries irrespective of fault of the employer;(2)"Earned premiums" shall include gross premiums charged on all policies written, including all determined excess and additional premiums, less return premiums, other than premiums returned to policyholders as dividends, and less reinsurance premiums and premiums on policies canceled, and less unearned premiums on policies in force. Any participating insurer which has charged in its premiums a loading solely for dividends, shall not be required to include such loading in its earned premiums, provided a statement of the amount of such loading has been filed with and approved by the director;(3)"Liability" shall relate to all insurance except compensation insurance against loss or damage from accident to or injury suffered by an employee or other person and for which the insured is liable;(4)"Loss payments" and "loss expense payments" shall include payments to claimants, including payments for medical or surgical attendants, legal expenses, salaries and expenses of investigators, adjusters and field men, rents, stationery, telegraph and telephone charges, postage, salaries and expenses of office employees, home office expenses, and all other payments made on account of claims, whether such payments shall be allocated to specific claims or unallocated. Source: SL 1966, ch 111, ch 29, 1.
58-20-10. Notice to either employer or insurer--Required policy provision.Every policy issued by any corporation, association or organization to assure the payment of compensation under the provisions of the title "Workers' Compensation" shall contain a clause providing that, as between any employer and the insurer, notice or knowledge of the occurrence of injury or death on the part of the insured shall be notice or knowledge on the part of the insurer; and jurisdiction of the insured for the purpose of this chapter shall be jurisdiction of the insurer, and the insurer shall be bound by every agreement, adjudgment, award, or judgment rendered against the insured. Source: SL 1966, ch 111, ch 29, 8.
58-20-11. Provision relieving insurer from payment on insolvency of insured prohibited.No such policy of insurance issued shall contain any provision relieving the insurer from payment if the insured becomes insolvent or discharged in bankruptcy during the period that the policy is in operation, or the compensation, or any part of it, is due and unpaid. Source: SL 1966, ch 111, ch 29, 9.
58-20-12. Policy insuring against employers' liability other than workers' compensation--Required provisions--Liability of insurer--Actions for recovery.Every policy written insuring against the liability of employers for personal injuries, other than payment of compensation under the provisions of the title, Workers' Compensation, shall contain provisions to the effect that the insurer shall be directly liable to the injured party, and, in the event of his death, to the party entitled to sue therefor, to pay him the amount of damages for which such insured is liable. Such injured party, or, in the event of his death, the party entitled to sue therefor, in his suit against the insured, may join the insurer as a defendant, in which case judgment shall bind either or both the insured and the insurer, or such injured party, or in the event of his death, the party entitled to sue therefor, after having obtained judgment against the insured alone, may proceed on such judgment in a separate claim against such insurer; but payment of such liability, in whole or in part, by either the insured or the insurer shall, to the extent thereof, be a bar to recovery against the other of the amount so paid. In no case shall the insurer be liable for damages beyond the face amount of the policy. Source: SL 1966, ch 111, ch 29, 12.
58-20-13. Form of insurance to be approved before issuance--Ruling subject to appeal.No such policy of compensation or liability insurance or rider shall be issued or delivered in this state until a copy of the form thereof shall have been filed with the director at least thirty days, unless prior to the expiration of such thirty days, the director shall in writing approve such form; also, no such policy or rider shall be issued if the director, in writing, notifies the insurer that in his opinion the form of such policy or rider does not comply with the provisions of this chapter, specifying the reasons. Such ruling shall be subject to appeal, the same as other decisions of the director in quasi-judicial matters. Source: SL 1966, ch 111, ch 29, 6.
58-20-14. Cancellation of policy--Notice of intention to cancel--Service on employer.No workers' compensation policy may be cancelled for nonpayment of premiums unless notice of the cancellation has been sent by mail to the employer at least ten days prior to the date of cancellation. Any policy cancelled for reasons other than nonpayment of premiums is subject to the provisions of 58-33-59 to 58-33-65.1, inclusive. For any cancellation, the insurer shall provide notice to the Department of Labor and Regulation at the same time notice is provided to the employer. The notice shall be served on the employer by delivering it to the employer or by sending it by mail, by registered or certified letter addressed to the employer at the employer's last known place of residence, but if the employer is a partnership, then such notice may be so given to any one of the partners, and if the employer be a corporation, then the notice may be given to any agent or officer of the corporation upon whom legal process may be served. Source: SL 1966, ch 111, ch 29, 11; SL 1971, ch 275, 6; SL 1982, ch 28, 18; SL 2004, ch 306, 1; SL 2011, ch 1 (Ex. Ord. 11-1), 33, eff. Apr. 12, 2011.
58-20-15. Equitable apportionment among insurers of applicants for policies--Participation by all insurers--Appeal to director--Judicial review.After consultation with insurers authorized to issue workers' compensation policies in this state, the director shall provide or approve a reasonable plan or plans for the equitable apportionment among such insurers of applicants for such workers' compensation policies who are in good faith entitled to but unable to procure such policies through ordinary methods. The director may approve applicants who are only able to procure workers' compensation policies at a rate that substantially exceeds that of the rate in the plan. When any such plans have been made by or been approved by the director, all such insurers shall subscribe thereto and participate therein. Any applicant for any such policy, any person insured under any such plan, and any insurer affected thereby, may appeal to the director from any ruling or decision of the manager or committee designated to operate such plan. Any person aggrieved hereunder by any order or act of the director may, within ten days after notice thereof, file a petition in the circuit court for the county of Hughes, or in the circuit court for the county in which applicant is a resident, for a review thereof. The court shall summarily hear the petition and make any appropriate order or decree. Source: SL 1966, ch 111, ch 29, 15; SL 2004, ch 306, 2.
58-20-16. Reinsurance reserve--Amount required.Any insurer engaging in the business of writing workers' compensation insurance in this state shall maintain a reinsurance reserve for outstanding losses under such insurance, for which the insured is liable as follows:(1)For all liability suits being defended under policies written more than ten years prior to the date as of which the statement is made, one thousand five hundred dollars for each suit; five and less than ten years prior to the date as of which the statement is made, one thousand dollars for each suit; three and less than five years prior to the date as of which the statement is made, eight hundred fifty dollars for each suit.(2)For all liability policies written during the three years immediately preceding the date as of which the statement is made, such reserve shall be sixty percent of the earned liability premiums of each of such years, less all loss and loss expense payments made under liability policies written in the corresponding years; but in any event, such reserve shall, for the first of such three years, be not less than seven hundred fifty dollars for each outstanding liability suit on said year's policies.(3)For all compensation claims under policies written more than three years prior to the date as of which the statement is made, the present values at four percent interest of the determined and the estimated future payments.(4)For all compensation claims under policies written in the three years immediately preceding the date as of which the statement is made, such reserve shall be sixty-five percent of the earned compensation premiums of each of such three years, less all loss and loss expense payments made in connection with such claims under policies written in the corresponding years; but in any event, in the case of the first year of any such three-year period, such reserve shall be not less than the present value at four percent interest of the determined and the estimated unpaid compensation claims under policies written during such year. Source: SL 1966, ch 111, ch 29, 2.
58-20-17. Unallocated compensation loss expense payments--Distribution schedule included in annual statement.All unallocated compensation loss expense payments made in a given calendar year subsequent to the first three years in which an insurer has been issuing compensation policies shall be distributed as follows: forty percent shall be charged to the policies written in that year, forty-five percent to the policies written in the preceding year, ten percent to the policies written in the second year preceding and five percent to the policies written in the third year preceding, and such payments made in each of the first three calendar years in which an insurer issues compensation policies shall be distributed as follows: in the first calendar year one hundred percent shall be charged to the policies written in that year; in the second calendar year fifty percent shall be charged to the policies written in that year and fifty percent to the policies written in the preceding year; in the third calendar year forty-five percent shall be charged to the policies written in that year, forty-five percent to the policies written in the preceding year and ten percent to the policies written in the second year preceding; and a schedule showing such distribution shall be included in the annual statement. Source: SL 1966, ch 111, ch 29, 3.
58-20-18. Unallocated liability loss expense payments--Distribution schedule included in annual statement.All unallocated liability loss expense payments made in a given calendar year, subsequent to the first four years in which an insurer has been issuing liability policies, shall be distributed as follows: thirty-five percent shall be charged to the policies written in that year, forty percent to the policies written in the preceding year, ten percent to the policies written in the second year preceding, ten percent to the policies written in the third year preceding, and five percent to the policies written in the fourth year preceding, and such payments made in each of the first four calendar years in which an insurer issues liability policies shall be distributed as follows: In the first calendar year one hundred percent shall be charged to the policies written in that year; in the second calendar year fifty percent shall be charged to the policies written in that year and fifty percent to the policies written in the preceding year; in the third calendar year forty percent shall be charged to the policies written in that year, forty percent to the policies written in the preceding year, and twenty percent to the policies written in the second year preceding; in the fourth calendar year thirty-five percent shall be charged to the policies written in that year, forty percent to the policies written in the preceding year, fifteen percent to the policies written in the second year preceding, and ten percent to the policies written in the third year preceding; and a schedule showing such distribution shall be included in the annual statement. Source: SL 1966, ch 111, ch 29, 3.
58-20-19. Inadequacy of liability or compensation loss reserves--Maintenance of additional reserves required by director.Whenever, in the judgment of the director, the liability or compensation loss reserves of any insurer under his supervision, calculated in accordance with the provisions of 58-20-16 to 58-20-18, inclusive, are inadequate, he may require such insurer to maintain additional reserves based upon estimated individual claims or otherwise. Source: SL 1966, ch 111, ch 29, 3.
58-20-2. Policies subject to chapter.All policies or contracts made for the insurance of the compensation provided by the title, Workers' Compensation, or against employers' liability described in 58-20-12, shall be deemed to be made subject to the provisions of this chapter and all provisions of such policies inconsistent herewith shall be void. Source: SL 1966, ch 111, ch 29, 13.
58-20-20. Annual statement--Inclusion of experience schedule.Each insurer that writes liability or compensation policies shall include in the annual statement required by law a schedule of its experience thereunder in such form as the director may prescribe. Source: SL 1966, ch 111, ch 29, 4.
58-20-21. Annual workplace safety review services--Recommendations for improved safety--Increased premiums.Any insurer writing workers' compensation insurance in this state shall offer to conduct or contract for annual workplace safety review services, including review reports with written recommendations for improved safety procedures, to each of its insureds whose policy premium is five thousand dollars or more, unless the employer has five or fewer employees. No written recommendation prepared by an insurer pursuant to this section is subject to discovery or disclosure under chapter 15-6 or any other provision of law or admissible as evidence in any action of any kind in any court or arbitration forum. However, the recommendation may be disclosed to a subsequent insurer of the employer. Compliance with this section does not constitute an undertaking by an insurer to supplant any responsibility its insured may otherwise have for workplace safety. Any employer subject to this section shall have workplace safety reviews conducted by the employer's insurer at least once every three years. If an insurer makes a written recommendation to correct a safety deficiency pursuant to 58-20-21, including failure to post safety posters as required by 62-2-11, and the deficiency has not been corrected at the time of a subsequent safety review, the insured is subject to an appropriate increase in premium as determined by the insurer subject to the approval of the director. The insurer is not responsible for inspecting for compliance with federal or state safety laws or regulations. Source: SL 1992, ch 364, 8; SL 1993, ch 362, 1; SL 1997, ch 292, 1; SL 2004, ch 306, 3.
58-20-22. Premium reductions and premium increases for certain insurers.Any insurer writing workers' compensation in this state shall provide an appropriate reduction in premium, as determined by the insurer, to its insureds that due to size do not qualify for experience rating and who have not incurred liability for indemnity compensation or for medical losses exceeding an amount to be determined by the insurer subject to approval by the director for the past three years. Further, any insured that due to size does not qualify for experience rating and who has incurred liability for indemnity compensation or for medical losses exceeding an amount to be determined by the insurer subject to approval by the director during the past three years is subject to an appropriate increase in premium as determined by the insurer. Source: SL 1992, ch 364, 9; SL 1993, ch 362, 2.
58-20-23. Liability for indemnity compensation or medical loss defined.For purposes of 58-20-22, liability for indemnity compensation or medical losses means payment made to or on behalf of the injured worker for medical costs, loss of wages, or injuries resulting in permanent total, permanent partial, or temporary disabilities, as defined in 62-1-1, 62-4-1, and 62-4-6. Source: SL 1992, ch 364, 10; SL 1993, ch 362, 3.
58-20-24. Policy to provide medical services and health care.Effective January 1, 1995, every policy issued by any corporation, association, or organization to assure the payment of compensation under the provisions of the title, Workers' Compensation, shall contain provisions to provide medical services and health care to injured workers for compensable injuries and diseases under a case management plan that meets the requirements established in rules promulgated by the Department of Labor and Regulation pursuant to chapter 1-26. All policies and plans shall meet the requirements of 58-17-54. However, the requirements of this section become effective January 1, 1994, for insurers issuing policies pursuant to 58-20-15. Source: SL 1993, ch 381, 5; SL 1999, ch 261, 1; SL 2011, ch 1 (Ex. Ord. 11-1), 33, eff. Apr. 12, 2011.
58-20-25. Terms as used in 58-20-25 to 58-20-40.Terms used in 58-20-25 to 58-20-40, inclusive, mean:(1)"Administrator," a person, partnership, limited liability company, or corporation engaged by a workers' compensation self-insurance association to carry out the policies established by the association and to provide management for the association;(2)"Association," a not-for-profit workers' compensation self-insurance association consisting of two or more employers which are electric utilities, or an electric utility trade association, which enter into agreements to pool their liabilities for workers' compensation benefits in this state;(3)"Certificate," a workers' compensation self-insurance certificate issued by the department in accordance with 58-20-25 to 58-20-40, inclusive;(4)"Department," the South Dakota Department of Labor and Regulation;(5)"Insolvency," the inability of an association to pay its outstanding lawful obligations as they mature in the regular course of business, as may be shown either by an excess of its required reserves and other liabilities over its assets, or by its not having sufficient assets to reinsure all of its outstanding liabilities after paying all accrued claims owed by it; and(6)"Workers' compensation liability," liability to which an electric utility company is subject as an employer under the South Dakota workers' compensation law. Source: SL 1995, ch 282, 1; SL 2011, ch 1 (Ex. Ord. 11-1), 33, eff. Apr. 12, 2011.
58-20-26. Electric utilities authorized to form self-insurance associations.Any two or more electric utility employers or their trade associations may form an association for the purpose of providing to members group self-insurance to protect members against losses arising from workers' compensation liability. Source: SL 1995, ch 282, 2.
58-20-27. Application for self-insurance association--Form.An association proposing to self-insure its workers' compensation liability shall apply to the department for the authority to self-insure, using forms available from the department. The application shall include:(1)The association's name;(2)The location and mailing address of the association's principal office and where its books and records are kept;(3)The name and address of each member of the association;(4)A copy of the bylaws or plan of operation adopted by the association;(5)Proof of compliance with 58-20-28;(6)A sample copy of the agreement between the association and the members securing the payment of each member's workers' compensation liability;(7)A pro forma financial statement, on a form acceptable to the department, showing the financial ability of the association to pay the workers' compensation liability of its members; and(8)The required application fee. Source: SL 1995, ch 282, 3.
58-20-28. Requirements to obtain self-insurance certificate.To obtain and maintain its certificate an association shall:(1)Have sufficient assets, net worth, and liquidity to promptly meet all obligations of the association's members under 58-20-25 to 58-20-40, inclusive, and their workers' compensation liability. In determining whether an association is in sound financial condition, consideration shall be given to the combined net worth of the member companies; the combined long-term and short-term debt to equity ratios of the member companies; other financial data requested by the department or submitted by the group; and the combined workers' compensation experience of the group for the last three years;(2)Furnish to the department security in the form of a bond, cash, certificate of deposit, government securities, irrevocable letter of credit, irrevocable trust, in any combination, in an amount equal to the greater of:(a)Two hundred fifty thousand dollars; or(b)Twenty-five percent of the association's preceding year's gross annual assessments to its members;(3)Obtain specific and aggregate excess insurance by an insurance company licensed to conduct business in South Dakota; and(4)Maintain an indemnity agreement jointly and severally binding the association and each member of the association to meet the workers' compensation liability of each member. Source: SL 1995, ch 282, 4.
58-20-29. Granting self-insurance application--Revocation.The department shall grant or deny the association's application to self-insure within sixty days after a complete application has been filed. However, the time may be extended for an additional thirty days upon fifteen days' prior notice to the applicant. The department shall grant a certificate upon a determination that the association has complied with the requirements of 58-20-25 to 58-20-40, inclusive, or the department shall issue an order denying a certificate setting forth the reasons for such refusal. Approval of the certificate shall remain effective until voluntarily terminated by the request of the association pursuant to 58-20-33 or revoked by order of the department. A certificate may be revoked by the department if the association has failed to comply with 58-20-25 to 58-20-40, inclusive, rules promulgated hereunder, or for a violation of 58-20-38. If issued by the department, a certificate authorizes the association to provide workers' compensation benefits and establishes compliance by the association's members with 62-5-1. Source: SL 1995, ch 282, 5.
58-20-3.1. Premiums based on certain wages prohibited.Premiums for workers' compensation insurance may not be based on wages paid to employees while they are on vacation, holidays, or sick leave or on wages received from employment not performed for the insured employer. Source: SL 1983, ch 386; SL 2016, ch 236, 7.
58-20-3. Issuance of policies covering employers as well as employees--Wage values of employers--Rights and remedies of employers.Any insurer authorized or which may be authorized to write workers' compensation insurance in this state, shall be and is hereby authorized to issue policies covering employers who perform labor incidental to their occupations as well as employees, such policies insuring to such employers the same compensation as provided for their employees and at the same rates. The estimation of wage values of employers as herein mentioned, shall be reasonable and separately stated in and added to the valuation of their payrolls on which their premiums are computed. Employers so insured shall have the same rights and remedies as are given to an employee under Title 62. Source: SL 1966, ch 111, ch 29, 14.
58-20-30. Examination of self-insurance association's activities and records.The department may examine the affairs, transactions, accounts, records, assets, and liabilities of any association created under 58-20-25 to 58-20-40, inclusive, as deemed reasonably necessary. Source: SL 1995, ch 282, 6.
58-20-31. Promulgation of rules governing self-insurance associations.The department may promulgate rules governing associations pursuant to chapter 1-26 concerning:(1)Application, financial, annual reports, or other forms to be created by the department under 58-20-25 to 58-20-40, inclusive;(2)Financial requirements of the department for approving and maintaining a certificate;(3)Requiring an application fee not to exceed two thousand dollars; and(4)Requiring the association to process and act upon claims in accordance with the guidelines applicable for domestic insurance companies. Source: SL 1995, ch 282, 7.
58-20-32. Voluntary termination of participation in self-insurance association.A member may voluntarily terminate its participation in an association by giving written notice to the other members of the association and the department at least ninety days before the desired termination date. The voluntary termination shall be approved by the department if it finds that the terminating member and the remaining members of the association are in good standing and have met all requirements of 58-20-25 to 58-20-40, inclusive. Source: SL 1995, ch 282, 8.
58-20-33. Involuntary termination of membership in self-insurance association.A member may be involuntarily terminated as a member of the association if the department finds, after due notice and hearing, that the member:(1)Has failed to pay any contribution or assessment due to the association;(2)Has failed to comply with 58-20-25 to 58-20-40, inclusive, or the rules promulgated pursuant to 58-20-25 to 58-20-40, inclusive; or(3)Has failed to comply with the bylaws, loss control policies or discharge any other obligation it owes to the association.A hearing may be initiated by the department on its own initiative or upon the request of the association's board of directors. Source: SL 1995, ch 282, 9.
58-20-34. Liability for contractual obligations subsequent to termination in self-insurance association.Any member who voluntarily terminates its membership in the association, or who is involuntarily terminated as a member of the association, shall nevertheless remain liable subsequent to the date of termination for all contractual obligations it entered into with the association during its membership in the association. Source: SL 1995, ch 282, 10.
58-20-35. Annual report of affairs of self-insurance associations.Each year after an association has been granted a certificate, the association shall file with the department an annual report of its affairs and operations during the last preceding calendar year. The report shall be made in such form and shall contain such information as the department may require in order to protect the public interest and the interests of the members of the association. An association shall provide a copy of its last fiscal year CPA audit of its operations to the department if requested. Source: SL 1995, ch 282, 11.
58-20-36. Dissolution of self-insurance association to be approved by department.No association may be voluntarily dissolved or otherwise cease to function without written approval by the department after the department has determined that all claims and other legal obligations of the association have been paid or that adequate provisions for such payment have been made. Source: SL 1995, ch 282, 12.
58-20-37. Deficiency of self-insurance associations made up by members.If the assets of an association are at any time insufficient to enable the association to discharge its liabilities and obligations, the association's members shall make up the deficiency or the department may order the association to levy an assessment upon its members in an amount necessary to make up the deficiency. Source: SL 1995, ch 282, 13.
58-20-38. Revocation of self-insurance association's certificate.If an association fails to make up a deficiency or to make the required assessment of its members pursuant to 58-20-37 within thirty days after the department orders it to do so, or if the deficiency is not fully made up within sixty days after the date on which the assessment is made, or within a longer period of time as may be specified by the department, the department shall revoke the association's certificate. Source: SL 1995, ch 282, 14.
58-20-39. Self-insurance association not an insurance company.Notwithstanding any other provision of law to the contrary, any association organized pursuant to 58-20-25 to 58-20-40, inclusive, is not an insurance company or insurer under the laws of this state; any agreement forming an association does not constitute insurance or the conduct of an insurance business; and no association organized pursuant to 58-20-25 to 58-20-40, inclusive, may be a member of the South Dakota Insurance Guaranty Association. Source: SL 1995, ch 282, 15.
58-20-4. Separate coverage of workers' compensation liabilities.Every policy of workers' compensation insurance, issued or delivered in this state by an authorized domestic or foreign insurer, shall cover separately and for a separate consideration, all the liabilities which are imposed upon an insurer by the provisions of the title, Workers' Compensation, and amendments thereof, whatever other contingencies may be insured by riders attached thereto or endorsements made thereon. Source: SL 1966, ch 111, ch 29, 5.
58-20-40. Proceedings or investigations by department.The provisions of chapter 1-26 govern all proceedings or investigations of the department pursuant to 58-20-25 to 58-20-40, inclusive. Source: SL 1995, ch 282, 16.
58-20-5. Entire liability of employer to employees covered by policy--Separate policy for specified plant or work location, special authorization.Every policy of insurance issued by a stock insurer, or by a mutual association authorized to transact workers' compensation or employers' liability insurance in this state, shall cover the entire liability of the employer to his employees covered by the policy or contract. However, if specifically authorized by the director, a separate policy may be issued for a specified plant or work location if the liability of such employer under this chapter to all his other employees, is otherwise secured. Source: SL 1966, ch 111, ch 29, 7.
58-20-6. Agreement of insurer as to prompt payment--Obligation not affected by any default of insured after injury--Direct obligation of insurer.No such policy of insurance shall be issued unless it contains the agreement of the insurer that it will promptly pay to the person entitled to compensation all installments of the compensation that may be awarded or agreed upon, and that the obligation shall not be affected by any default of the insured after the injury, or by any default in the giving of any notice required by such policy, or otherwise. Such agreement shall be construed to be a direct obligation by the insurer to the person entitled to compensation, enforceable in his name. Source: SL 1966, ch 111, ch 29, 10.
58-20-7. Right of employees to enforce liability of insurance carrier--Inclusion of provision in policy.Every policy of insurance issued by a stock insurer or by a mutual insurer shall contain a provision setting forth the right of the employees to enforce in their own names, either by at any time filing a separate claim or by at any time making the insurance carrier a party to the original claims, the liability of the insurance carrier in whole or in part for the payment of such compensation. Source: SL 1966, ch 111, ch 29, 7.
58-20-8. Payment of compensation by employer or insurance carrier bars recovery against the other.Payment of such compensation, in whole or in part, by either the employer or the insurance carrier shall, to the extent thereof, be a bar to the recovery against the other of the amount so paid. Source: SL 1966, ch 111, ch 29, 7.
58-20-9. Lien of worker upon amount due under policy--Inability of insured, direct payment by insurer to worker, agents, and dependents.Every policy shall provide that the worker shall have a first lien upon any amount becoming due on account of such policy to the insured from the insurer, and that in case of the legal incapacity, inability, or disability of the insured to receive the amount due and pay it over to the insured worker, or his dependents, such insurer shall pay the same directly to such worker, his agent, or to a trustee for him or his dependents, to the extent of discharging any obligation of the insured and to such worker or his dependents. Source: SL 1966, ch 111, ch 29, 9.
58-21-1. Qualifications of sole surety on official bonds.Whenever any bond, undertaking, recognizance, or other obligation is by law, or the charter, ordinances, rules, or regulations of any municipality, board, body, organization, court, judge, or public officer, required or permitted to be made, given, tendered, or filed, with surety or sureties, and whenever the performance of any act, duty, or obligation, or the refraining from any act, is required or permitted to be guaranteed, such bond, undertaking, obligation, recognizance, or guaranty may be executed by a surety insurer qualified to act as surety or guarantor as provided in this chapter. Source: SL 1966, ch 111, ch 28, 1.
58-21-2. Certificate of authority as evidence of qualifications.A valid subsisting certificate of authority or duly certified copy thereof issued by the director to a surety insurer shall be accepted as evidence of qualification to become sole surety on all bonds, undertakings, recognizances, and obligations required or permitted by law, or in the charter, ordinances, rules, or regulations of any municipality, board, organization, court, judge, or public officer, without further proof or qualification regarding solvency, credit, or financial sufficiency to act as surety. Source: SL 1966, ch 111, ch 28, 3.
58-21-3. Execution by insurer of official bonds--Compliance with law, rule, or regulation.Execution by such insurer of such bond, undertaking, obligation, recognizance, or guaranty shall be in all respects a full and complete compliance with every requirement of every law, charter, ordinance, rule, or regulation, that such bond, undertaking, obligation, recognizance, or guaranty shall be executed by one surety or by one or more sureties, or that such surety shall be a resident, or householder, or freeholder, or either or both, or possess any other qualifications; and all courts, judges, heads of departments, boards, bodies, municipalities, and public officers of every character shall accept and treat accordingly such bond, undertaking, obligation, recognizance, or guaranty when so executed by such insurer, as conforming to and fully and completely complying with every such requirement of every such law, charter, ordinance, rule, or regulation. Source: SL 1966, ch 111, ch 28, 1.
58-21-4. Forfeitures for unauthorized business--Amount--Action to recover.Any such insurer doing business in this state without a valid certificate of authority shall forfeit one hundred dollars for every day it neglects to procure such certificate. Any insurance producer making assurance or soliciting applications for any insurer having no such certificate shall forfeit the sum of three hundred dollars, and any person acting for an insurer authorized to transact business in this state without having the required insurance producer's certificate in the person's possession shall be liable to pay twenty-five dollars for each day's neglect to procure such certificate. Such penalties may be recovered in a civil action in the circuit court of any county in this state. Source: SL 1966, ch 111, ch 28, 4; SL 2001, ch 286, 130.
58-21-5. Release from liability on official bonds.A surety insurer may be released from its liability on a bond referred to in 58-21-1 upon the same terms and conditions as are by law prescribed for the release of individual sureties. Source: SL 1966, ch 111, ch 28, 2.
58-22-1. Definition of terms.Terms used in this chapter mean:(1)"Bail bond," cash, property or surety given to obtain a defendant's release;(1A)"Bail bondsman," a surety bondsman, professional bondsman, or a property bondsman;(1B)"Cash," the coins and bills issued by the government of the United States and does not include the transfer of funds electronically;(2)"Insurer," any domestic, foreign, or alien surety company which has qualified generally to transact surety business and specifically to transact bail bond business in this state;(3)"Professional bondsman," any person who has been approved by the director and who pledges cash or approved unregistered bonds as security for a bail bond in connection with a judicial proceeding and receives or is promised money or other things of value;(4)"Property bondsman," a person who pledges real or other property as security for a bail bond in a judicial proceeding and who receives or is promised money or other things of value therefor;(5)"Runner," a person employed by a bail bondsman for the purpose of assisting the bail bondsman in presenting the defendant in court when required or to assist in apprehension and surrender of defendant to the court, or keeping defendant under necessary surveillance. This does not affect the right of a bail bondsman to hire counsel or to ask assistance of law enforcement officers;(6)"Surety bondsman," any person who has been approved by the director and appointed by an insurer by power of attorney to execute or countersign bail bonds for the insurer in connection with judicial proceedings and who receives or is promised money or other things of value therefor. Source: SL 1966, ch 111, ch 31, 1; SL 2013, ch 250, 1.
58-22-10. Professional bondsman--Annual financial statement furnished by applicant.In addition to the requirements prescribed in 58-22-6, an applicant for a professional bondsman license shall furnish annually a detailed financial statement under oath, and such statement shall be subject to the same examination as is prescribed by law for domestic insurers. Source: SL 1966, ch 111, ch 31, 9.
58-22-11. Refusal, suspension, or cancellation of license for inadequate financial statement.A license may be refused, suspended, or canceled by the director at any time he determines that the financial statement filed by the applicant or professional bondsman is inadequate to meet the requirements of the director. Source: SL 1966, ch 111, ch 31, 24.
58-22-12. Application for license as runner--Affirmative showing of qualifications.In addition to the other requirements prescribed in this chapter, an applicant for a license to serve as a runner shall affirmatively show:(1)That the applicant is a natural person who has reached the age of twenty-one years;(2)That the applicant is a citizen of the United States and has been a bona fide resident of this state for more than one year last past;(3)That each appointing bail bondsperson is obligated to supervise the applicant's activities, and be responsible for the applicant's conduct in the bail bond business; and(4)That the applicant has not been convicted of, nor has pled guilty or nolo contendere to, a felony or of any crime involving moral turpitude. The director of the Division of Insurance may waive the restriction relating to the conviction of, or plea of guilty or nolo contendere to, a felony or a crime involving moral turpitude if three years have elapsed since completion of the sentence imposed by the court in connection with the violation. Source: SL 1966, ch 111, ch 31, 10; SL 1998, ch 296, 7.
58-22-13. Runner's application--Fees--Fingerprints and photograph of applicant.Each runner's application shall be accompanied by a license fee of thirty dollars and an appointment fee of ten dollars for each bail bondsperson employing the applicant and shall be submitted to the director with each application for a license to serve as a runner, together with fingerprints and photograph. The employing bail bondsperson is responsible for submitting the application and appointment fee. Source: SL 1966, ch 111, ch 31, 10; SL 1998, ch 296, 9.
58-22-14. Application for license or renewal--Investigation of applicant's fitness--Criminal background check.The applicant for any license under this chapter shall apply in writing, on forms prepared and supplied by the director, and the director may propound any reasonable interrogatories to an applicant for a license under this chapter or on any renewal thereof, relating to the applicant's qualifications, residence, prospective place of business, and any other matters which, in the opinion of the director, are deemed necessary or expedient in order to protect the public and ascertain the qualifications of the applicant. The director may also conduct any reasonable inquiry or investigation the director sees fit, relative to the determination of the applicant's fitness to be licensed or to continue to be licensed. The applicant shall provide any necessary authorization requested by the director to facilitate an inquiry or investigation. As part of any application to obtain licensure as a bail bondsperson or runner under this chapter, each applicant shall submit to a state and federal criminal background investigation by means of fingerprint checks by the Division of Criminal Investigation and the Federal Bureau of Investigation. Upon application, the director shall submit completed fingerprint cards to the Division of Criminal Investigation for purposes of conducting both the state and federal criminal background investigation. Upon completion of the criminal background investigation the Division of Criminal Investigation shall forward to the director all information obtained as a result of the criminal background investigation. The applicant is responsible for any costs associated with background investigations as charged by the appropriate agency conducting and furnishing any background investigations. Failure to submit or cooperate with any criminal background investigation is grounds for denial of an application for licensure under this chapter. Source: SL 1966, ch 111, ch 31, 5; SL 1998, ch 296, 10; SL 2016, ch 233, 4.
58-22-15. Failure of applicant for license to secure approval--Filing of another application.The failure of the applicant to secure approval of the director shall not preclude him from applying as many times as he desires, but no application shall be considered by the director within one year subsequent to the date upon which the director denied the last application. Source: SL 1966, ch 111, ch 31, 5.
58-22-16. Examination of bail bondsperson or runner.The applicant shall appear in person and take a written examination prepared by the director, testing the applicant's ability and qualifications to be a bail bondsperson or runner.Each examination shall be held at a time and place as designated by the director. Source: SL 1966, ch 111, ch 31, 11; SL 2016, ch 233, 5.
58-22-17. Examination fee.The fee for such examination shall be ten dollars and shall be submitted with the application. Source: SL 1966, ch 111, ch 31, 11.
58-22-18. Failure of applicant to pass--Subsequent examinations.The failure of an applicant to pass an examination shall not preclude him from taking subsequent examinations; provided, however, that at least one year must intervene between examinations. Source: SL 1966, ch 111, ch 31, 11.
58-22-19. Expiration of licenses.All licenses issued shall expire annually on May first unless revoked or suspended prior thereto by the director, or upon notice served upon the director that the insurer or employer of any runner has canceled the licensee's authority to act for such insurer or employer. Source: SL 1966, ch 111, ch 31, 6.
58-22-2. Qualifications of surety for release of person on bail.Each and every surety for the release of a person on bail shall be qualified as:(1)An insurer and represented by a surety bondsman or bondsmen; or(2)A professional bondsman properly qualified and approved by the director; or(3)A natural person who has reached the age of twenty-one years, a citizen of the United States and a bona fide resident of South Dakota for a period of one year immediately last past and who holds record title to property in South Dakota acceptable to the proper authority approving the bail bond. Source: SL 1966, ch 111, ch 31, 4.
58-22-20. Renewal license--Issuance by director--Fee.A renewal license shall be issued by the director to a licensee who has continuously maintained a license in effect without further examination, unless deemed necessary by the director, but such license is in all other respects required to comply with and be subject to the provisions of this chapter. After the receipt of such licensee's application for renewal the current license shall continue in effect until the renewal license is issued or denied for cause. Source: SL 1966, ch 111, ch 31, 12; SL 1998, ch 296, 12.
58-22-21. Causes for denial, suspension, revocation, or refusal to renew license.The director may deny, suspend, revoke, or refuse to renew any license issued under this chapter for any of the following causes:(1)For any cause for which issuance of the license could have been refused had it then existed and been known to the director;(2)Violation of any laws of this state to bail in the course of dealings under the license issued the licensee by the director;(3)Material omission, misstatement, misrepresentation, or fraud in obtaining the license;(4)Misappropriation, conversion, or unlawful withholding of moneys, belonging to insurers or others and received in the conduct of business under the license;(5)Conviction of, or a plea of guilty or nolo contendere to, a felony or any crime involving moral turpitude;(6)Fraudulent or dishonest practices in the conduct of business under the license;(7)Willful failure to comply with, or willful violation of any proper order, rule, or regulation of the director, or the provisions of this chapter;(8)If, in the judgment of the director, the licensee has, in the conduct of affairs under the license, demonstrated incompetency, or untrustworthiness, or conduct or practices rendering the licensee unfit to carry on the bail bond business or making the licensee's continuance in such business detrimental to the public interest, or that the licensee is no longer in good faith carrying on the bail bond business, or that the licensee is guilty of rebating, or offering to rebate, or unlawfully dividing, or offering to divide such licensee's premiums in the case of professional bondsperson, and for such reasons is found by the director to be a source of detriment, injury, or loss to the public. Source: SL 1966, ch 111, ch 31, 13; SL 1998, ch 296, 13.
58-22-22. Suspension of license--Investigation by director--Notice and charges--Failure to answer or deny charges, revocation of license.If, after investigation, it shall appear to the satisfaction of the director that a bail bondsman or runner has been guilty of violating any of the laws of this state relating to bail bonds, the director shall, upon ten days' notice in writing to the bail bondsman or runner and to the insurer represented by him if a surety bondsman, accompanied by a copy of the charges of the unlawful conduct of such bail bondsman or runner, suspend the license of such bail bondsman or runner, unless on or before the expiration of the ten days the bail bondsman or runner shall make to the director answer to the charges. If, after the expiration of said ten days, and within twenty days thereafter, the bail bondsman or runner shall have failed to make answer or deny said charges the license of the bail bondsman or runner shall thereupon stand revoked. Source: SL 1966, ch 111, ch 31, 14.
58-22-23. Denial of charges of unlawful conduct--Hearing by director, notice of time and place, rights of parties--Suspension or revocation of license.If, however, the bail bondsman or runner shall file written answer denying the charges within the time specified, the director shall call a hearing within a reasonable time for the purpose of taking testimony and evidence on any issue of fact made by the charges and answer. The director shall give notice to such bail bondsman or runner and to the insurer represented by him, if a surety bondsman, of the time and place of hearing. The parties shall have the right to produce witnesses, and to appear personally or by counsel. If upon such hearing the director shall determine that the bail bondsman or runner is guilty as alleged in said charges, he shall thereupon revoke the license of the bail bondsman or runner, or suspend him for a definite period of time to be fixed in the order of suspension. Source: SL 1966, ch 111, ch 31, 14.
58-22-24. Deposit by professional bondsperson--Amount--Law governing--Waiver.Professional bondspersons shall, before writing cash or security bail bonds, deposit with the director in the same manner as required of domestic insurers, an amount determined by the director of not less than ten thousand dollars and an amount necessary to cover forfeitures as required to be filed with the director annually. Such deposit is subject to all laws, rules, and regulations concerning deposits by domestic insurers. The director may waive the deposit requirement contained in this section for a person authorized pursuant to 58-22-37 to countersign for a bail bondsperson. Source: SL 1966, ch 111, ch 31, 24; SL 1966, ch 31, 18 as added by SL 1967, ch 137; SL 1998, ch 296, 14.
58-22-25. Annual registration required--Violation as misdemeanor.No bail bondsperson may become a surety on an undertaking unless the bail bondsperson has registered in the office of the sheriff in the county in which the bondsperson resides. The bail bondsperson may then become a surety in any other county upon presenting to the official required to approve the sufficiency of bail, a certificate of such registration. A surety bondsperson shall also file a certified copy of appointment by power of attorney from each insurer which the bail bondsperson represents as agent with the sheriff. Registration and filing of certified copy of renewed power of attorney shall be performed annually on October first. No bail bondsperson may register with the sheriff unless such bail bondsperson is currently licensed with the director. Any violation of this section is a Class 1 misdemeanor. Source: SL 1966, ch 111, ch 31, 26, 27; SDCL, 58-22-48; SL 1974, ch 55, 48; SL 1978, ch 359, 2; SL 1998, ch 296, 15.
58-22-26. Notice to sheriffs of discontinuance of business during license period--Return of license for cancellation.Any bail bondsperson who discontinues writing bail bonds during the period for which licensed shall notify the sheriffs with whom registered and return the license to the director for cancellation within thirty days from such discontinuance. Source: SL 1966, ch 111, ch 31, 20; SL 1974, ch 55, 49; SL 1998, ch 296, 17.
58-22-27. Appointment of runners--Director's approval required--Grounds for denying appointment.Every person duly licensed as a bail bondsperson may appoint as a runner any person who holds or has qualified for a runner's license. Each bail bondsperson appointing a runner in this state shall file with, and obtain approval from the director for each appointment which shall be in a format prescribed by the director, and pay a fee of ten dollars. The appointment is effective upon the date it is processed by the Division of Insurance. The director may deny an appointment for reasons of protection of the public health, welfare, or safety, including the following:(1)The runner to be appointed is not properly licensed;(2)An investigation or administrative action concerning the runner or bail bondsperson by the Division of Insurance is eminent or on-going;(3)Material omission, misstatement, misrepresentation, or fraud in applying for the appointment; or(4)Conviction of, or a plea of guilty or nolo contendere to, a felony or any crime involving moral turpitude.The director shall give written notice to the bail bondsperson of approval, denial, or delay of a runner's appointment within thirty days of the bail bondsperson filing the appointment and shall send a copy of the notice to the runner. Source: SL 1966, ch 111, ch 31, 21; SL 1998, ch 296, 18.
58-22-28. Termination of appointment of runner--Notice filed with director--Notice to runner--Information privileged.A bail bondsman terminating the appointment of a runner shall file written notice thereof with the director, together with a statement that he has given or mailed notice to the runner. Such notice filed with the director shall state the reasons, if any, for such termination. Information so furnished the director shall be privileged and shall not be used as evidence in any action against the bail bondsman. Source: SL 1966, ch 111, ch 31, 21.
58-22-29. Giving or promising anything of value to principal as misdemeanor.No bail bondsperson or runner may pay a fee or rebate or give or promise anything of value to the principal or an agent of the principal. Violation of this section is a Class 1 misdemeanor. Source: SL 1966, ch 111, ch 31, 15 (4), 27; SDCL, 58-22-48; SL 1978, ch 359, 2; SL 1998, ch 296, 20.
58-22-3. Persons disqualified as bail bondspersons or runners--Violation as felony.The following persons or classes may not be bail bondspersons or runners and may not directly or indirectly receive any benefits from the execution of any bail bond: jailers, police officers, committing magistrates, magistrate court judges, sheriffs, deputy sheriffs, and constables, any person having the power to arrest or having anything to do with the control of federal, state, county, or municipal prisoners. Violation of this section is a Class 6 felony. Source: SL 1966, ch 111, ch 31, 17, 27; SDCL, 58-22-48; SL 1978, ch 359, 2; SL 1998, ch 296, 1.
58-22-30. Acceptance of anything of value from principal except premium as misdemeanor--Collateral security or indemnity permitted.No bail bondsperson or runner may accept anything of value from a principal except the premium. However, the bondsperson may accept collateral security or other indemnity from the principal which shall be returned upon final termination of liability on the bond. Such collateral security or other indemnity required by the bondsperson shall be reasonable in relation to the amount of the bond. Violation of this section is a Class 1 misdemeanor. Source: SL 1966, ch 111, ch 31, 15 (6), 27; SDCL, 58-22-48; SL 1978, ch 359, 2; SL 1998, ch 296, 21.
58-22-31. Receipt for collateral--Description of collateral received.When a bail bondsman accepts collateral he shall give a written receipt for same, and this receipt shall give in detail a full description of the collateral received. Source: SL 1966, ch 111, ch 31, 16.
58-22-32. Solicitation of business where prisoners confined as misdemeanor.No bail bondsperson or runner may solicit business in or about any place where prisoners are confined. Violation of this section is a Class 1 misdemeanor. Source: SL 1966, ch 111, ch 31, 15 (7), 27; SDCL, 58-22-48; SL 1978, ch 359, 2; SL 1998, ch 296, 22.
58-22-33. Giving or promising anything of value to public officials to secure settlement, remission, or reduction as felony.No bail bondsperson or runner may pay a fee or rebate or give or promise anything of value to a jailer, police, peace officer, committing magistrate, or any other person who has power to arrest or hold in custody; or to any public official or public employee in order to secure a settlement, compromise, remission, or reduction of the amount of any bail bond or the forfeiture thereof. Violation of this section is a Class 6 felony. Source: SL 1966, ch 111, ch 31, 15 (2), 27; SDCL, 58-22-48; SL 1978, ch 359, 2; SL 1998, ch 296, 23.
58-22-34. Giving anything of value to attorney in bail bond matter as felony--Exception.No bail bondsperson or runner may pay a fee or rebate or give anything of value to an attorney in bail bond matters; except in defense of any action on a bond. Violation of this section is a Class 6 felony. Source: SL 1966, ch 111, ch 31, 15 (3), 27; SDCL, 58-22-48; SL 1978, ch 359, 2; SL 1998, ch 296, 24.
58-22-35. Bail bondsperson or runner acting as attorney prohibited--Misdemeanor.No bail bondsperson or runner may participate in the capacity of an attorney at a trial or hearing of one on whose bond such bail bondsperson or runner is surety. Violation of this section is a Class 1 misdemeanor. Source: SL 1966, ch 111, ch 31, 15 (5), 27; SDCL, 58-22-48; SL 1978, ch 359, 2; SL 1998, ch 296, 25.
58-22-36. Advising employment of particular attorney as misdemeanor.No bail bondsperson or runner may suggest or advise the employment of or name for employment any particular attorney to represent the bondsperson's or runner's principal. Violation of this section is a Class 2 misdemeanor. Source: SL 1966, ch 111, ch 31, 15 (1), 27; SDCL, 58-22-48; SL 1978, ch 359, 2; SL 1998, ch 296, 26.
58-22-37. Signing or countersigning of bond in blank by bail bondsman prohibited, exception.A bail bondsman shall not sign nor countersign in blank any bond, nor shall he give a power of attorney to, or otherwise authorize, anyone to countersign his name to bonds unless the person so authorized is a licensed bondsman and the power of attorney is filed and approved by the director. Source: SL 1966, ch 111, ch 31, 18; SL 1967, ch 137.
58-22-38. Annual list of forfeitures of bonds--Contents.A professional bondsman shall on or before March first of each year file a sworn statement listing every forfeiture of bonds executed by him during the preceding calendar year giving date of forfeiture, amount of forfeiture and name of court where forfeiture is recorded, and date of payment. Source: SL 1966, ch 111, ch 31, 9.
58-22-39. Affidavit of property bondsman as to consideration for undertaking--Willful misstatement as perjury.Every property bondsman shall file with the undertaking an affidavit stating whether or not he or anyone for his use has been promised or has received any security or consideration for his undertaking, and if so, the nature and amount thereof, and the name of the person by whom such promise was made or from whom such security or consideration was received. Any willful misstatement in such affidavit relating to the security or consideration promised or given shall render the person making it subject to the same prosecution and penalty as one who commits perjury. Source: SL 1966, ch 111, ch 31, 25.
58-22-4. License required to act as bail bondsperson or runner--Exception--Violation as felony or misdemeanor.No person may act in the capacity of a bail bondsperson or runner or perform any of the functions, duties, or powers prescribed for bail bondsperson or runners under the provisions of this chapter unless that person is qualified and licensed as provided in this chapter. However, none of the provisions of this section prohibit any person, from pledging real or other property as security for a bail bond in judicial proceedings if that person does not receive, or is not promised, money or other things of value therefor. Acting in the capacity of a bail bondsperson or runner without being licensed is a Class 6 felony. Receipt of money or other things of value by any person not acting in the capacity of a bail bondsperson is a Class 2 misdemeanor. Source: SL 1966, ch 111, ch 31, 5, 27; SDCL, 58-22-48; SL 1978, ch 359, 2; SL 1998, ch 296, 2.
58-22-40. Surety's right to enforce indemnity agreement limited by affidavit.An action to enforce any indemnity agreement shall not lie in favor of the surety against such indemnitor, except with respect to agreements set forth in the affidavit required by 58-22-39. In an action by the indemnitor, such surety shall have the right to retain only such security or collateral as is mentioned in the affidavit required by 58-22-39. Source: SL 1966, ch 111, ch 31, 25.
58-22-41. Deposit by defendant admitted to bail.When the defendant has been admitted to bail, he, or another in his behalf, may deposit with an official authorized to take bail, a sum of money, or nonregistered bonds of the United States, or of the state, or of any county, municipality within the state, equal in market value to the amount of such bail, together with his personal undertaking, and an undertaking of such other person, if the money or bonds are deposited by another. Upon delivery of a certificate of such deposit to the official having custody of the defendant, he shall be discharged from custody in the cause. Source: SL 1966, ch 111, ch 31, 23; SL 1992, ch 60, 2.
58-22-42. Bail by surety substituted for deposit--Refunding of deposit--Cancellation of original undertaking.If money or bonds have been deposited, bail by sureties may be substituted therefor at any time before a breach of the undertaking, and the official taking the new bail shall make an order that the money or bonds be refunded to the person depositing the same and they shall be refunded accordingly, and the original undertakings shall be canceled. Source: SL 1966, ch 111, ch 31, 22.
58-22-43. Bail other than deposit--Cancellation by deposit.When bail other than a deposit of money or bonds has been given, the defendant or the surety may, at any time before a breach of the undertaking, deposit the sum mentioned in the undertaking, and upon such deposit being made, accompanied by a new undertaking, the original undertaking shall be canceled. Source: SL 1966, ch 111, ch 31, 23.
58-22-44. Undertaking for appearance before a magistrate or court--Time of appearance.If no day is fixed for the appearance of the defendant, or an impossible day, or a day in vacation, the undertaking, if for his appearance before a magistrate for a hearing, shall bind the defendant to appear in ten days from the receipt of notice so to do by the defendant, his counsel, or any surety on the undertaking; and if for his appearance in a court for trial, shall bind the defendant so to appear on the first day of the next term of the court which shall commence more than three days after the giving of the undertaking. Source: SL 1966, ch 111, ch 31, 3.
58-22-45. Liability on undertaking unaffected by defects.The liability of a person on an undertaking shall not be affected by reason of the lack of any qualifications, sufficiency, or competency provided in the criminal procedure law, or by reason of any other agreement that is expressed in the undertaking, or because the defendant has not joined in the undertaking. Source: SL 1966, ch 111, ch 31, 3.
58-22-46. Validity of undertaking entered into on Sunday or holiday.No undertaking shall be invalid, nor shall any person be discharged from his undertaking, nor a forfeiture thereof be stayed nor shall judgment thereon be stayed, set aside, or reversed, the collection of any such judgment be barred or defeated by reason of any defect of form, omission or recital or of condition, failure to note or record the default of any principal or surety, or because of any other irregularity, or because the undertaking was entered into on Sunday or other holiday, if it appears from the tenor of the undertaking before what magistrate or at what court the principal was bound to appear, and that the official before whom it was entered into was legally authorized to take it and the amount of bail is stated. Source: SL 1966, ch 111, ch 31, 3.
58-22-47. Administration and enforcement of chapter by director--Employment of personnel.The director may administer and enforce the provisions of this chapter. The Department of Labor and Regulation may employ and discharge such employees, examiners, counsel, and such other assistants as shall be deemed necessary, and it shall prescribe their duties, and their compensation shall be the same as other state employees receive for similar services. Source: SL 1966, ch 111, ch 31, 2; SL 1986, ch 22, 32; SL 2004, ch 17, 307; SL 2011, ch 1 (Ex. Ord. 11-1), 162, eff. Apr. 12, 2011.
58-22-49. Written appointment required with application for runner's license.The application for a runner's license shall be accompanied by a written appointment of the applicant as a runner by each licensed bail bondsperson employing the applicant. Source: SL 1998, ch 296, 8.
58-22-5. Licenses to individuals only--Examination waived for persons previously acting--Exemptions.No license may be issued except in compliance with this chapter and none may be issued except to an individual. However, any person performing the functions of a bail bondsperson or runner, within the definition of this chapter, on July 1, 1966, is not required to take an examination, but shall be issued a license upon making the application required by this chapter, and renewals shall be granted subject to the provisions of 58-22-6, 58-22-19, and 58-22-21. The provisions of this chapter do not apply to the holder of a valid all lines fire and casualty insurance producer's license held prior to July 1, 1998.A firm, partnership, association, or corporation, as such need not be licensed. Source: SL 1966, ch 111, ch 31, 5; SL 1998, ch 296, 3; SL 2001, ch 286, 131.
58-22-50. Licensee to notify Division of certain convictions.Any person holding a license under this chapter shall notify the Division of Insurance of a conviction or plea of guilty or nolo contendere to a felony or a crime of moral turpitude within twenty days of the conviction or plea. Violation of this section is a Class 1 misdemeanor. Source: SL 1998, ch 296, 11.
58-22-51. Out-of-state bail bondsperson--Notification of activities--Limitations on activities--License required.Any out-of-state bail bondsperson or runner entering this state shall notify all local law enforcement agencies in the area where the bail bondsperson or runner intends to conduct runner activities as defined in subdivision 58-22-1(5), including, at a minimum, the office of the county's sheriff, and also, if operating within a municipality, the office of the municipal police as to the bail bondsperson's or runner's presence and intended activity and present evidence of out-of-state licensure. No out-of-state bail bondsperson or runner who is unlicensed in that person's state of domicile may conduct any runner activities in this state. No bail bond activities as prescribed by this chapter may be conducted by any person in this state unless that person is licensed in this state as a bail bondsperson as prescribed by this chapter. Violation of this section is a Class 6 felony. Source: SL 1998, ch 296, 16; SL 1999, ch 254, 1.
58-22-52. List of runners to be furnished to director--Fee.Each bail bondsperson shall, on or before May first of each year, furnish to the director a list of all runners appointed, accompanied by a ten dollar reappointment fee for each runner. Each bail bondsperson who, subsequent to the filing of this list, appoints additional persons as runners shall comply with the requirements of this section. Source: SL 1998, ch 296, 19.
58-22-53. Posting of bond under bondsperson's own license for licensee's release prohibited.No bail bondsperson may post a corporate surety bond under the bondsperson's own license for the licensee's release from incarceration. Source: SL 2016, ch 233, 1.
58-22-54. Enforcement of title permitted although license surrendered or lapsed.The director retains the authority to enforce the provisions of and impose any penalty or remedy authorized by this chapter and title 58 against any person who is under investigation for or charged with any violation of this chapter or title 58 even if the person's license has been surrendered or has lapsed by operation of law. Source: SL 2016, ch 233, 2.
58-22-55. Report of felony criminal prosecution.A person licensed under this chapter shall report any felony criminal prosecution of the person taken in any jurisdiction to the director within thirty days of the initial pretrial hearing date. The report shall include a copy of the initial complaint filed, the order resulting from the hearing, and any other relevant legal documents.For purposes of this section, initial pretrial hearing means either a defendant's arraignment or the first time that a defendant who is accused of a crime, or the defendant's attorney, appears before a court in a criminal action in any jurisdiction, whichever occurs first. Source: SL 2016, ch 233, 3.
58-22-6. Application for license--Affirmative showing of qualifications.The application for license, in addition to the other matters set out in this chapter to serve as a bail bondsperson shall affirmatively show that the applicant is a natural person who has reached the age of twenty-one years, is a citizen of the United States, has been a bona fide resident of the state for the preceding year, will actively engage in the bail bond business, and has not been convicted of, or pled guilty or nolo contendere to, a felony or a crime involving moral turpitude or any crime involving moral turpitude. The director of the Division of Insurance may waive the restriction relating to the conviction of, or plea of guilty or nolo contendere to, a felony if three years have elapsed since the completion of the sentence imposed by the court in connection with the violation. Source: SL 1966, ch 111, ch 31, 7; SL 1998, ch 296, 4.
58-22-7. License fee submitted to director--Fingerprints and photograph of applicant.A license fee of thirty dollars shall be submitted to the director with each application for license as bail bondsperson.The applicant shall also furnish with the application, a complete set of the applicant's fingerprints and a recent credential-size full face photograph of the applicant. The applicant's fingerprints shall be certified by an authorized law enforcement officer. Source: SL 1966, ch 111, ch 31, 8; SL 1998, ch 296, 5.
58-22-8. Surety bondspersons annual list--Subsequent appointments--Fees.Every insurer shall annually, prior to May first, furnish the director a list of all surety bondsperson appointed by it to write bail bonds on its behalf accompanied by a renewal fee of ten dollars for each bondsperson being reappointed. Every such insurer who subsequently appoints a surety bondsperson in the state shall give notice to the director along with a written application for license for bondspersons accompanied by a ten dollar appointment fee. All such appointments are subject to the issuance of a license to such surety bondsperson. Source: SL 1966, ch 111, ch 31, 19; SL 1998, ch 296, 6.
58-22-9. Termination of appointment of surety bondsman by insurer--Notice to director--Information privileged.An insurer terminating the appointment of a surety bondsman shall file written notice thereof with the director, together with a statement that it has given or mailed notice to the surety bondsman. Such notice filed with the director shall state the reasons, if any, for such termination. Information so furnished the director shall be privileged and shall not be used as evidence in or basis for any action against the insurer or any of its representatives. Source: SL 1966, ch 111, ch 31, 19.
58-23-1. Action against insurer by injured party where execution returned unsatisfied.All liability insurance policies issued in this state shall provide in substance that if an execution upon any final judgment in an action brought by the injured or by another person claiming, by, through, or under the injured, is returned unsatisfied, then an action may be maintained by the injured, or by such other person against the insurer under the terms of the policy for the amount of any judgment recovered in such action, not exceeding the amount of the policy, and every such policy shall be construed to so provide, anything in such policy to the contrary notwithstanding. Source: SL 1966, ch 111, ch 32, 2.
58-23-2. Bankruptcy or insolvency of assured--Insurer not released from liability.No liability insurance policy issued in this state shall contain any requirement for the payment of liability or loss under the policy, by the assured, but all such policies shall provide in substance that the bankruptcy or insolvency of the assured shall not release the insurer from liability. Source: SL 1966, ch 111, ch 32, 2.
58-23-3. Tort liability of charitable institution--Insurer estopped from asserting charitable immunity defense.Each policy issued to cover the liability of any charitable institution for negligence or any other tort shall contain a provision to the effect that the insurer shall be estopped from asserting, as a defense to any claim covered by said policy, that such institution is immune from liability on the ground that it is a charitable institution. Source: SL 1966, ch 111, ch 32, 3.
58-23-4. Primary and excess coverage on vehicle loaned by automobile service agency.When an automobile insurance policy is in force for anyone engaged in the business of selling, repairing, servicing, storing, or parking motor vehicles and the person or organization allows the use of a vehicle with or without consideration to any other person or organization and the vehicle is involved in an accident out of which bodily injury or property damage to third persons or damage to the insured vehicle arises, the following automobile insurance policies shall be applicable:(1)In the event no other automobile insurance policy is in force at the time of the accident for the person or organization using the vehicle, the coverage provided by the motor vehicle owner's automobile policy shall extend to the borrower in the event the owner's automobile insurance policy extends coverage to said borrower.(2)In the event that another automobile insurance policy is in force for the person or organization using the vehicle, any coverage provided by the motor vehicle owner's automobile insurance policy shall be excess coverage only but limited by the terms of the owner's applicable automobile insurance policy. The coverages in the policy afforded the person or organization using the vehicle shall be primary. Source: SL 1970, ch 275, 1; SL 1978, ch 363, 1.
58-23-5. Effective date of vehicle coverage provisions.The provisions of 58-23-4 shall apply only to policies and renewals having effective commencement dates subsequent to July 1, 1970.Any policy provisions used by automobile insurance companies in this state, subsequent to July 1, 1970, at variance with 58-23-4, shall be interpreted as to comply with the provisions of said section. Source: SL 1970, ch 275, 2.
58-23-6. Supplemental automobile coverage--Definition of terms.Terms used in 58-23-6 to 58-23-8, inclusive, mean:(1)"Automobile," a four-wheel passenger motor vehicle designed for use upon public roads, not operated for commercial use, and owned by a natural person. This definition includes trailers designed for use with such motor vehicles, but does not include a motorcycle or a motorcycle with a sidecar attached thereto;(2)"Automobile liability policy," a policy of insurance, insuring against liability on account of bodily injury;(3)"Insured," the named insured or any other person who is in or upon, entering into, or alighting from, the automobile insured and described in the policy with the express or implied permission of the named insured or the person operating the automobile with the express or implied consent of the named insured. The term insured also includes the named insured or any member of the named insured's household when either of them is a pedestrian and collides with or is struck by a motor vehicle or trailer;(4)"Medical expense," reasonable and customary expenses for necessary medical, hospital, surgical, X ray, and dental services, including prosthetic devices, and necessary ambulance, professional nursing, and funeral expenses;(5)"Named insured," the individual or individuals designated by name as specifically insured in the policy declaration. Source: SL 1971, ch 270, 1; SL 1972, ch 263, 1; SL 1990, ch 399; SL 1993, ch 363; SL 1995, ch 283.
58-23-7. Supplemental coverage to be offered with automobile liability policy.No application for an automobile liability policy may be taken with respect to any automobile registered or principally garaged in this state unless the supplemental coverages set forth in 58-23-8 are made available to the named insured. Source: SL 1971, ch 270, 2; SL 1972, ch 263, 2; SL 2005, ch 273, 1. 
58-23-8. Accident, disability, and medical benefits included in supplemental coverage.Supplemental insurance coverages shall as a minimum include:(1)Accidental death benefits of at least ten thousand dollars payable upon the loss of life of the named insured which shall result directly from and independently of all other causes from bodily injury, other than sickness or disease or death resulting therefrom, caused by accident sustained by the named insured while occupying an automobile, or entering or alighting therefrom, or through being struck by a motor vehicle while a pedestrian, if death occurs within ninety days of the accident;(2)Indemnity of at least sixty dollars per week for disability extending beyond fourteen days from the date of the accident for a period of at least fifty-two consecutive weeks during such period of time as the named insured is prevented from performing the usual duties of his regular occupation, by reason of injuries and disability accidentally sustained and arising while occupying an automobile, or entering, or alighting therefrom, or through being struck by a motor vehicle while a pedestrian. If the injured named insured is a person not gainfully employed at the time of the accident, the supplemental insurance coverage may provide that the indemnity per week may be reduced fifty percent. The disability benefits shall be paid in full without reduction because of any benefits available under any workers' compensation law or similar law or from any other source;(3)Indemnity to the named insured and to any other insured, irrespective of legal liability, for medical expenses in an aggregate amount of at least two thousand dollars for each such injured person, incurred within two years from the date of the accident by reason of bodily injuries arising out of the use of the automobile described in the policy or through being struck by a motor vehicle while a pedestrian. Source: SL 1971, ch 270, 3.
58-23-9. Motor vehicle defined.For the purposes of 58-23-8, the term, motor vehicle, means automobiles, motor trucks, motorcycles, and all vehicles propelled by power other than muscular power and designed primarily for travel on the public highway except traction engines, road rollers, farm wagons, freight trailers, house trailers, trailers, vehicles that run only on rails or tracks, and off-road vehicles as defined in 32-3-1. However, a vehicle not designed for travel on the public highway that is licensed is a motor vehicle for purposes of 58-23-8. Freight trailers, house trailers, and trailers which are attached to a motor vehicle are part of that motor vehicle. Source: SL 2011, ch 221, 1.
58-23A-1. Exclusion of coverage on basis of execution of arbitration agreement prohibited.No medical or hospital professional liability insurance policy shall contain a provision or be construed to exclude coverage on the basis of the insured's execution of an agreement contemplated by chapter 21-25B. Source: SDCL, 21-25A-3 as added by SL 1976, ch 155, 2.
58-23A-2. Reports of malpractice claims required of insurers--Frequency.Each insurance company engaged in issuing professional medical malpractice insurance in this state shall file with the State Division of Insurance a report of all claims for medical malpractice made against any of its insureds and received by it since its last report. Such reports shall be made to the division not less than semiannually on dates determined by the division. Source: SL 1976, ch 316, 1, 3.
58-23A-3. Form and contents of report on claims.Such reports shall be in writing on a form prescribed by the division and shall contain the following information:(1)Name and address of physician, nurse, hospital, or other person or institution against which claim is made;(2)Name, address, and age of the claimant or plaintiff;(3)Nature and substance of the claim; and(4)Date and place from which the claim arose. Source: SL 1976, ch 316, 2.
58-23A-4. Data required on disposition of claims.The following data and information shall be furnished by the insurance company to the division within thirty days from any judgment, settlement, or other dismissal involving the insured:(1)Date of any judgment, settlement, or other dismissal;(2)Whether any appeal has been taken and by which party;(3)Amount of any judgment against the insured;(4)Amount of any settlement paid on behalf of the insured, whether such settlement was negotiated by suit or without the filing of a complaint for damages; and(5)If consideration was not paid on behalf of the insured and a judgment of no cause for action was not entered, the reason for any dismissal. Source: SL 1976, ch 316, 4.
58-23A-5. Forwarding of information to professional licensing board.The Division of Insurance shall, within thirty days of receipt, submit in writing to the appropriate state professional and occupational licensing board, the data and information furnished to the division pursuant to this chapter, but only that which is relevant to the board. Source: SL 1976, ch 316, 7.
58-23A-6. Information and files kept by division--Confidentiality--Release at director's discretion.The Division of Insurance shall retain the information and maintain the files in the form and for a period as it shall determine necessary. The division shall maintain the data and information filed in accordance with this chapter as confidential records and shall release the same only for bona fide research, educational, or legislative purposes, or as required by 58-23A-5. The director of the division in his sole discretion shall determine the validity of any request for the information. Source: SL 1976, ch 316, 5.
58-23A-7. Insurers and division not liable for official actions under chapter.There is no liability on the part of, and no cause of action of any nature may arise against, an insurer reporting pursuant to this chapter or its insurance producers or employees, or the division or its representatives, for any action taken by them pursuant to this chapter. Source: SL 1976, ch 316, 6; SL 2001, ch 286, 132.
58-24-1. Purpose of chapter.The purpose of this chapter is to promote the public welfare by regulating insurance rates to the end that they shall not be excessive, inadequate or unfairly discriminatory, and to authorize and regulate cooperative action among insurers in rate-making and in other matters within the scope of this chapter. Nothing in this chapter is intended to prohibit or discourage reasonable competition, or to prohibit or encourage, except to the extent necessary to accomplish the aforementioned purpose, uniformity in insurance rates, rating systems, rating plans, or practices. This chapter shall be liberally interpreted to carry into effect the provisions hereof. Source: SL 1966, ch 111, ch 15, 1.
58-24-10.1. Rating rules required to be filed with director--Filing date--Supporting information required.Every insurer writing automobile insurance as defined by subdivisions 58-11-45(1) to (3), inclusive, and subdivision 58-23-6(2), and every insurer writing liability insurance, physical damage insurance, and collision insurance on all motor vehicles ordinarily used on the public highways, except for insurance which falls within the inland marine risk exemption of 58-24-10 or for insurance policies excluded under the definition of "policy" in subdivision 58-11-45(5), shall file with the director of the Division of Insurance every manual, minimum, class rate, rating schedule, or rating plan and every other rating rule, and modification of any of the foregoing which it proposes to use, and shall indicate the character and extent of the coverages contemplated. The filing date shall be the effective date thereof unless the insurer proposes an effective date subsequent to the filing date. If the director is not satisfied with the information provided to support a filing made in accordance with this section, he shall proceed in accordance with 58-24-13. Source: SL 1979, ch 341, 4, 5.
58-24-10.2. Rate information required to be filed prior to effective date on finding that closer supervision is required--Extension of waiting period--Approval or disapproval.The director of the Division of Insurance may by order require that a particular insurer otherwise entitled to file its rates in accordance with 58-24-10.1, file any or all of its rates and supplementary rate information thirty days prior to their effective date, if and to the extent that he finds, after a hearing, that the protection of the interests of its insureds and the public in this state require closer supervision of its rates because of the insurer's financial condition or rating practices. He may extend the waiting period for any filing for not to exceed thirty additional days by written notice to the insurer before the first thirty-day period expires. A filing not disapproved before the expiration of the waiting period shall be deemed to meet the requirements of this chapter, subject to the possibility of subsequent disapproval under 58-24-21. Source: SL 1979, ch 341, 7.
58-24-10. Filing of rates with director--Effective date--Character and extent of coverage--Exceptions.Every insurer shall file with the director of the Division of Insurance every manual, minimum, class rate, rating schedule, or rating plan and every other rating rule, and every modification of any of the foregoing which it proposes to use. Every such filing shall state the proposed effective date thereof, and shall indicate the character and extent of the coverage contemplated. The filing date is the effective date thereof unless the insurer proposes an effective date subsequent to the filing date.This section does not apply to:(1)Inland marine risks which by general custom of the business are not written according to manual rates or rating plans; or(2)Automobile and other motor vehicle insurance subject to 58-24-10.1. Source: SL 1966, ch 111, ch 15, 4 (1); SL 1979, ch 341, 3; SL 2004, ch 307, 8.
58-24-12. Satisfaction of insurer's obligations by becoming member of or subscriber to licensed rating organization.An insurer may satisfy its obligation to make filings pursuant to this chapter by:(1)Becoming a member of, or a subscriber to, a licensed rating organization that makes filings; and(2)Authorizing the director to accept filings on its behalf.Nothing contained in this chapter may be construed as requiring any insurer to become a member of or a subscriber to any rating organization. Source: SL 1966, ch 111, ch 15, 4 (2); SL 2014, ch 239, 1.
58-24-13. Information furnished in support of filing.If a filing is not accompanied by the information upon which the insurer supports the filing, and the director does not have sufficient information to determine whether the filing meets the requirements of the chapter, the director shall require the insurer to furnish the information upon which the insurer supports the filing. The information furnished in support of a filing may include:(1)The experience or judgment of the insurer or rating organization making the filing;(2)Its interpretation of any statistical data it relies upon;(3)The experience of other insurers or rating organizations; or(4)Any other relevant factors. Source: SL 1966, ch 111, ch 15, 4 (1); SL 2008, ch 269, 1.
58-24-14. Filing open to public inspection--Specially rated inland marine risks.A filing and any supporting information shall be open to public inspection after the filing becomes effective. Specific inland marine rates on risks specially rated, made by a rating organization, shall be filed with the director. Source: SL 1966, ch 111, ch 15, 4 (1).
58-24-15. Review of filings by director.The director shall review filings as soon as reasonably possible after they have been made in order to determine whether they meet the requirements of this chapter. Source: SL 1966, ch 111, ch 15, 4 (3).
58-24-17. Filing with respect to specially rated risks--Effective date.Specific inland marine rates on risks specially rated by a rating organization, or any specific filing with respect to a surety or guaranty bond required by law or by court or executive order, or by order, rule, or regulation of a public body and not covered by a previous filing, shall become effective when filed and deemed to meet the requirements of this chapter until such time as the director reviews the filing and so long thereafter as the filing remains in effect. Source: SL 1966, ch 111, ch 15, 4 (5).
58-24-18. Disapproval of filing prohibited if rates meet requirements.No filing shall be disapproved if the rates thereby produced meet the requirements of this chapter. Source: SL 1966, ch 111, ch 15, 5 (5).
58-24-19. Disapproval of filings by director--Notice--Contents.If the director finds that a filing does not meet the requirements of this chapter, the director shall send to the insurer or rating organization which made the filing, written notice of disapproval of the filing specifying therein in what respects the director finds the filing fails to meet the requirements of this chapter and stating that the filing may not become effective. Source: SL 1966, ch 111, ch 15, 5 (1); SL 2006, ch 260, 1.
58-24-2. Application of chapter.This chapter applies to all forms of casualty insurance, including fidelity, surety, and guaranty bonds, to all forms of property, fire, marine, and inland marine insurance, workers' compensation, and to any combination of any of the foregoing, on risks or operations in this state. Inland marine insurance shall be deemed to include insurance now or hereafter defined by statute, or by interpretation thereof, or if not so defined or interpreted, by ruling of the director, or as established by general custom of the business, as inland marine insurance. Source: SL 1966, ch 111, ch 15, 2.
58-24-20. Disapproval of filing with respect to specially rated risks--Notice, contents.If within thirty days after a specific inland marine rate on a risk specially rated by a rating organization or after a special surety or guaranty filing subject to 58-24-17 has become effective, the director finds that such filing does not meet the requirements of this chapter, he shall send to the rating organization or insurer which made such filing written notice of disapproval of such filing specifying therein in what respects he finds that such filing fails to meet the requirements of this chapter and stating when, within a reasonable period thereafter, such filing shall be deemed no longer effective. Said disapproval shall not affect any contract made or issued prior to the expiration of the period set forth in said notice. Source: SL 1966, ch 111, ch 15, 5 (2).
58-24-21. Effect of finding and order that filing does not comply with chapter.If at any time subsequent to the applicable review period provided for in 58-24-19, 58-24-20, or in the case of a filing made under 58-24-10.1, the director of the Division of Insurance finds that a filing does not meet the requirements of this chapter, he shall, after a hearing held upon not less than ten days' written notice, specifying the matters to be considered at such hearing, to every insurer and rating organization which made such filing, issue an order specifying in what respect he finds that such filing fails to meet the requirements of this chapter, and stating when, within a reasonable period thereafter, such filing shall be deemed no longer effective. Copies of said order shall be sent to every such insurer and rating organization. Said order shall not affect any contract or policy made or issued prior to the expiration of the period set forth in said order. Source: SL 1966, ch 111, ch 15, 5 (3); SL 1979, ch 341, 6.
58-24-22. Request by aggrieved party for hearing on filing--Grounds for application.Any person or organization aggrieved with respect to any filing which is in effect may make written application to the director for a hearing thereon, provided, however, that the insurer or rating organization that made the filing shall not be authorized to proceed under this section. Such application shall specify the grounds to be relied upon by the applicant and such application must show that the person or organization making such application has a specific economic interest affected by the filing. No rating or advisory organization shall have any status under this chapter to make application for a hearing on any filing made by an insurer with the director. Source: SL 1966, ch 111, ch 15, 5 (4).
58-24-23. Hearing on filing--Action by director--Notice of hearing.If the director shall find that an application pursuant to 58-24-22 is made in good faith, that the applicant has a specific economic interest, that the applicant would be so aggrieved if his grounds are established, and that such grounds otherwise justify holding a hearing, he shall within thirty days after receipt of such application hold a hearing upon not less than ten days' written notice to the applicant and to every insurer and rating organization which made such filing. Source: SL 1966, ch 111, ch 15, 5 (4).
58-24-24. Finding that filing does not comply--Order discontinuing filing--Effective date.If, after hearing pursuant to 58-24-23, the director finds that the filing does not meet the requirements of this chapter, he shall issue an order specifying in what respect he finds that such filing fails to meet the requirements of this chapter, and stating when, within a reasonable period thereafter, such filing shall be deemed no longer effective. Copies of said order shall be sent to the applicant and to every such insurer and rating organization. Said order shall not affect any contract or policy made or issued prior to the expiration of the period set forth in said order. Source: SL 1966, ch 111, ch 15, 5 (4).
58-24-25. Issuance of contract or policy contrary to filings prohibited--Inland marine risks excepted.No insurer shall make or issue a contract or policy except in accordance with the filings which are in effect for said insurer as provided in this chapter. This section shall not apply to contracts or policies for inland marine risks as to which filings are not required. Source: SL 1966, ch 111, ch 15, 4 (8).
58-24-26. Excess rate approved for specific risk--Filing application.Upon written application signed by the insured, stating the reasons therefor, filed with and approved by the director, a rate in excess of that provided by a filing otherwise applicable may be used on any specific risk. The application for approval of this rate shall be filed prior to the effective date of the policy being issued. The director may waive the requirement of prior filing if a special need or circumstance can be demonstrated. Source: SL 1966, ch 111, ch 15, 4 (7); SL 1967, ch 133; SL 1990, ch 400, 2; SL 2009, ch 267, 1.
58-24-27. Assigned risks--Reasonable rate modifications.Agreements may be made among insurers with respect to the equitable apportionment among them of insurance which may be afforded applicants who are in good faith entitled to but who are unable to procure such insurance through ordinary methods, and such insurers may agree among themselves on the use of reasonable rate modifications for such insurance, such agreements and rate modifications to be subject to the approval of the director. Source: SL 1966, ch 111, ch 15, 15.
58-24-28. Information to be furnished insureds.Every rating organization and every insurer which makes its own rates shall, within a reasonable time after receiving written request therefor and upon payment of such reasonable charge as it may make, furnish to any insured affected by a rate made by it, or to the authorized representative of such insured, all pertinent information as to such rate. Source: SL 1966, ch 111, ch 15, 9.
58-24-29. Right of insured to hearing on application of rating system.Every rating organization and every insurer which makes its own rates shall provide within this state reasonable means whereby any person aggrieved by the application of its rating system may be heard, in person or by his authorized representative, on his written request to review the manner in which such rating system has been applied in connection with the insurance afforded him. If the rating organization or insurer fails to grant or reject such request within thirty days after it is made, the applicant may proceed in the same manner as if his application had been rejected. Source: SL 1966, ch 111, ch 15, 9.
58-24-3. Insurance to which chapter does not apply.This chapter shall not apply to:(1)Reinsurance, other than joint reinsurance to the extent stated in 58-24-57 and 58-24-58;(2)Life insurance;(3)Health insurance;(4)Insurance of vessels or craft, their cargoes, marine builders' risks, marine protection and indemnity, or other risks commonly insured under marine, as distinguished from inland marine insurance policies; or(5)Title insurance. Source: SL 1966, ch 111, ch 15, 2.
58-24-30. Appeal to director from rating organization or insurer--Affirmance or reversal of action.Any party affected by the action of such rating organization or such insurer on such request may, within thirty days after written notice of such action, appeal to the director who, after a hearing held upon not less than ten days' written notice to the appellant and to such rating organization or insurer, may affirm or reverse such action. Source: SL 1966, ch 111, ch 15, 9.
58-24-31. Recording and reporting of loss and experience--Rules and statistical plans of director.The director shall promulgate rules and statistical plans, reasonably adapted to each of the rating systems on file with the division, which may be modified from time to time and which shall be used thereafter by each insurer in the recording and reporting of its loss and country-wide expense experience in order that the experience of all insurers may be made available at least annually in such form and detail as may be necessary in determining whether rating systems comply with the standards set forth in 58-24-5 to 58-24-8, inclusive. Such rules and plans may also provide for the recording and reporting of expense experience items which are specially applicable to this state and are not susceptible of determination by a prorating of country-wide expense experience. In promulgating such rules and deciding what plans to use, the director shall give due consideration to the rating systems on file and, in order that the plans may be as uniform as is practicable among the several states, to the rules and to the form of the plans used for such rating systems in other states. No insurer shall be required to record or report its loss experience on a classification basis that is inconsistent with the rating system filed by it. The director may designate one or more rating organizations or other agencies for assistance in gathering such experience and making compilations thereof, and such compilations shall be made available, subject to rules promulgated by the director, to insurers and rating organizations. Source: SL 1966, ch 111, ch 15, 13(1); SL 1986, ch 22, 34.
58-24-33. Exchange of information and experience data with other states--Consultation as to rate-making.In order to further uniform administration of rate regulatory laws, the director and every insurer and rating organization may exchange information and experience data with insurance supervisory officials, insurers, and rating organizations in other states and may consult with them with respect to rate-making and the application of rating systems. Source: SL 1966, ch 111, ch 15, 13 (3).
58-24-34. Withholding of or giving false or misleading information--Penalties.No person or organization shall willfully withhold information from, or knowingly give false or misleading information to, the director, any statistical agency designated by the director, any rating organization, or any insurer, which will affect the rates or premiums chargeable under this chapter. A violation of this section is a Class 2 misdemeanor and shall subject the one guilty of such violation to the penalties provided in 58-24-61 and 58-24-62. Source: SL 1966, ch 111, ch 15, 14; SL 1978, ch 359, 2.
58-24-35. Application for license as rating organization--Contents.A corporation, unincorporated association, partnership, individual, or any other legal business entity, whether located within or outside this state, may apply for a license as a rating organization by providing the following information in its application:(1)A copy of its governing documents, to include its constitution, articles of agreement or association, certificate of incorporation, bylaws, rules, and regulations, as applicable;(2)A list of its members and subscribers;(3)The name and address of a resident of this state upon whom notices or orders of the director or process affecting such rating organization may be served; (4)A statement of its qualifications as a rating organization; and(5)A statement specifying the kind of insurance, or subdivision, class, or part of risk or combination thereof for which the rating organization intends to be licensed. Source: SL 1966, ch 111, ch 15, 6 (1); SL 2014, ch 239, 2.
58-24-36. Issuance of license--Finding by director--Time for granting or denying application.If the director finds that the applicant is competent, trustworthy, and otherwise qualified to act as a rating organization and that the contents of its application conform to the requirements of law, the director shall issue a license specifying the kinds of insurance, or subdivisions or classes of risks or parts or combinations thereof for which the applicant is authorized to act as a rating organization. Each application shall be granted or denied in whole or in part by the director within sixty days of the date of its filing with the director. Source: SL 1966, ch 111, ch 15, 6 (1); SL 2014, ch 239, 3.
58-24-37. Duration of rating organization license--Fee.Each license issued pursuant to 58-24-36 remains in effect for three years unless suspended or revoked by the director. The license fee for any applicant pursuant to this chapter is twenty-five dollars. Source: SL 1966, ch 111, ch 15, 6 (1); SL 2014, ch 239, 4.
58-24-38. Suspension or revocation of license.Any license issued pursuant to 58-24-36 may be suspended or revoked by the director, after hearing upon notice, if the rating organization ceases to meet any requirement of this chapter, including the requirements of initial licensure. Source: SL 1966, ch 111, ch 15, 6 (1); SL 2014, ch 239, 5.
58-24-39. Notice to director of change in license application information.Each rating organization shall notify the director promptly of any change in information from what was provided in its application pursuant to 58-24-35. Source: SL 1966, ch 111, ch 15, 6 (1); SL 2014, ch 239, 6.
58-24-4. Making of rates--Provisions governing.Rates shall be made in accordance with the provisions of 58-24-5 to 58-24-8, inclusive. Source: SL 1966, ch 111, ch 15, 3 (1).
58-24-40. Subscribers to rating services--Rules of rating organization.Subject to rules and regulations of the rating organization that have been approved by the director as reasonable, each rating organization shall permit any insurer that is not a member to be a subscriber to its rating services for any kind of insurance for which it is licensed. Notice of any proposed change to a rule shall be given to each subscriber. Each rating organization shall furnish its rating services without discrimination to each member and subscriber. Source: SL 1966, ch 111, ch 15, 6 (2); SL 2014, ch 239, 7.
58-24-41. Review by director of reasonableness of rule or refusal to admit insurer as subscriber.Any subscriber, member, or insurer may request a hearing held by the director to determine the reasonableness of any rule or regulation of a rating organization in its application to each subscriber or the refusal of any rating organization to admit an insurer as a subscriber. The hearing shall be held upon at least ten days' written notice to such rating organization and to each subscriber or insurer pursuant to chapter 1-26. If the director finds that the rule is unreasonable in its application to subscribers, or that an insurer is denied subscription without justification, the director shall order that the rule is not applicable to subscribers or that the insurer is to be admitted as a subscriber, as applicable. Source: SL 1966, ch 111, ch 15, 6 (2); SL 2014, ch 239, 8.
58-24-42. Order affirming action of rating organization.If, after the hearing held pursuant to 58-24-41, the director finds that the action of the rating organization was justified, the director shall issue an order affirming its action. Source: SL 1966, ch 111, ch 15, 6 (2); SL 2014, ch 239, 9.
58-24-43. Actuarial, technical, or other services provided to subscribers.Any rating organization may subscribe for or purchase actuarial, technical, or other services, and such services shall be available to all members and subscribers without discrimination. Source: SL 1966, ch 111, ch 15, 6 (6).
58-24-44. Examination of evidences of insurance or cancellation--Rules as to submission--Information confidential.Any rating organization may provide for the examination of policies, daily reports, binders, renewal certificates, endorsements, or other evidences of insurance, or the cancellation thereof, and may make reasonable rules governing their submission. Rules shall contain a provision that if any insurer does not furnish satisfactory evidence to the rating organization of the correction of any error or omission previously called to its attention by the rating organization within sixty days, the rating organization shall notify the director thereof. All information submitted for examination under this section is confidential. Source: SL 1966, ch 111, ch 15, 6 (5); SL 2014, ch 239, 10.
58-24-45.1. Group insurance marketing permitted--Conditions.An insurer may market insurance through a group insurance or mass marketing plan, franchise, or blanket policy for any line of insurance regulated under this chapter if:(1)The insured group was not formed solely for the purpose of purchasing insurance; and(2)The premium is paid or collected by:(a)An employer, labor union, or the trustee of a fund established by the employer or labor union; (b)The trustee of a fund established by two or more employers in the same industry, or related industries; (c)Two or more labor unions or an association which have been in existence for one or more years and which have a constitution and bylaws; or(d)A wireless telecommunications provider from its customers and the premium is for insurance covering wireless telecommunications equipment. Source: SL 1979, ch 341, 12; SL 2008, ch 270, 1; SL 2014, ch 239, 12.
58-24-45. Regulation of payment of dividends, savings, or unabsorbed premium deposits prohibited.No rating organization may adopt any rule the effect of which would prohibit or regulate the payment of dividends, savings, or unabsorbed premium deposits allowed or returned by insurers to their policyholders, members, or subscribers. Source: SL 1966, ch 111, ch 15, 6 (3); SL 2014, ch 239, 11.
58-24-46. Cooperation between organizations and insurers authorized--Review of cooperative activities by director.Cooperation among rating organizations or among rating organizations and insurers in rate-making or in other matters within the scope of this chapter is hereby authorized, provided the filings resulting from such cooperation are subject to all the provisions of this chapter which are applicable to filings generally. The director may review such cooperative activities and practices and if, after a hearing, he finds that any such activity or practice is unfair or unreasonable or otherwise inconsistent with the provisions of this chapter, he may issue a written order specifying in what respects such activity or practice is unfair or unreasonable or otherwise inconsistent with the provisions of this chapter and requiring the discontinuance of such activity or practice. Source: SL 1966, ch 111, ch 15, 6 (4).
58-24-47. Appeal to director from action of rating organization--Hearing--Order.Any member or subscriber to a rating organization may appeal to the director from the action or decision of the rating organization in approving or rejecting any proposed change in or addition to the filings of the rating organization. The director shall, after a hearing held upon not less than ten days' written notice to the appellant and to the rating organization, issue an order approving the action or decision of the rating organization or, if the director finds that the action or decision was unreasonable, issue an order directing the rating organization to make an addition to its filings on behalf of its members and subscribers, in a manner consistent with the director's findings within a reasonable time after the issuance of the order. Source: SL 1966, ch 111, ch 15, 8; SL 2014, ch 239, 13.
58-24-48. Appeal based on failure to file for different expense system--Application of rate-making standards.If an appeal under 58-24-47 is based upon the failure of the rating organization to make a filing on behalf of the member or subscriber, which is based on a system of expense provisions which differs, in accordance with the right granted in 58-24-8, from the system of expense provisions included in a filing made by the rating organization, the director shall, if the director grants the appeal, order the rating organization to make the requested filing for use by the appellant. In deciding the appeal the director shall apply the standards set forth in 58-24-5 to 58-24-9, inclusive. Source: SL 1966, ch 111, ch 15, 8; SL 2014, ch 239, 14.
58-24-49. Application of insurer to file deviation--Basis for modification--Copy to rating organization.Every member of or subscriber to a rating organization shall adhere to the filings made on its behalf by such organization except that any such insurer may make written application to the director to file a deviation from the class rates, schedules, rating plans, or rules respecting any kind of insurance, or class of risk within a kind of insurance, or combination thereof. Such application shall specify the basis for the modification and a copy shall also be sent simultaneously to such rating organization. Source: SL 1966, ch 111, ch 15, 7.
58-24-5. Excessive, inadequate, or discriminatory rates prohibited.Rates shall not be excessive, inadequate, or unfairly discriminatory. Source: SL 1966, ch 111, ch 15, 3 (1) (a).
58-24-50. Deviations to be uniform within class.As to all forms of casualty insurance, including workers' compensation or any combination thereof, no application shall be granted under 58-24-51 unless the requested deviation is based upon a uniform percentage decrease or increase to be applied to the premiums produced by such rating system, as filed, for a kind of insurance or for a class of insurance which is found by the director to be a proper rating unit for the application of such uniform percentage decrease or increase, or for a subdivision of a kind of insurance comprised of a group of manual classifications which are treated as a separate unit for rate-making purposes or for which separate expense provisions are included in the filings of the rating organization. Source: SL 1966, ch 111, ch 15, 3 (2).
58-24-51. Criteria considered on application for deviation--Order permitting or denying deviation.In considering the application to file such deviation, the director shall give consideration to the available statistics and the principles for rate-making as provided in 58-24-5 to 58-24-9, inclusive. The director shall issue an order permitting the deviation for such insurer to be filed if he finds it to be justified and it shall thereupon become effective. He shall issue an order denying such application if he finds that the deviation applied for does not meet the requirements of this chapter. Source: SL 1966, ch 111, ch 15, 7.
58-24-52. Duration of permitted deviation.Each deviation permitted to be filed shall remain in effect for a period of not less than one year from the effective date unless sooner withdrawn by the insurer with the approval of the director or until terminated in accordance with the provisions of 58-24-21 to 58-24-24, inclusive. Source: SL 1966, ch 111, ch 15, 7.
58-24-53. Advisory organization license required.Each group, association, or other organization of insurers, whether located within or outside this state, which assists insurers which make their own filings or rating organizations in rate-making, by the collection and furnishing of loss or expense statistics, or by the submission of recommendations, but which does not make filings under this chapter shall be subject to licensure pursuant to this chapter as an advisory organization. Source: SL 1966, ch 111, ch 15, 10 (1); SL 2014, ch 239, 15.
58-24-54. Advisory organization filing requirements.Each advisory organization shall file with the director the requirements of 58-24-35 and an agreement that the director may examine the advisory organization in accordance with the provisions of 58-24-59. Source: SL 1966, ch 111, ch 15, 10 (2); SL 2014, ch 239, 16.
58-24-55. Unfair or unreasonable advisory organization practices--Order requiring discontinuance.If the director finds that an advisory organization has furnished information or assistance that involves any act or practice which is unfair or unreasonable or otherwise inconsistent with the provisions of this chapter, the director may issue an order specifying in what respect such act or practice is unfair or unreasonable or otherwise inconsistent with the provisions of this chapter, and requiring the discontinuance of such act or practice. Source: SL 1966, ch 111, ch 15, 10 (3); SL 2014, ch 239, 17.
58-24-56. Filings based on information furnished by noncompliant advisory organization prohibited--Order requiring discontinuance.No insurer that makes its own filings or any rating organization that submits filings with the division may support its filings by statistics or adopt rate-making recommendations furnished to it by an advisory organization which has not complied with 58-24-54 or with an order of the director involving statistics or recommendations issued under 58-24-55. If the director finds an insurer or rating organization to be in violation of this section the director may issue an order requiring the discontinuance of the violation. Source: SL 1966, ch 111, ch 15, 10 (4); SL 2014, ch 239, 18.
58-24-57. Insurers engaging in joint underwriting or joint reinsurance subject to regulation.Every group, association, or other organization of insurers which engages in joint underwriting or joint reinsurance shall be subject to regulation with respect thereto as provided in this title. Source: SL 1966, ch 111, ch 15, 11 (1).
58-24-58. Unfair or unreasonable practices of joint underwriters or joint reinsurers--Order requiring discontinuance.If, after a hearing, the director finds that any activity or practice of any group identified in 58-24-57 is unfair or unreasonable or otherwise inconsistent with the provisions of this chapter, the director may issue an order specifying in what respect the activity or practice is unfair or unreasonable or otherwise inconsistent with the provisions of this chapter and requiring the discontinuance of the activity or practice. Source: SL 1966, ch 111, ch 15, 11 (2); SL 2014, ch 239, 19.
58-24-59. Examination of rating organizations, advisory organizations, joint underwriters, and joint reinsurers--Acceptance of report of official of another state.As often as the director deems necessary, the director shall examine each rating organization licensed in this state as provided in 58-24-35 to 58-24-39, inclusive, each advisory organization referred to in 58-24-53, and each group, association, or other organization referred to in 58-24-57. The cost of any examination shall be paid by the rating organization, advisory organization, or group, association or other organization examined. The officers, manager, agents, and employees of the rating organization, advisory organization, or group, association, or other organization may be examined at any time under oath and shall exhibit all books, records, accounts, documents, or agreements governing its method of operation. In lieu of the above, the director may accept the report of an examination made by the insurance supervisory official of another state. No rating organization examined may be reimbursed from the examination fund. Source: SL 1966, ch 111, ch 15, 12; SL 2014, ch 239, 20.
58-24-6.1. Failure of rate to reflect difference in expected losses and expenses as unfair discrimination--Averaged group rates not unfairly discriminatory.One rate is unfairly discriminatory in relation to another in the same class if it clearly fails to reflect equitably the difference in expected losses and expenses. Rates are not unfairly discriminatory because different premiums result for policyholders with like loss exposures but different expense factors, or like expense factors but different loss exposures, so long as the rates reflect the differences with reasonable accuracy. Rates are not unfairly discriminatory if they are averaged broadly among persons insured under a group, franchise, or blanket policy. Source: SL 1979, ch 341, 11.
58-24-6. Making of rates--Matters considered.To determine whether rates are excessive, inadequate, or unfairly discriminatory, the director may consider:(1)Past and prospective loss experience within this state;(2)Conflagration and catastrophic hazards;(3)Reasonable margin for the underwriting profit and contingencies;(4)Dividends, savings, or unabsorbed premium deposits allowed or returned by insurers to their policyholders, members, or subscribers;(5)Past and prospective expenses specially applicable to this state; and(6)All other relevant factors within and outside this state.The loss experience shall be on at least the most recent five-year period for which such experience is available. If South Dakota data are not adequate because of insufficient sample size, the director shall consider the loss experience or the expense data, or both, outside this state. Source: SL 1966, ch 111, ch 15, 3 (1) (b); SL 1990, ch 400, 1.
58-24-61. Violation of chapter--Penalties.The director may, if the director finds that any person or organization has violated any provision of this chapter, issue an order which imposes a penalty of not more than five hundred dollars for each violation, but if the director finds a violation to be willful the director may impose a penalty of not more than five thousand dollars for each violation. The penalties may be in addition to any other penalty provided by law or order of the director issued pursuant to this chapter. Source: SL 1966, ch 111, ch 15, 16; SL 2014, ch 239, 21.
58-24-62. Suspension of license of rating organization or insurer.The director may suspend the license of any rating organization or insurer that fails to comply with an order of the director after the time prescribed for an appeal therefrom has expired or the order has been affirmed on appeal. The director may determine when a suspension of license becomes effective. Any suspension remains in effect for the period fixed by the director, or until the order upon which the suspension is based is modified, rescinded, or reversed. Source: SL 1966, ch 111, ch 15, 16; SL 2014, ch 239, 22.
58-24-63. Written order of director for imposition of penalty and suspension of license--Hearing, notice, findings.No penalty shall be imposed and no license shall be suspended or revoked except upon a written order of the director, stating his findings, made after a hearing held upon not less than ten days' written notice to such person or organization specifying the alleged violation. Source: SL 1966, ch 111, ch 15, 16.
58-24-64. Request for hearing on order or decision--Notice--Affirmance, reversal, or modification.Any insurer or rating organization aggrieved by any order or decision of the director made without a hearing, may, within thirty days after notice of the order to the insurer or organization, make written request to the director for a hearing thereon. The director shall issue a notice of hearing pursuant to chapter 1-26 within twenty days after receipt of a request and shall give not less than ten days' written notice of the time and place of the hearing. Within a reasonable time after the hearing the director shall affirm, reverse, or modify the director's previous action, specifying the reasons therefor. Pending the hearing and decision thereon the director may suspend or postpone the effective date of the director's previous action. Source: SL 1966, ch 111, ch 15, 17 (1); SL 2014, ch 239, 23.
58-24-65. Rehearing and appeal from order of director.Any order or decision of the director in proceedings arising under this chapter shall be subject to rehearing and review on appeal in the same manner and by the same procedure as provided by chapter 1-26, and such procedure shall be exclusive of all other remedies. Source: SL 1966, ch 111, ch 15, 17 (2).
58-24-66. Notice required for filing for workers' compensation insurance.At least fifteen days before any rating organization makes a loss cost filing required by 58-24-10 for workers' compensation insurance, the rating organization shall give the director of the Division of Insurance notice of its intent to make a loss cost filing. Source: SL 1990, ch 401, 1; SL 1993, ch 362, 4.
58-24-67. Notice to workers' compensation purchaser organizations.Within thirty days of receipt of a notice pursuant to 58-24-66, the director of the Division of Insurance shall schedule an informal hearing and send notice of the intent to conduct the informal hearing to organizations of purchasers of workers' compensation insurance and insurers who have registered with the director to receive such notices. Source: SL 1990, ch 401, 2; SL 1993, ch 362, 5.
58-24-68. Exempt commercial policyholder--Definition.For the purposes of 58-24-68 to 58-24-74, inclusive, the term, exempt commercial policyholder, means any person who applies for or procures any kind of property casualty insurance, except title or workers' compensation insurance, through the use of a risk manager employed or retained by such person, and meets at least two of the following qualifications:(1)Has purchased the insurance with aggregate premiums in the sum of at least fifty thousand dollars, during the most recently completed calendar year;(2)Has a net worth of at least ten million dollars, as reported in the policyholder's most recently issued financial statement, reviewed or audited by an independent certified public accountant;(3)Has annual net revenues or net sales of at least ten million dollars, as reported in the policyholder's most recently issued financial statement, reviewed or audited by an independent certified public accountant;(4)Employs at least one hundred full-time employees, either individually or, if the policyholder is a member of an affiliated group, collectively with all members of the affiliated group;(5)Has, if the policyholder is a nonprofit organization, an annual operating budget of at least two million five hundred thousand dollars, for the most recently completed calendar or fiscal year, whichever applies;(6)Has, if the policyholder is a public entity, an operating budget of at least ten million dollars, for the most recently completed calendar or fiscal year, whichever applies; or(7)Has, if the policyholder is a municipality, a population of at least twenty thousand. Source: SL 2004, ch 307, 1; SL 2022, ch 183, 1.
58-24-69. Risk manager defined.For the purposes of 58-24-68 to 58-24-74, inclusive, the term, risk manager, means an employee of the exempt commercial policyholder, or a third-party consultant retained by the policyholder who provides skilled services in loss prevention, loss reduction, or risk and insurance coverage analysis, and the purchase of insurance, and who possesses at least one of the following credentials:(1)A bachelor's or higher degree in risk management issued by an accredited college or university;(2)A designation as a chartered property and casualty underwriter issued by the American Institute for Chartered Property and Casualty Underwriters and Insurance Institute of America;(3)A designation as an associate in risk management issued by the American Institute for Chartered Property and Casualty Underwriters and Insurance Institute of America;(4)A designation as a certified risk manager issued by the National Alliance for Insurance Education and Research;(5)A designation as a fellow in risk management or RIMS fellow issued by the Global Risk Management Institute; or(6)At least seven years of experience in one or more of the following areas of commercial property and casualty insurance:(a)Risk financing;(b)Claims administration;(c)Loss prevention; or(d)Risk and insurance coverage analysis. Source: SL 2004, ch 307, 2.
58-24-7. Risks grouped by classification for rate-making--Modification of classification rates.Risks may be grouped by classifications for the establishment of rates and minimum premiums. Classification rates may be modified to produce rates for individual risks in accordance with rating plans which establish standards for measuring variations in hazards or expense provisions, or both. Such standards may measure any differences among risks that can be demonstrated to have a probable effect upon losses or expenses. Source: SL 1966, ch 111, ch 15, 3 (1) (d).
58-24-70. Exemption from rate and form filing requirements for policy issued to exempt commercial policyholder--Disclosure requirements.An insurer issuing a policy to an exempt commercial policyholder is exempt, except as provided for in 58-24-68 to 58-24-74, inclusive, from the rate filing requirements of chapter 58-24 and the form filing requirements of 58-11-12. At the time of soliciting an exempt commercial policyholder to purchase insurance, the insurance producer, or the insurer in the case of a direct procurement from the insurer, shall disclose to the policyholder and the policyholder's risk manager, on a form created by the insurer, that a premium or rate may be quoted or a policy form may be used that is not subject to the rate and form filing requirements of the Division of Insurance. Source: SL 2004, ch 307, 3.
58-24-71. Third-party consultant disclosure requirements.If a third-party consultant is retained by the exempt commercial policyholder to act as the policyholder's risk manager when a quote for insurance is delivered to the policyholder, the consultant shall disclose, in writing, the existence of any commission, fee, or contingency arrangement the third-party consultant has with the insurer. Source: SL 2004, ch 307, 4.
58-24-72. Promulgation of rules.The director may promulgate rules, pursuant to chapter 1-26, to carry out the provisions of 58-24-68 to 58-24-74, inclusive, to ensure that insurers make policyholders aware of their exempt status and that insurers keep separate records of exempt policies. The rules may include certification, record keeping, and notices. Source: SL 2004, ch 307, 5.
58-24-73. Insurer to maintain and provide copies of disclosures--Examination.The insurer shall maintain copies of the disclosures required by 58-24-68 to 58-24-73, inclusive. The copies are subject to examination. The insurer shall provide the copies to the division upon request as provided by this title. Source: SL 2004, ch 307, 6.
58-24-74. Insurer to maintain records relating to insurance sales to exempt commercial policyholder--Examination by director.Any insurer who sells any kind of insurance to an exempt commercial policyholder shall maintain records relating to the insurance sales as required by 58-24-68 to 58-24-74, inclusive. At a minimum, the records shall include: any data, statistics, rates, rating plans, rating systems, and underwriting rules used in underwriting and issuing such policies; claims-made policy forms; annual experience data on each risk insured, including written premiums, written premiums at a manual rate, paid losses, outstanding losses, loss adjustment expenses, underwriting expenses, underwriting profits, and profits from contingencies; and complaint information required under South Dakota law.The insurer shall maintain the records for five years. The insurer shall make such records available for examination by the director at any reasonable hour. Source: SL 2004, ch 307, 7.
58-24-75. Premium increase prohibited for certain accidents involving law enforcement, emergency, or snow removal personnel--Exception.No insurer may increase the premium or rate of an insured at policy issuance, during the term of a policy, or at renewal because of an accident if the insured was lawfully engaged in the performance of official duties as a law enforcement officer, firefighter, emergency medical technician, or operator of emergency snow removal equipment, if the operation of the emergency snow removal equipment is in response to a request from and in support of a law enforcement officer, firefighter, or emergency medical technician for any accident:(1)That occurred while the law enforcement officer, firefighter, emergency medical technician, or operator of emergency snow removal equipment was lawfully engaged in the performance of official duties; and(2)That occurred while the law enforcement officer, firefighter, emergency medical technician, or operator of emergency snow removal equipment was driving an emergency vehicle; and(3)For which the law enforcement officer, firefighter, emergency medical technician, or operator of emergency snow removal equipment furnishes notice to the insurer that the accident occurred under circumstances identified in subdivisions (1) and (2) of this section.This section is not applicable to commercial lines policies. Any premium or rate increase in violation of this section, which is made erroneously and does not constitute a continuing business practice of the insurer, may not be the basis of any disciplinary action by the division against the insurer if the insurer refunds any excess premium promptly upon discovery of the error or upon request by the insured. Source: SL 2007, ch 181, 3; SL 2008, ch 162, 2; SL 2014, ch 240, 1.
58-24-8. System of expense provisions used in rate-making--Reflection of operating methods.The systems of expense provisions included in the rates for use by any insurer or group of insurers may differ from those of other insurers or group of insurers to reflect the requirements of the operating methods of any such insurer or group of insurers with respect to any kind of insurance, or with respect to any subdivision or combination thereof for which subdivision or combination separate expense provisions are applicable. Source: SL 1966, ch 111, ch 15, 3 (1) (c).
58-24-9. Uniformity as to rates not required.Except to the extent necessary to meet the provisions of 58-24-5, uniformity among insurers in any matters within the scope of 58-24-4 to 58-24-8, inclusive, is neither required nor prohibited. Source: SL 1966, ch 111, ch 15, 3 (2).
58-25-1. Application of chapter.This chapter applies to all kinds and classes of insurance which insure or guarantee titles to real or leasehold property or any estate therein, or against loss by reason of defects, encumbrances, liens, or charges on real or leasehold property or any estate therein; or which insure or guarantee the validity, priority and status of real and leasehold property liens and estates; or which insure or guarantee the correctness and sufficiency of searches for instruments, liens, charges or other matters affecting the title to real or leasehold property or any estate therein. Any person making such guarantees or issuing such insurance shall be deemed to be engaged in the business of title insurance and is hereinafter referred to as "insurer." Source: SL 1966, ch 111, ch 14, 1.
58-25-10. Filing of rates and policies--Approval or disapproval by director.Any filing made pursuant to 58-25-7 to 58-25-9, inclusive, shall be approved by the director, unless he finds that such filing does not meet the requirements of this chapter or shall otherwise be contrary to law. As soon as reasonably possible after the filing has been made, the director shall, in writing, approve or disapprove the same; provided, however, that, if such filing has not been disapproved by the director within fifteen days from the date of filing, or within thirty days if such period be extended in writing by the director during the first fifteen days, it shall be deemed approved, and the rates, contracts, or other subject matter of such filing may be put into effect by the insurer at the expiration of such waiting period. In the event the director disapproves any filing, he shall specify in what respect he finds that such filing does not meet the requirements of this chapter or is otherwise contrary to law. Source: SL 1966, ch 111, ch 14, 3 (4).
58-25-11. Finding of director that prior approved filing does not comply with law--Hearing on request--Affirmance or modification of prior action.If at any time after the approval of a filing, the director should find that the filing does not meet the requirements of 58-25-7 to 58-25-10, inclusive, or is otherwise contrary to law, or if any party having an interest in such filing should make complaint in writing, setting forth specific and reasonable causes for complaint to the director, or if any insurer, upon notice of disapproval by the director of a filing pursuant to this section, should so request, the director shall hold a hearing within thirty days and shall give notice of the hearing in writing to all parties in interest. The director may confirm, modify, change or rescind any previous action, if warranted by the facts shown at the hearing. Source: SL 1966, ch 111, ch 14, 3 (5).
58-25-12. Issuance of contract, policy, or guarantee of insurance contrary to filings prohibited--Special risks excepted--Misdemeanor.No insurer shall make or issue any contract, policy, or guarantee of insurance except in accordance with filings approved as provided in 58-25-10, except as to special or unusual risks for which no filing has been provided in 58-25-7 and 58-25-8. Violation of this section is a Class 2 misdemeanor. Source: SL 1966, ch 111, ch 14, 3 (6); SL 1978, ch 359, 2.
58-25-13. Deviations, rebates, and discounts prohibited.Every insurer shall hold to the rates or premiums as approved by the director and may not deviate therefrom nor allow to or for the account of any insured a rebate or discount on the rates or premiums payable. As compensation for procuring business, an insurer may pay or allow a commission to any licensed insurance producer of the insurer. Source: SL 1966, ch 111, ch 14, 3 (7); SL 2001, ch 286, 133.
58-25-14. Exchange of information and experience data--Consultation as to rate-making.In order to further more equitable establishment and adjustment of rates and premiums and forms of contracts, policies, or guarantees of insurance, the director and every insurer may exchange information and experience data with each other, and with the insurance supervisory officials and insurers in other states and with national organizations and associations and may consult and cooperate with them in respect to rate- and premium-making and forms of contracts, policies, and guarantees of insurance. Source: SL 1966, ch 111, ch 14, 3 (8).
58-25-15. False or misleading information as misdemeanor.No person or organization shall knowingly give false or misleading information to the director, to any insurer or to any other person which will in any manner affect the proper determination of rates or premiums, or the proper issuance of a contract, policy, or guarantee of insurance. Violation of this section is a Class 2 misdemeanor. Source: SL 1966, ch 111, ch 14, 5; SL 1978, ch 359, 2.
58-25-16. Countersignature by agent or abstracter of county required--Violation as misdemeanor.No insurance company shall issue any policy of title insurance or certificate of title or other guarantee of title, covering any property located within the State of South Dakota, unless the same is countersigned by a person, partnership, or corporation, who has met the requirements of 36-13-8 and 36-13-10 in the county in which the real property is located, or maintains an abstract plant in the county where the real property is located and meets the requirements of chapter 36-13. A violation of this section is a Class 2 misdemeanor. Source: SL 1966, ch 111, ch 14, 4; SL 1978, ch 359, 2; SL 1979, ch 345.
58-25-17. Violation of chapter--Imposition of penalties by director.The director may, if he finds that any person or organization has violated any provision of this chapter, impose a penalty of not more than two hundred fifty dollars for each such violation, but, if he finds such violation to be willful he may impose a penalty of not more than one thousand dollars for each such violation. Such penalties may be in addition to any other penalty provided by law. Source: SL 1966, ch 111, ch 14, 6 (1).
58-25-18. Suspension of license of insurer--Failure to comply with order of director--Time of taking effect--Duration.The director may suspend the license of any insurer who fails to comply with any lawful order of the director within the time limited by such order, or any extension thereof which the director may grant. The director shall not suspend the license of any insurer for failure to comply with an order until the time prescribed for an appeal therefrom has expired or, if any appeal has been taken, until such order has been affirmed. The director may determine when a suspension of license shall become effective, and it shall remain in effect for a period fixed by him, unless he modifies or rescinds such suspension, or until the order upon which such suspension is based is modified, rescinded, or reversed. Source: SL 1966, ch 111, ch 14, 6 (2).
58-25-19. Written order of director for imposition of penalty and suspension of license--Hearing, notice, findings.No penalty shall be imposed and no license shall be suspended except upon written order of the director, stating his findings, made after a hearing held upon not less than ten days' written notice to such person or insurer and specifying the alleged violation. Source: SL 1966, ch 111, ch 14, 6 (3).
58-25-2. Making of rates--Provisions governing.All rates shall be made in accordance with the provisions of 58-25-3 to 58-25-6, inclusive. Source: SL 1966, ch 111, ch 14, 2.
58-25-20. Conduct of hearings before director.Hearings before the director as to matters under this chapter shall be conducted in accordance with chapter 1-26. Source: SL 1966, ch 111, ch 14, 7 (1); SL 1978, ch 359, 16.
58-25-22. Title insurance company to maintain reserve--Amount.A title insurance company shall establish and maintain a statutory premium reserve of not less than an amount computed in accordance with this section. The statutory premium reserve shall consist of the aggregate of the statutory premium reserve on January 1, 2002, and:(1)A sum equal to twenty-four cents for each one thousand dollars of net retained liability under each title insurance policy written for less than five hundred thousand dollars after January 1, 2002; and(2)A sum equal to twelve cents for each one thousand dollars of net retained liability under each title insurance policy written for five hundred thousand dollars or greater after January 1, 2002. Source: SL 2002, ch 239, 1.
58-25-23. Reserves restored to net profits over twenty-year period--Amortization rate.The aggregate of the amounts set aside in this reserve in any calendar year pursuant to 58-25-22 shall be released from the reserve and restored to net profits over a period of twenty years at an amortization rate not to exceed the following formula: thirty-five percent of the aggregate sum on July first of the year next succeeding the year of addition; fifteen percent of the aggregate sum on July first of each of the succeeding two years; ten percent of the aggregate sum on July first of the next succeeding year; three percent of the aggregate sum on July first of each of the next three succeeding years; two percent of the aggregate sum on July first of each of the next three succeeding years; and one percent of the aggregate sum on July first of each of the next succeeding ten years. Source: SL 2002, ch 239, 2.
58-25-24. Calculation of adjusted statutory or unearned premium reserve.The insurer shall calculate an adjusted statutory or unearned premium reserve as of the year of first application of 58-25-22. The adjusted reserve must be calculated as if 58-25-22 had been in effect for each year beginning twenty years before the year of first application of 58-25-22. For purposes of this calculation, the balance of the reserve as of that date is considered to be zero. If the adjusted reserve so calculated exceeds the aggregate amount set aside for statutory or unearned premiums in the insurer's most recent annual statement filed with the director, the insurer shall, out of total charges for policies of title insurance, increase its statutory or unearned premium reserve by an amount equal to one-sixth of that excess in each of the succeeding six years, beginning with the calendar year that includes the year of first application of 58-25-22 until the entire excess has been added. Source: SL 2002, ch 239, 3.
58-25-25. Adjusted reserves restored to net profits or equity.The aggregate of the amounts set aside in this reserve in any calendar year as adjustments to the insurer's statutory or unearned premium reserve pursuant to 58-25-24 shall be released from the reserve and restored to net profits, or equity if the additions required by 58-25-24 reduced equity directly, over a period not exceeding ten years pursuant to the following table: Year of AdditionReleaseYear 1Equally over ten yearsYear 2Equally over nine yearsYear 3Equally over eight yearsYear 4Equally over seven yearsYear 5Equally over six yearsYear 6Equally over five years For purposes of this section, year is the calendar year following the year of first application of 55-25-22. Source: SL 2002, ch 239, 4.
58-25-26. Title insurer to maintain known claim reserve--Amount.A title insurer shall establish and maintain a known claim reserve in an amount estimated to be sufficient to cover all unpaid losses, claims, and allocated loss adjustment expenses arising under title insurance policies, guaranteed certificates of title, guaranteed searches, and guaranteed abstracts of title and all unpaid losses, claims, and allocated loss adjustment expenses for which the title insurer may be liable and for which the title insurer has received notice by or on behalf of the insured, holder of a guarantee or escrow, or security depositor. Source: SL 2002, ch 239, 5.
58-25-27. Supplemental reserve to cover liabilities.A supplemental reserve shall be established consisting of any other reserves necessary, when taken in combination with the reserves required by 58-25-22 to 58-25-27, inclusive, to cover the company's liabilities with respect to all losses, claims, and loss adjustment expenses. Source: SL 2002, ch 239, 6.
58-25-3. Reasonableness and adequacy of rates.Rates shall be reasonable and adequate for the class of risks to which they apply. Source: SL 1966, ch 111, ch 14, 2 (1).
58-25-4. Unfair discrimination in rates prohibited.Rates shall not discriminate unfairly between risks involving essentially the same hazards and expense elements. Source: SL 1966, ch 111, ch 14, 2 (2).
58-25-5. Grouping of guarantees by classification for rate-making.Guarantees may be grouped by classification for the establishment of rates and minimum premiums. A special or unusual guarantee, more hazardous to the insurer than ordinary title guarantees because of an alleged irregularity or a difference in interpretation or application of law which might affect marketability of title, may be classified individually and separately according to the circumstances peculiar to each case. Source: SL 1966, ch 111, ch 14, 2 (4).
58-25-6. Matters considered in making rates.Due consideration will be given to past and prospective loss experiences within and outside the state, reasonable margin for profit and contingencies, cost of participating insurance, percentage to be allocated to reserve, operating expenses and all other relevant factors fairly attributable to the business of title insurance. Source: SL 1966, ch 111, ch 14, 2 (3).
58-25-7. Schedule of rates or premiums--Filing with director--Contents.Every insurer must file with the director, any manual or schedule of rates or premiums which it proposes to use, together with any rules or regulations governing the setting or making of such rates or premiums, and indicate the character or extent of coverage contemplated under such rates and premiums, except that insurers need not include rates or premiums for a special or unusual guarantee as defined in 58-25-5, and such rates or premiums may be classified individually and separately according to the circumstances peculiar to each case. Source: SL 1966, ch 111, ch 14, 3 (1).
58-25-8. Contracts, policies, or guarantees required to be filed with director, exceptions.Every insurer must file with the director, all forms of contracts, policies, or guarantees of insurance with any and all types of modifications thereof, except as to special or unusual risks, which it proposes to use. Source: SL 1966, ch 111, ch 14, 3 (2).
58-25-9. Change in rates or premiums or in contract forms--Filing with and approval by director required.No change in rates or premiums or in the forms of contracts, policies, or guarantees of insurance shall be permitted to any insurer, unless and until a report indicating such change is filed and approved by the director. Source: SL 1966, ch 111, ch 14, 3 (3).
58-26-1. Assets allowed in determination of financial condition.In any determination of the financial condition of an insurer, there shall be allowed as assets only such assets as are owned by the insurer and which consist of:(1)Cash in the possession of the insurer, or in transit under its control, and including the true balance of any deposit in a solvent bank or trust company;(2)Investments, securities, properties, and loans acquired or held in accordance with this title and in connection therewith the following items:(a)Interest due or accrued on any bond or evidence of indebtedness which is not in default and which is not valued on a basis including accrued interest;(b)Declared and unpaid dividends on shares of stock, unless such amount has otherwise been allowed as an asset;(c)Interest due or accrued upon a collateral loan in an amount not to exceed one year's interest thereon;(d)Interest due or accrued on deposits in solvent banks and trust companies, and interest due or accrued on other assets, if such interest is in the judgment of the director a collectible asset;(e)Interest due or accrued on a mortgage loan, in an amount not exceeding in any event the amount, if any, of the excess of the value of the property less delinquent taxes thereon over the unpaid principal; but in no event may interest accrued for a period in excess of eighteen months be allowed as an asset;(f)Rent due or accrued on real property if such rent is not in arrears for more than three months, and rent more than three months in arrears if the payment of such rent be adequately secured by property held in the name of the tenant and conveyed to the insurer as collateral;(g)The unaccrued portion of taxes paid prior to the due date on real property;(3)Premium notes, policy loans, and other policy assets and liens on policies and certificates of life insurance and annuity contracts and accrued interest thereon, in an amount not exceeding the legal reserve and other policy liabilities carried on each individual policy;(4)The net amount of uncollected and deferred premiums and annuity considerations in the case of a life insurer;(5)Premiums in the course of collection, other than for life insurance, not more than three months past due, less commissions payable thereon. The foregoing limitation does not apply to premiums payable directly or indirectly by the United States government or by any of its instrumentalities;(6)Installment premiums other than life insurance premiums to the extent of the unearned premium reserve carried on the policy to which premiums apply;(7)Notes and like written obligations not past due, taken for premiums other than life insurance premiums, on policies permitted to be issued on such basis, to the extent of the unearned premium reserves carried thereon;(8)The full amount of reinsurance recoverable by a ceding insurer from a solvent reinsurer and which reinsurance is authorized under this title;(9)Amounts receivable by an assuming insurer representing funds withheld by a solvent ceding insurer under a reinsurance treaty;(10)Deposits or equities recoverable from underwriting associations, syndicates, and reinsurance funds, or from any suspended banking institution, to the extent deemed by the director available for the payment of losses and claims and at values to be determined by the director; (11)Data and word processing machines used in the insurer's business. However, the original cost of the system shall be at least one thousand dollars but may not be more than three percent of the admitted assets of the insurer. Such cost shall be amortized over a period not to exceed five years;(12)All assets, whether or not consistent with the provisions of this section, as may be allowed pursuant to the annual statement form approved by the director for the kinds of insurance to be reported upon therein;(13)Goodwill arising from acquisitions and mergers occurring after January 1, 2001;(14)Other assets, not inconsistent with the provisions of this section, deemed by the director to be available for the payment of losses and claims at values to be determined by the director. Source: SL 1966, ch 111, ch 5, 1; SL 1978, ch 364; SL 1983, ch 376, 1; SL 2001, ch 283, 1; SL 2004, ch 308, 1.
58-26-10.1. Radio and television facilities allowable as assets.If an investment pursuant to 58-27-51 is in the assets of a separate business of ownership and operation of a radio station, television station, or community antenna television system, duly licensed by the federal communications commission and in which the insurer is authorized to engage under the provisions of its articles of incorporation, whether such assets or property are real, personal, or mixed, then in determining the value of such investments the actual value, but not exceeding the cost thereof, reduced by reasonable depreciation allowances, of the towers, and transmission cables equipment, used exclusively in such separate business and accounts receivable not over thirty days old, generated therein, shall be counted notwithstanding the provisions of subdivision 58-26-10(4). Source: SDCL, 58-27-51 as added by SL 1974, ch 317.
58-26-10. Assets not allowed in determining financial condition.In addition to assets impliedly excluded by other provisions of this title, the following expressly may not be allowed as assets in any determination of the financial condition of an insurer:(1)Goodwill, except goodwill permitted by 58-26-1, trade names, and other like intangible assets;(2)Advances to officers, other than policy loans, whether secured or not, and advances to employees, representatives, insurance producers, and other persons on personal security only;(3)Stock of such insurer, owned by it, or any material equity therein or loans secured thereby, or any material proportionate interest in such stock acquired or held through the ownership by such insurer of an interest in another firm, corporation, or business unit;(4)Furniture, fixtures, furnishings, safes, vehicles, libraries, stationery, literature, and supplies, except in the case of title insurers such materials and plants as the insurer is expressly authorized to invest in under this title and except, in the case of any insurer, such personal property as the insurer is permitted to hold pursuant to this title, or which is acquired through foreclosure of chattel mortgages or which is reasonably necessary for the maintenance and operation of real estate lawfully acquired and held by the insurer other than real estate used by it for home office, branch office, and similar purposes;(5)The amount, if any, by which the aggregate book value of investments as carried in the ledger assets of the insurer exceeds the aggregate value thereof as determined under this title. Source: SL 1966, ch 111, ch 5, 3; SL 2001, ch 286, 134; SL 2004, ch 308, 2.
58-26-100. Prescribed formulaic reserve component.A principle-based valuation may include a prescribed formulaic reserve component. Source: SL 2015, ch 254, 34.
58-26-101. Data to be submitted as prescribed in valuation manual.A company shall submit mortality, morbidity, policyholder behavior, or expense experience and other data as prescribed in the valuation manual. Source: SL 2015, ch 254, 35.
58-26-102. Confidential information defined.For purposes of this chapter, confidential information, means:(1)A memorandum in support of an opinion submitted pursuant to 58-26-46 to 58-26-55.1, inclusive, and any other document, material, and other information, including all working papers, and copies thereof, created, produced, or obtained by or disclosed to the director or any other person in connection with such memorandum;(2)All documents, materials, and other information, including all working papers, and copies thereof, created, produced, or obtained by or disclosed to the director or any other person in the course of an examination made pursuant to 58-26-96; provided that if an examination report or other material prepared in connection with an examination made pursuant to chapter 58-3 is not held as private and confidential information pursuant to chapter 58-3, an examination report or other material prepared in connection with an examination made pursuant to 58-26-96 is not confidential information to the same extent as if such examination report or other material had been prepared pursuant to chapter 58-3;(3)Any reports, documents, materials, and other information developed by a company in support of, or in connection with, an annual certification by the company pursuant to subdivision 58-26-99(2) evaluating the effectiveness of the company's internal controls with respect to a principle-based valuation and any other documents, materials, and other information, including all working papers, and copies thereof, created, produced, or obtained by or disclosed to the director or any other person in connection with such reports, documents, materials, and other information;(4)Any principle-based valuation report developed pursuant to subdivision 58-26-99(3) and any other documents, materials, and other information, including all working papers, and copies thereof, created, produced, or obtained by or disclosed to the director or any other person in connection with such report; and(5)Any documents, materials, data, and other information submitted by a company pursuant to 58-26-101, collectively, "experience data," and any other documents, materials, data, and other information, including all working papers, and copies thereof, created or produced in connection with such experience data, in each case that include any potentially company-identifying or personally identifiable information, that is provided to or obtained by the director together with any experience data, the experience materials, and any other documents, materials, data, and other information, including all working papers, and copies thereof, created, produced, or obtained by or disclosed to the director or any other person in connection with such experience materials. Source: SL 2015, ch 254, 36.
58-26-103. Confidential information privileged--Use and sharing.(1)Except as provided in 58-26-102 to 58-26-104, inclusive, a company's confidential information is confidential by law and privileged, and is not subject to open records, freedom of information, sunshine or other appropriate phrase, is not subject to subpoena and is not subject to discovery or admissible in evidence in any private civil action; provided, however, that the director is authorized to use the confidential information in the furtherance of any regulatory or legal action brought against the company as a part of the director's official duties;(2)Neither the director nor any person who received confidential information while acting under the authority of the director is permitted to testify in any private civil action concerning any confidential information;(3)In order to assist in the performance of the director's duties, the director may share confidential information: (a)With other state, federal, and international regulatory agencies and with the NAIC and its affiliates and subsidiaries; and(b)In the case of confidential information specified in subdivisions 58-26-102(1) and (4) only, with the Actuarial Board for Counseling and Discipline or its successor upon request stating that the confidential information is required for the purpose of professional disciplinary proceedings and with state, federal, and international law enforcement officials;In the case of (a) and (b), provided that such recipient agrees, and has the legal authority to agree, to maintain the confidentiality and privileged status of such documents, materials, data, and other information in the same manner and to the same extent as required for the director;(4)The director may receive documents, materials, data, and other information, including otherwise confidential and privileged documents, materials, data, or information, from the NAIC and its affiliates and subsidiaries, from regulatory or law enforcement officials of other foreign or domestic jurisdictions and from the Actuarial Board for Counseling and Discipline or its successor and shall maintain as confidential or privileged any document, material, data, or other information received with notice or the understanding that it is confidential or privileged under the laws of the jurisdiction that is the source of the document, material, or other information;(5)The director may enter into agreements governing sharing and use of information consistent with this section;(6)No waiver of any applicable privilege or claim of confidentiality in the confidential information occurs as a result of disclosure to the director pursuant to this section or as a result of sharing as authorized in subdivision (3);(7)A privilege established under the law of any state or jurisdiction that is substantially similar to the privilege established pursuant to this section is available and enforced in any proceeding in, and in any court of, this state;(8)For purposes of 58-26-102 to 58-26-104, inclusive, regulatory agency, law enforcement agency, and the NAIC include their employees, agents, consultants, and contractors. Source: SL 2015, ch 254, 37.
58-26-104. Exceptions to confidentiality of information.Notwithstanding 58-26-103, any confidential information specified in subdivisions 58-26-102(1) and (4):(1)May be subject to subpoena for the purpose of defending an action seeking damages from the appointed actuary submitting the related memorandum in support of an opinion submitted pursuant to 58-26-46 to 58-26-55.1, inclusive, or principle-based valuation report developed pursuant to subdivision 58-26-99(3), by reason of an action required by this chapter or by regulations promulgated hereunder;(2)May otherwise be released by the director with the written consent of the company; and(3)Once any portion of a memorandum in support of an opinion submitted pursuant to 58-26-46 to 58-26-55.1, inclusive, or a principle-based valuation report developed pursuant to subdivision 58-26-99(3), is cited by the company in its marketing or is publicly volunteered to or before a governmental agency other than a state insurance department or is released by the company to the news media, all portions of such memorandum or report is no longer confidential. Source: SL 2015, ch 254, 38.
58-26-105. Exemption of certain forms or product lines of domestic insurer.The director may exempt specific product forms or product lines of a domestic company that is licensed and doing business only in South Dakota from the requirements of 58-26-91 to 58-26-97, inclusive, provided:(1)The director has issued an exemption in writing to the company and has not subsequently revoked the exemption in writing; and(2)The company computes reserves using assumptions and methods used prior to the operative date of the valuation manual in addition to any requirements established by the director and promulgated by regulation.For any company granted an exemption pursuant to this section, 58-26-46 to 58-26-84, inclusive, are applicable. With respect to any company applying this exemption, any reference to 58-26-91 to 58-26-97, inclusive, found in 58-26-46 to 58-26-84, inclusive, is not applicable. Source: SL 2015, ch 254, 39.
58-26-11. Capital stock and liabilities chargeable against assets.In any determination of the financial condition of an insurer, capital stock and liabilities to be charged against its assets shall include:(1)The amount of its capital stock outstanding, if any;(2)The amount, estimated consistently with the provisions of this title, necessary to pay all of its unpaid losses and claims incurred on or prior to the date of statement, whether reported or unreported, together with the expenses of adjustment or settlement thereof;(3)With reference to life insurance, annuity contracts, and disability and accidental death benefits:(a)The amount of reserves on life insurance policies and annuity contracts in force, valued according to the tables of mortality, rates of interest, and methods adopted pursuant to this title which are applicable thereto;(b)Reserves for disability benefits, for both active and disabled lives;(c)Reserves for accidental death benefits; and(d)Any additional reserves which may be required by the director consistent with practice formulated or approved by the national association of insurance commissioners, on account of such insurance;(4)With reference to health insurance, the amount of reserves required pursuant to 58-26-30;(5)With reference to insurance other than that specified in subdivisions (3) and (4), and other than title insurance, the amount of reserves equal to the unearned portions of the gross premiums charged on policies in force, computed in accordance with this chapter;(6)Taxes, expenses, and other obligations due or accrued at the date of the statement. Source: SL 1966, ch 111, ch 5, 4.
58-26-12. Assets allowed as deductions from corresponding liabilities.Assets may be allowed as deductions from corresponding liabilities, and liabilities may be charged as deductions from assets, and deductions from assets may be charged as liabilities, in accordance with the form of annual statement applicable to the insurer as prescribed by the director, or otherwise in his discretion. Source: SL 1966, ch 111, ch 5, 2.
58-26-13.1. Actuarial opinion of property, casualty, and health insurers.Every property and casualty and health insurer doing business in this state shall file with its annual statement an actuarial opinion which complies with the standards and procedures in the National Association of Insurance Commissioners Annual Statement Instructions: Property and Casualty, Title, Life/Accident/Health, Health Maintenance Organizations and Hospital Medical and Dental Service or Indemnity Corporations as adopted by rule promulgated by the director pursuant to chapter 1-26. Source: SL 1992, ch 349, 2; SL 1993, ch 357, 5; SL 1994, ch 375, 3; SL 1997, ch 293, 1.
58-26-13.2. Time limit for compliance with actuary opinion requirements.Each domestic insurer shall comply with 58-26-13.1 and 58-26-44 for the year ending December 31, 1993, and each year thereafter, unless the director permits otherwise.Each foreign insurer shall comply with 58-26-13.1 and 58-26-44 for the year ending December 31, 1994, and each year thereafter, unless the director permits otherwise. Source: SL 1992, ch 349, 4.
58-26-2. Valuation of bonds or other evidences of debt--Method of calculation.All bonds or other evidences of debt having a fixed term and rate of interest held by an insurer may, if amply secured and not in default as to principal or interest, be valued as follows:(1)If purchased at par, at the par value;(2)If purchased above or below par, on the basis of the purchase price adjusted so as to bring the value to par at maturity and so as to yield in the meantime the effective rate of interest at which the purchase was made, or in lieu of such method, according to such accepted method of valuation as is approved by the director;(3)Purchase price shall in no case be taken at a higher figure than the actual market value at the time of purchase, plus actual brokerage, transfer, postage, or express charges paid in the acquisition of such securities;(4)Unless otherwise provided by valuation established or approved by the director, no such security shall be carried at above the call price for the entire issue during any period within which the security may be so called.The director shall have full discretion in determining the method of calculating values according to the rules set forth in this section. Source: SL 1966, ch 111, ch 5, 12.
58-26-3. Valuation of securities other than evidences of debt.Securities, other than those referred to in 58-26-2, held by an insurer, shall be valued, in the discretion of the director, at their market value, or at their appraised value, or at prices determined by him as representing their fair market value. Source: SL 1966, ch 111, ch 5, 13 (1).
58-26-30. Reserve requirements for health insurance.For all health insurance policies the insurer shall maintain an active life reserve which shall place a sound value on its liabilities under such policies and be not less than the reserve according to appropriate standards set forth in regulations issued by the director and, in no event, less in the aggregate than the prorata gross unearned premiums for such policies. Source: SL 1966, ch 111, ch 5, 7.
58-26-31. Reserve for outstanding losses under liability insurance and workers' compensation.An insurer shall maintain a reserve for outstanding losses under insurance against loss or damage from accident to or injuries suffered by an employee or other person and for which the insured is liable and which shall be computed as provided by 58-26-32 to 58-26-35, inclusive. Source: SL 1966, ch 111, ch 5, 8.
58-26-32. Reserve for workers' compensation claims under policies written in three years preceding.For all workers' compensation claims under policies written in the three years immediately preceding the date as of which the statement is made, the reserve required by 58-26-31 shall be calculated in accordance with the Annual Statement Instructions Manual prescribed by the National Association of Insurance Commissioners as adopted by rule by the director pursuant to chapter 1-26. But in any event, the reserve may not be less than the present value at four percent interest of the determined and the estimated unpaid compensation claims under policies written during the three-year period. Source: SL 1966, ch 111, ch 5, 8 (4); SL 1995, ch 284, 44.
58-26-33. Reserve for workers' compensation claims under policies written more than three years preceding.For all workers' compensation claims under policies written more than three years prior to the date as of which the statement is made, the reserve required by 58-26-31 shall be the present value at four per cent interest of the determined and the estimated future payments. Source: SL 1966, ch 111, ch 5, 8 (3).
58-26-34. Reserve for liability policies written during three years preceding.For all liability policies written during the three years immediately preceding the date as of which the statement is made, the reserve required by 58-26-31 shall be calculated in accordance with the Annual Statement Instructions Manual prescribed by the National Association of Insurance Commissioners as adopted by rule by the director pursuant to chapter 1-26. But in any event, the reserve may not be less than the determined and estimated unpaid claims under policies written during the three-year period. For all liability policies written more than three years prior to the date as of which the statement is made, the reserves required by 58-26-31 shall be determined and estimated unpaid claims. Source: SL 1966, ch 111, ch 5, 8 (2); SL 1995, ch 284, 45.
58-26-35. Maintaining a reserve for outstanding losses under credit insurance policies.An insurer shall maintain a reserve for outstanding losses under credit insurance policies in accordance with the Annual Statement Instructions Manual prescribed by the National Association of Insurance Commissioners as adopted by rule by the director pursuant to chapter 1-26. But in any event, the reserve may not be less than the determined and estimated unpaid claims on all policies. Source: SL 1966, ch 111, ch 5, 8 (1); SL 1995, ch 284, 46.
58-26-36. Unearned premium reserve--Insurers required to maintain.As to insurance against loss or damage to property, except as provided in 58-26-41, and as to all general casualty insurance and surety insurance, every insurer shall maintain an unearned premium reserve on all policies in force. Source: SL 1966, ch 111, ch 5, 5 (1).
58-26-37. Unearned premium reserve--Computation--Use of table.The director may require that reserves required by 58-26-36 shall be equal to the unearned portions of the gross premiums in force after deducting applicable reinsurance in solvent insurers as computed on each respective risk from the policy's date of issue. If the director does not so require, the portions of the gross premium in force, less applicable reinsurance in solvent insurers, to be held as an unearned premium reserve, shall be computed according to the following table:Term for which policy was writtenReserve for unearned premium 1 Year or less  1/22 Years 1st Year3/4 2nd Year1/43 Years 1st Year5/6 2nd Year1/2 3rd Year1/64 Years 1st Year7/8 2nd Year5/8 3rd Year3/8 4th Year1/85 Years 1st Year9/10 2nd Year7/10 3rd Year1/2 4th Year3/10 5th Year1/10Over 5 Years Pro Rata  Source: SL 1966, ch 111, ch 5, 5 (2).
58-26-38. Unearned premium reserve--Computation on a prorata basis.In lieu of computation according to the table in 58-26-37, the insurer at its option may compute all of the reserves required by 58-26-36 on a monthly or more frequent prorata basis. Source: SL 1966, ch 111, ch 5, 5 (3).
58-26-39. Change in method of computation of unearned premium reserve--Approval of director required.After adopting a method for computing the reserve required by 58-26-36, an insurer shall not change methods without approval of the director. Source: SL 1966, ch 111, ch 5, 5 (4).
58-26-4. Preferred or guaranteed stocks--Method of computing value approved by director.Preferred or guaranteed stocks or shares while paying full dividends may be carried at a fixed value in lieu of market value, at the discretion of the director and in accordance with such method of computation as he may approve. Source: SL 1966, ch 111, ch 5, 13 (2).
58-26-40. Unearned premium reserve provisions inapplicable to title insurance.Sections 58-26-36 to 58-26-39, inclusive, do not apply to title insurance. Source: SL 1966, ch 111, ch 5, 5 (5).
58-26-41. Unearned premium reserve on marine and transportation insurance.As to marine and transportation insurance, the entire amount of premiums on trip risks not terminated shall be deemed unearned; and the director may require the insurer to carry a reserve equal to one hundred percent of premiums on trip risks written during the month ended as of the date of statement. Source: SL 1966, ch 111, ch 5, 6.
58-26-43. Increase of inadequate reserves.If loss experience shows that an insurer's loss reserves, however computed or estimated, are inadequate, the director shall require the insurer to maintain loss reserves in such increased amount as is needed to make them adequate. Source: SL 1966, ch 111, ch 5, 9.
58-26-44.1. Definition of terms in 58-26-45 to 58-26-105.Terms used in 58-26-45 to 58-26-105, inclusive, apply on or after the operative date of the valuation manual and mean:(1)"Accident and health insurance," a contract that incorporates morbidity risk and provides protection against economic loss resulting from accident, sickness, or medical conditions and as may be specified in the valuation manual;(2)"Appointed actuary," a qualified actuary who is appointed in accordance with the valuation manual to prepare the actuarial opinion required pursuant to 58-26-55.1;(3)"Company," an entity, which:(a)Has written, issued, or reinsured life insurance contracts, accident and health insurance contracts, or deposit-type contracts in this state and has at least one policy in force or on claim; or(b)Has written, issued, or reinsured life insurance contracts, accident and health insurance contracts, or deposit-type contracts in any state and is required to hold a certificate of authority to write life insurance, accident and health insurance, or deposit-type contracts in this state;(4)"Deposit-type contract," a contract that does not incorporate mortality or morbidity risks and as may be specified in the valuation manual;(5)"Life insurance," a contract that incorporates mortality risk, including annuity and pure endowment contracts, and as may be specified in the valuation manual;(6)"NAIC," the National Association of Insurance Commissioners;(7)"Policyholder behavior," any action a policyholder, contract holder, or any other person with the right to elect options, such as a certificate holder, may take under a policy or contract subject to this chapter including, lapse, withdrawal, transfer, deposit, premium payment, loan, annuitization, or benefit elections prescribed by the policy or contract but excluding events of mortality or morbidity that result in benefits prescribed in their essential aspects by the terms of the policy or contract;(8)"Principle-based valuation," a reserve valuation that uses one or more methods or one or more assumptions determined by the insurer and is required to comply with 58-26-98 to 58-26-100, inclusive, as specified in the valuation manual;(9)"Qualified actuary," an individual who is qualified to sign the applicable statement of actuarial opinion in accordance with the American Academy of Actuaries qualification standards for actuaries signing such statements and who meets the requirements specified in the valuation manual;(10)"Tail risk," a risk that occurs either where the frequency of low probability events is higher than expected under a normal probability distribution or where there are observed events of very significant size or magnitude;(11)"Valuation manual," the manual of valuation instructions adopted by the NAIC as specified in this chapter and as approved by the director pursuant to rules promulgated pursuant to chapter 1-26. Source: SL 2015, ch 254, 1.
58-26-44. Application of chapter.This chapter applies to all persons doing an insurance business notwithstanding any provision in this title exempting them from the insurance laws of this state. Source: SL 1992, ch 349, 3.
58-26-45.1. Adoption of NAIC valuation manual of instruction--Valuation of reserve liabilities for contracts issued after operative date of valuation manual.The director may, by rules promulgated pursuant to chapter 1-26, adopt the manual of valuation instruction adopted by the NAIC after the NAIC notifies the director that the valuation manual is operative. After the director adopts the NAIC valuation manual of instruction, the director shall annually value, or cause to be valued, the reserve liabilities, hereinafter called reserves, for all outstanding life insurance contracts, annuity and pure endowment contracts, accident and health contracts, and deposit-type contracts of every company issued on or after the operative date of the valuation manual. In lieu of the valuation of the reserves required of a foreign or alien company, the director may accept a valuation made, or caused to be made, by the insurance supervisory official of any state or other jurisdiction when the valuation complies with the minimum standard provided pursuant to this chapter.The provisions in 58-26-91 to 58-26-100, inclusive, shall apply to all policies and contracts issued on or after the operative date of the valuation manual. Source: SL 2015, ch 254, 3.
58-26-45. Valuation of reserve liabilities for policies and contracts issued before operative date of valuation manual--Calculating reserves.The director shall annually value the reserve liabilities for all outstanding life insurance policies and annuity and pure endowment contracts of every life insurance company doing business in this state issued on or after July 1, 1995, and prior to the operative date of the valuation manual. In calculating the reserves, the director may use group methods and approximate averages for fractions of a year or otherwise. In lieu of the valuation of the reserves required of any foreign or alien company, the director may accept any valuation made by the insurance supervisory official of any state or other jurisdiction if the valuation complies with the minimum standard provided by this chapter.The provisions in 58-26-56 to 58-26-84, inclusive, apply to all policies and contracts, as appropriate, subject to this chapter issued on or after July 1, 1995, and prior to the operative date of the valuation manual. The provisions set forth in 58-26-91 to 58-26-100, inclusive, do not apply to any such policies and contracts.The minimum standard for the valuation of policies and contracts issued prior to July 1, 1995, is that provided by the laws in effect immediately prior to that date. Source: SL 1995, ch 284, 1; SL 2015, ch 254, 2.
58-26-46. Annual opinion of qualified actuary required--Promulgation of rules.Any life insurance company doing business in this state shall annually submit the opinion of a qualified actuary as to whether the reserves and related actuarial items held in support of the policies and contracts specified by the director are computed appropriately, are based on assumptions which satisfy contractual provisions, are consistent with prior reported amounts and comply with applicable laws of this state. The director shall promulgate rules pursuant to chapter 1-26 to specify the policies and contracts for which an opinion is required and to define the specifics of this opinion and add any other items deemed to be necessary to its scope. Source: SL 1995, ch 284, 2.
58-26-47. Opinion required as to adequacy of reserves to provide for company's obligations.Any life insurance company shall also annually include in the opinion required by 58-26-46 to 58-26-50, inclusive, an opinion of the same qualified actuary as to whether the reserves and related actuarial items held in support of the policies and contracts specified by the director by rules promulgated pursuant to chapter 1-26, if considered in light of the assets held by the company with respect to the reserves and related actuarial items, including the investment earnings on the assets and the considerations anticipated to be received and retained under the policies and contracts, make adequate provision for the company's obligations under the policies and contracts, including the benefits under and expenses associated with the policies and contracts. Source: SL 1995, ch 284, 3.
58-26-48. Promulgation of rules for establishing higher reserves.The director may provide by rules promulgated pursuant to chapter 1-26 for a transition period for establishing any higher reserves which the qualified actuary considers necessary in order to render the opinion required by 58-26-46 to 58-26-50, inclusive. Source: SL 1995, ch 284, 4.
58-26-49. Form and substance of actuary's opinion.Each opinion required by 58-26-47 and 58-26-48 shall be governed by the following provisions:(1)A memorandum, in form and substance acceptable to the director as specified by rules promulgated pursuant to chapter 1-26, shall be prepared to support each actuarial opinion;(2)If the insurance company fails to provide a supporting memorandum at the request of the director within a period specified or the director determines that the supporting memorandum provided by the insurance company fails to meet the standards prescribed by the rules or is otherwise unacceptable to the director, the director may engage a qualified actuary at the expense of the company to review the opinion and the basis for the opinion and prepare the supporting memorandum as is required by the director. Source: SL 1995, ch 284, 5.
58-26-5. Real property acquired pursuant to mortgage loan or contract for sale--Restriction as to valuation.Real property acquired pursuant to a mortgage loan or contract for sale, in the absence of a recent appraisal deemed by the director to be reliable, shall not be valued at an amount greater than the unpaid principal of the defaulted loan or contract at the date of such acquisition, together with any taxes and expenses paid or incurred in connection with such acquisition, and the cost of improvements thereafter made by the insurer and any amounts thereafter paid by the insurer on assessments levied for improvements in connection with the property. Source: SL 1966, ch 111, ch 5, 14 (1).
58-26-50. Provisions governing submission of actuary's opinion.Any opinion required by 58-26-46 to 58-26-49, inclusive, shall be governed by the following provisions:(1)The opinion shall be submitted with the annual statement reflecting the valuation of the reserve liabilities for each year ending on or after December 31, 1995;(2)The opinion shall apply to any business in force including individual and group health insurance plans, in form and substance acceptable to the director specified by rules promulgated pursuant to chapter 1-26;(3)The opinion shall be based on standards adopted from time to time by the Actuarial Standards Board and on additional standards as the director may by rules prescribe. Source: SL 1995, ch 284, 6.
58-26-51. Opinion submitted by foreign or alien company.In the case of an opinion required to be submitted pursuant to 58-26-46 to 58-26-49, inclusive, by a foreign or alien company, the director may accept the opinion filed by that company with the insurance supervisory official of another state if the director determines that the opinion reasonably meets the requirements applicable to a company domiciled in this state. Source: SL 1995, ch 284, 7.
58-26-52. Qualified actuary defined.For the purposes of the opinion required by 58-26-46 to 58-26-50, inclusive, qualified actuary means a member in good standing of the American Academy of Actuaries who meets the requirements set forth in rules promulgated pursuant to chapter 1-26. Source: SL 1995, ch 284, 8; SL 2015, ch 254, 4.
58-26-53. Liability of qualified actuary.Except in cases of fraud or willful misconduct, the qualified actuary is not liable for damages to any person, other than the insurance company and the director, for any act, error, omission, decision, or conduct with respect to the actuary's opinion. Source: SL 1995, ch 284, 9.
58-26-54. Promulgation of rules defining disciplinary action against company or qualified actuary.The director shall promulgate rules pursuant to chapter 1-26 to define disciplinary action that may be taken by the director against the company or the qualified actuary. Source: SL 1995, ch 284, 10.
58-26-55.1. Opinion of actuary on reserves and related actuarial items to be in accordance with valuation manual.(1)Every company with outstanding life insurance contracts, accident and health insurance contracts, or deposit-type contracts in this state and subject to regulation by the director shall annually submit the opinion of the appointed actuary as to whether the reserves and related actuarial items held in support of the policies and contracts are computed appropriately, are based on assumptions that satisfy contractual provisions, are consistent with prior reported amounts, and comply with applicable laws of this state. The valuation manual will prescribe the specifics of this opinion including any items deemed to be necessary to its scope.(2)Every company with outstanding life insurance contracts, accident and health insurance contracts, or deposit-type contracts in this state and subject to regulation by the director, except as exempted in the valuation manual, shall also annually include in the opinion required pursuant to subdivision (1), an opinion of the same appointed actuary as to whether the reserves and related actuarial items held in support of the policies and contracts specified in the valuation manual, when considered in light of the assets held by the company with respect to the reserves and related actuarial items, including the investment earnings on the assets and the considerations anticipated to be received and retained under the policies and contracts, make adequate provision for the company's obligations under the policies and contracts, including the benefits under and expenses associated with the policies and contracts.(3)Each opinion required by subdivision (2) is governed by the following provisions:(a)A memorandum, in form and substance as specified in the valuation manual, and acceptable to the director, shall be prepared to support each actuarial opinion; and(b)If the insurance company fails to provide a supporting memorandum at the request of the director within a period specified in the valuation manual or the director determines that the supporting memorandum provided by the insurance company fails to meet the standards prescribed by the valuation manual or is otherwise unacceptable to the director, the director may engage a qualified actuary at the expense of the company to review the opinion and the basis for the opinion and prepare the supporting memorandum required by the director.(4)Every opinion is governed by the following provisions:(a)The opinion is in form and substance as specified in the valuation manual and acceptable to the director;(b)The opinion is submitted with the annual statement reflecting the valuation of such reserve liabilities for each year ending on or after the operative date of the valuation manual;(c)The opinion applies to all policies and contracts subject to subdivision (2), plus other actuarial liabilities as may be specified in the valuation manual;(d)The opinion is based on standards adopted from time to time by the Actuarial Standards Board or its successor, and on such additional standards as may be prescribed in the valuation manual;(e)In the case of an opinion required to be submitted by a foreign or alien company, the director may accept the opinion filed by that company with the insurance supervisory official of another state if the director determines that the opinion reasonably meets the requirements applicable to a company domiciled in this state; (f)Except in cases of fraud or willful misconduct, the appointed actuary is not liable for damages to any person, other than the insurance company and the director, for any act, error, omission, decision, or conduct with respect to the appointed actuary's opinion;(g)Disciplinary action by the director against the company or the appointed actuary shall be defined in rules promulgated by the director, pursuant to chapter 1-26. Source: SL 2015, ch 254, 5.
58-26-55. Confidentiality of material supporting opinion of qualified actuary.Any memorandum in support of the opinion, required pursuant to 58-26-46 to 58-26-49, inclusive, and any other material provided by the company to the director in connection with the opinion, shall be kept confidential by the director, other than for the purpose of defending an action seeking damages from any person by reason of any action required by this chapter or by rules promulgated pursuant to this chapter. However, the memorandum or other material may otherwise be released by the director with the written consent of the company or to the American Academy of Actuaries upon request stating that the memorandum or other material is required for the purpose of professional disciplinary proceedings and setting forth procedures satisfactory to the director for preserving the confidentiality of the memorandum or other material. If any portion of the confidential memorandum is cited by the company in its marketing or is cited before any governmental agency other than a state insurance department or division or is released by the company to the news media, all portions of the confidential memorandum are no longer confidential. Source: SL 1995, ch 284, 11.
58-26-56. Minimum standard for valuation of policies and contracts.Except as provided in 58-26-64 to 58-26-74, inclusive, and 58-26-84, the minimum standard for the valuation of policies and contracts issued prior to July 1, 1995, shall be that provided by the laws in effect immediately prior to July 1, 1995. Except as otherwise provided in 58-26-64 to 58-26-74, inclusive, and 58-26-84, the minimum standard for the valuation of all policies and contracts issued on or after July 1, 1995, shall be the commissioners' reserve valuation methods defined in 58-26-75, 58-26-76, 58-26-81, 58-26-82, and 58-26-84, three and one-half percent interest, or in the case of life insurance policies and contracts, other than annuity and pure endowment contracts, issued on or after July 1, 1973, four percent interest for such policies issued prior to July 1, 1978, five and one-half percent interest for single premium life insurance policies and four and one-half percent interest for all other policies issued on and after July 1, 1978, and the tables provided for in 58-26-57 to 58-26-63, inclusive. Source: SL 1995, ch 284, 12; SL 2015, ch 254, 6.
58-26-57. Mortality tables used for ordinary life insurance policies.The tables that shall be used for ordinary policies of life insurance issued on the standard basis, excluding any disability and accidental death benefits in the policies are: the Commissioners 1941 Standard Ordinary Mortality Table for policies issued prior to the operative date of 58-15-38 and 58-15-42, the Commissioners 1958 Standard Ordinary Mortality Table for policies issued on or after the operative date of 58-15-38 and 58-15-42, and prior to the operative date of 58-15-43.1 to 58-15-43.11, inclusive, provided that for any category of policies issued on female risks, all modified net premiums and present values referred to in this chapter may be calculated according to an age not more than six years younger than the actual age of the insured; and for such policies issued on or after the operative date of 58-15-43.1 to 58-15-43.11, inclusive, (i) the Commissioners 1980 Standard Ordinary Mortality Table, or (ii) at the election of the company for any one or more specified plans of life insurance, the Commissioners 1980 Standard Ordinary Mortality Table with ten-year select mortality factors, or (iii) any ordinary mortality table, adopted after 1980 by the NAIC, which is approved by rules promulgated pursuant to chapter 1-26 by the director for use in determining the minimum standard of valuation for the policies. Source: SL 1995, ch 284, 13; SL 2015, ch 254, 7.
58-26-58. Mortality tables used for industrial life insurance policies.The tables that shall be used for all industrial life insurance policies issued on the standard basis, excluding any disability and accidental death benefits in the policies are: the 1941 Standard Industrial Mortality Table for policies issued prior to the operative date of 58-15-38, and for policies issued on or after the operative date, the Commissioners 1961 Standard Industrial Mortality Table or any industrial mortality table, adopted after 1980 by the NAIC, that is approved by rules promulgated pursuant to chapter 1-26 by the director for use in determining the minimum standard of valuation for the policies. Source: SL 1995, ch 284, 14; SL 2015, ch 254, 8.
58-26-59. Mortality tables used for individual annuity and pure endowment contracts.The tables that shall be used for individual annuity and pure endowment contracts, excluding any disability and accidental death benefits in the policies are: the 1937 Standard Annuity Mortality Table, or at the option of the company, the Annuity Mortality Table for 1949, Ultimate, or any modification of either of these tables approved by the director. Source: SL 1995, ch 284, 15.
58-26-6. Purchase money mortgage on real property--Restriction as to valuation.Purchase money mortgages on real property referred to in 58-26-5 shall be valued in an amount not exceeding the acquisition cost of the real property covered thereby or ninety per cent of the fair value of such real property, whichever is less. Source: SL 1966, ch 111, ch 5, 15.
58-26-60. Mortality tables used for group annuity and pure endowment contracts.The tables that shall be used for group annuity and pure endowment contracts, excluding any disability and accidental death benefits in the policies are: the Group Annuity Mortality Table for 1951, any modification of the table approved by the director or at the option of the company, any of the tables or modifications of tables specified for individual annuity and pure endowment contracts. Source: SL 1995, ch 284, 16.
58-26-61. Disability tables used for total and permanent disability.The tables that shall be used for total and permanent disability benefits in or supplementary to ordinary policies or contracts are: for policies or contracts issued on or after January 1, 1966, the tables of Period 2 disablement rates and the 1930 to 1950 termination rates of the 1952 Disability Study of the Society of Actuaries, with due regard to the type of benefit or any tables of disablement rates and termination rates adopted after 1980 by the NAIC, that are approved by rules promulgated pursuant to chapter 1-26 by the director for use in determining the minimum standard of valuation for the policies; for policies or contracts issued on or after January 1, 1961, and prior to January 1, 1966, either of the tables or, at the option of the company, the Class (3) Disability Table (1926) and for policies issued prior to January 1, 1961, the Class (3) Disability Table (1926). Any table shall, for active lives, be combined with a mortality table permitted for calculating the reserves for life insurance policies. Source: SL 1995, ch 284, 17; SL 2015, ch 254, 9.
58-26-62. Tables used for accidental death benefits.The tables that shall be used for accidental death benefits in or supplementary to policies issued on or after January 1, 1966, are: the 1959 Accidental Death Benefits Table or any accidental death benefits table adopted after 1980 by the NAIC, that is approved by rules promulgated pursuant to chapter 1-26 by the director for use in determining the minimum standard of valuation for the policies; for policies issued on or after January 1, 1961, and prior to January 1, 1966, either table or, at the option of the company, the Inter-Company Double Indemnity Mortality Table; and for policies issued prior to January 1, 1961, the Inter-Company Double Indemnity Mortality Table. Either table shall be combined with a mortality table for calculating the reserves for life insurance policies. Source: SL 1995, ch 284, 18; SL 2015, ch 254, 10.
58-26-63. Tables to be approved by director.The tables for group life insurance, life insurance issued on the substandard basis, and other special benefits shall be approved by the director. Source: SL 1995, ch 284, 19.
58-26-64. Minimum standard of valuation for individual annuity and pure endowment contracts and group annuity and pure endowment contracts on or after July 1, 1995.Except as provided in 58-26-71 to 58-26-74, inclusive, the minimum standard of valuation for individual annuity and pure endowment contracts issued on or after July 1, 1995, and for annuities and pure endowments purchased on or after July 1, 1995, under group annuity and pure endowment contracts, are the commissioners' reserve valuation methods defined in 58-26-75 and 58-26-76 and the tables and interest rates set forth in 58-26-65 to 58-26-69, inclusive. Source: SL 1995, ch 284, 20; SL 2015, ch 254, 11.
58-26-65. Tables used for individual annuity and pure endowment contracts issued prior to July 1, 1978--Interest.The tables that shall be used for individual annuity and pure endowment contracts issued prior to July 1, 1978, excluding any disability and accidental death benefits in the contracts are: the 1971 Individual Annuity Mortality Table or any modification of this table approved by the director, and six percent interest for single premium immediate annuity contracts, and four percent interest for all other individual annuity and pure endowment contracts. Source: SL 1995, ch 284, 21.
58-26-66. Tables used for individual single premium immediate annuity contracts issued on or after July 1, 1978--Interest.The tables that shall be used for individual single premium immediate annuity contracts issued on or after July 1, 1978, excluding any disability and accidental death benefits in the contracts are: the 1971 Individual Annuity Mortality Table or any individual annuity mortality table, adopted after 1980 by the NAIC that is approved by rules promulgated pursuant to chapter 1-26 by the director for use in determining the minimum standard of valuation for the contracts, or any modification of these tables approved by the director, and seven and one-half percent interest. Source: SL 1995, ch 284, 22; SL 2015, ch 254, 12.
58-26-67. Tables used for individual annuity and pure endowment contracts issued on or after July 1, 1978--Interest.The tables that shall be used for individual annuity and pure endowment contracts issued on or after July 1, 1978, other than single premium immediate annuity contracts, excluding any disability and accidental death benefits in the contracts are: the 1971 Individual Annuity Mortality Table or any individual annuity mortality table adopted after 1980 by the NAIC, that is approved by rules promulgated pursuant to chapter 1-26 by the director for use in determining the minimum standard of valuation for the contracts, or any modification of these tables approved by the director, and five and one-half percent interest for single premium deferred annuity and pure endowment contracts and four and one-half percent interest for all other individual annuity and pure endowment contracts. Source: SL 1995, ch 284, 23; SL 2015, ch 254, 13.
58-26-68. Tables used for annuities and pure endowments purchased under group contracts prior to July 1, 1978--Interest.The tables that shall be used for all annuities and pure endowments purchased prior to July 1, 1978, under group annuity and pure endowment contracts, excluding any disability and accidental death benefits purchased under the contracts are: the 1971 Group Annuity Mortality Table or any modification of this table approved by the director, and six percent interest. Source: SL 1995, ch 284, 24.
58-26-69. Tables used for annuities and pure endowments purchased under group contracts after July 1, 1978--Interest.The tables that shall be used for all annuities and pure endowments purchased on or after July 1, 1978, under group annuity and pure endowment contracts, excluding any disability and accidental death benefits purchased under the contracts are: the 1971 Group Annuity Mortality Table, or any group annuity mortality table adopted after 1980 by the NAIC, that is approved by rules promulgated pursuant to chapter 1-26 by the director for use in determining the minimum standard of valuation for annuities and pure endowments, or any modification of these tables approved by the director, and seven and one-half percent interest. Source: SL 1995, ch 284, 25; SL 2015, ch 254, 14.
58-26-7. Appraisal for valuation of other real property.Real property held by an insurer, other than that described in 58-26-5, shall not be valued at an amount in excess of fair value as determined by recent appraisal. If valuation is based on an appraisal more than three years old, the director may at his discretion call for and require a new appraisal in order to determine fair value. Source: SL 1966, ch 111, ch 5, 14 (2).
58-26-70. Written notice of election to comply with provisions of 58-26-64 to 58-26-69, inclusive--Operative date.After July 1, 1973, any company may file with the director a written notice of its election to comply with the provisions of 58-26-64 to 58-26-69, inclusive, after a specified date before January 1, 1979, which is the operative date of 58-26-64 to 58-26-69, inclusive, for the company. However, if a company does not elect to comply, the operative date of 58-26-64 to 58-26-69, inclusive, for the company is January 1, 1979. Source: SL 1995, ch 284, 26.
58-26-71. Calendar year statutory valuation interest rates defined.The interest rates used in determining the minimum standard for the valuation of life insurance policies issued in a particular calendar year, on or after the operative date of 58-15-43.1 to 58-15-43.11, inclusive; individual annuity and pure endowment contracts issued in a particular calendar year on or after January 1, 1983; annuities and pure endowments purchased in a particular calendar year on or after January 1, 1983, under group annuity and pure endowment contracts; and the net increase, if any, in a particular calendar year after January 1, 1983, in amounts held under guaranteed interest contracts; shall be the calendar year statutory valuation interest rates as defined in this section.(1)The calendar year statutory valuation interest rates, "I", shall be determined as follows and the results rounded to the nearer one-quarter of one percent:(a)For life insurance,I = .03 + W(R1 - .03) + W (R2 - .09); 2(b)For single premiums immediate annuities and for annuity benefits involving life contingencies arising from other annuities with cash settlement options and from guaranteed interest contracts with cash settlement options,I = .03 + W(R - .03)where R1 is the lesser of R and .09, R2 is the greater of R and .09, R is the reference interest rate defined in 58-26-71 to 58-26-74, inclusive, and W is the weighting factor defined in 58-26-71 to 58-26-74, inclusive;(c)For other annuities with cash settlement options and guaranteed interest contracts with cash settlement options, valued on an issue year basis, except as stated in subdivision (b), the formula for life insurance stated in subdivision (a) applies to annuities and guaranteed interest contracts with guarantee durations in excess of ten years and the formula for single premium immediate annuities stated in subdivision (b) applies to annuities and guaranteed interest contracts with guarantee duration of ten years or less;(d)For other annuities with no cash settlement options and for guaranteed interest contracts with no cash settlement options, the formula for single premium immediate annuities stated in subdivision (b) applies;(e)For other annuities with cash settlement options and guaranteed interest contracts with cash settlement options, valued on a change in fund basis, the formula for single premium immediate annuities stated in subdivision (b) applies.(2)However, if the calendar year statutory valuation interest rate for any life insurance policies issued in any calendar year determined without reference to this sentence differs from the corresponding actual rate for similar policies issued in the immediately preceding calendar year by less than one-half of one percent, the calendar year statutory valuation interest rate for life insurance policies is equal to the corresponding actual rate for the immediately preceding calendar year. For purposes of applying the immediately preceding sentence, the calendar year statutory valuation interest rate for life insurance policies issued in a calendar year shall be determined for 1980, using the reference interest rate defined in 1979, and shall be determined for each subsequent calendar year regardless of when 58-15-43.1 to 58-15-43.11, inclusive, became operative. Source: SL 1995, ch 284, 27; SL 2015, ch 254, 15.
58-26-72. Weighting factors.The weighting factors referred to in the formulas stated in 58-26-71 are given in the following tables: (1)Weighting factors for life insurance:Guarantee, Duration (Years)Weighting Factors10 or less.50More than 10, but not more than 20.45More than 20.35For life insurance, the guarantee duration is the maximum number of years the life insurance can remain in force on a basis guaranteed in the policy or under options to convert to plans of life insurance with premium rates or nonforfeiture values or both which are guaranteed in the original policy;(2)Weighting factor for single premium immediate annuities and for annuity benefits involving life contingencies arising from other annuities with cash settlement options and guaranteed interest contracts with cash settlement options: .80(3)Weighting factors for other annuities and for guaranteed interest contracts, except as stated in subdivision (2) above, shall be as specified in tables (a), (b), and (c) below, according to the rules and definitions in (d), (e), and (f) below:(a)For annuities and guaranteed interest contracts valued on an issue year basis:Guarantee Duration (Years)Weighting Factor for Plan Type   ABC5 or less .80.60.50More than 5, but not more than 10 .75.60.50More than 10, but not more than 20 .65.50.45More than 20 .45.35.35(b)For annuities and guaranteed interest contracts valued on a change in fund basis, the factors shown in (a) above increased by: Plan Type   ABC  .15.25.05(c)For annuities and guaranteed interest contracts valued on an issue year basis other than those with no cash settlement options which do not guarantee interest on considerations received more than one year after issue or purchase and for annuities and guaranteed interest contracts valued on a change in fund basis which do not guarantee interest rates on considerations received more than twelve months beyond the valuation date, the factors shown in table (a) or derived in table (b) increased by: Plan Type   ABC  .05.05.05(d)For other annuities with cash settlement options and guaranteed interest contracts with cash settlement options, the guarantee duration is the number of years for which the contract guarantees interest rates in excess of the calendar year statutory valuation interest rate for life insurance policies with guarantee duration in excess of twenty years. For other annuities with no cash settlement options and for guaranteed interest contracts with no cash settlement options, the guaranteed duration is the number of years from the date of issue or date of purchase to the date annuity benefits are scheduled to commence.(e)Plan type as used in the above tables is defined as follows:(i)Plan Type A: At any time policyholder may withdraw funds only (1) with an adjustment to reflect changes in interest rates or asset values since receipt of the funds by the insurance company, or (2) without adjustment but in installments over five years or more, or (3) as an immediate life annuity, or (4) no withdrawal permitted.(ii)Plan Type B: Before expiration of the interest rate guarantee, policyholder may withdraw funds only (1) with an adjustment to reflect changes in interest rates or asset values since receipt of the funds by the insurance company, or (2) without adjustment but in installments over five years or more or (3) no withdrawal permitted. At the end of interest rate guarantee, funds may be withdrawn without adjustment in a single sum or installments over less than five years.(iii)Plan Type C: Policyholder may withdraw funds before expiration of interest rate guarantee in a single sum or installments over less than five years either (1) without adjustment to reflect changes in interest rates or asset values since receipt of the funds by the insurance company, or (2) subject only to a fixed surrender charge stipulated in the contract as a percentage of the fund.(f)A company may elect to value guaranteed interest contracts with cash settlement options and annuities with cash settlement options on either an issue year basis or on a change in fund basis. Guaranteed interest contracts with no cash settlement options and other annuities with no cash settlement options must be valued on an issue year basis. As used in 58-26-71 to 58-26-74, inclusive, an issue year basis of valuation refers to a valuation basis under which the interest rate used to determine the minimum valuation standard for the entire duration of the annuity or guaranteed interest contract is the calendar year valuation interest rate for the year of issue or year of purchase of the annuity or guaranteed interest contract, and the change in fund basis of valuation refers to a valuation basis under which the interest rate used to determine the minimum valuation standard applicable to each change in the fund held under the annuity or guaranteed interest contract is the calendar year valuation interest rate for the year of the change in the fund. Source: SL 1995, ch 284, 28.
58-26-73. Reference interest rate defined.Reference interest rate referred to in 58-26-71 is defined as follows:(1)For all life insurance, the lesser of the average over a period of thirty-six months and the average over a period of twelve months, ending on June thirtieth of the calendar year next preceding the year of issue, of the Monthly Average of the Composite Yield on Seasoned Corporate Bonds, as published by Moody's Investors Service, Inc.;(2)For single premium immediate annuities and for annuity benefits involving life contingencies arising from other annuities with cash settlement options and guaranteed interest contracts with cash settlement options, the average over a period of twelve months, ending on June thirtieth of the calendar year of issue or year of purchase, of the Monthly Average of the Composite Yield on Seasoned Corporate Bonds, as published by Moody's Investors Service, Inc.;(3)For other annuities with cash settlement options and guaranteed interest contracts with cash settlement options, valued on a year of issue basis, except as stated in subdivision (2), with guarantee duration in excess of ten years, the lesser of the average over a period of thirty-six months and the average over a period of twelve months, ending on June thirtieth of the calendar year of issue or purchase, of the Monthly Average of the Composite Yield on Seasoned Corporate Bonds, as published by Moody's Investors Service, Inc.;(4)For other annuities with cash settlement options and guaranteed interest contracts with cash settlement options, valued on a year of issue basis, except as stated in subdivision (2), with guarantee duration of ten years or less, the average over a period of twelve months, ending on June thirtieth of the calendar year of issue or purchase, of the Monthly Average of the Composite Yield on Seasoned Corporate Bonds, as published by Moody's Investors Service, Inc.;(5)For other annuities with no cash settlement options and for guaranteed interest contracts with no cash settlement options, the average over a period of twelve months, ending on June thirtieth of the calendar year of issue or purchase, of the Monthly Average of the Composite Yield on Seasoned Corporate Bonds, as published by Moody's Investors Service, Inc.;(6)For other annuities with cash settlement options and guaranteed interest contracts with cash settlement options, valued on a change in fund basis, except as stated in subdivision (2), the average over a period of twelve months, ending on June thirtieth of the calendar year of the change in the fund, of the Monthly Average of the Composite Yield on Seasoned Corporate Bonds, as published by Moody's Investors Service, Inc. Source: SL 1995, ch 284, 29.
58-26-74. Alternative method for determination of reference interest rate.If the Monthly Average of the Composite Yield on Seasoned Corporate Bonds is no longer published by Moody's Investors Service, Inc., or if the NAIC determines that the Monthly Average of the Composite Yield on Seasoned Corporate Bonds as published by Moody's Investors Service, Inc., is no longer appropriate for the determination of the reference interest rate, then an alternative method for determination of the reference interest rate, which is adopted by the NAIC and approved by rules promulgated pursuant to chapter 1-26 by the director, may be substituted. Source: SL 1995, ch 284, 30; SL 2015, ch 254, 16.
58-26-75. Valuation of reserves--Policies providing for uniform amount of insurance and requiring payment of uniform premiums--Policies providing varying amounts of insurance or varying premiums--Certain group annuity and pure endowment contracts maintained by employers--Disability and accidental death benefits--Other benefits.Except as otherwise provided in 58-26-76, 58-26-81, 58-26-82, and 58-26-84, reserves according to the commissioners' reserve valuation method, for the life insurance and endowment benefits of policies providing for a uniform amount of insurance and requiring the payment of uniform premiums shall be the excess, if any, of the present value, at the date of valuation, of future guaranteed benefits provided for by the policies, over the then present value of any future modified net premiums of the policies. The modified net premiums for any policy shall be the uniform percentage of the respective contract premiums for the benefits such that the present value, at the date of issue of the policy, of all the modified net premiums shall be equal to the sum of the then present value of the benefits provided for by the policy and the excess of subdivision (1) over subdivision (2) as follows:(1)A net level annual premium equal to the present value, at the date of issue, of the benefits provided for after the first policy year, divided by the present value, at the date of issue, of an annuity of one per annum payable on the first and each subsequent anniversary of a policy on which a premium falls due. However, the net level annual premium may not exceed the net level annual premium on the nineteen year premium whole life plan for insurance of the same amount at an age one year higher than the age at issue of the policy;(2)A net one year term premium for the benefits provided for in the first policy year.Any life insurance policy issued on or after January 1, 1986, for which the contract premium in the first policy year exceeds that of the second year and for which no comparable additional benefit is provided in the first year for the excess and which provides an endowment benefit or a cash surrender value or a combination thereof in an amount greater than the excess premium, the reserve according to the commissioners' reserve valuation method as of any policy anniversary occurring on or before the assumed ending date defined in this chapter as the first policy anniversary on which the sum of any endowment benefit and any cash surrender value then available is greater than the excess premium shall, except as otherwise provided in 58-26-81 and 58-26-82, be the greater of the reserve as of the policy anniversary calculated as described in the preceding paragraph and the reserve as of the policy anniversary calculated as described in that paragraph, but with (i) the value defined in subdivision (1) of that paragraph being reduced by fifteen percent of the amount of excess first year premium, (ii) all present values of benefits and premiums being determined without reference to premiums or benefits provided for by the policy after the assumed ending date, (iii) the policy being assumed to mature on the date as an endowment, and (iv) the cash surrender value provided on the date being considered as an endowment benefit. In making the above comparison, the mortality and interest bases stated in 58-26-56 to 58-26-63, inclusive, and 58-26-71 to 58-26-74, inclusive, shall be used.Reserves according to the commissioners' reserve valuation method for: (i) life insurance policies providing for varying amount of insurance or requiring the payment of varying premiums; (ii) group annuity and pure endowment contracts purchased under a retirement plan or plan of deferred compensation, established or maintained by an employer, including a partnership or sole proprietorship, or by an employee organization, or by both, other than a plan providing individual retirement accounts or individual retirement annuities under section 408 of the Internal Revenue Code, as of January 1, 1995; (iii) disability and accidental death benefits in all policies and contracts; and (iv) all other benefits, except life insurance and endowment benefits in life insurance policies and benefits provided by all other annuity and pure endowment contracts, shall be calculated by a method consistent with the principles of the preceding paragraphs of this section. Source: SL 1995, ch 284, 31; SL 2015, ch 254, 17.
58-26-76. Valuation of reserves for certain annuity or pure endowment contracts.This section applies to all annuity and pure endowment contracts other than group annuity and pure endowment contracts purchased under a retirement plan or plan of deferred compensation, established or maintained by an employer, including a partnership or sole proprietorship, or by an employee organization, or by both, other than a plan providing individual retirement accounts or individual retirement annuities under section 408 of the Internal Revenue Code, as of January 1, 1995.Reserves according to the commissioners' annuity reserve method for benefits under annuity or pure endowment contracts, excluding any disability and accidental death benefits in the contracts, are the greatest of the respective excesses of the present values, at the date of valuation, of the future guaranteed benefits, including guaranteed nonforfeiture benefits, provided for by the contracts at the end of each respective contract year, over the present value, at the date of valuation, of any future valuation considerations derived from the future gross considerations, required by the terms of the contract, that become payable prior to the end of the respective contract year. The future guaranteed benefits shall be determined by using the mortality table, if any, and the interest rate or rates, specified in the contracts for determining guaranteed benefits. The valuation considerations are the portions of the respective gross considerations applied under the terms of the contract to determine nonforfeiture values. Source: SL 1995, ch 284, 32.
58-26-77. Minimum aggregate reserves for life insurance policies.No company's aggregate reserves for all life insurance policies, excluding disability and accidental death benefits, issued on or after July 1, 1995, may be less than the aggregate reserves calculated in accordance with the methods set forth in 58-26-75, 58-26-76, 58-26-81, 58-26-82, and 58-26-83 and the mortality table or tables and rate or rates of interest used in calculating nonforfeiture benefits for the policies. The aggregate reserves for all policies, contracts, and benefits may not be less than the aggregate reserves determined by the appointed actuary to be necessary to give the opinion required by 58-26-46 to 58-26-55, inclusive. Source: SL 1995, ch 284, 33; SL 2015, ch 254, 18.
58-26-78. Standards for calculating reserves for policies and contracts issued prior to July 1, 1995.Reserves for policies and contracts issued prior to July 1, 1995, may be calculated, at the option of the company, according to any standards which produce greater aggregate reserves for all the policies and contracts than the minimum reserves required by the laws in effect immediately prior to July 1, 1995. Source: SL 1995, ch 284, 34; SL 2015, ch 254, 19.
58-26-79. Standards for calculating reserves for policies, contracts or benefits issued on or after July 1, 1995.Reserves for any category of policies, contracts, or benefits as established by the director, issued on or after July 1, 1995, may be calculated, at the option of the company, according to any standards which produce greater aggregate reserves for any category than those calculated according to the minimum standard provided in this chapter, but the rate or rates of interest used for policies and contracts, other than annuity and pure endowment contracts, may not be greater than the corresponding rate or rates of interest used in calculating any nonforfeiture benefits provided in the policies or contracts. Source: SL 1995, ch 284, 35; SL 2015, ch 254, 20.
58-26-8. Personal property acquired pursuant to chattel mortgage--Restriction as to valuation.Personal property acquired pursuant to chattel mortgages made in accordance with 58-27-45 to 58-27-47, inclusive, shall not be valued at an amount greater than the unpaid balance of principal on the defaulted loan at the date of acquisition, together with taxes and expenses incurred in connection with such acquisition, or the fair value of such property, whichever amount is the lesser. Source: SL 1966, ch 111, ch 5, 14 (3).
58-26-80. Company's greater standard of valuation may be lowered with director approval.Any company which adopts any standard of valuation producing greater aggregate reserves than those calculated according to the minimum standard provided in this chapter may, with the approval of the director, adopt any lower standard of valuation, but not lower than the minimum provided by this chapter. However, for the purposes of this section and 58-26-78 and 58-26-79, the holding of additional reserves previously determined by the appointed actuary to be necessary to render the opinion required by 58-26-46 to 58-26-55, inclusive, is not considered to be the adoption of a higher standard of valuation. Source: SL 1995, ch 284, 36; SL 2015, ch 254, 21.
58-26-81. Determining minimum reserve when gross premium charged is less than the valuation net premium.If in any contract year the gross premium charged by any company on any policy or contract is less than the valuation net premium for the policy or contract calculated by the method used in calculating the reserve thereon but using the minimum valuation standards of mortality and rate of interest, the minimum reserve required for the policy or contract is the greater of either the reserve calculated according to the mortality table, rate of interest, and method actually used for the policy or contract, or the reserve calculated by the method actually used for the policy or contract but using the minimum valuation standards of mortality and rate of interest and replacing the valuation net premium by the actual gross premium in each contract year for which the valuation net premium exceeds the actual gross premium. The minimum valuation standards of mortality and rate of interest referred to in this section and 58-26-82 are those standards stated in 58-26-56 to 58-26-63, inclusive, and 58-26-71 to 58-26-74, inclusive. Source: SL 1995, ch 284, 37; SL 2015, ch 254, 22.
58-26-82. Application of 58-26-75 and 58-26-81 to certain life insurance policies issued on or after January 1, 1986.If for any life insurance policy issued on or after January 1, 1986, for which the gross premium in the first policy year exceeds that of the second year and for which no comparable additional benefit is provided in the first year for the excess and which provides an endowment benefit or a cash surrender value or a combination thereof in an amount greater than the excess premium, the foregoing provisions of 58-26-81 and this section shall be applied as if the method actually used in calculating the reserve for the policy were the method described in 58-26-75, ignoring the second paragraph of 58-26-75. The minimum reserve at each policy anniversary of a policy shall be the greater of the minimum reserve calculated in accordance with 58-26-75, including the second paragraph of that section, and the minimum reserve calculated in accordance with 58-26-81 and this section. Source: SL 1995, ch 284, 38.
58-26-83. Requirements for reserves for life insurance providing for future premium determination or for reserves undeterminable under methods in 58-26-75, 58-26-76, 58-26-81, or 58-26-82.Any plan of life insurance which provides for future premium determination, the amounts of which are to be determined by the insurance company based on then estimates of future experience, or in the case of any plan of life insurance or annuity which is of a nature that the minimum reserves cannot be determined by the methods described in 58-26-75, 58-26-76, 58-26-81, and 58-26-82, the reserves which are held under any plan must:(1)Be appropriate in relation to the benefits and the pattern of premiums for that plan; and(2)Be computed by a method which is consistent with the principles of this Standard Valuation Law, as determined by rules promulgated by the director pursuant to chapter 1-26. Source: SL 1995, ch 284, 39.
58-26-84. Promulgation of rules for minimum standards applicable to health plans issued on or after July 1, 1995 and before operative date of valuation manual.The director shall promulgate rules pursuant to chapter 1-26 for containing the minimum standards applicable to the valuation of health plans, including disability, sickness, and accident, issued on or after July 1, 1995, and prior to the operative date of the valuation manual. For accident and health insurance contracts issued on or after the operative date of the valuation manual, the standard prescribed in the valuation manual is the minimum standard of valuation required pursuant to 58-26-45.1. Source: SL 1995, ch 284, 40; SL 2015, ch 254, 23.
58-26-86. Actuarial opinion summary to be filed with property, casualty, and health insurers' annual statement.Each property and casualty and health insurer domiciled in this state shall file with the insurer's annual statement an actuarial opinion summary written by the company's appointed actuary which complies with the National Association of Insurance Commissioners annual statement instructions: property and casualty, title, life/accident/health, health maintenance organizations, and hospital medical and dental service or indemnity corporations as adopted by rules promulgated by the director pursuant to chapter 1-26.A company licensed, but not domiciled in this state, shall provide the actuarial opinion summary upon request. Source: SL 2009, ch 271, 41.
58-26-87. Actuarial report and workpapers to support actuarial opinion.The actuarial report and underlying workpapers as required by the National Association of Insurance Commissioners annual statement instructions, as adopted by rules promulgated by the director pursuant to chapter 1-26, shall be prepared to support each actuarial opinion. Source: SL 2009, ch 271, 42.
58-26-88. Preparation of supporting actuarial report or workpapers upon insurer's failure to provide acceptable supporting documents.If the insurance company fails to provide a supporting actuarial report or workpapers at the request of the director or the director determines that the supporting actuarial report or workpapers provided by the insurance company is otherwise unacceptable, the director may engage a qualified actuary at the expense of the company to review the opinion and the basis for the opinion and prepare the supporting actuarial report or workpapers. Source: SL 2009, ch 271, 43.
58-26-89. Statement of actuarial opinion to be filed with annual statement--Public document.The statement of actuarial opinion shall be provided with the annual statement in accordance with the appropriate National Association of Insurance Commissioners Property and Casualty annual statement instructions: property and casualty, title, life/accident/health, health maintenance organizations and hospital medical and dental service or indemnity corporations as adopted by rules promulgated by the director pursuant to chapter 1-26, and shall be treated as a public document. Source: SL 2009, ch 271, 44.
58-26-9. Valuation not to be inconsistent with approved method.No valuations under 58-26-2 to 58-26-8, inclusive, shall be inconsistent with any applicable valuation or method then currently formulated or approved by the national association of insurance commissioners or its successor organization. Source: SL 1966, ch 111, ch 5, 16.
58-26-90. Confidentiality of actuarial report, workpapers, or actuarial opinion summary provided in support of opinion.Documents, materials, or other information in the possession or control of the Division of Insurance that are considered an actuarial report, workpapers, or actuarial opinion summary provided in support of the opinion, and any other material provided by the company to the director in connection with the actuarial report, workpapers, or actuarial opinion summary, are confidential and privileged, are not subject to 1-26-2, 1-27-1, or 58-2-26, are not subject to subpoena, and are not subject to discovery or admissible in evidence in any private civil action.This section does not limit the director's authority to release the documents to the Actuarial Board for Counseling and Discipline (ABCD) so long as the material is required for the purpose of professional disciplinary proceedings and that the ABCD establishes procedures satisfactory to the director for preserving the confidentiality of the documents, nor does this section limit the director's authority to use the documents, materials, or other information in furtherance of any regulatory or legal action brought as part of the director's official duties. Source: SL 2009, ch 271, 45.
58-26-91. Minimum standard of valuation for policies issued on or after operative date of valuation manual.For policies issued on or after the operative date of the valuation manual, the standard prescribed in the valuation manual is the minimum standard of valuation required pursuant to 58-26-45.1, except as provided pursuant to 58-26-95 or 58-26-97. Source: SL 2015, ch 254, 25.
58-26-92. Prerequisites for adoption of NAIC valuation manual of instruction.The director may not adopt the NAIC valuation manual of instruction until all of the following have occurred:(1)The valuation manual is adopted by the NAIC by an affirmative vote of at least forty-two members, or three-fourths of the members voting, whichever is greater;(2)The Standard Valuation Law, as amended by the NAIC in 2009, or legislation including substantially similar terms and provisions, is enacted by states representing greater than seventy-five percent of the direct premiums written as reported in the following annual statements submitted for 2008: life, accident, and health annual statements; health annual statements; or fraternal annual statements;(3)The Standard Valuation Law, as amended by the NAIC in 2009, or legislation including substantially similar terms and provisions, is enacted by at least forty-two of the following fifty-five jurisdictions: The fifty states of the United States, American Samoa, the American Virgin Islands, the District of Columbia, Guam, and Puerto Rico. Source: SL 2015, ch 254, 26.
58-26-93. Adoption of change to valuation manual.The director may approve a change to the valuation manual pursuant to rules promulgated pursuant to chapter 1-26 when the change to the valuation manual is adopted by the NAIC by an affirmative vote representing:(1)At least three-fourths of the members of the NAIC voting, but not less than a majority of the total membership; and(2)Members of the NAIC representing jurisdictions totaling greater than seventy-five percent of the direct premiums written as reported in the following annual statements most recently available prior to the vote in subdivision (1) above: life, accident, and health annual statements, health annual statements, or fraternal annual statements. Source: SL 2015, ch 254, 27.
58-26-94. Specifications required for adoption of valuation manual.The director may adopt the NAIC valuation manual of instruction if the valuation manual specifies the following:(1)Minimum valuation standards for, and definitions of, the policies or contracts subject to 58-26-45.1. The minimum valuation standards are:(a)The commissioner's reserve valuation method for life insurance contracts, other than annuity contracts, subject to 58-26-45.1;(b)The commissioners annuity reserve valuation method for annuity contracts subject to 58-26-45.1; and(c)Minimum reserves for all other policies or contracts subject to 58-26-45.1;(2)Which policies or contracts or types of policies or contracts that are subject to the requirements of a principle-based valuation in 58-26-98 and the minimum valuation standards consistent with those requirements;(3)For policies and contracts subject to a principle-based valuation pursuant to 58-26-98 to 58-26-100, inclusive:(a)Requirements for the format of reports to the director pursuant to subdivision 58-26-99(3), and which shall include information necessary to determine if the valuation is appropriate and in compliance with this chapter;(b)Assumptions are prescribed for risks over which the company does not have significant control or influence; and(c)Procedures for corporate governance and oversight of the actuarial function, and a process for appropriate waiver or modification of such procedures;(4)For policies not subject to a principle-based valuation pursuant to 58-26-98 to 58-26-100, inclusive, the minimum valuation standard shall:(a)Be consistent with the minimum standard of valuation prior to the operative date of the valuation manual; or(b)Develop reserves that quantify the benefits and guarantees, and the funding, associated with the contracts and their risks at a level of conservatism that reflects conditions that include unfavorable events that have a reasonable probability of occurring;(5)Other requirements, including those relating to reserve methods, models for measuring risk, generation of economic scenarios, assumptions, margins, use of company experience, risk measurement, disclosure, certifications, reports, actuarial opinions and memorandums, transition rules, and internal controls; and(6)The data and form of the data required pursuant to 58-26-101, with whom the data must be submitted, and may specify other requirements including data analyses and reporting of analyses. Source: SL 2015, ch 254, 28.
58-26-95. Exceptions to valuation manual requirements.In the absence of a specific valuation requirement or if a specific valuation requirement in the valuation manual is not, in the opinion of the director, in compliance with this chapter, then the company shall, with respect to the requirements, comply with minimum valuation standards prescribed by the director by rules promulgated pursuant to chapter 1-26. Source: SL 2015, ch 254, 29.
58-26-96. Qualified actuary engaged by director or by official of another state.The director may engage a qualified actuary, at the expense of the company, to perform an actuarial examination of the company and opine on the appropriateness of any reserve assumption or method used by the company, or to review and opine on a company's compliance with any requirement set forth in this chapter. The director may rely upon the opinion, regarding provisions contained within this chapter, of a qualified actuary engaged by the insurance supervisory official of another state, district or territory of the United States. As used in this section, the term, engage, includes employment and contracting. Source: SL 2015, ch 254, 30.
58-26-97. Required change in assumption or method and adjustment of reserves.The director may require a company to change any assumption or method that in the opinion of the director is necessary in order to comply with the requirements of the valuation manual or this chapter; and the company shall adjust the reserves as required by the director. The director may take other disciplinary action as permitted pursuant to the laws of this state. Source: SL 2015, ch 254, 31.
58-26-98. Reserves to be established using principle-based valuation--Conditions.A company must establish reserves using a principle-based valuation that meets the following conditions for policies or contracts as specified in the valuation manual:(1)Quantify the benefits and guarantees, and the funding, associated with the contracts and their risks at a level of conservatism that reflects conditions that include unfavorable events that have a reasonable probability of occurring during the lifetime of the contracts. For polices or contracts with significant tail risk, reflects conditions appropriately adverse to quantify the tail risk;(2)Incorporate assumptions, risk analysis methods, financial models, and management techniques that are consistent with, but not necessarily identical to, those utilized within the company's overall risk assessment process, while recognizing potential differences in financial reporting structures and any prescribed assumption or method;(3)Incorporate assumptions that are derived in one of the following manners:(a)The assumption is prescribed in the valuation manual;(b)For an assumption that is not prescribed, the assumption shall be established utilizing the company's available experience, to the extent it is relevant and statistically credible; or to the extent that company data is not available, relevant, or statistically credible, be established utilizing other relevant, statistically credible experience;(4)Provide margins for uncertainty including adverse deviation and estimation error, such that the greater the uncertainty the larger the margin and resulting reserve. Source: SL 2015, ch 254, 32.
58-26-99. Procedures, controls and report regarding principle-based valuation.A company using a principle-based valuation for one or more policies or contracts subject to 58-26-98 to 58-26-100, inclusive, as specified in the valuation manual shall:(1)Establish procedures for corporate governance and oversight of the actuarial valuation function consistent with those described in the valuation manual;(2)Provide to the director and the board of directors an annual certification of the effectiveness of the internal controls with respect to the principle-based valuation. The controls shall be designed to assure that all material risks inherent in the liabilities and associated assets subject to such valuation are included in the valuation, and that valuations are made in accordance with the valuation manual. The certification shall be based on the controls in place as of the end of the preceding calendar year;(3)Develop, and file with the director upon request, a principle-based valuation report that complies with standards prescribed in the valuation manual. Source: SL 2015, ch 254, 33.
58-27-1. Application of chapter.Except for 58-27-68, this chapter applies to domestic insurers only. Source: SL 1966, ch 111, ch 6, 1.
58-27-10. Loans guaranteed by United States or Canada.An insurer may invest in loans guaranteed as to principal and interest by the United States of America or Canada, or by any agency or instrumentality of the United States or Canada. Source: SL 1966, ch 111, ch 6, 7.
58-27-100. Time limit for compliance with 58-27-89 to 58-27-102.All persons subject to 58-27-89 to 58-27-102, inclusive, shall be in compliance with 58-27-89 to 58-27-102, inclusive, by July 1, 1993. The director may establish limitations on the obligations or time frames for those persons to reduce obligations in violation of 58-27-89 to 58-27-102, inclusive. Source: SL 1992, ch 350, 12.
58-27-101.Investment in money market funds.The term, money market fund, means any open end, diversified management type of mutual fund registered under the Investment Company Act of 1940, 15 U.S. C. 80a-1 et seq., as adopted by the director pursuant to rules promulgated pursuant to chapter 1-26, the moneys of which are invested only in the following kinds of investments, none of which shall mature more than three hundred ninety-seven days from the date of acquisition by the mutual fund:(1)Securities issued or guaranteed as to principal and interest by the government of the United States or by agencies, government sponsored enterprises, or instrumentalities thereof;(2)Certificates of deposit and bankers' acceptances of banks chartered by the United States or any state thereof or foreign branches of such banks;(3)Commercial paper and other obligation of corporations chartered by or under the laws of the United States or any state thereof;(4)Repurchase agreements with respect to those investments; and(5)Dollar-denominated unsecured promissory obligations of foreign corporations which have an investment grade rating from at least one rating agency recognized by the Securities Valuation Office of the National Association of Insurance Commissioners.Insurance companies may invest in the shares of any one or more money market funds the objectives of which include the maintenance of a stable net asset value of a specified dollar amount per share and the shareholders of which may withdraw the value of their shares by check, telephone, or mail.In addition to the forty percent investment limitation available for money-market fund investments pursuant to 58-27-57, an insurer may acquire additional money market funds pursuant to this section not to exceed ten percent of its admitted assets. The aggregate value of all money market shares which may be acquired under this section and 58-27-57 may not exceed fifty percent of the insurance company's total admitted assets. At the time of the investment, no insurance company's investment may exceed five percent of the outstanding shares of any one money market fund. No investment may exceed the lesser of the amount in this section or the amount in 58-27-53.The limitations set forth in this section do not apply to investments in money market funds in which portfolio assets are invested entirely in the type of securities permitted pursuant to 58-27-9 to 58-27-13, inclusive. Source: SL 1992, ch 350, 24; SL 1994, ch 384, 5; SL 1997, ch 294, 24.
58-27-102. Investment in company owned life insurance contracts.An insurer may invest in company owned life insurance contracts if:(1)The life insurance is whole life;(2)The life insurance contract does not vest in any employee of the insurer; and(3)The company is the beneficiary and has an insurable interest.All cash values of life insurance contracts owned by the insurers under this section may not at any one time exceed five percent of the insurers' admitted assets. Source: SL 1992, ch 350, 25.
58-27-103. Investment in a collateralized pool of mortgages--Requirements--Restrictions.In addition to investment in mortgages in 58-27-32 to 58-27-48, inclusive, an insurer may invest in obligations or certificates entitled to receive both principal and interest, or both principal and implied interest, from a pool collateralized by one or more commercial and residential mortgages. The collateral for the investments shall have been sold to and be currently owned by either a trust or institution established solely for the purpose of holding the mortgages or certificates for the benefit of the obligee. Any investment authorized under this section shall have a minimum quality rating of two by the Securities Valuation Office of the National Association of Insurance Commissioners and shall meet volatility standards. If at any time thereafter the quality rating drops below a rating of two the insurer is subject to 58-27-90. The director shall promulgate rules pursuant to chapter 1-26 to set volatility standards and reporting requirements for investments under this section.An insurer's investments authorized under this section may not exceed forty percent of its admitted assets. This restriction does not apply to obligations of the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation and those issued, assumed, guaranteed, or insured by the United States or a government sponsored enterprise of the United States, if the instruments of the government sponsored enterprise are assumed, guaranteed, or insured by the United States or are otherwise backed or supported by the full faith and credit of the United States.Any particular investment held by an insurer on February 7, 1995, under this section, which was a legal investment at the time it was made, and which is the type of investment the insurer was legally entitled to possess under this section immediately prior to February 7, 1995, is considered an eligible investment under this section. Any additional investment pursuant to this section may not be made if the total amount invested would at any time exceed forty percent of admitted assets. Source: SL 1993, ch 364, 2; SL 1994, ch 384, 6; SL 1995, ch 285, 2; SL 1995, ch 286; SL 1996, ch 299; SL 1997, ch 294, 25.
58-27-104. Investment in a collateralized pool of assets other than mortgages--Requirements.An insurer may invest in an interest in a collateralized pool whose underlying assets are not addressed or may be prohibited by chapter 58-26 or 58-27. An insurer may invest in interest-bearing obligations entitled to receive both principal and interest, or both principal and implied interest, from a pool collateralized by one or more assets other than those authorized in 58-27-103. The collateral for the investments shall have been sold to and be currently owned by a trust or corporation established solely for the purpose of holding the assets for the benefit of the obligee. Any investment authorized under this section shall have a minimum quality rating of two by the Securities Valuation Office of the National Association of Insurance Commissioners. If at any time thereafter the quality rating drops below a rating of two the insurer is subject to 58-27-90.An insurer's investments authorized under this section may not exceed forty percent of its admitted assets.If the underlying investment of the pool is an investment set forth in chapters 58-26 and 58-27, any requirement or limitation for that investment shall apply. This section is subject to the five percent limitation of 58-27-53. Source: SL 1993, ch 364, 3; SL 1994, ch 384, 7; SL 1997, ch 294, 26.
58-27-105. Foreign investments.An insurer may invest in securities or other investments which are issued or denominated in the currency of countries other than the United States or whose obligor is domiciled in another country. The securities and investments shall meet the limitation, quality, and quantity requirements of chapters 58-26 and 58-27.The investments in other countries may not exceed in the aggregate twenty percent of the insurer's admitted assets or one hundred percent of capital and surplus, whichever is less. Source: SL 1993, ch 364, 4; SL 1997, ch 294, 27.
58-27-107. Ratification of investment.Any investment satisfying the provisions of 58-27-53, 58-27-57, 58-27-103, 58-27-104, or 58-27-105 entered into before January 1, 1993, is hereby ratified. Source: SL 1993, ch 364, 7; SL 1997, ch 294, 29.
58-27-108. Rating and valuation of investments--Requirements--Divestment.Any investment shall be rated and valued in accordance with standards promulgated by the Securities Valuation Office of the National Association of Insurance Commissioners as adopted by the director pursuant to rules promulgated pursuant to chapter 1-26. The rating of the investment must comply with the statutory requirement for the investment.Any insurer may purchase any investment not rated by the Securities Valuation Office of the National Association of Insurance Commissioners if the investment has received an equivalent rating by an independent rating agency which is recognized by the Securities Valuation Office. If the insurer purchases an investment not previously rated and valued by the Securities Valuation Office, application for a rating and valuation shall be filed in accordance with the standards promulgated by the Securities Valuation Office. If the investment, when rated by the Securities Valuation Office, does not comply with the statutory requirement, the insurer must divest of the investment pursuant to 58-27-97.Nothing in this section is applicable to the assets in any separate accounts maintained by the insurer. Source: SL 1994, ch 384, 1; SL 1997, ch 294, 30.
58-27-109. Institution defined.For purposes of this chapter, an institution is a corporation, a joint stock company, an association, a trust, a business partnership, a business joint venture, or a similar entity. Source: SL 1994, ch 384, 4.
58-27-11. Obligations of states, provinces, and political subdivisions.An insurer may invest any of its funds in bonds, warrants, or other evidences of indebtedness which are general obligations of, or are secured by pledge of specific revenues by, this state or of any other state of the United States or province of Canada or of any of the political subdivisions or other taxing districts of such states or provinces. Source: SL 1966, ch 111, ch 6, 8.
58-27-110. Title plans investments.A domestic title insurer may make investments in title plants in an aggregate amount not exceeding twenty-five percent of the insurer's assets. Source: SL 1997, ch 294, 32.
58-27-111. Joint venture and limited partnership investments.Notwithstanding direct investment limitations applicable to real estate, securities, and other assets as provided in this chapter, an insurer may become a limited partner in a limited partnership or invest in a joint venture with equity interests in real estate, securities, or other assets. Investments made under this section are treated as a permitted investment under 58-27-51, 58-27-51.1, and 58-27-51.2, and within the limitations imposed by those sections. An insurer may not invest more than five percent of its admitted assets in any one limited partnership or joint venture. Determination of the amount an insurer has invested in limited partnerships or joint ventures for the purposes of this section shall be based on the cost of such investments to the insurer. Any investment satisfying the provisions of this section and entered into before July 1, 1997, is hereby ratified. Source: SL 1997, ch 294, 33.
58-27-12.1. Maximum investments in bonds, warrants, and evidence of indebtedness.An insurer may invest up to twenty percent of its admitted assets in any bonds, warrants, or evidence of indebtedness described in 58-27-11 and 58-27-12 and not rated pursuant to 58-27-108. The valuation of such investments shall be the amortized cost of the investments or the market value of the investments, whichever is less. Source: SL 2004, ch 309, 1.
58-27-12. Revenue bonds of states, provinces, and political subdivisions.An insurer may invest in bonds, notes, or evidences of indebtedness of any state of the United States or province of Canada, or any political subdivision thereof or any agency or instrumentality of any of the foregoing, which are payable from revenues or earnings specifically pledged for the payment of the principal and interest on such obligations, and for the payment of which a lawful debt service fund or reserve fund has been established and is being maintained. Source: SL 1966, ch 111, ch 6, 9.
58-27-13. Obligations or stock of federal agencies.An insurer may invest in the obligations, or stock thereof where stated, of the following agencies of the government of the United States of America, whether or not such obligations are guaranteed by such government:(1)Commodity credit corporation;(2)Federal intermediate credit banks;(3)Federal land banks;(4)Banks for cooperatives;(5)Federal home loan banks, and stock thereof;(6)Federal national mortgage association, and stock thereof when acquired in connection with sale of mortgage loans to such association; and(7)Any other similar agency of the government of the United States of America and of similar financial quality. Source: SL 1966, ch 111, ch 6, 10; SL 1979, ch 37, 7.
58-27-14. Certificates of deposit in federally insured banks.An insurer may invest in certificates of deposit in any bank that is a member of the federal deposit insurance corporation. Source: SL 1966, ch 111, ch 6, 18; SL 1971, ch 265, 1; SL 1974, ch 316.
58-27-15.1. Credit Union accounts.To the extent that such an account is insured by the National Credit Union Share Insurance Fund (NCUSIF), or any successor organizations, an insurer may invest in member accounts of federal or state-chartered credit unions. Source: SL 1997, ch 294, 6.
58-27-15. Federally insured savings and loan accounts.To the extent that such an account is insured by the Savings Association Insurance Fund (SAIF), or any successor organizations, an insurer may invest in share or savings accounts of savings and loan and building and loan associations. Source: SL 1966, ch 111, ch 6, 21; SL 1971, ch 265, 2; SL 1982, ch 364; SL 1997, ch 294, 5.
58-27-16. Obligations of international bank and certain development banks for reconstruction and development.An insurer may invest in obligations issued, assumed, or guaranteed by the International Bank for Reconstruction and Development, by the African Development Bank, or other development banks as approved by and reflected in the securities valuation manual of the National Association of Insurance Commissioners. Source: SL 1966, ch 111, ch 6, 11; SL 1989, ch 435.
58-27-17. Investments authorized for insurers.An insurer may invest in:(1)Bonds, debentures, notes, and other evidences of indebtedness, or participations thereon, issued, assumed, or guaranteed by any solvent institution existing under the laws of the United States of America or Canada, or any state or province thereof, and which bear or accrue interest at a fixed or floating rate;(2)Secured and unsecured obligations of institutions described in subdivision (1) of this section, bearing or accruing interest at a fixed or floating rate, with mandatory principal and interest due at specified times;(3)Adjustment, income, or other contingent interest obligations of institutions described in subdivision (1) of this section;(4)Securities of any (a) open-end or closed-end management type investment company or investment trust fund registered under the Investment Company Act of 1940, as adopted by the director pursuant to rules promulgated pursuant to chapter 1-26, or (b) issuer meeting the requirements of Section 3(c)(1) of the Investment Company Act of 1940, as adopted by the director pursuant to rules promulgated pursuant to chapter 1-26; and(5)Preferred shares of any solvent institution existing under the laws of the United States of America or Canada, or of any state or province thereof.If an insurer has an investment in violation of this section, it shall divest itself of the investment pursuant to 58-27-74. Source: SL 1966, ch 111, ch 6, 12 (1); SL 1992, ch 350, 13; SL 1994, ch 384, 2; SL 1997, ch 294, 7.
58-27-2. Eligible investments by insurers--Violation as misdemeanor.Insurers shall invest in or lend their funds on the security of, and shall hold as invested assets, only eligible investments as prescribed in this chapter. Violation of this section is a Class 2 misdemeanor. Source: SL 1966, ch 111, ch 6, 2 (1); SL 1978, ch 359, 2.
58-27-23. Nonassessable common stock of corporation--Insurance stocks excepted.An insurer may invest in nonassessable common shares, trust certificates, or other equity interests, excluding preferred shares, insurance stocks, or acquisitions subject to subdivision 58-27-17(5) or 58-27-111, of any solvent institution existing under the laws of the United States of America or Canada, or any state or province thereof. Source: SL 1966, ch 111, ch 6, 14; SL 1997, ch 294, 8.
58-27-24. Stock of solvent insurers meeting requirements.An insurer may invest in the stocks of other solvent insurers formed under the laws of this or another state, which stocks meet the applicable requirements of subdivision 58-27-17(5) and 58-27-23. Source: SL 1966, ch 111, ch 6, 15 (1); SL 1992, ch 350, 19.
58-27-25. Insurer acquiring controlling interest in another stock insurer--Limitation as to amount.An insurer may acquire and hold the controlling interest in the outstanding voting stock of another stock insurer formed under the laws of this or another state. All stocks under this section shall be subject to the limitation as to amount as provided in 58-27-27. Source: SL 1966, ch 111, ch 6, 15 (2).
58-27-26. Investments in stock of majority owned subsidiary corporations.With the consent of the director of the Division of Insurance, an insurer may invest in the stock of its majority owned subsidiary insurance corporation; or in the stock of any other majority owned corporation. Source: SL 1966, ch 111, ch 6, 16; SL 1969, ch 130; SL 1983, ch 376, 3.
58-27-27. Maximum amount of investments in stock of majority owned subsidiary, or another insurer or wholly owned subsidiary.The insurer's investments in the stock of its majority owned subsidiary insurance corporation under 58-27-26, together with its investments in insurance stocks under 58-27-25, may not at any time exceed the amount of the investing insurer's surplus, if a life insurer, or its surplus to policyholders if other than a life insurer. Any investment in a noninsurance majority owned corporation under 58-27-26 is subject to the limitations under 58-5A-73. Source: SL 1966, ch 111, ch 6, 16; SL 1969, ch 130; SL 1994, ch 385.
58-27-28. Equipment trust obligations or certificates.An insurer may invest in equipment trust obligations or certificates adequately secured and evidencing an interest in transportation equipment, wholly or in part within the United States of America, which obligations or certificates carry the right to receive determined portions of rental, purchase, or other fixed obligatory payments to be made for the use or purchase of such transportation equipment. Source: SL 1966, ch 111, ch 6, 12 (5).
58-27-29. Foreign securities--Insurer authorized to do business in foreign country--Limitation as to amount.An insurer authorized to transact insurance in a foreign country may make investments, in aggregate amount not exceeding its deposit and obligations incurred in such country, in securities of or in such country possessing characteristics and of a quality similar to like investments required pursuant to this chapter for investments in the United States of America. Canadian securities eligible for investment under other provisions of this chapter are not subject to this section. Source: SL 1966, ch 111, ch 6, 22.
58-27-3. Time of determination of eligibility of investment.Eligibility of an investment shall be determined as of the date of its making or acquisition, except as stated in 58-27-4, and shall at all times be subject to the aggregate investment limitations set forth in this chapter. Source: SL 1966, ch 111, ch 6, 2 (3); SL 1997, ch 294, 1.
58-27-30. Collateral loans--Pledge of securities--Restricted amount.An insurer may lend and thereby invest its funds upon the pledge of securities eligible for investment under this chapter. As of the date made, no such loan shall exceed in amount seventy-five percent of the market value of such collateral pledged. The amount so loaned shall be included pro rata in determining the maximum percentage of funds permitted under this chapter to be invested in the respective categories of securities so pledged. Source: SL 1966, ch 111, ch 6, 20.
58-27-31. Policy loans by life insurer--Maximum amount.A life insurer may lend to its policyholder upon pledge of the policy as collateral security, any sum not exceeding the cash surrender value of the policy; or may lend against pledge or assignment of any of its supplementary contracts or other contracts or obligations, so long as the loan is adequately secured by such pledge or assignment. Source: SL 1966, ch 111, ch 6, 19.
58-27-32. Real estate mortgages and deeds of trust.An insurer may invest any of its funds in bonds, notes, or other evidences of indebtedness which are secured by first mortgages or deeds of trust on improved unencumbered real property located in the United States. Source: SL 1966, ch 111, ch 6, 24 (1).
58-27-33. Improved real property defined.For the purposes of 58-27-32, "improved real property" shall constitute only farm lands used for tillage, crop or pasture, and real estate on which permanent improvements, or improvements under construction or in process of construction, suitable for residence, institutional, commercial, or industrial use, are situated. Source: SL 1966, ch 111, ch 6, 27.
58-27-34. Interests and restrictions not constituting encumbrances upon improved real property.Real property shall not be deemed to be encumbered within the meaning of 58-27-32 by reason of the existence of instruments reserving mineral, oil, timber, or similar rights, rights-of-way, sewer rights, rights in walls, nor by reason of any liens for taxes or assessments not yet due, or on account of liens not delinquent for community recreational facilities, or for the maintenance of community facilities, nor by reason of building restrictions or other restrictive covenants common to the community in which the property is located, nor by liens for service and maintenance of water rights where not delinquent, nor when such real property is subject to lease under which rents or profits are reserved to the owner if in any event the security for the loan or investment is a first lien upon the real property. Source: SL 1966, ch 111, ch 6, 28 (1).
58-27-36. Bonds or notes secured by mortgage or trust deed guaranteed by federal housing administration.An insurer may invest any of its funds in bonds or notes secured by mortgage or trust deed guaranteed or insured by the federal housing administration under the terms of an act of Congress of the United States of June 27, 1934, entitled the "National Housing Act," as amended. Source: SL 1966, ch 111, ch 6, 24 (4).
58-27-37. Bonds or notes secured by mortgage or trust deed guaranteed by administrator of veterans' affairs.An insurer may invest any of its funds in bonds or notes secured by mortgage or trust deed guaranteed or insured as to principal in whole or in part by the administrator of veterans' affairs pursuant to the provisions of title III of an act of Congress of the United States of June 22, 1944, entitled the "Servicemen's Readjustment Act of 1944," as amended. Source: SL 1966, ch 111, ch 6, 24 (5).
58-27-38. Equity of seller of real property in contract for deed--Maximum amount of investment.An insurer may invest any of its funds in the equity of the seller of real property in a contract for deed, covering the entire balance due on a bona fide sale of such property, in amount not to exceed ten thousand dollars or the amount permissible under 58-27-52 to 58-27-60, inclusive, whichever is greater, in any one such contract for deed; nor in any amount in excess of the following percentages of the actual sale price or fair value of the property, whichever is the smaller:(1)If a dwelling primarily designed for single-family occupancy and occupied by the purchaser under such contract, seventy-five percent.(2)In all other cases, seventy-five percent. Source: SL 1966, ch 111, ch 6, 24 (2).
58-27-39. Evidences of debt secured by mortgage or trust deed upon leasehold estates--Eligibility for investment.An insurer may invest any of its funds in evidences of debt secured by first mortgages or deeds of trust upon leasehold estates, running for a term of not less than fifteen years beyond the maturity of the loan as made or as extended, in improved real property, otherwise unencumbered, and if the mortgagee is entitled to be subrogated to all the rights under the leasehold. Source: SL 1966, ch 111, ch 6, 24 (6).
58-27-4. Prior legal investment deemed eligible.Any particular investment held by an insurer on July 1, 1997, and which was a legal investment at the time it was made, and which the insurer was legally entitled to possess immediately prior to July 1, 1997 shall be deemed to be an eligible investment. Source: SL 1966, ch 111, ch 6, 2 (2); SL 1997, ch 294, 2.
58-27-40. Purchase money mortgage or other securities received by insurer upon sale or exchange of real property.An insurer may invest any of its funds in purchase money mortgages or like securities received by it upon the sale or exchange of real property acquired pursuant to 58-27-50. Source: SL 1966, ch 111, ch 6, 24 (3).
58-27-41. Maximum loan on security of real property--Misdemeanor.An insurer shall not make or acquire a loan or loans upon the security of any one parcel of real property in aggregate amount in excess of ten thousand dollars or more than the amount permissible under 58-27-53, whichever is the greater. Violation of this section is a Class 2 misdemeanor. Source: SL 1966, ch 111, ch 6, 26 (2); SL 1978, ch 359, 2.
58-27-42. Real property mortgage loan limited by property value--Loan on leasehold--Additional investment in other assets.No mortgage loan or investment in a mortgage loan upon any one parcel of real property may exceed in amount at the time of acquisition:(1)Seventy-five percent of the fair value of the property if the property is a dwelling house primarily intended for occupancy by one family and the loan is required to be amortized within not more than thirty years by payment of installments on the loan at regular intervals not less frequent than annually; or(2)Seventy-five percent of the fair value of the property in all other cases. However, the percentage may be up to one hundred percent if the loan is made to a corporation which qualifies under subdivision 58-27-17(2) for investment in its bonds, notes, or other evidences of indebtedness, or if the borrower assigns to the lender a noncancellable lease or leases on the real estate providing rentals payable to the borrower in amount sufficient to repay the loan with interest in the manner specified by the note or notes evidencing the loan and executed as lessee or lessees by a corporation or corporations, which qualified under subdivision 58-27-17(2) for investment in its or their bonds, notes, or other evidences of indebtedness and in each case the obligations of the borrower or of the lessee or lessees shall be rated in the three highest grades by any one of the recognized rating agencies or whose securities, if publicly issued, would qualify for a rating. The director shall define "noncancellable lease" and "recognized rating agencies" by regulation. No mortgage loan upon a leasehold may be made or acquired pursuant to this subdivision unless the terms of the mortgage loan shall provide for amortization payments to be made by the borrower on the principal thereof at least once in each year in amount sufficient to completely amortize the loan within four-fifths of the term of the leasehold which is unexpired at the time the loan is made, but in no event exceeding thirty years.(3)An additional ten percent of the fair value of the property in excess of the limitation imposed by subdivisions (1) and (2) of this section, but not to exceed one hundred percent in all, if the excess is treated as an investment under 58-27-51 and within the limitations imposed by the section.An insurer's investments authorized under this section may not exceed twenty five percent of its admitted assets. Source: SL 1966, ch 111, ch 6, 25 (1); SL 1967, ch 130; SL 1972, ch 265; SL 1992, ch 350, 20; SL 1995, ch 285, 1.
58-27-43. Deduction from loan of amount guaranteed by administrator of veterans' affairs.The extent to which a mortgage loan made under 58-27-36 or 58-27-37 is guaranteed by the administrator of veterans' affairs may be deducted before application of the limitations contained in 58-27-42. The provisions of 58-27-42 shall not apply to the bonds or notes described in 58-27-36. Source: SL 1966, ch 111, ch 6, 25 (2).
58-27-44. Appraisal to determine market value of property.The fair value of property shall be determined by appraisal by a competent appraiser at the time of the making or acquisition of a mortgage loan or investing in a contract for the deed thereon; except, that as to bonds or notes secured by mortgage or trust deed guaranteed or insured by the federal housing administration, or guaranteed or insured as to principal in full or in part by the administrator of veterans' affairs, or guaranteed or insured by the farmers home administration, the valuation made by such administration or administrator shall be deemed to have been made by a competent appraiser for the purposes of this section. Source: SL 1966, ch 111, ch 6, 26 (1).
58-27-45. Loan on or investment in real estate mortgage on security of chattel mortgage--Limited amount.In connection with a mortgage loan on the security of real estate designed and used primarily for residential purposes only, which mortgage loan was acquired pursuant to 58-27-32 to 58-27-40, inclusive, an insurer may lend or invest an amount not exceeding twenty percent of the amount loaned on or invested in such real estate mortgage on the security of a chattel mortgage to be amortized by regular periodic payments within a term of not more than five years, and representing a first and prior lien, except for taxes not then delinquent, on personal property constituting durable equipment owned by the mortgagor and kept and used in the mortgaged premises. Source: SL 1966, ch 111, ch 6, 29 (1).
58-27-46."Durable equipment" defined.For the purposes of 58-27-45, the term "durable equipment" shall include only mechanical refrigerators, air conditioning equipment, mechanical laundering machines, heating and cooking stoves and ranges, and, in addition, in the case of apartment houses, motels and hotels, room furniture and furnishings. Source: SL 1966, ch 111, ch 6, 29 (2).
58-27-47. Acquisition of chattel mortgage--Separate appraisal of included items to determine fair market value--Maximum amount of loan.Prior to the acquisition of a chattel mortgage under 58-27-45, items of property to be included therein shall be separately appraised by a qualified appraiser and the fair market value thereof determined. No such chattel mortgage loan shall exceed in amount the same ratio of loan to the value of the property as is applicable to the companion loan on the real property. Source: SL 1966, ch 111, ch 6, 29 (3).
58-27-48. Liens on personal property as additional security permitted.Sections 58-27-45 to 58-27-47, inclusive, shall not prohibit an insurer from taking liens on personal property as additional security for any investment otherwise eligible under this chapter. Source: SL 1966, ch 111, ch 6, 29 (4).
58-27-49. Sale of mortgage loans to federal national mortgage association.Notwithstanding any other provision of law, any institution, including an insurance company or other insuring organization, organized under the laws of this state, which has as one of its principal purposes the making or purchasing of loans secured by real estate mortgages, is authorized to sell such mortgage loans to the federal National Mortgage Association, a corporation chartered by an act of Congress, or any successor thereof, and in connection therewith to make payments of any capital contributions, required pursuant to law, in the nature of subscriptions for stock of the federal National Mortgage Association or any successor thereof, to receive stock evidencing such capital contributions, and to hold or dispose of such stock. Source: SL 1955, ch 231; SDC Supp 1960, 39.0309.
58-27-5. Acquisition of ineligible securities or property--Disposition.No provision of this chapter shall prohibit the acquisition by an insurer of other or additional securities or property if received as a dividend or as a lawful distribution of assets, or under a lawful and bona fide agreement of bulk reinsurance, merger, or consolidation. Any investment so acquired which is not otherwise eligible under this chapter shall be disposed of pursuant to 58-27-73 and 58-27-74 if personal property or securities, or pursuant to 58-27-70 to 58-27-72, inclusive, if real property. Source: SL 1966, ch 111, ch 6, 3 (3).
58-27-50. Restrictions on purposes and amount of real estate investments.An insurer may invest in real estate only if used for the purposes or acquired in the manners and within the limits as follows:(1)The land and the building thereon in which it has its principal office and such other real estate including regional home offices as shall be requisite for its convenient accommodation in the transaction of its business. Except with the consent of the director of the Division of Insurance, all such investments may not aggregate more than fifteen percent of the insurer's admitted assets;(2)Real estate acquired in satisfaction of loans, mortgages, liens, judgments, decrees, or debts previously owing to the insurer in the course of its business;(3)Real estate acquired in part payment of the consideration on the sale of other real estate owned by it, if such transaction does not increase the insurer's investment in real estate;(4)Real estate acquired by gift or devise, or through merger, consolidation, or bulk reinsurance of another insurer under this title;(5)The seller's interest in real property subject to an agreement of purchase or sale, but the sum invested in any such parcel of real estate may not exceed three-fourths of the market value of such parcel;(6)Real estate, or any interest therein acquired or held by purchase, lease, or otherwise, other than real estate to be used primarily for agricultural, ranch, mining, development of oil or mineral resources, recreational, amusement, or club purposes, acquired as an investment for the production of income, or acquired to be improved or developed for investment purposes pursuant to an existing program therefor. The insurer may hold, improve, develop, maintain, manage, lease, sell, and convey real estate acquired by it under this section. No insurer may have at any one time invested in real estate under this subdivision an amount exceeding fifteen percent of its admitted assets, nor in any single parcel of real estate under this subdivision, an amount in excess of five percent of its admitted assets; or(7)Additional real estate and equipment incident to real estate, if necessary or convenient for the purpose of enhancing the sale or other value of real estate previously acquired or held by the insurer under subdivision (2), (3), (4), or (6). Such real estate and equipment shall be included, together with the real estate for the enhancement of which it was acquired, for the purpose of applicable investment limits, and shall be subject to disposal at the same time and under the same conditions as applying to such enhanced real estate under 58-27-70 to 58-27-72, inclusive.Except with the director's consent, all real estate owned by the insurer under this section, except a seller's interest specified in subdivision (5) may not at any one time exceed twenty percent of the insurer's admitted assets. Source: SL 1966, ch 111, ch 6, 30; SL 1983, ch 376, 4; SL 1997, ch 294, 9.
58-27-51.1. Additional investment authority--Life and health insurers.In addition to the authority provided under 58-27-51, an insurer authorized to write life or health insurance, or both, may invest a percentage of the amount by which the insurer's total adjusted capital equals or exceeds two hundred percent of its company action level risk-based capital in investments of any kind, in the discretion of the insurer, without regard to any condition of, restriction in, or exclusion prescribed in chapter 58-27, and regardless of whether the same or a similar type of investment has been included in, or omitted from, any such section, subject to an aggregate limitation equal to the greatest of:(1)Fifty percent of the excess of total adjusted capital over the risk-based capital threshold if the insurer has total adjusted capital that equals or exceeds two hundred percent of its company action level risk-based capital;(2)Seventy-five percent of the excess of total adjusted capital over the risk-based capital threshold if the insurer has total adjusted capital that equals or exceeds two hundred twenty-five percent of its company action level risk-based capital; or(3)One hundred percent of the excess of total adjusted capital over the risk-based capital threshold if the insurer has total adjusted capital that equals or exceeds two hundred fifty percent of its company action level risk-based capital.For the purpose of this section, risk-based capital threshold means two hundred percent of an insurer's company action level risk-based capital. The director shall promulgate rules pursuant to chapter 1-26 to define company action level risk-based capital and total adjusted capital. Source: SL 1997, ch 294, 11.
58-27-51.2. Additional investment authority--Property and casualty insurers.In addition to the authority provided under 58-27-51, an insurer authorized to write property and casualty insurance may invest a percentage of the amount by which the insurer's total adjusted capital equals or exceeds two hundred percent of its company action level risk-based capital in investments of any kind, in the discretion of the insurer, without regard to any condition of, restriction in, or exclusion prescribed in chapter 58-27, and regardless of whether the same or a similar type of investment has been included in, or omitted from, any such section, subject to an aggregate limitation equal to the greatest of:(1)Fifty percent of the excess of total adjusted capital over the risk-based capital threshold if the insurer has total adjusted capital that equals or exceeds two hundred twenty five percent of its company action level risk-based capital;(2)Seventy-five percent of the excess of total adjusted capital over the risk-based capital threshold if the insurer has total adjusted capital that equals or exceeds two hundred fifty percent of its company action level risk-based capital; or(3)One hundred percent of the excess of total adjusted capital over the risk-based capital threshold if the insurer has total adjusted capital that equals or exceeds two hundred seventy-five percent of its company action level risk-based capital.For the purpose of this section, risk-based capital threshold means two hundred percent of an insurer's company action level risk-based capital. The director shall promulgate rules pursuant to chapter 1-26 to define company action level risk-based capital and total adjusted capital. Source: SL 1997, ch 294, 12.
58-27-51.3. Additional investment authority--Valuation of investments.Any investment purchased and held pursuant to 58-27-51.1 or 58-27-51.2 shall be valued in accordance with chapters 58-26 and 58-27 or in accordance with the methods established by the National Association of Insurance Commissioners. If valuation methods are not prescribed by chapter 58-26 or 58-27, or the National Association of Insurance Commissioners has not established a valuation method for any investment, the investment must be valued at the lower of cost or market. Source: SL 1997, ch 294, 13.
58-27-51. Maximum investments in other assets--Exceptions.Notwithstanding the aggregate limitations set forth in chapter 58-27, an insurer may exceed such limitations if it does not invest, in the aggregate, an amount in excess of fifty percent of its capital and surplus in excess of four hundred thousand dollars, if such investment otherwise complies with chapter 58-27. The provisions of this section do not apply to the exceptions set forth in 58-27-53 or 58-27-57. Source: SL 1966, ch 111, ch 6, 23; SL 1974, ch 317; SL 1983, ch 376, 5; SL 1985, ch 390; SL 1997, ch 294, 10; SL 2000, ch 245, 2; SL 2001, ch 284, 2.
58-27-52. Limits on categories of investments.Except as otherwise provided in this chapter, an insurer shall invest in or hold as admitted assets categories of investments only within applicable limits as prescribed by 58-27-53 to 58-27-60, inclusive. Source: SL 1966, ch 111, ch 6, 5; SL 1997, ch 294, 14.
58-27-53. Maximum amount of investments or loans with one person, institution, corporation, or municipal corporation--Exceptions.An insurer may not, except with the consent of the director, have any combination of investments in or loans upon the security of the obligations, property, or securities of any one person, institution, corporation, or municipal corporation aggregating an amount exceeding five percent of the insurer's assets. This restriction does not apply to the following:(1)Bonds, notes, debentures, certificates, participations, or interest or other obligations issued by, or the payment of which is guaranteed or insured by, the United States Government or any agency or instrumentality or subdivision thereof;(2)Obligations of the Student Loan Marketing Association, the Federal National Mortgage Association, or the Federal Home Loan Mortgage Corporation;(3)Bonds, notes, debentures, or other obligations issued by, or the payment of which is guaranteed by, the State of South Dakota or any state as defined in subdivision 58-1-2(17); or(4)Policy loans made under 58-27-31 or investments made pursuant to either 58-27-25 or 58-27-26, or both. Source: SL 1966, ch 111, ch 6, 5 (1); SL 1983, ch 376, 6; SL 1993, ch 364, 1; SL 1997, ch 294, 15; SL 2000, ch 245, 1; SL 2017, ch 214, 1.
58-27-54. Maximum amount of investment in voting stock of corporation--Exceptions.An insurer may not invest in or hold at any one time more than ten percent of the outstanding voting stock of any corporation, except with respect to voting rights of preference stock during default and of dividends; this section does not apply to stock of a majority owned subsidiary of the insurer or to controlling stock of an insurer acquired under 58-27-24 to 58-27-26, inclusive. Source: SL 1966, ch 111, ch 6, 5 (2); SL 1983, ch 376, 7.
58-27-55. Maintenance of invested funds--Minimum amount--Guaranteed securities--Real property.An insurer, other than title insurer, shall invest and maintain invested funds not less in amount than the minimum paid-in capital stock required under this title of a domestic stock insurer transacting like kinds of insurance, only in cash and the securities provided for under 58-27-9 to 58-27-15, inclusive, and under 58-27-32 to 58-27-40, inclusive. Source: SL 1966, ch 111, ch 6, 5 (3).
58-27-56. Minimum investments by life insurer.A life insurer shall also invest and keep invested its funds in amount not less than the reserves under its life insurance policies and annuity contracts in force, in cash or investments provided for under this chapter. Source: SL 1966, ch 111, ch 6, 5 (4).
58-27-57. Maximum amount of investment in certain classes of securities.Except with the director's consent, no insurer may have invested at any one time more than forty percent of its assets in the class of securities described in subdivisions 58-27-17(1), (2), (3), and (4) and in 58-27-28, exclusive of obligations of the Student Loan Marketing Association, public utilities and securities described in 58-27-103 and 58-27-104, and obligations guaranteed or insured by the United States government or any instrumentality or subdivision thereof or any state as defined in subdivision 58-1-2(17). For purposes of determining compliance with this section, the investments under subdivision 58-27-17(4) are limited to those mutual funds that are investing at least ninety percent in bonds defined in subdivisions 58-27-17(1), (2), and (3) and 58-27-9 to 58-27-13, inclusive. Source: SL 1966, ch 111, ch 6, 5 (5); SL 1992, ch 350, 21; SL 1993, ch 364, 5; SL 1997, ch 294, 16; SL 2001, ch 284, 1; SL 2017, ch 214, 2.
58-27-58. Limitations on investments in corporate stock--Exceptions.An insurer may invest and have invested at any one time in aggregate amount not more than twenty percent of its assets in all investments under 58-27-23 and 58-27-24 and not more than twenty-five percent of its assets in all investments under subdivisions 58-27-17(4) and (5) and 58-27-23 and 58-27-24. Determination of the amount which an insurer has invested for the purposes of this section shall be based on the cost of such investments to the insurer. This section does not apply to stock of a controlled or subsidiary insurance corporation or other corporation under 58-27-25 and 58-27-26. This section does not apply to 58-27-101. For purposes of determining compliance with this section, the investments under subdivision 58-27-17(4) are limited to those mutual funds investing less than ninety percent in bonds defined in subdivisions 58-27-17(1), (2), and (3) and 58-27-9 to 58-27-13, inclusive. Source: SL 1966, ch 111, ch 6, 5 (6); SL 1983, ch 376, 8; SL 1992, ch 350, 22; SL 1997, ch 294, 17.
58-27-6. Time of investment limitation based on amount of insurer's admitted assets, risk based capital, or capital and surplus.Unless otherwise specified, any investment limitation based upon the amount of the insurer's admitted assets, risk based capital, or capital and surplus, shall relate to such admitted assets, risk based capital, or capital and surplus as shown by the insurer's annual statement as of the December thirty-first next preceding date of acquisition of the investment by the insurer, or as shown by a current financial statement filed with the director. For purposes of computing any limitation based upon admitted assets, the insurer shall deduct the following to the extent included in the insurer's admitted assets, from the amount of its admitted assets:(1)Collateral received in a reverse repurchase transaction or a securities lending transaction;(2)Cash received in a dollar roll transaction; and(3)The assets in any separate accounts maintained by the insurer. Source: SL 1966, ch 111, ch 6, 2 (4); SL 1997, ch 294, 3.
58-27-60. Limits of investments in real estate--Law governing.Limits as to investments in the category of real estate shall be as provided in 58-27-50. Source: SL 1966, ch 111, ch 6, 5 (8).
58-27-61. Investment or loans on own capital stock.In addition to investments excluded pursuant to other provisions of this title, no insurer may invest in or lend its funds upon the security of issued shares of its own capital stock except out of unborrowed surplus, or except in connection with a pension plan approved by the director for the benefit of the insurer's officers, employees, representatives, or insurance producers. No such stock may, however, constitute an asset of the insurer in any determination of its financial condition. Source: SL 1966, ch 111, ch 6, 34 (1) (a); SL 2001, ch 286, 135.
58-27-62. Loan secured by own stock as collateral.In addition to investments excluded pursuant to other provisions of this title, an insurer shall not invest in or lend its funds upon the security of any note or other evidence of indebtedness secured by its own stock as collateral or other than as authorized by 58-27-31, 58-27-36, and 58-27-37, either directly or indirectly, to any of its officers, directors, or affiliates, except that it may make loans of the type described in 58-27-32 to 58-27-40, inclusive, to corporate affiliates, provided that no such loan or loans to an affiliate or affiliates, so made or acquired, shall in the aggregate exceed forty percent of the surplus of the insurer, and no single loan shall exceed twenty percent of such surplus. The real estate involved in any such loan to an affiliate shall be worth at least double the amount loaned thereon, as justified by the appraisal report of an independent, competent, and recognized appraiser or appraisers. The investments authorized by this section may be made notwithstanding the provisions of 47-1A-830 to 47-1A-833.1, inclusive, to the contrary and without liability on the part of the officers and directors specified therein. Source: SL 1966, ch 111, ch 6, 34 (1) (c); SL 2005, ch 202, 25. 
58-27-64. Affiliate defined.The term "affiliate" when used in 58-27-62 to 58-27-66, inclusive, shall mean any person, firm, trust, corporation, or other business entity, which by stock ownership or by any contractual arrangement whatsoever, has the power, either directly or indirectly, to control twenty-five percent or more of the voting shares or voting rights of such insurer or any such organization which is similarly controlled by any such insurer to such extent and all other affiliates of any such affiliate. Source: SL 1966, ch 111, ch 6, 34 (1) (e).
58-27-65. Finding of director that security designed to evade chapter--Investment or loan prohibited.In addition to investments excluded pursuant to other provisions of this title, an insurer shall not invest in or lend its funds upon the security of any investment or security which is found by the director to be designed to evade any prohibition of this chapter. Source: SL 1966, ch 111, ch 6, 34 (1) (b).
58-27-66. Pension or profit-sharing trust agreement not prohibited.The provisions of 58-27-62 and 58-27-65 shall not be construed to prohibit the making of pension or profit-sharing trust agreements involving the employees of affiliates or consolidations, mergers, or other transactions otherwise authorized by this title. Source: SL 1966, ch 111, ch 6, 34 (1) (f).
58-27-67. Underwriting of securities or property prohibited.No insurer shall underwrite or participate in the underwriting of an offering of securities or property by any other person. Source: SL 1966, ch 111, ch 6, 34 (2).
58-27-68. Foreign insurer--Permitted investment portfolio--Domicile of alien insurer.The investment portfolio of a foreign insurer shall be as permitted by the laws of its domicile but shall be of a quality substantially as high as that required under this chapter for similar funds of like domestic insurers. For the purposes of this provision, the domicile of an alien insurer, other than a life insurer formed under the laws of Canada, shall be deemed to be that state in which it maintains its principal deposit. Source: SL 1966, ch 111, ch 6, 35.
58-27-69. Authorization of investment or loan by board or committee of insurer.An insurer may not make any investment or loan, other than policy loans or annuity contract loans of a life insurer, unless the same is authorized, approved, or ratified by the insurer's board of directors or by a committee authorized by such board and charged with the supervision or making of such investment or loan. The minutes of any such committee shall be recorded and regular reports of such committee shall be submitted to the board of directors. Source: SL 1966, ch 111, ch 6, 4; SL 1997, ch 294, 19.
58-27-7. Investments required to produce income--Exemptions--Rules.No security or investment, other than real and personal property acquired under 58-27-50; common shares of solvent institutions acquired under 58-27-23, 58-27-25, 58-27-26, or 58-27-51; investments acquired under 58-27-103, 58-27-104, or 58-27-111; and mutual funds acquired under subdivision 58-27-17(4) that invest less than ninety percent in bonds, is eligible for acquisition unless it is interest-bearing or interest-accruing or dividend- or income-paying, and the insurer is entitled to receive for its exclusive account and benefit the interest or income accruing thereon. The director of the Division of Insurance may promulgate rules regarding the acquisition of over-the-counter and exchange listed options and financial futures, including the exemption of these securities from the operation of this section. Source: SL 1966, ch 111, ch 6, 3 (1); SL 1972, ch 264; SL 1983, ch 376, 2; SL 1997, ch 294, 4.
58-27-70. Disposal of real estate unnecessary for transaction of insurance business--Time limit.Except as stated in 58-27-72, the insurer shall dispose of real estate acquired under subdivision 58-27-50(1) within five years after it has ceased to be necessary for the convenient accommodation of the insurer in the transaction of its business. Source: SL 1966, ch 111, ch 6, 31 (1).
58-27-71. Disposal of real estate acquired in satisfaction of debt, as part payment of consideration on sale of real estate, as gift or devise, or through merger, consolidation, or bulk reinsurance--Time limit.Except as stated in 58-27-72, the insurer shall dispose of real estate acquired under subdivisions 58-27-50(2), (3), and (4) within five years after the date of acquisition. The insurer may agree to sell such real estate by contract for deed upon the best terms obtainable. Source: SL 1966, ch 111, ch 6, 31 (2).
58-27-72. Extension of time for disposal of real estate--Election to hold as investment for income purposes, acquisition cost.Upon proof satisfactory to him that the interests of the insurer will suffer materially by the forced sale thereof, the director may by order grant a reasonable extension of the period, as specified in such order, within which the insurer shall dispose of any particular parcel of such real estate; unless the insurer elects to hold such real estate as an investment for income purposes under subdivision 58-27-50(6), in which event thereafter such real estate shall be deemed to have been acquired at a cost equal to its book value at the time of such election and to be held under, and subject to, the provisions of subdivision 58-27-50(6). Source: SL 1966, ch 111, ch 6, 31 (3).
58-27-73. Immediate disposal of ineligible property or security unlawfully acquired.Any ineligible property or security unlawfully acquired by an insurer shall be disposed of forthwith, and for failure so to do within thirty days after order of the director requiring such disposal, the director may suspend or revoke the insurer's certificate of authority. Source: SL 1966, ch 111, ch 6, 32 (3).
58-27-74. Disposal of lawfully acquired ineligible property--Extension of time.Any personal property or securities lawfully acquired by an insurer which it could not otherwise have invested in or loaned its funds upon at the time of such acquisition, shall be disposed of by the insurer within one year from date of acquisition, unless within such period the security has attained the standard for eligibility. The director, upon application and proof that forced sale of any such property or security would be against the best interests of the insurer, may extend the disposal period for an additional reasonable time. Source: SL 1966, ch 111, ch 6, 32 (1).
58-27-75. Ineligible personal property or securities not allowable as assets of insurer.While any property or security described in 58-27-74 remains so ineligible it shall not be allowed as an asset of the insurer. Source: SL 1966, ch 111, ch 6, 32 (2).
58-27-76. Expiration of period for disposal of ineligible property or securities--Disallowance as admitted asset.Any real estate, personal property, or securities acquired and held by an insurer after expiration of the period for disposal thereof or any extension of such period granted by the director, as provided in 58-27-50 and 58-27-70 to 58-27-75, inclusive, shall not be allowed as an admitted asset of the insurer. Source: SL 1966, ch 111, ch 6, 33 (1).
58-27-77. Immediate disposal of ineligible investment unlawfully acquired.The insurer shall forthwith dispose of any ineligible investment unlawfully acquired by it, and the director may suspend or revoke the insurer's certificate of authority if the insurer fails to dispose of the investment within such reasonable time as the director may, by his order, specify. Source: SL 1966, ch 111, ch 6, 33 (2).
58-27-78. Nominee holding investments--Definitions.Terms used in 58-27-78 to 58-27-84, inclusive, mean:(1)"Clearing corporation," a corporation as defined in subdivision 57A-8-102(5);(2)"Custodian bank," any bank or trust company which is supervised or examined by a state or federal authority having supervision over banks and which may act as custodian for an insurer;(3)"Member bank," a national bank, state bank, or trust company which is a member of the United States Federal Reserve System;(4)"Securities lending transaction," a transaction in which securities are loaned by an insurer to an institution that is obligated to return equivalent or substantially similar securities to the insurer, either within a specified period of time or upon demand;(5)"Reverse repurchase transaction," a transaction in which an insurer sells securities to an institution and is obligated to repurchase equivalent or substantially similar securities from the institution at a specified price, either within a specified period of time or upon demand;(6)"Repurchase transaction," a transaction in which an insurer purchases securities from an institution that is obligated to repurchase equivalent or substantially similar securities from the insurer at a specified price, either within a specified period of time or upon demand;(7)"Dollar roll transaction," two simultaneous transactions with different settlement dates no more than ninety-six days apart, so that in the transaction with the earlier settlement date, an insurer sells to an institution, and in the other transaction, the insurer is obligated to purchase from the same institution, substantially similar securities of the following type:(a)Securities issued, assumed, or guaranteed by the Government National Mortgage Association, the Federal National Mortgage Association, or the Federal Home Loan Mortgage Corporation, or their respective successors;(b)Securities referred to in Section 106 of Title I of the Secondary Mortgage Market Enhancement Act of 1984 (15 U.S.C. 77r-1), as adopted by the director pursuant to rules promulgated pursuant to chapter 1-26;(c)Any other securities approved by the director;(8)"Substantially similar securities," securities of the same issuer having similar features that meet all criteria for substantially similar or equivalent securities specified in the National Association of Insurance Commissioners Accounting Practices and Procedures Manual, as adopted by the director pursuant to rules promulgated pursuant to chapter 1-26; and(9)"Securities," any investment of the type authorized or permitted under chapter 58-27. Source: SL 1983, ch 377, 1; SL 1997, ch 294, 20; SL 2017, ch 214, 3.
58-27-79. Name in which investments held.A company's investments shall be held in its own name or the name of its nominee. However, this provision does not apply under the circumstances outlined in 58-27-80 to 58-27-83, inclusive. Source: SL 1983, ch 377, 2.
58-27-8. Security or investment ineligible for purchase or exchange at more than market value.No security or investment shall be eligible for purchase or exchange at a price above its market value. Source: SL 1966, ch 111, ch 6, 3 (2).
58-27-80. Holding in name of clearing corporation, custodian bank or nominee--Conditions.Investments may be held in the name of a clearing corporation or of a custodian bank or in the name of the nominee of either under the following conditions:(1)The clearing corporation, custodian bank, or nominee is legally authorized to hold the particular investment for the account of others;(2)If the investment is evidenced by a certificate and held in the name of a custodian bank or the nominee of a custodian bank, a written agreement shall provide that certificates so deposited shall at all times be kept separate and apart from other deposits with the depository so that at all times they may be identified as belonging solely to the company making the deposit; and(3)If a clearing corporation is to act as depository, the investment may be merged or held in bulk in the clearing corporation's or its nominee's name with other investments deposited with the clearing corporation by any other person if a written agreement provides that adequate evidence of the deposit is to be obtained and retained by the company or a custodian bank. Source: SL 1983, ch 377, 3.
58-27-81. Securities lending, repurchase, reverse repurchase and dollar roll transactions--Agreement required.An insurer may enter into securities lending, repurchase, reverse repurchase, and dollar roll transactions subject to the following requirements:(1)A written plan or investment policy that specifies guidelines and objectives relating to such transactions shall be adopted by the insurer's board of directors or a committee authorized and charged by such board with the supervision or making of investments or loans;(2)All transactions entered into pursuant to this section, other than dollar roll transactions, shall be subject to a written agreement, including a master agreement for a series of transactions or an agreement with an agent acting on behalf of the insurer, which provides that:(a)Transactions authorized in this section shall be fully collateralized by cash or eligible securities as permitted or authorized under chapter 58-27 excluding any investments acquired under 58-27-51.1 or 58-27-51.2;(b)The collateral shall be marked to market each business day and adjusted as needed to comply with subsection (a) of this subdivision;(c)For purposes of this agreement, market value shall include accrued interest; and(d)The insurer may retain the collateral or use the collateral to purchase investments equivalent to the loaned securities if the borrower defaults under the terms of the agreement and the borrower remains liable for any losses and expenses incurred by the insurer due to default that are not covered by the collateral;(3)Any transaction entered into pursuant to this section may be terminated at a specified time or upon the earlier demand of the insurer;(4)Any cash received by an insurer in a transaction under this section shall be invested in accordance with chapter 58-27 and in a manner that recognizes the liquidity needs of the transaction or used by the insurer for its general corporate purposes;(5)An insurer is limited to no more than five percent of its admitted assets being subject to securities lending, repurchase, or reverse repurchase transactions outstanding with any one institution under this section;(6)No more than forty percent of an insurer's admitted assets in the aggregate may be subject to securities lending, repurchase, and reverse repurchase transactions.The director of the Division of Insurance may promulgate rules pursuant to chapter 1-26 to establish financial solvency standards, valuation standards, and reporting requirements for investments and transactions under this section. Source: SL 1983, ch 377, 4; SL 1997, ch 294, 21.
58-27-82. Participation in federal reserve book-entry system.A company may participate through a member bank in the federal reserve book-entry system and the records of the member bank shall at all times show that the investments are held for the company or for specific accounts of the company. Source: SL 1983, ch 377, 5.
58-27-83. Interest in pool of obligations--Fractional interest in an obligation--Requirements.An investment may consist of an individual interest in a pool of obligations or a fractional interest in a single obligation if the certificate of participation or interest or the confirmation of participation or interest in the investment is issued in the name of the company or the name of the custodian bank or the nominee of either and if the certificate or confirmation must, if held by a custodian bank, be kept separate and apart from the investments of others so that at all times the participation may be identified as belonging solely to the company making the investment. Source: SL 1983, ch 377, 6.
58-27-84. Evidence of investment required in absence of certificate.If an investment is not evidenced by a certificate, except as provided in 58-27-82, adequate evidence of the insurer's investment shall be obtained and retained by the insurer, a custodian bank, or clearing corporation. Adequate evidence, for purposes of this section, means a written receipt or other verification issued by the depository or issuer or a custodian bank which shows that the investment is held for the insurer, or if applicable under 58-27-111, limited partnership or joint venture documentation. Transfers of ownership of investments held as described in subdivision 58-27-80(3), 58-27-82 and 58-27-83 may be evidenced by bookkeeping entry on the books of the issuer of the investment or its transfer or recording agent or the clearing corporation without physical delivery of certificates, if any, evidencing the insurer's investment. Source: SL 1983, ch 377, 7; SL 1997, ch 294, 22.
58-27-85. Banking business authorized--Acquisition of banks--Regulation of such banking business.Any insurance company, directly or through subsidiaries, may engage in all facets of the banking business. Any such insurance company may acquire all or substantially all of the shares of an existing bank which is established under the laws of this state or any other state. Any such banking business is subject to the same laws and regulations and the application thereof by the Division of Banking as are applicable to the operation of banks which are unaffiliated with insurance companies. Source: SL 1983, ch 376, 10.
58-27-86. Approval of banking acquisition required--Considerations in determining--Conditions.Any acquisition under 58-27-85 is subject to approval by the Division of Insurance. In considering an application for approval, the division may consider whether, in the case of an insurance company, the economic advantages to the state in terms of employment and capital investment are adequate to permit approval of the application. Any approval granted to an insurance company or an insurance holding company by the division is subject to such conditions as the division deems necessary and to the division's continuing authority to ascertain the insurance company's compliance with the provisions of this section and the conditions of approval. Source: SL 1983, ch 376, 11.
58-27-87. Banking patronage as prerequisite to issuance of insurance policy prohibited.No insurance company as a prerequisite to the sale of an insurance policy may require the insured or those purchasing insurance on his behalf to do banking business with any insurance company or a subsidiary bank. Source: SL 1983, ch 376, 12.
58-27-88. Limitation on application of Secondary Mortgage Market Enhancement Act to certain investments.Any investments set forth in section 106 of the Secondary Mortgage Market Enhancement Act of 1984 (PL 98-440) shall be approved by the director. The director may limit the amount in each investment or disapprove the investment. Source: SL 1991, ch 403.
58-27-89. Definition of terms.Terms used in 58-27-89 to 58-27-102, inclusive, mean:(1)"Admitted assets," assets as shown by the insurer's annual statement as of the December thirty-first next preceding date of acquisition of the investment by the insurer, or as shown by a current financial statement filed with the director, computed in the same manner as admitted assets in chapter 58-26, and for purposes of computing any limitation based upon admitted assets, the insurer shall deduct from the amount of its admitted assets the amounts specified in subdivisions (1) to (3) of 58-27-6;(2)"Aggregate amount of medium to lower quality obligations," the aggregate statutory statement value thereof;(3)"Lower grade obligations," obligations and preferred shares which are rated four, five, or six by the Securities Valuation Office of the National Associations of Insurance Commissioners;(4)"Medium grade obligations," obligations and preferred shares which are rated three by the Securities Valuation Office of the National Association of Insurance Commissioners. Source: SL 1992, ch 350, 1; SL 1994, ch 384, 3; SL 1997, ch 294, 23.
58-27-9. Obligations of United States or Canada.An insurer may invest in bonds, notes, warrants, and other evidences of indebtedness which are direct obligations of the United States of America or of Canada or for which the full faith and credit of the United States of America or of Canada is pledged for the payment of principal and interest. Source: SL 1966, ch 111, ch 6, 6.
58-27-90. Limitations on acquiring medium or lower grade obligations.No domestic insurer may acquire, directly or indirectly, any medium or lower grade obligation of any institution if, after acquisition, the aggregate amount of all medium and lower grade obligations then held by the domestic insurer would exceed twenty percent of its admitted assets. Of that twenty percent, no more than ten percent may consist of obligations rated four, five, or six. Of the ten percent, not more than three percent may be a combination of obligations rated five and six. Obligations rated six may not exceed one percent. Attaining or exceeding the limit of any one category does not preclude an insurer from acquiring obligations in other categories subject to the specific and multi-category limits. An insurer may exceed the limit of any one category if the rating of an obligation changes after the purchase, but at no time may the insurer exceed the twenty percent limitation. Source: SL 1992, ch 350, 2.
58-27-91. Obligations contracted prior to July 1, 1992.A domestic insurer is not prohibited from acquiring an obligation if, before July 1, 1992, it was contractually committed to acquire and it would have been permitted to acquire but it shall notify the director of the acquisition and submit a copy of the contract. Source: SL 1992, ch 350, 3.
58-27-92. Multiple obligations in same institution.Notwithstanding the requirements of 58-27-89 and 58-27-90, a domestic insurer may acquire an obligation of an institution in which the insurer already has one or more obligations, if the obligation is acquired in order to protect an investment previously made in the obligations of the institution, provided that all acquired obligations may not exceed one-half of one percent of the insurer's admitted assets. Source: SL 1992, ch 350, 4.
58-27-93. Written plans for making medium or lower grade obligations--Contents of plan--Deadline.The board of directors of any domestic insurance company which acquires or invests in, directly or indirectly, medium or lower grade obligations of any institution, shall adopt a written plan for the making of those investments. The plan, in addition to guidelines with respect to the quality of the issues invested in, shall contain diversification standards including standards for issuer, industry, duration, liquidity, and geographic location. Within one year from July 1, 1992, the board shall have adopted a plan. Source: SL 1992, ch 350, 5.
58-27-94. Limit on amount invested in medium or lower grade obligations.No domestic insurer may invest more than an aggregate of one percent of its admitted assets in medium grade obligations issued, guaranteed, or insured by any one institution nor may it invest more than one-half of one percent of its admitted assets in lower grade obligations issued, guaranteed, or insured by any one institution. In no event, however, may a domestic insurer invest more than one percent of its admitted assets in any medium or lower grade obligations issued, guaranteed, or insured by any one institution. Source: SL 1992, ch 350, 6.
58-27-95. Restructuring of medium or lower grade obligation already held.A domestic insurer is not prohibited from acquiring an obligation as a result of a restructuring of a medium or lower grade obligation already held. Source: SL 1992, ch 350, 7.
58-27-96. Conflicting provisions.If any provision of this Title conflicts with the provisions of 58-27-89 to 58-27-102, inclusive, and has a lesser standard of investment, the provisions of 58-27-89 to 58-27-102, inclusive, shall prevail. Source: SL 1992, ch 350, 8.
58-27-97. Excess transactions.If an insurer exceeds any one category, the excess is nonadmitted and the director may require the company to increase capital and surplus to protect policyholders. The insurer's excess transaction is also subject to 58-27-74. Source: SL 1992, ch 350, 9.
58-27-98. Promulgation of rules.The director may promulgate rules, pursuant to chapter 1-26, for determining the quality and quantity of investments and assets. Source: SL 1992, ch 350, 10.
58-27-99. Application of 58-27-89 to 58-27-102.Sections 58-27-89 to 58-27-102, inclusive, applies to all persons doing insurance business notwithstanding any provision exempting them from other insurance laws except insurers licensed pursuant to chapter 58-35. Source: SL 1992, ch 350, 11.
58-28-13. Life insurers authorized to establish separate accounts--Allocations to provide insurance or annuities.A domestic life insurer, including for the purposes of this chapter all domestic fraternal beneficiary associations, societies or companies which operate on a legal reserve basis may establish one or more separate accounts, and may allocate thereto amounts, including without limitation proceeds applied under optional modes of settlement or under dividend options, to provide for life insurance or annuities, and benefits incidental thereto, payable in fixed or variable amounts or both, subject to 58-28-14 to 58-28-22, inclusive. Source: SL 1966, ch 111, ch 6, 36 (2); 36 (1) as amended by SL 1967, ch 131; SDCL, 58-28-1; SL 1971, ch 266, 1.
58-28-14. Approval required to maintain guaranteed benefits and funds in separate account.Except with the approval of the director and under such conditions as to investments and other matters as he may prescribe, which shall recognize the guaranteed nature of the benefits provided, reserves for:(1)Benefits guaranteed as to dollar amount and duration and(2)Funds guaranteed as to principal amount or stated rate of interest shall not be maintained in a separate account. Source: SL 1966, ch 111, ch 6, 36 (4); 36 (2) as amended by SL 1967, ch 131; SDCL, 58-28-2; SL 1969, ch 132; SL 1971, ch 266, 1 (3).
58-28-15. Securities in which investment authorized--Not considered in applying company's investment limitations.Except as may be provided with respect to reserves for guaranteed benefits and funds referred to in 58-28-14, amounts allocated to any separate account and accumulations thereon may be invested and reinvested:(1)In any class of investments which are authorized by chapter 58-27, except as provided in 58-27-51 or 58-27-51.1, and except that limitations on the amount of assets which may be invested in the various classes of investments imposed in chapter 58-27 does not apply;(2)In shares registered on a national securities exchange, although the same do not meet the dividend paying requirements of 58-27-23;(3)In the securities of an open-end investment company or companies registered under the Investment Company Act of 1940.The investments in such separate account or accounts may not be taken into account in applying the investment limitations otherwise applicable to the investments of the insurer. Source: SL 1966, ch 111, ch 6, 36 (4); 36 (2) as amended by SL 1967, ch 131; SDCL, 58-28-2; SL 1969, ch 132; SL 1971, ch 266, 1 (2); SL 1997, ch 294, 34.
58-28-16. Gains and losses from allocated assets credited or charged to separate account.The income, gains, and losses, realized or unrealized, from assets allocated to a separate account shall be credited to or charged against the account, without regard to other income, gains, or losses of the insurer. Source: SL 1966, ch 111, ch 6, 36 (3); SL 1967, ch 131; SDCL, 58-28-3; SL 1971, ch 266, 1 (1).
58-28-17. Ownership by insurer--Not a trustee.Amounts allocated to a separate account in the exercise of the power granted by this chapter shall be owned by the insurer, and the insurer shall not be, nor hold itself out to be, a trustee with respect to such amounts. Source: SL 1966, ch 111, ch 6, 36 (6); 36 (5) as amended by SL 1967, ch 131; SDCL, 58-28-5; SL 1971, ch 266, 1 (5).
58-28-18. Separate account not chargeable with liabilities from other business.If and to the extent so provided under the applicable contracts, that portion of the assets of any such separate account equal to the reserves and other contract liabilities with respect to such account shall not be chargeable with liabilities arising out of any other business the insurer may conduct. Source: SL 1966, ch 111, ch 6, 36 as added by SL 1969, ch 131; SDCL Supp, 58-28-6.1; SL 1971, ch 266, 1 (5).
58-28-19. Voting and other rights accorded to beneficiaries of accounts.To the extent such insurer deems it necessary to comply with any applicable federal or state laws, such insurer, with respect to any separate account, including without limitation any separate account which is a management investment company or a unit investment trust, may provide for persons having an interest therein appropriate voting and other rights and special procedures for the conduct of the business of such account, including without limitation special rights and procedures relating to investment policy, investment advisory services, selection of independent public accountants, and the selection of a committee, the members of which need not be otherwise affiliated with such insurer, to manage the business of such account. Source: SL 1966, ch 111, ch 6, 36 as added by SL 1969, ch 131; SDCL Supp, 58-28-6.4; SL 1971, ch 266, 1 (7).
58-28-20. Restrictions on transfers between accounts.No sale, exchange, or other transfer of assets may be made by an insurer between any of its separate accounts or between any other investment account and one or more of its separate accounts unless, in case of a transfer into a separate account, such transfer is made solely to establish the account or to support the operation of the contracts with respect to the separate account to which the transfer is made, and unless such transfer, whether into or from a separate account, is made:(1)By a transfer of cash; or(2)By a transfer of securities having a readily determinable market value, provided that such transfer of securities is approved by the director.The director may approve other transfers among such accounts if, in his opinion, such transfers would not be inequitable. Source: SL 1966, ch 111, ch 6, 36 (8); 36 (6) as amended by SL 1967, ch 131; SDCL, 58-28-6; SL 1971, ch 266, 1 (6).
58-28-21. Valuation of assets allocated to account.Unless otherwise approved by the director, assets allocated to a separate account shall be valued at their market value on the date of valuation, or if there is no readily available market, then as provided under the terms of the contract or the rules or other written agreement applicable to such separate account. Source: SL 1966, ch 111, ch 6, 36 (10); 36 (8) as amended by SL 1967, ch 131; SDCL, 58-28-8; SL 1971, ch 266, 1 (4).
58-28-22. Valuation of portion of assets equal to reserve liability.Notwithstanding 58-28-21, unless otherwise approved by the director, the portion, if any, of the assets of such separate account equal to the insurer's reserve liability with regard to the guaranteed benefits and funds referred to in 58-28-14 shall be valued in accordance with the rules otherwise applicable to the insurer's assets. Source: SL 1971, ch 266, 1 (4).
58-28-23. Contract to state procedure for determining amount of variable benefits.Any contract providing benefits payable in variable amounts delivered or issued for delivery in this state shall contain a statement of the essential features of the procedures to be followed by the insurer in determining the dollar amount of such variable benefits. Source: SL 1966, ch 111, ch 6, 36 (4) as added by SL 1967, ch 131; SDCL, 58-28-4; SL 1971, ch 266, 2.
58-28-24.1. Right of annuitant to cancel--Refund by insurer.Every individual variable annuity contract issued for delivery in South Dakota on or after July 1, 1978, shall contain a provision, or a notice attached to the contract, to the effect that during a period of ten days from the date the contract is delivered to the contract owner, it may be surrendered to the insurer together with a written request for cancellation of the contract and in such event, the insurer will pay to the contract owner an amount equal to the sum of:(1)The difference between the premiums paid and the amounts, if any, allocated to any separate accounts under the contract; and(2)The cash value of the contract on the date of surrender attributable to the amounts so allocated. Source: SL 1978, ch 361, 1.
58-28-24.2. Issuance of policies by insurance company or fraternal benefit society--Delivery receipts--Certificates of mailing--Term of retention.An insurance company or fraternal benefit society shall issue policies in this state for which an examination period is required in accordance with one of the following methods:(1)If the policy is delivered by an insurance producer, a receipt shall be signed by the policyowner acknowledging delivery of the policy. The receipt shall include the policy number and the date of the delivery;(2)If the policy is delivered by mail, it shall be sent by registered or certified mail, return receipt requested, or a certificate of mailing shall be obtained showing the date the policy was mailed to the policyowner. For policy issuances verified by a certificate of mailing, it is presumed that the policy is received by the policyowner ten days from the date of mailing.The receipts and the certificates of mailing described in this section shall be retained by the insurer for five years. If a producer obtains the delivery receipt, the producer shall forward the signed delivery receipt to the insurer. Source: SL 1982, ch 28, 18; SL 1987, ch 374, 5; SL 2001, ch 286, 136; SL 2002, ch 232, 4.
58-28-24. Statement included as to variability of benefits.Any such contract under which the benefits vary to reflect investment experience, including a group contract and any certificate in evidence of variable benefits issued thereunder, shall state that such dollar amount will so vary and shall contain on its first page a statement to the effect that the benefits thereunder are on a variable basis. Source: SL 1966, ch 111, ch 6, 36 (4) as added by SL 1967, ch 131; SDCL, 58-28-4; SL 1971, ch 266, 2.
58-28-25. Approval by director required for variable contracts.No domestic life insurer and no other life insurer admitted to transact business in this state shall deliver or issue for delivery within this state variable contracts, unless the director is satisfied that its condition or method of operation in connection with the issuance of such contracts will not render its operation hazardous to the public or its policyholders in this state. Source: SL 1966, ch 111, ch 6, 36 (9) as added by SL 1967, ch 131; SDCL, 58-28-9; SL 1971, ch 266, 3.
58-28-26. Factors considered by director in examining variable contracts.In connection with 58-28-25, the director shall consider among other things:(1)The history and financial condition of the insurer;(2)The character, responsibility, and fitness of the officers and directors of the insurer; and(3)The law and regulation under which the insurer is authorized in the state of domicile to issue variable contracts. Source: SL 1966, ch 111, ch 6, 36 (9) as added by SL 1967, ch 131; SDCL, 58-28-10; SL 1971, ch 266, 3.
58-28-27. Affiliated insurer measured by factors applicable to parent.If the insurer is a subsidiary of an admitted life insurer, or affiliated with such insurer through common management or ownership, it may be deemed by the director to have met the provisions of 58-28-25 and 58-28-26 if either it or the parent or the affiliated insurer meets the requirements hereof. Source: SL 1971, ch 266, 3.
58-28-28. Grace, reinstatement, and nonforfeiture provisions required.Any individual variable life insurance or annuity contracts delivered or issued for delivery in this state shall contain grace, reinstatement, and nonforfeiture provisions appropriate to such a contract. Source: SL 1971, ch 266, 5; SL 1977, ch 412, 21.
58-28-29. Actuarial standards for reserve liability on variable contracts.The reserve liability for variable contracts shall be established in accordance with actuarial procedures that recognize the variable nature of the benefits provided and any mortality guarantees. Source: SL 1971, ch 266, 5.
58-28-30. General insurance law applicable--Exceptions. Except for 58-15-13, 58-15-14, 58-15-15, 58-15-17, 58-15-18, 58-15-19, 58-15-21, 58-15-22, 58-15-29, 58-15-31, 58-15-32, 58-15-33, 58-15-34, 58-15-35, 58-15-36, 58-15-38, 58-15-39, and 58-27-108, as in the case of a variable life insurance policy, 58-15-57, 58-15-62, 58-15-64, 58-15-65, 58-15-66, 58-15-83 to 58-15-93, inclusive, and 58-27-108, as in the case of a variable annuity contract and except as is otherwise provided in this chapter, all pertinent provisions of the insurance code apply to separate accounts and contracts relating thereto. Source: SL 1966, ch 111, ch 6, 36 (11) as added by SL 1967, ch 131; SDCL, 58-28-12; SL 1971, ch 266, 5; SL 1977, ch 412, 22; SL 1990, ch 30, 17; SL 1997, ch 294, 31; SL 2003, ch 251, 1; SL 2021, ch 210,  17.
58-28-31. Regulation of variable contracts by director--Rules--Review of contracts--Disclosure document.The director has sole authority to regulate the issuance and sale of variable contracts and promulgate rules to carry out the purposes and provisions of this chapter. The Division of Insurance may, upon request by the director, review the underlying investments in securities of variable contracts. The Division of Insurance may require filing a disclosure document with the Division of Insurance pursuant to chapter 47-31B. Source: SL 1966, ch 111, ch 6, 36(10) as added by SL 1967, ch 131; SDCL 58-28-11; SL 1969, ch 133; SL 1971, ch 266, 4; SL 1986, ch 22, 37; SL 1993, ch 365; SL 2004, ch 278, 66; SL 2017, ch 231 (Ex. Ord. 17-2), 19, eff. Apr. 13, 2017.
58-28-32. Deferment of variable death benefits payment--Time period--State of emergency.Except if variable death benefits are used to pay premiums, the payment of variable death benefits in excess of any minimum death benefits, cash values, policy loans, or partial withdrawals, or the payment of variable death benefits in excess of any partial surrenders, may be deferred either:(1)For up to six months from the date of the request, if the payments are based on policy values that do not depend on the investment performance of the separate account; or(2)For any period during which the New York stock exchange is closed for trading, except for normal holiday closing, or for any period during which the securities and exchange commission determines that a state of emergency exists which may make such payment impractical. Source: SL 2003, ch 251, 2.
58-28-33. Promulgation of rules relating to variable life insurance policies--Uniformity--Limitations.The director may promulgate rules pursuant to chapter 1-26 relating to variable life insurance policies. In promulgating the rules, the director shall give substantial consideration to the standards contained in the National Association of Insurance Commissioners (NAIC) Variable Life Insurance Model Regulation and otherwise design the rules to achieve uniformity, to the degree reasonably possible, in the standards for variable life insurance. The rules shall be limited to the following:(1)Standards for suitability of sales and sales materials;(2)Policy benefit and design requirements;(3)Establishment and administration of separate accounts;(4)Disclosure requirements; and(5)Definition of terms. Source: SL 2003, ch 251, 3.
58-29A-100. Examination and regulation of association--Annual report.The association is subject to examination and regulation by the director. The board of directors shall submit, not later than May thirtieth of each year, a financial report for the preceding calendar year in a form approved by the director. Source: SL 2000, ch 247, 47; SL 2011, ch 222, 1.
58-29A-101. Immunity from liability of persons acting under chapter.There is no liability on the part of and no cause of action of any nature may arise against any member insurer, the association or its agents or employees, the board of directors, any person serving as a representative of any director, or the director or the director's representatives for any action taken or any failure to act by them in the performance of their powers and duties under this chapter. Source: SL 2000, ch 247, 48.
58-29A-102. Judicial review of director's actions.Any final action or order of the director under this chapter is subject to judicial review in a court of competent jurisdiction. Source: SL 2000, ch 247, 49.
58-29A-103. Premiums to include amounts sufficient for assessments.The rates and premiums charged for insurance policies to which this chapter applies shall include amounts sufficient to recoup a sum equal to the amounts paid to the association by the member insurer less any amounts returned to the member insurer by the association and such rates may not be deemed excessive because they contain an amount reasonably calculated to recoup assessments paid by the member insurer. Source: SL 2000, ch 247, 50.
58-29A-104. Unfair trade practice to advertise protection given by chapter.It is unfair trade practice for any insurer or insurance producer to in any manner make use of the protection given policyholders by this chapter as a reason for buying insurance from the insurer or insurance producer. Source: SL 2000, ch 247, 51; SL 2001, ch 286, 138.
58-29A-105. Payment of claims to be made in any reasonable order.The association shall pay claims in any order which it deems reasonable, including the payment of claims as such are received from the claimants or in groups or categories of claims. Source: SL 2000, ch 247, 52.
58-29A-106. Association to be recognized as claimant in liquidation of insolvent insurer--Priority of distribution.The association and any similar organization in another state shall be recognized as claimants in the liquidation of an insolvent insurer for any amounts paid by them on covered claims obligations as determined under this chapter or similar laws in other states and shall receive dividends and any other distributions at the priority set forth in 58-29B-124. Source: SL 2000, ch 247, 53.
58-29A-107. Insolvent insurer's records to be made available to board.The liquidator, receiver, or statutory successor of an insolvent insurer covered by this chapter shall permit access by the board or its authorized representative to any of the insolvent insurer's records that are necessary for the board in carrying out its functions under this chapter with regard to covered claims. In addition, the liquidator, receiver, or statutory successor shall provide the board or its representative with copies of such records upon request by the board and at the expense of the board. Source: SL 2000, ch 247, 54.
58-29A-108. Jurisdiction over claims against association.Except for actions by member insurers aggrieved by final actions or decisions of the association pursuant to subdivision 58-29A-84(7), any action relating to or arising out of this chapter against the association shall be brought in a court in this state. The courts in this state have exclusive jurisdiction over all actions relating to or arising out of this chapter against the association. Source: SL 2000, ch 247, 55.
58-29A-109. Citation of chapter.This chapter shall be known as the South Dakota Insurance Guaranty Association Act. Source: SL 2000, ch 247, 56.
58-29A-54. Scope of application of chapter.This chapter applies to any kind of direct insurance, but does not apply to:(1)Life, annuity, health, or disability insurance;(2)Mortgage guaranty, financial guaranty, or other forms of insurance offering protection against investment risks;(3)Fidelity or surety bonds, or any other bonding obligations;(4)Credit insurance, vendors' single-interest insurance, or collateral protection insurance, or any similar insurance protecting the interests of a creditor arising out of a creditor-debtor transaction;(5)Insurance of warranties or service contracts including insurance that provides for the repair, replacement, or service of goods or property or indemnification for repair, replacement, or service for the operational or structural failure of the goods or property due to a defect in materials or workmanship or to normal wear and tear, or provides reimbursement for the liability incurred by the issuer of agreements or service contracts that provide such benefits;(6)Title insurance;(7)Ocean marine insurance;(8)Any transaction or combination of transactions between a person, including affiliates of the person, and an insurer, including affiliates of the insurer, that involves the transfer of investment or credit risk unaccompanied by a transfer of insurance risk; or(9)Any insurance provided by or guaranteed or reinsured by any governmental body. Source: SL 2000, ch 247, 1.
58-29A-55. Definition of terms.Terms used in this chapter mean:(1)"Account," any one of the three accounts created by this chapter;(2)"Affiliate," any person who, directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with another person on December thirty-first of the year immediately preceding the date the insurer becomes an insolvent insurer;(3)"Association," the South Dakota Insurance Guaranty Association created under this chapter;(4)"Claimant," any insured making a first party claim or any person instituting a liability claim. No person who is an affiliate of the insolvent insurer may be a claimant;(5)"Director," the director of the Division of Insurance of the Department of Labor and Regulation;(6)"Control," the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract other than a commercial contract for goods or nonmanagement services, or otherwise, unless the power is the result of an official position with or corporate office held by the person. Control is presumed to exist if a person, directly or indirectly, owns, controls, holds with the power to vote, or holds proxies representing ten percent or more of the voting securities of any other person. This presumption may be rebutted by a showing that control does not exist in fact;(7)"Covered claim,"(a)An unpaid claim, including one for unearned premiums, submitted by a claimant, which arises out of and is within the coverage and is subject to the applicable limits of an insurance policy to which this chapter applies issued by an insurer, if the insurer becomes an insolvent insurer after July 1, 1970, and:(i)The claimant or insured is a resident of this state at the time of the insured event. However, for entities other than an individual, the residence of a claimant, insured, or policyholder is the state in which its principal place of business is located at the time of the insured event; or(ii)The claim is a first party claim for damage to property with a permanent location in this state.(b)The term, covered claim, does not include:(i)Any amount awarded as punitive or exemplary damages;(ii)Any amount sought as a return of premium under any retrospective rating plan;(iii)Any amount due any reinsurer, insurer, insurance pool, or underwriting association as subrogation recoveries, reinsurance recoveries, contribution, indemnification, or otherwise. No claim for any amount due any reinsurer, insurer, insurance pool, or underwriting association may be asserted against a person insured under a policy issued by an insolvent insurer other than to the extent the claim exceeds the association obligation limitations set forth in this chapter;(iv)Any first party claims by an insured whose net worth exceeds fifty million dollars. An insured's net worth shall be deemed to include the aggregate net worth of the insured and any of its subsidiaries and affiliates as calculated on a consolidated basis;(v)Any first party claims by an insured which is an affiliate of the insolvent insurer; (8)"Insolvent insurer," an insurer authorized to transact insurance in this state, either at the time the policy was issued or when the insured event occurred, and against whom a final order of liquidation has been entered after July 1, 1970, with a finding of insolvency by a court of competent jurisdiction in the insurer's state of domicile;(9)"Member insurer," any person who:(a)Writes any kind of insurance to which this chapter applies, including the exchange of reciprocal or interinsurance contracts; and(b)Is licensed to transact insurance in this state except companies defined in chapter 58-35.An insurer shall cease to be a member insurer effective on the day following the termination or expiration of its license to transact the kinds of insurance to which this chapter applies, however, the insurer shall remain liable as a member insurer for any obligations, including obligations for assessments levied prior to the termination or expiration of the insurer's license and assessments levied after the termination or expiration, with respect to any insurer that became an insolvent insurer prior to the termination or expiration of the insurer's license;(10)"Net direct written premiums," direct gross premiums written in this state on insurance policies to which this chapter applies, less return premiums thereon and dividends paid or credited to policyholders on such direct business. The term, net direct written premiums, does not include premiums on contracts between insurers or reinsurers;(11)"Net worth," the total assets of a person less the total liabilities against those assets as determined in accordance with generally accepted accounting principles. If the person is one who prepares an annual report to shareholders, the annual report for the fiscal year immediately preceding the date the insurer becomes an insolvent insurer shall be used to determine net worth. If the person is one who does not prepare an annual report, but does prepare an annual financial report for management which reflects net worth, then the annual financial report for management for the fiscal year immediately preceding the date the insurer becomes an insolvent insurer shall be used to determine net worth;(12)"Person," any individual, corporation, partnership, association, or voluntary organization;(13)"Unearned premium," the premium for the unexpired period of a policy that has been terminated prior to the expiration of the period for which the premium has been paid. The term does not include any premium that is returnable to the insured for any other reason. Source: SL 2000, ch 247, 2; SL 2003, ch 272 (Ex. Ord. 03-1), 27; SL 2004, ch 310, 1; SL 2011, ch 1 (Ex. Ord. 11-1), 162, eff. Apr. 12, 2011.
58-29A-56. Creation of association--Membership--Exercise of powers.There is created a nonprofit unincorporated legal entity to be known as the South Dakota Insurance Guaranty Association. Any insurer defined as a member insurer in subdivision 58-29A-55(9) is a member of the association as a condition of its authority to transact insurance in this state. The association shall perform its functions under a plan of operation established and approved under 58-29A-83 to 58-29A-87, inclusive, and shall exercise its powers through a board of directors established under 58-29A-57 and 58-29A-58. Source: SL 2000, ch 247, 3.
58-29A-57. Board of directors--Appointment and terms of members--Vacancies on board.The board of directors of the association shall consist of seven persons, each of whom shall be appointed by the director for a term of three years and until a successor has been appointed and qualified. The director shall consult with member insurers concerning their recommendations for the board of directors. Any vacancy on the board shall be filled for the remaining period of the term by a majority vote of the remaining board members subject to the approval of the director. Source: SL 2000, ch 247, 4.
58-29A-58. Representation of member insurers on board--Domestic insurers.In approving selections to the board, the director shall consider, among other things, whether all member insurers are fairly represented. No less than two members of the board shall be domestic insurers. Source: SL 2000, ch 247, 5.
58-29A-59. Reimbursement of director's expenses.Members of the board may be reimbursed from the assets of the association for expenses incurred by them as members of the board of directors. Source: SL 2000, ch 247, 6.
58-29A-60. General corporate powers of association.The association may:(1)Employ or retain such persons as are necessary to handle claims and perform other duties of the association;(2)Borrow funds necessary to effect the purposes of this chapter in accord with the plan of operation;(3)Sue or be sued. The power to sue includes the power and right to intervene as a party before any court in this state that has jurisdiction over an insolvent insurer as defined by this chapter;(4)Negotiate and become a party to such contracts as are necessary to carry out the purpose of this chapter;(5)Perform such other acts as are necessary or proper to effectuate the purpose of this chapter. Source: SL 2000, ch 247, 7.
58-29A-61. Tax exemption of association.The association is exempt from payment of all fees and all taxes levied by this state or any of its subdivisions except taxes levied on real property. Source: SL 2000, ch 247, 8.
58-29A-62. Notice to director of indications of member insolvency.To aid in the detection and prevention of insurer insolvencies, it is the duty of the board of directors, upon majority vote, to notify the director of any information indicating any member insurer may be insolvent or in a financial condition hazardous to the policyholders or the public. Source: SL 2000, ch 247, 9.
58-29A-63. Examination of insurer on request by board--Cost of examination--Handling of report.To aid in the detection and prevention of insurer insolvencies, the board of directors may, upon majority vote, request that the director order an examination of any member insurer which the board in good faith believes may be in a financial condition hazardous to the policyholders or the public. Within thirty days of the receipt of such request, the director shall begin the examination. The examination may be conducted as a National Association of Insurance Commissioners' Examination or may be conducted by such persons as the director designates. The cost of the examination shall be paid by the association and the examination report shall be treated as are other examination reports. In no event may the examination report be released to the board of directors prior to its release to the public, but this does not preclude the director from complying with 58-29A-64. The director shall notify the board of directors when the examination is completed. The request for an examination shall be kept on file by the director but it may not be open to public inspection prior to the release of the examination report to the public. Source: SL 2000, ch 247, 10.
58-29A-64. Insolvency or hazardous condition reported to board of directors.The director shall report to the board of directors when the director has reasonable cause to believe that any member insurer examined or being examined at the request of the board of directors may be insolvent or in a financial condition hazardous to the policyholders or the public. Source: SL 2000, ch 247, 11.
58-29A-65. Recommendations for detection and prevention of insolvencies.The board of directors may, upon majority vote, make recommendations to the director for the detection and prevention of insurer insolvencies. Source: SL 2000, ch 247, 12.
58-29A-66. Recommendations on improving regulation for solvency.The board of directors may, upon majority vote, make recommendations to the director on matters generally related to improving or enhancing regulation for solvency. Source: SL 2000, ch 247, 13.
58-29A-67. Report by directors on history and causes of insolvency.The board of directors may, at the conclusion of any domestic insurer insolvency in which the association was obligated to pay covered claims, prepare a report on the history and causes of such insolvency, based on the information available to the association, and submit the report to the director. Source: SL 2000, ch 247, 14.
58-29A-68. Obligation of association on claims against insolvent insurer--Deductible and maximum amounts.The association is obligated to pay covered claims existing prior to the order of liquidation, arising within thirty days after the order of liquidation, or before the policy expiration date if less than thirty days after the order of liquidation, or before the insured replaces the policy or causes its cancellation, if the insured does so within thirty days of the order of liquidation. The obligation shall be satisfied by paying to the claimant an amount as follows:(1)The full amount of a covered claim for benefits under a workers' compensation insurance coverage;(2)An amount not exceeding twenty-five thousand dollars per policy for a covered claim for the return of unearned premium;(3)An amount not exceeding three hundred thousand dollars per claim for all other covered claims.In no event is the association obligated to a claimant in an amount in excess of the obligation of the insolvent insurer under the policy or coverage from which the claim arises. Notwithstanding any other provisions of this chapter, a covered claim does not include a claim filed with the association after the earlier of eighteen months after the date of the order of liquidation, or the final date set by the court for the filing of claims against the liquidator or receiver of an insolvent insurer and does not include any claim filed with the association or a liquidator for protection afforded under the insured's policy for incurred-but-not-reported losses. The association shall pay only that amount of each unearned premium which is in excess of one hundred dollars.Any obligation of the association to defend an insured shall cease upon the association's payment, by settlement releasing the insured or on a judgment, of an amount equal to the lesser of the association's covered claim obligation limit, or the applicable policy limit, or tender of such amount.Notwithstanding any other provisions of this chapter, except in the case of a claim for benefits under workers' compensation coverage, any obligation of the association to any person shall cease when ten million dollars has been paid in the aggregate by the association and any associations similar to the association of any other state or states or any property/casualty security fund which obtains contributions from insurers on a pre-insolvency basis, to or on behalf of any insured and its affiliates on covered claims or allowed claims arising under the policy or policies of any one insolvent insurer. If the association determines that there may be more than one claimant having a covered claim or allowed claim against the association or any associations similar to the association or any property/casualty insurance security fund in other states, under the policy or policies of any one insolvent insurer, the association may establish a plan to allocate amounts payable by the association in such manner as the association in its discretion deems equitable. Source: SL 2000, ch 247, 15; SL 2004, ch 310, 2.
58-29A-69. Association deemed insurer to extent of obligations on covered claims.The association shall be deemed the insurer to the extent of its obligation on the covered claims and to such extent, subject to the limitations provided in this chapter, shall have all rights, duties, and obligations of the insolvent insurer as if the insurer had not become insolvent, including the right to pursue and retain salvage and subrogation recoverable on paid covered claim obligations. The association may not be deemed the insolvent insurer for any purpose relating to the issue of whether the association is amenable to the personal jurisdiction of the courts of any state. Source: SL 2000, ch 247, 16.
58-29A-70. Investigation, adjustment, and payment or denial of claims--Review of previous settlements, releases, and judgments.The association shall investigate claims brought against the association and adjust, compromise, settle, and pay covered claims to the extent of the association's obligation and deny any other claims and may review settlements, releases, and judgments to which the insolvent insurer or its insureds were parties to determine the extent to which such settlements, releases, and judgments may be properly contested. The association may appoint and direct legal counsel retained under liability insurance policies for the defense of covered claims. Source: SL 2000, ch 247, 17.
58-29A-71. Transfer or recovery of claim from certain covered persons.The association, at its sole discretion, may transfer claims handling and financial responsibility for a covered claim to, or recover from, the following persons the amount of any covered claim paid on behalf of such person pursuant to this chapter:(1)Any insured whose net worth exceeds fifty million dollars and whose liability obligations to other persons, including obligations under workers' compensation insurance coverages, are satisfied in whole or in part by payments made under this chapter. Any insured's net worth is deemed to include the aggregate net worth of the insured and any of its subsidiaries and affiliates as calculated on a consolidated basis; and(2)Any person who is an affiliate of the insolvent insurer and whose liability obligations to other persons are satisfied in whole or in part by payments made under this chapter.The term, affiliate, does not include any insurance producer of the insolvent insurer. Source: SL 2000, ch 247, 18; SL 2001, ch 286, 137; SL 2004, ch 310, 3.
58-29A-72. Means of handling claims--Designation of servicing facility.The association shall handle claims through its employees or through one or more insurers or other persons designated as servicing facilities. Designation of a servicing facility is subject to the approval of the director, but such designation may be declined by a member insurer. Source: SL 2000, ch 247, 19.
58-29A-73. Reimbursement of servicing facility--Payment of other expenses.The association shall reimburse each servicing facility for obligations of the association paid by the facility and for expenses incurred by the facility while handling claims on behalf of the association and shall pay the other expenses of the association authorized by this chapter. Source: SL 2000, ch 247, 20.
58-29A-74. Separate accounts for administration and assessment.For purposes of administration and assessment, the association shall be divided into three separate accounts:(1)The workers' compensation insurance account;(2)The automobile insurance account; and(3)The account for all other insurance to which this chapter applies. Source: SL 2000, ch 247, 21.
58-29A-75. Allocation of claims, expenses, and assessments to separate accounts--Operating expenses excepted.The association shall allocate claims paid and expenses incurred among the three accounts separately, and assess member insurers separately for each account amounts necessary to pay the obligations of the association under 58-29A-68 subsequent to an insolvency, the expenses of handling covered claims subsequent to an insolvency, the cost of examinations under 58-29A-63 and other expenses authorized by this chapter, except that expenses paid from assessments authorized by 58-29A-76 need not be allocated to any particular account. Source: SL 2000, ch 247, 22.
58-29A-76. Administrative assessments for operating expenses.In addition to any other assessments authorized by this chapter, the association may assess each member insurer an administrative assessment not to exceed five hundred dollars per annum. The administrative assessment shall be made for the purpose of paying operating expenses of the association and its employees not directly attributable to any particular insolvency or insolvent insurer, and the administrative assessment may not be on a pro rata basis. The assessments are due not less than thirty days after prior written notice to the member insurer and shall accrue interest at ten percent per annum on and after the due date. Source: SL 2000, ch 247, 23; SL 2013, ch 251, 1.
58-29A-77. Apportionment of assessments among members--Notice of assessment.The assessments of each member insurer shall be in the proportion that the net direct written premiums of the member insurer for the preceding calendar year on the kinds of insurance in the account bears to the net direct written premiums of all member insurers for the preceding calendar year on the kinds of insurance in the account. The assessment is due not less than thirty days after prior written notice to the member insurer and shall accrue interest at ten percent per annum on and after the due date. Source: SL 2000, ch 247, 24.
58-29A-78. Maximum assessment in relation to net premiums.No member insurer may be assessed in any year on any account an amount greater than two percent of that member insurer's net direct written premiums for the preceding calendar year on the kinds of insurance in the account. Source: SL 2000, ch 247, 25.
58-29A-79. Offset of payments and expenses against assessment due.Each member insurer may set off against any assessment, authorized payments made on covered claims and expenses incurred in the payment of such claims by the member insurer if they are chargeable to the account for which the assessment is made. Source: SL 2000, ch 247, 26.
58-29A-80. Exemption or deferment of assessments to avoid impairment of capital or surplus.The association may exempt or defer, in whole or in part, the assessment of any member insurer, if the assessment would cause the member insurer's financial statement to reflect amounts of capital or surplus less than the minimum amounts required for a certificate of authority by any jurisdiction in which the member insurer is authorized to transact insurance . However, during the period of deferment, no dividends may be paid to shareholders or policyholders. Deferred assessments shall be paid when such payment will not reduce capital or surplus below required minimums. Such payments shall be refunded to those companies receiving larger assessments by virtue of the deferment, or at the election of any such company, credited against future assessments. Source: SL 2000, ch 247, 27.
58-29A-81. Proration of payments when assets insufficient for full payment.If the maximum assessment, together with the other assets of the association in any account, does not provide in any one year in any account an amount sufficient to make all necessary payments from that account, the funds available shall be prorated and the unpaid portion shall be paid as soon thereafter as funds become available. Source: SL 2000, ch 247, 28.
58-29A-82. Refund of surplus to member insurers.The association may refund to the member insurers in proportion to the contribution of each member insurer to that account that amount by which the assets of the account exceed the liabilities, if, at the end of any calendar year, the board of directors finds that the assets of the association in any account exceed the liabilities of that account as estimated by the board of directors for the coming year. Source: SL 2000, ch 247, 29.
58-29A-83. Plan of operation submitted to director--Approval.The association shall submit to the director a plan of operation and any amendments necessary or suitable to assure the fair, reasonable, and equitable administration of the association. The plan of operation and any amendments is effective upon approval in writing by the director. Source: SL 2000, ch 247, 30.
58-29A-84. Required contents of plan of operation.The plan of operation shall:(1)Establish the procedures whereby all the powers and duties of the association under 58-29A-60, 58-29A-68 to 58-29A-73, inclusive, and 58-29A-75 to 58-29A-82, inclusive, will be performed;(2)Establish procedures for handling assets of the association;(3)Establish the amount and method of reimbursing members of the board of directors under 58-29A-59;(4)Establish procedures by which claims may be filed with the association and establish acceptable forms of proof of covered claims. Notice of claims to the receiver or liquidator of the insolvent insurer shall be deemed notice to the association or its agent and a list of such claims shall be periodically submitted to the association or similar organization in another state by the receiver or liquidator;(5)Establish regular places and times for meetings of the board of directors;(6)Establish procedures for records to be kept of all financial transactions of the association, its agents, and the board of directors;(7)Provide that any member insurer aggrieved by any final action or decision of the association may appeal to the director within thirty days after the action or decision;(8)Establish the procedures whereby selections for the board of directors will be submitted to the director;(9)Establish procedures for the disposition of liquidating dividends or other moneys received from the estate of the insolvent insurer;(10)Contain additional provisions necessary or proper for the execution of the powers and duties of the association. Source: SL 2000, ch 247, 31.
58-29A-85. Compliance with plan of operation--Violation as misdemeanor.All member insurers shall comply with the plan of operation. Violation of this section is a Class 2 misdemeanor. Source: SL 2000, ch 247, 32.
58-29A-86. Delegation of functions to interstate organization--Reimbursement of organization--Approval of delegation.The plan of operation may provide that any or all powers and duties of the association, except those under subdivision 58-29A-60(2) and those under 58-29A-75 to 58-29A-81, inclusive, are delegated to a corporation, association, or other organization which performs or will perform functions similar to those of this association, or its equivalent, in two or more states. Such a corporation, association, or organization shall be reimbursed as a servicing facility would be reimbursed and shall be paid for its performance of any other functions of the association. A delegation under this section shall take effect only with the approval of both the board of directors and the director, and may be made only to a corporation, association, or organization which extends protection not substantially less favorable and effective than that provided by this chapter. Source: SL 2000, ch 247, 33.
58-29A-87. Director's rules promulgated in lieu of amendments to plan of operation.If at any time the association fails to submit suitable amendments to the plan of operation, the director shall, after notice and hearing, promulgate such reasonable rules as are necessary or advisable to effectuate the provisions of this chapter. The rules shall continue in force until modified by the director or superseded by a plan submitted by the association and approved by the director. Source: SL 2000, ch 247, 34.
58-29A-88. Notice to association of insolvency of insurer.The director shall notify the association of the existence of an insolvent insurer not later than three days after the director receives notice of the determination of the insolvency. The association is entitled to a copy of any complaint seeking an order of liquidation with a finding of insolvency against a member company at the same time that the complaint is filed with a court of competent jurisdiction. Source: SL 2000, ch 247, 35.
58-29A-89. Statement of members' premiums furnished to association.The director shall, upon request of the board of directors, provide the association with a statement of the net direct written premiums of each member insurer. Source: SL 2000, ch 247, 36.
58-29A-90. Stay of default proceedings against insolvent insurer--Setting aside of prior proceedings.Any proceeding in which the insolvent insurer is a party or is obligated to defend a party in any court in this state shall, subject to waiver by the association in specific cases involving covered claims, be stayed until the last day fixed by the court for the filing of claims and such additional time thereafter as may be determined by the court from the date the insolvency is determined or an ancillary proceeding is instituted in the state, whichever is later, to permit proper defense by the association of all pending causes of action. As to any covered claims arising from a judgment under any decision, verdict, or finding based on the default of the insolvent insurer or its failure to defend an insured, the association, either on its own behalf or on behalf of such insured, may apply to have the judgment, order, decision, verdict, or finding set aside by the same court or administrator that made the judgment, order, decision, verdict, or finding and shall be permitted to defend against the claim on the merits. Source: SL 2000, ch 247, 37.
58-29A-91. Suspension or revocation of certificate of authority for failure to pay assessment or comply with plan--Fine as alternative.The director may suspend or revoke, after notice and hearing, the certificate of authority to transact insurance in this state of any member insurer that fails to pay an assessment when due or fails to comply with the plan of operation. As an alternative, the director may levy a fine on any member insurer which fails to pay an assessment when due. The fine may not exceed five percent of the unpaid assessment per month, except that no fine may be less than one hundred dollars per month. Source: SL 2000, ch 247, 38.
58-29A-92. Revocation of designation of servicing facility.The director may revoke the designation of any servicing facility if the director finds claims are being handled unsatisfactorily. Source: SL 2000, ch 247, 39.
58-29A-93. Duplicate coverage--Insured to exhaust rights against solvent insurer.Any person having a claim against an insurer, whether or not the insurer is a member insurer, under any provision in an insurance policy other than a policy of an insolvent insurer which is also a covered claim, shall be required to first exhaust any right under the policy. Any amount payable on a covered claim under this chapter shall be reduced by the amount of any recovery under the insurance policy. Source: SL 2000, ch 247, 40.
58-29A-94. Duplicate coverage by insolvent insurers--Factors governing primary recovery.Any person having a claim which may be recovered under more than one insurance guaranty association or its equivalent shall seek recovery first from the association of the place of residence of the insured except that if it is a first-party claim for damage to property with a permanent location, the person shall seek recovery first from the association of the location of the property, and if it is a workers' compensation claim, the person shall seek recovery first from the association of the residence of the claimant. Any recovery under this chapter shall be reduced by the amount of recovery from any other insurance guaranty association or its equivalent. Source: SL 2000, ch 247, 41.
58-29A-95. Subrogation of association to rights of claimant.Any person recovering under this chapter shall be deemed to have assigned that person's rights under the policy to the association to the extent of any recovery from the association. Every insured or claimant seeking the protection of this chapter shall cooperate with the association to the same extent as such person would have been required to cooperate with the insolvent insurer. Source: SL 2000, ch 247, 42.
58-29A-96. Restrictions on liability of insured to association.The association has no cause of action against the insured of the insolvent insurer for any sums it has paid out, except such causes of action as the insolvent insurer would have had if the sums had been paid by the insolvent insurer and except as provided in 58-29A-71. Source: SL 2000, ch 247, 43.
58-29A-97. Liability of insureds for unpaid assessments.In the case of an insolvent insurer operating on a plan with assessment liability, payments of claims of the association may not operate to reduce the liability of insureds to the receiver, liquidator, or statutory successor for unpaid assessments. Source: SL 2000, ch 247, 44.
58-29A-98. Settlements by association binding on successor of insolvent insurer--Priority of claim and expenses.The receiver, liquidator, or statutory successor of an insolvent insurer is bound by determinations of covered claim eligibility under this chapter and by settlements of claims made by the association or a similar organization in another state. The court having jurisdiction shall grant such claims priority equal to that which the claimant would have been entitled in the absence of this chapter against the assets of the insolvent insurer. The expenses of the association or similar organization in handling claims shall be accorded the same priority as the liquidator's expenses. Source: SL 2000, ch 247, 45.
58-29A-99. Association's statements of claims paid filed with receiver or liquidator.The association shall periodically file with the receiver or liquidator of the insolvent insurer statements of the covered claims paid by the association and estimates of anticipated claims on the association which shall preserve the rights of the association against the assets of the insolvent insurer. Source: SL 2000, ch 247, 46.
58-29B-1. Citation of chapter.This chapter may be cited as the Insurers Supervision, Rehabilitation, and Liquidation Act. Source: SL 1989, ch 436, 1.
58-29B-10. Obstruction or interference in conduct of proceedings.No person may obstruct or interfere with the director in the conduct of any delinquency proceeding or any investigation preliminary or incidental thereto. This section may not be construed to abridge otherwise existing legal rights, including the right to good faith resistance to a petition for liquidation or other delinquency proceedings, or other orders. Source: SL 1989, ch 436, 10.
58-29B-100. Amounts for disbursements to associations.The liquidator's proposal shall provide for disbursements to the associations in amounts estimated at least equal to the claim payments made or to be made thereby for which such associations could assert a claim against the liquidator, and shall further provide that if the assets available for disbursement from time to time do not equal or exceed the amount of such claim payments made, or to be made, by the association then disbursements shall be in the amount of available assets. Source: SL 1989, ch 436, 100.
58-29B-101. Insolvent insurer writing life or health insurance or annuities--Liquidator to include disbursements to guaranty in proposal.The liquidator's proposal shall, with respect to an insolvent insurer writing life or health insurance or annuities, provide for disbursements of assets to any guaranty association or any foreign guaranty association covering life or health insurance or annuities or to any other entity or organization reinsuring, assuming, or guaranteeing policies or contracts of insurance under the acts creating such associations. Source: SL 1989, ch 436, 101.
58-29B-102. Notice of application for approval of proposal.Notice of the application under 58-29B-98 shall be given to the association and to the directors of insurance of each of the states. Any such notice shall be deemed to have been given when deposited in the United States' mail, with first class postage prepaid thereon, at least thirty days prior to submission of such application to the court. Action on the application may be taken by the court provided the required notice has been given and the liquidator's proposal complies with subdivisions 58-29B-99(1) and (2). Source: SL 1989, ch 436, 102.
58-29B-103. Filing proof of claims--Exceptions.Proof of all claims shall be filed with the liquidator in the form required by 58-29B-106 to 58-29B-110, inclusive, on or before the last day for filing specified in the notice required under 58-29B-51 and 58-29B-52, except that proof of claims for cash surrender values or other investment values in life insurance and annuities need not be filed unless the liquidator expressly so requires. Source: SL 1989, ch 436, 103.
58-29B-104. Circumstances under which claimant making late filing may share in distributions. The liquidator may permit a claimant making a late filing to share in distributions, whether past or future, as if he were not late, to the extent that any such payment will not prejudice the orderly administration of the liquidation, under the following circumstances:(1)The existence of the claim was not known to the claimant and that he filed his claim as promptly thereafter as reasonably possible after learning of it;(2)A transfer to a creditor was avoided under 58-29B-61 to 58-29B-83, inclusive, or was voluntarily surrendered under 58-29B-84 and 58-29B-85, and that the filing satisfies the conditions of 58-29B-84 and 58-29B-85; or(3)The valuation under 58-29B-121 and 58-29B-122, of security held by a secured creditor shows a deficiency, which is filed within thirty days after the valuation. Source: SL 1989, ch 436, 104; SL 2021, ch 210,  18.
58-29B-105. Certain late filing claims of guaranty association--Right to share in distributions.The liquidator shall permit late filing claims to share in distributions, whether past or future, as if they were not late, if such claims are claims of a guaranty association or foreign guaranty association for reimbursement of covered claims paid or expenses incurred, or both, subsequent to the last day for filing where such payments were made and expenses incurred as provided by law. Source: SL 1989, ch 436, 105.
58-29B-106. Treatment of late claims not covered by 58-29B-104.The liquidator may consider any claim filed late which is not covered by 58-29B-104, and permit it to receive distributions which are subsequently declared on any claims of the same or lower priority if the payment does not prejudice the orderly administration of the liquidation. The late filing claimant shall receive, at each distribution, the same percentage of the amount allowed on his claim as is then being paid to claimants of any lower priority. This shall continue until his claim has been paid in full. Source: SL 1989, ch 436, 106.
58-29B-107. Proof of claim--Contents.Proof of claim shall consist of a verified statement signed by the claimant that includes all of the following that are applicable:(1)The particulars of the claim including the consideration given for it;(2)The identity and amount of the security on the claim;(3)The payments made on the debt, if any;(4)That the sum claimed is justly owing and that there is no setoff, counterclaim, or defense to the claim;(5)Any right of priority of payment or other specific right asserted by the claimants;(6)A copy of the written instrument which is the foundation of the claim;(7)The name and address of the claimant and the attorney who represents him, if any. Source: SL 1989, ch 436, 107.
58-29B-108. Failure to provide necessary information--Liquidator may require prescribed forms and additional information.The liquidator need not consider or allow a claim if it does not contain all the information in 58-29B-107, which may be applicable. The liquidator may require that a prescribed form be used and may require that other information and documents be included. Source: SL 1989, ch 436, 108.
58-29B-109. Liquidator may request or otherwise obtain additional information or evidence.At any time the liquidator may request the claimant to present information or evidence supplementary to that required under 58-29B-107, and may take testimony under oath, require production of affidavits or depositions, or otherwise obtain additional information or evidence. Source: SL 1989, ch 436, 109.
58-29B-11. Failure to cooperate--Obstruction or interference--Penalty.Any person included within 58-29B-9 who fails to cooperate with the director, or any person who obstructs or interferes with the director in the conduct of any delinquency proceeding or any investigation preliminary or incidental thereto, or who violates any order the director issued validly under this chapter may be ordered by the court to pay a fine not exceeding ten thousand dollars or sentenced to state imprisonment for a term of not more than one year, or both, or after a hearing, the director may impose and order the person to pay an administrative penalty not to exceed ten thousand dollars and may order the revocation or suspension of any insurance licenses issued by the director. Source: SL 1989, ch 436, 11.
58-29B-110. Judgment or order not evidence of liability or quantum of damages.No judgment or order against an insured or the insurer entered after the date of filing of a successful petition for liquidation and no judgment or order against an insured or the insurer entered at any time by default or by collusion need be considered as evidence of liability or of quantum of damages. No judgment or order against an insured or the insurer entered within four months before the filing of the petition need be considered as evidence of liability or of the quantum of damages. Source: SL 1989, ch 436, 110.
58-29B-111. Claims of guaranty associations--Form and content.All claims of a guaranty association or foreign guaranty association shall be in such form and contain such substantiation as may be agreed to by the association and the liquidator. Source: SL 1989, ch 436, 111.
58-29B-112. Third party's claim contingent on judgment against insured--Consideration.The claim of a third party which is contingent only on his first obtaining a judgment against the insured shall be considered and allowed as if there were no such contingency. Source: SL 1989, ch 436, 112.
58-29B-113. Contingent claims allowed.A claim may be allowed even if contingent, if it is filed in accordance with 58-29B-103 to 58-29B-106, inclusive. It may be allowed and may participate in all distributions declared after it is filed to the extent that it does not prejudice the orderly administration of the liquidation. Source: SL 1989, ch 436, 113.
58-29B-114. Treatment of claims due except for passage of time.Claims that are due except for the passage of time shall be treated as settled claims are treated. However, such claims may be discounted at the rate specified in 58-15-15.8 minus two percent. Source: SL 1989, ch 436, 114.
58-29B-115. Claims made under employment contracts by directors or similar personnel--Limit on payment.Claims made under employment contracts by directors, principal officers, or persons in fact performing similar functions or having similar powers are limited to payment for services rendered prior to the issuance of any order of rehabilitation or liquidation under 58-29B-32 or 58-29B-42. Source: SL 1989, ch 436, 115.
58-29B-116. Third party claim against insured of insurer in liquidation filed with liquidator--Insured's filing--Late filing.If any third party asserts a cause of action against an insured of an insurer in liquidation, the third party may file a claim with the liquidator. Whether or not the third party files a claim, the insured may file a claim on his own behalf in the liquidation. If the insured fails to file a claim by the date for filing claims specified in the order of liquidation or within sixty days after mailing of the notice required by 58-29B-51 and 58-29B-52, whichever is later, he is an unexcused late filer. Source: SL 1989, ch 436, 116.
58-29B-117. Allowance of insured's claim--Liquidator's recommendations to court--Sums withheld--Procedures upon allowance.The liquidator shall make his recommendations to the court under 58-29B-125, for the allowance of an insured's claim under 58-29B-116, after consideration of the probable outcome of any pending action against the insured on which the claim is based, the probable damages recoverable in the action and the probable costs and expenses of defense. After allowance by the court, the liquidator shall withhold any dividends payable on the claim, pending the outcome of litigation and negotiation with the insured. Upon request by the claimant the liquidator may reconsider the claim on the basis of additional information and amend his recommendations to the court. The court may amend its allowance as it considers appropriate. As claims against the insured are settled or barred, the insured shall be paid from the amount withheld the same percentage dividend as was paid on other claims of like property, based on the lesser of the amount actually recovered from the insured by action or paid by agreement plus the reasonable costs and expenses of defense or the amount allowed on the claims by the court. After all claims are settled or barred, any sum remaining from the amount withheld shall revert to the undistributed assets of the insurer. Delay in final payment under this section shall not be a reason for unreasonable delay of final distribution and discharge of the liquidator. Source: SL 1989, ch 436, 117.
58-29B-118. Several claims founded upon one policy--Disposition--Prohibited claims.If several claims founded upon one policy are filed, whether by third parties or as claims by the insured under 58-29B-116 or 58-29B-128, and the aggregate allowed amount of the claims to which the same limit of liability in the policy is applicable exceeds that limit, each claim as allowed shall be reduced in the same proportion so that the total equals the policy limit. Claims by the insured shall be evaluated as in 58-29B-117. If any insured's claim is subsequently reduced under 58-29B-117, the amount thus freed shall be apportioned ratably among the claims which have been reduced under this section. No claim may be presented under 58-29B-116 or this section, if it is or may be covered by any guaranty association or foreign guaranty association. Source: SL 1989, ch 436, 118.
58-29B-119. Liquidator to give written notice of denial of claim--Objections.If a claim is denied in whole or in part by the liquidator, written notice of the determination shall be given to the claimant or his attorney by first class mail at the address shown in the proof of claim. Within sixty days from the mailing of the notice, the claimant may file his objections with the liquidator. If no such filing is made, the claimant may not further object to the determination. Source: SL 1989, ch 436, 119.
58-29B-12. Directors and deputies responsible for official bonds--Source of payment.In any proceeding under this chapter, the director and his deputies shall be responsible on their official bonds for the faithful performance of their duties. If the court deems it desirable for the protection of the assets, it may at any time require an additional bond from the director or his deputies, and such bonds shall be paid for out of the assets of the insurer as a cost of administration. Source: SL 1989, ch 436, 12.
58-29B-120. Hearing upon objections--Notice--Referee may conduct.If objections are filed with the liquidator and the liquidator does not alter his denial of the claim as a result of the objections, the liquidator shall ask the court for a hearing as soon as practicable and give notice of the hearing by first class mail to the claimant or his attorney and to any other persons directly affected, not less than ten nor more than thirty days before the date of the hearing. The matter may be heard by the court or by a court-appointed referee who shall submit findings of fact along with his recommendation. Source: SL 1989, ch 436, 120.
58-29B-121. Creditor's claim secured by "other person"--Subrogation--Right to distribution.If a creditor whose claim against an insurer is secured, in whole or in part, by the undertaking of another person, fails to prove and file that claim, the other person may do so in the creditor's name, and shall be subrogated to the rights of the creditor, whether the claim has been filed by the creditor or by the other person in the creditor's name, to the extent that he discharges the undertaking. In the absence of an agreement with the creditor to the contrary, the other person is not entitled to any distribution paid on the claim from the insurer's estate to the creditor if the claim of the other person equals the amount of the entire claim of the creditor. Any excess received by the creditor shall be held by him in trust for such other person. The term "other person," as used in this section is not intended to apply to a guaranty association or foreign guaranty association. Source: SL 1989, ch 436, 121.
58-29B-122. Valuation of security held by secured creditor.The value of any security held by a secured creditor shall be determined in one of the following ways, as the court may direct:(1)By converting the same into money according to the terms of the agreement pursuant to which the security was delivered to such creditors; or(2)By agreement, arbitration, compromise, or litigation between the creditor and the liquidator. Source: SL 1989, ch 436, 122.
58-29B-123. Valuation made under supervision of court--Treatment of deficiency and surrender of security.The determination made pursuant to 58-29B-122 shall be under the supervision and control of the court with due regard for the recommendation of the liquidator. The amount so determined shall be credited upon the secured claim, and any deficiency shall be treated as an unsecured claim. If the claimant shall surrender his security to the liquidator, the entire claim shall be allowed as if unsecured. Source: SL 1989, ch 436, 123.
58-29B-124. Priority and order of distribution of claims from insurer's estate.The priority of distribution of claims from the insurer's estate shall be in accordance with the order in which each class of claims is herein set forth. Every claim in each class shall be paid in full or adequate funds retained for such payment before the members of the next class receive any payment. No subclasses may be established within any class. The order of distribution of claims shall be:(1)Class 1. The costs and expenses of administration, including but not limited to the following:(a)The actual and necessary costs of preserving or recovering the assets of the insurer;(b)Compensation for all services rendered in the liquidation;(c)Any necessary filing fees;(d)The fees and mileage payable to witnesses;(e)Reasonable attorney's fees;(f)The reasonable expenses of a guaranty association or foreign guaranty association in handling claims;(2)Class 2. Debts due to employees for services performed to the extent that they do not exceed one thousand dollars and represent payment for services performed within one year before the filing of the petition for liquidation. Officers and directors are not entitled to the benefit of this priority. Such priority shall be in lieu of any other similar priority which may be authorized by law as to wages or compensation of employees;(3)Class 3. All claims under policies for losses incurred, including third party claims, all claims against the insurer for liability for bodily injury or for injury to or destruction of tangible property which are not under policies, and all claims of a guaranty association or foreign guaranty association. All claims under life insurance and annuity policies, whether for death proceeds, annuity proceeds, or investment values shall be treated as loss claims. That portion of any loss, indemnification for which is provided by other benefits or advantages recovered or recoverable in discharge of familial obligations of support or by way of succession at death or as proceeds of life insurance, or as gratuities. No payment by an employer to this employee may be treated as a gratuity;(4)Class 4. Claims under nonassessable policies for unearned premium or other premium refunds and claims of general creditors;(5)Class 5. Claims of the federal or any state or local government. Claims, including those of any governmental body for a penalty or forfeiture, shall be allowed in this class only to the extent of the pecuniary loss sustained from the act, transaction, or proceeding out of which the penalty or forfeiture arose, with reasonable and actual cost occasioned thereby. The remainder of such claims shall be postponed to the class of claims under subdivision (8) of this section;(6)Class 6. Claims filed late or any other claims other than claims under subdivisions (7) and (8) of this section;(7)Class 7. Surplus or contribution notes, or similar obligations, and premium refunds on assessable policies. Payments to members of domestic mutual insurance companies shall be limited in accordance with law;(8)Class 8. The claims of shareholders or other owners. Source: SL 1989, ch 436, 124.
58-29B-125. Review, investigation and negotiation of claims by liquidator--Exception--Report to court.The liquidator shall review all claims duly filed in the liquidation and shall make such further investigation as he shall deem necessary. He may compound, compromise, or in any other manner negotiate the amount for which claims will be recommended to the court except where the liquidator is required by law to accept claims as settled by any person or organization, including any guaranty association or foreign guaranty association. Unresolved disputes shall be determined under 58-29B-119 or 58-29B-120. As soon as practicable, he shall present to the court a report of the claims against the insurer with his recommendations. The report shall include the name and address of each claimant and the amount of the claim finally recommended, if any. If the insurer has issued annuities or life insurance policies, the liquidator shall report the persons to whom, according to the records of the insurer, amounts are owed as cash surrender values or other investment value and the amounts owed. Source: SL 1989, ch 436, 125.
58-29B-126. Court approval, disapproval, or modification of report.The court may approve, disapprove, or modify, the report on claims by the liquidator. Such reports as are not modified by the court within a period of sixty days following submission by the liquidator shall be treated by the liquidator as allowed claims, subject thereafter to later modification or to rulings made by the court pursuant to 58-29B-119 and 58-29B-120. No claim under a policy of insurance may be allowed for an amount in excess of the applicable policy limits. Source: SL 1989, ch 436, 126.
58-29B-127. Distributions by liquidator under court direction--Manner of payment.Under the direction of the court, the liquidator shall pay distributions in a manner that will assure the proper recognition of priorities and a reasonable balance between the expeditious completion of the liquidation and the protection of unliquidated and undetermined claims, including third party claims. Distribution of assets in kind may be made at valuations set by agreement between the liquidator and creditor and approved by the court. Source: SL 1989, ch 436, 127.
58-29B-128. Disposition of unclaimed funds subject to distribution.All unclaimed funds subject to distribution remaining in the liquidator's hands when he is ready to apply to the court for discharge, including the amount distributable to any creditor, shareholder, member, or other person who is unknown or cannot be found, shall be deposited with the state treasurer, and shall be paid without interest except in accordance with 58-29B-123 to the person entitled thereto or his legal representative upon proof satisfactory to the state treasurer of his right thereto. Any amount on deposit not claimed within six years from the discharge of the liquidator shall be deemed to have been abandoned and shall be escheated without formal escheat proceedings and be deposited into the general fund. Source: SL 1989, ch 436, 128.
58-29B-129. Disposition of funds not distributed.All funds withheld under 58-29B-112 to 58-29B-114, inclusive, and not distributed shall upon discharge of the liquidator be deposited with the state treasurer and paid by him in accordance with 58-29B-123. Any sums remaining which under 58-29B-123 would revert to the undistributed assets of the insurer shall be transferred to the state treasurer and become the property of the state under 58-29B-128, unless the director in his discretion petitions the court to reopen the liquidation under 58-29B-131. Source: SL 1989, ch 436, 129.
58-29B-13.1. Service of appropriate orders by director.If the director has reasonable cause to believe, and determines, after a hearing held pursuant to the provisions of 58-29B-17, that any domestic insurer has committed or engaged in, or is about to commit or engage in, any act, practice, or transaction that would subject it to delinquency proceedings under this chapter, he may make and serve upon the insurer and any other persons involved, such orders as are reasonably necessary to correct, eliminate, or remedy such conduct, condition, or ground. Source: SL 1989, ch 436, 13A.
58-29B-13. Proceedings commenced prior to enactment of chapter.Every proceeding heretofore commenced under the laws in effect before the enactment of this chapter shall be deemed to have commenced under this chapter for the purpose of conducting the proceeding henceforth, except that in the discretion of the director the proceeding may be continued, in whole or in part, as it would have been continued had this chapter not been enacted. Source: SL 1989, ch 436, 13.
58-29B-130. Application for discharge.If all assets justifying the expense of collection and distribution have been collected and distributed under this chapter, the liquidator shall apply to the court for discharge. The court may grant the discharge and make any other orders, including an order to transfer to the state treasurer any remaining funds that are uneconomic to distribute, as may be deemed appropriate. Any other person may apply to the court at any time for an order under this section. If the application is denied, the applicant shall pay the costs and expenses of the liquidator in resisting the application, including a reasonable attorney's fee. Source: SL 1989, ch 436, 130.
58-29B-131. Petition to reopen proceedings for good cause.After the liquidation proceeding has been terminated and liquidator discharged, the director or other interested party may at any time petition the court to reopen the proceedings for good cause, including the discovery of additional assets. If the court is satisfied that there is justification for reopening, it shall so order. Source: SL 1989, ch 436, 131.
58-29B-132. Recommendation and direction for retention or disposal of insurer's records.If it appears to the director that the records of any insurer in process of liquidation or completely liquidated are no longer useful, he may recommend to the court and the court shall direct what records should be retained for future reference and what should be destroyed. Source: SL 1989, ch 436, 132.
58-29B-133. Audits of receivership books.The court may, as it considers desirable, cause audits to be made of the books of the director relating to any receivership established under this chapter, and a report of each audit shall be filed with the director and with the court. The books, records, and other documents of the receivership shall be made available to the auditor at any time without notice. The expense of each audit shall be considered a cost of administration of the receivership. Source: SL 1989, ch 436, 133.
58-29B-134. Director's application to act as conservator--Grounds.If a domiciliary liquidator has not been appointed, the director may apply to the court by verified petition for an order directing him to act as conservator to conserve the property of an alien insurer not domiciled in this state or a foreign or alien insurer on any one or more of the following grounds:(1)Any of the grounds in 58-29B-31;(2)That any of its property has been sequestered by official action in its domiciliary state, or in any other state;(3)That enough of its property has been sequestered in a foreign country to give reasonable cause to fear that the insurer is or may become insolvent;(4)That its certificate of authority to do business in this state has been revoked or that none was ever issued and that there are residents of this state with outstanding claims or outstanding policies. Source: SL 1989, ch 436, 134.
58-29B-135. Issuance of order allowing director to act as conservator--Filing--Notice imparted.The court may issue the order in whatever terms it deems appropriate. The filing or recording of the order with the clerk of the circuit court of Hughes County or the register of deeds of the county in which the principal business of the company is located or the county in which its principal office or place of business is located, shall impart the same notice as a deed, bill of sale, or other evidence of title duly filed or recorded with that register of deeds would have imparted. Source: SL 1989, ch 436, 135.
58-29B-136. Petition to liquidate assets of foreign or alien insurer.The conservator may at any time petition the court for an order under 58-29B-138 to 58-29B-143, inclusive, to liquidate assets of a foreign or alien insurer under conservation, or, if appropriate, for an order under 58-29B-145 to 58-29B-150, inclusive, to be appointed ancillary receiver. Source: SL 1989, ch 436, 136.
58-29B-137. Termination of conservation of insurer.The conservator may at any time petition the court for an order terminating conservation of an insurer. If the court finds that the conservation is no longer necessary, it shall order that the insurer be restored to possession of its property and the control of its business. The court may also make such finding and issue such order at any time upon motion of any interested party, but if such motion is denied all costs shall be assessed against such party. Source: SL 1989, ch 436, 137.
58-29B-138. Director's application to liquidate assets of foreign or alien insurer--Grounds.If a domiciliary receiver has not been appointed, the director may apply to the circuit court of Hughes County by verified petition for an order directing him to liquidate the assets found in this state of a foreign insurer or an alien insurer or an alien insurer not domiciled in this state, on any of the following grounds:(1)Any of the grounds in 58-29B-31 or 58-29B-41; or(2)Any of the grounds specified in subdivisions 58-29B-134(2) to (4), inclusive. Source: SL 1989, ch 436, 138.
58-29B-139. Notice of orders sought under 58-29B-134 or 58-29B-138.If an order is sought under 58-29B-134 or 58-29B-138, the court shall cause the insurer to be given such notice and time to respond thereto as is reasonable under the circumstances. Source: SL 1989, ch 436, 139.
58-29B-14. Director's determination of continuation of business hazardous--Notification of insurer.If upon examination or at any other time the director has reasonable cause to believe or determines that any domestic insurer is in such condition as to render the continuance of its business hazardous to the public or to holders of its policies or certificates of insurance, or if such domestic insurer gives its consent, then the director shall upon his determination:(1)Notify the insurer of his determination; and(2)Furnish to the insurer a written list of the director's requirements to abate his determination. Source: SL 1989, ch 436, 14.
58-29B-140. Order to liquidate in whatever terms court deems appropriate--Filing--Notice imparted.If it appears to the court that the best interests of creditors, policyholders, and the public require, the court may issue an order to liquidate in whatever terms it deems appropriate. The filing or recording of the order with the clerk of the circuit court of Hughes County or the register of deeds of the county in which the principal business of the company is located or the county in which its principal office or place of business is located, shall impart the same notice as a deed, bill of sale, or other evidence of title duly filed or recorded with that register of deeds would have imparted. Source: SL 1989, ch 436, 140.
58-29B-141. Domiciliary receiver, conservator, or liquidator appointed while liquidation proceeding--Duty to act as ancillary receiver.If a domiciliary receiver, conservator, or liquidator is appointed in a reciprocal state while a liquidation is proceeding under this section the liquidator under this section shall thereafter act as ancillary receiver under 58-29B-145 to 58-29B-148, inclusive. If a domiciliary liquidator is appointed in a nonreciprocal state while a liquidation is proceeding under this section the liquidator may petition the court for permission to act as ancillary receiver under 58-29B-145 to 58-29B-150, inclusive. Source: SL 1989, ch 436, 141; SL 2008, ch 271, 1.
58-29B-142. Director's application to act as receiver--Grounds.On the same grounds as are specified in 58-29B-138, the director may petition any appropriate federal district court to be appointed receiver to liquidate that portion of the insurer's assets and business over which that court will exercise jurisdiction, or any lesser part thereof that the director deems desirable for the protection of the policyholders and creditors in this state. Source: SL 1989, ch 436, 142.
58-29B-143. Payment of resident's claims against foreign or alien insurer.The court may order the director, if he has liquidated the assets of a foreign or alien insurer under this chapter, to pay claims of residents of this state against the insurer under such rules as to the liquidation of insurers under this chapter as are otherwise compatible with the provisions of this chapter. Source: SL 1989, ch 436, 143.
58-29B-144. Domiciliary receiver, conservator, or liquidator of insurer domiciled in reciprocal state--Title vested--Date of vesting.The domiciliary receiver, conservator, or liquidator of an insurer domiciled in a reciprocal state shall, except as to special deposits and security on secured claims under 58-29B-149, be vested by operation of law with the title to all of the assets, property, contracts, and rights of action, insurance producers' balances, and all of the books, accounts, and other records of the insurer located in this state. The date of vesting shall be the date of the filing of the petition for receivership, conservatorship, or liquidation, as the case may be, if that date is specified by the domiciliary law for the vesting of property in the domiciliary state. Otherwise, the date of vesting shall be the date of entry of the order directing possession to be taken. The domiciliary receiver, conservator, or liquidator may immediately recover balances due from insurance producers and obtain possession of the books, accounts, and other records of the insurer located in this state. The domiciliary receiver, conservator, or liquidator also may recover all other assets of the insurer located in this state, subject to 58-29B-145 to 58-29B-150, inclusive. Source: SL 1989, ch 436, 144; SL 2001, ch 286, 148; SL 2008, ch 271, 2.
58-29B-145. Domiciliary liquidator for insurer not domiciled in reciprocal state--Title vested--Timing--Petition for conservation or liquidation.If a domiciliary liquidator is appointed for an insurer not domiciled in a reciprocal state, the director of this state shall be vested by operation of law with the title to all of the property, contracts, and rights of action, and all of the books, accounts, and other records of the insurer located in this state, at the same time that the domiciliary liquidator is vested with title in the domicile. The director of this state may petition for a conservation or liquidation order under 58-29B-134 to 58-29B-144, inclusive, or for an ancillary receivership under 58-29B-145 to 58-29B-148, inclusive, or after approval by the circuit court of Hughes County may transfer title to the domiciliary liquidator, as the interests of justice and the equitable distribution of the assets require. Source: SL 1989, ch 436, 145.
58-29B-146. Resident claimants--With whom and when to file.Claimants residing in this state may file claims with the liquidator or ancillary receiver, if any, in this state or with the domiciliary receiver, conservator, or liquidator, if the domiciliary law permits. The claims shall be filed on or before the last date fixed for the filing of claims in the domiciliary receivership, conservator, or liquidation proceedings. Source: SL 1989, ch 436, 146; SL 2008, ch 271, 3.
58-29B-147. Domiciliary receiver, conservator, or liquidator appointed for alien insurer--Appointment as ancillary receiver.If a domiciliary receiver, conservator, or liquidator has been appointed for an insurer not domiciled in this state, the director may file a petition with the circuit court of Hughes County requesting appointment as ancillary receiver in this state:(1)If the director finds that there are sufficient assets of the insurer located in this state to justify the appointment of an ancillary receiver; or(2)If the protection of creditors or policyholders in this state so requires. Source: SL 1989, ch 436, 147; SL 2008, ch 271, 4.
58-29B-148. Court may appoint ancillary receiver on terms deemed appropriate--Filing--Notice imparted.The court may issue an order appointing an ancillary receiver in whatever terms it deems appropriate. The filing or recording of the order with the register of deeds in this state imparts the same notice as a deed, bill of sale, or other evidence of title duly filed or recorded with that register of deeds. Source: SL 1989, ch 436, 148.
58-29B-149. Duties and powers of ancillary receiver when domiciliary receiver, conservator, or liquidator appointed in reciprocal state.If a domiciliary receiver, conservator, or liquidator has been appointed in a reciprocal state, then the ancillary receiver appointed in this state may, whenever necessary, aid and assist the domiciliary receiver, conservator, or liquidator in recovering assets of the insurer located in this state. The ancillary receiver shall, as soon as practicable, liquidate from their respective securities those special deposit claims and secured claims which are proved and allowed in the ancillary proceedings in this state, and shall pay the necessary expenses of the proceedings. The ancillary receiver shall promptly transfer all remaining assets, books, accounts, and records to the domiciliary receiver, conservator, or liquidator. The ancillary receiver and the receiver's deputies have the same powers and duties with respect to the administration of assets as a liquidator of an insurer domiciled in this state. Source: SL 1989, ch 436, 149; SL 2008, ch 271, 5.
58-29B-15. Supervision of insurer--Appointment of supervisor--Certain acts by insurer prohibited--Costs.If the director makes a determination to supervise an insurer subject to an order under 58-29B-13.1 or 58-29B-14, he shall notify the insurer. During the period of supervision, the director may appoint a supervisor to supervise such insurer. The order appointing a supervisor shall direct the supervisor to enforce orders issued under this chapter and may also require that the insurer not do any of the following things, during the period of supervision, without the prior approval of the director or the supervisor:(1)Dispose of, convey, or encumber any of its assets or its business in force;(2)Withdraw from any of its bank accounts;(3)Lend any of its funds;(4)Invest any of its funds;(5)Transfer any of its property;(6)Incur any debt, obligation, or liability;(7)Merge or consolidate with another company;(8)Enter into any new reinsurance contract or treaty; or(9)Write any new insurance contract or renew any insurance contract.All costs and expenses, including attorney fees, associated with administering the supervision order are the responsibility of the insurer and shall be paid from insurer's funds or assets. Source: SL 1989, ch 436, 15; SL 1991, ch 404, 1.
58-29B-150. Duties and powers of ancillary receivers, conservators, or liquidators when domiciliary liquidator appointed in this state.When a domiciliary liquidator has been appointed in this state, ancillary receivers, conservators, or liquidators appointed in reciprocal states shall have, as to assets and books, accounts, and other records in their respective states, corresponding rights, duties, and powers to those provided in this chapter for ancillary receivers appointed in this state. Source: SL 1989, ch 436, 150; SL 2008, ch 271, 6.
58-29B-151. Director may institute proceedings under 58-29B-13 to 58-29B-30.The director in his sole discretion may institute proceedings under 58-29B-13 to 58-29B-30, inclusive, at the request of the director or other appropriate insurance official of the domiciliary state of any foreign or alien insurer having property located in this state. Source: SL 1989, ch 436, 151.
58-29B-152. Liquidation proceeding against insurer domiciled in state--Claimants residing in foreign countries or states not reciprocal--Filing.In a liquidation proceeding begun in this state against an insurer domiciled in this state, claimants residing in foreign countries or in states not reciprocal states shall file claims in this state, and claimants residing in reciprocal states may file claims either with the ancillary receivers, if any, in their respective states, or with the domiciliary liquidator. Claims shall be filed on or before the last date fixed for the filing of claims in the domiciliary liquidation proceeding. Source: SL 1989, ch 436, 152.
58-29B-153. Proof of claims of residents in reciprocal states.Claims belonging to claimants residing in reciprocal states may be proved either in the liquidation proceeding in this state as provided in this chapter, or in ancillary proceedings, if any, in the reciprocal states. If notice of the claims and opportunity to appear and be heard is afforded the domiciliary liquidator of this state as provided in 58-29B-155, with respect to ancillary proceedings, the final allowance of claims by the court in ancillary proceedings in reciprocal states shall be conclusive as to amount and as to priority against special deposits or other security located in such ancillary state, but are not conclusive with respect to priorities against general assets under 58-29B-124. Source: SL 1989, ch 436, 153.
58-29B-154. Proceeding in reciprocal state against domiciled insurer--Filing.In a liquidation proceeding in a reciprocal state against an insurer domiciled in that state, claimants against the insurer who reside within this state may file claims either with the ancillary receiver, if any, in this state, or with the domiciliary receiver, conservator, or liquidator. Claims shall be filed on or before the last dates fixed for the filing of claims in the domiciliary receivership, conservatorship, or liquidation proceeding. Source: SL 1989, ch 436, 154; SL 2008, ch 271, 7.
58-29B-155. Proof of claims of South Dakota residents--Elections--Procedure.Claims belonging to claimants residing in this state may be proved either in the domiciliary state under the law of that state, or in ancillary proceedings, if any, in this state. If a claimant elects to prove a claim in this state, the claimant shall file the claim with the liquidator in the manner provided in 58-29B-103 to 58-29B-111, inclusive. The ancillary receiver shall make a recommendation to the court as under 58-29B-125 and 58-29B-126. The ancillary receiver shall also arrange a date for hearing if necessary under 58-29B-124 and 58-29B-125 and shall give notice to the receiver, conservator, or liquidator in the domiciliary state, either by registered or certified mail or by personal service at least forty days prior to the date set for hearing. If the domiciliary receiver, conservator, or liquidator, within thirty days after the giving of such notice, gives notice in writing to the ancillary receiver and to the claimant, either by registered or certified mail or by personal service, of the receiver's intention to contest the claim, the receiver is entitled to appear or to be represented in any proceeding in this state involving the adjudication of the claim. Source: SL 1982, ch 28, 18; SL 1989, ch 436, 155; SL 2008, ch 271, 8.
58-29B-156. Final allowance by state courts conclusive as to amount and priority.The final allowance of the claim by the courts of this state shall be accepted as conclusive as to amount and as to priority against special deposits or other security located in this state. Source: SL 1989, ch 436, 156.
58-29B-157. Attachment, garnishment, levy of execution prohibited during receivership, conservatorship, or liquidation proceedings.During the pendency in this or any other state of a receivership, conservatorship, or liquidation proceeding, whether called by those names or not, no action or proceeding in the nature of an attachment, garnishment, or levy of execution may be commenced or maintained in this state against the delinquent insurer or its assets. Source: SL 1989, ch 436, 157; SL 2008, ch 271, 9.
58-29B-158. Domiciliary state's order of distribution controls claims of residents of this and reciprocal states.In a liquidation proceeding in this state involving one or more reciprocal states, the order of distribution of the domiciliary state shall control as to all claims of residents of this and reciprocal states. All claims of residents of reciprocal states shall be given equal priority of payment from general assets regardless of where such assets are located. Source: SL 1989, ch 436, 158.
58-29B-159. Owners of special deposit claims--Priority--Deficiencies in deposit.The owners of special deposit claims against an insurer for which a liquidator is appointed in this or any other state has priority against the special deposits in accordance with the statutes governing the creation and maintenance of the deposits. If there is a deficiency in any deposit, so that the claims secured by it are not fully discharged from it, the claimants may share in the general assets, but the sharing shall be deferred until general creditors, and also claimants against other special deposits who have received smaller percentages from their respective special deposits, have been paid percentages of their claims equal to the percentage paid from the special deposit. Source: SL 1989, ch 436, 159.
58-29B-16. Insurer to comply with director's requirements--Time period--Failure to comply.Any insurer subject to an order under 58-29B-13.1 and 58-29B-14 shall comply with the lawful requirements of the director and, if placed under supervision, shall have sixty days from the date the supervision order is served within which to comply with the requirements of the director. In the event of such insurer's failure to comply within the proper time, the director may institute proceedings under 58-29B-31 or 58-29B-41 to have a rehabilitator or liquidator appointed, or extend the period of supervision. Source: SL 1989, ch 436, 16.
58-29B-160. Owner of secured claim--Elections.The owner of a secured claim against an insurer for which a liquidator has been appointed in this or any other state may surrender his security and file his claim as a general creditor, or the claim may be discharged by resort to the security in accordance with 58-29B-122 and 58-29B-123, in which case the deficiency, if any, shall be treated as a claim against the general assets of the insurer on the same basis as claims of unsecured creditors. Source: SL 1989, ch 436, 160.
58-29B-161. Ancillary receiver's failure to transfer certain assets.If an ancillary receiver in another state or foreign country, whether called by that name or not, fails to transfer to the domiciliary liquidator in this state any assets within his control other than special deposits, diminished only by the expenses of the ancillary receivership, if any, the claims filed in the ancillary receivership, other than special deposit claims or secured claims, shall be placed in the class of claims under subdivision 58-29B-124(7). Source: SL 1989, ch 436, 161.
58-29B-17. Hearings--Notice and procedure.The notice of hearing under 58-29B-13.1 and any order issued pursuant to that section shall be served upon the insurer pursuant to the applicable rules of civil or administrative procedure. The notice of hearing shall state the time and place of hearing, and the conduct, condition, or ground upon which the director would base his order. Unless mutually agreed between the director and the insurer, the hearing shall occur no less than ten days nor more than thirty days after notice is served and shall be in Hughes County or such other location as may be designated by the director. All hearings shall be private, unless the insurer requests a public hearing. Source: SL 1989, ch 436, 17.
58-29B-18. Request for hearing--Request not to stay order.Any insurer subject to an order under 58-29B-14 may request a hearing to review that order. Such a hearing shall be held as provided in 58-29B-17, but the request for a hearing may not stay the effect of the order. Source: SL 1989, ch 436, 18.
58-29B-19. Waiver of hearing--Application for judicial relief--Judicial review of order after hearing.If the director issues an order under 58-29B-14, the insurer may, at any time, waive a director's hearing and apply for immediate judicial relief by means of any remedy afforded by law without first exhausting administrative remedies. If a hearing is held subsequent to the hearing, any party to the proceedings whose interests are substantially affected shall be entitled to judicial review of any order issued by the director. Source: SL 1989, ch 436, 19.
58-29B-2. Scope.The provisions of this chapter apply to:(1)All insurers who are doing, or have done, an insurance business in this state, and against whom claims arising from that business may exist now or in the future;(2)All insurers who purport to do an insurance business in this state;(3)All insurers who have insureds resident in this state;(4)All other persons organized or in the process of organizing with the intent to do an insurance business in this state;(5)All nonprofit service plans and all fraternal benefit societies, health maintenance organizations, benefit societies and any other entity subject to Title 58;(6)All title insurance companies, subject to chapter 58-25;(7)Any entity whose administrative actions represent the administrative actions of an insurance company. Source: SL 1989, ch 436, 2.
58-29B-20. Requests for review of supervisor's actions.During the period of supervision the insurer may request the director to review an action taken or proposed to be taken by the supervisor, specifying wherein the action complained of is believed not to be in the best interest of the insurer. Source: SL 1989, ch 436, 20.
58-29B-21. Violation of supervision order--Penalty.If any person has violated any supervision order issued under this chapter, he is liable to pay a civil penalty imposed by the circuit court of Hughes County not to exceed ten thousand dollars. Source: SL 1989, ch 436, 21.
58-29B-22. Application for necessary orders to enforce supervision order.The director may apply for and any court of general jurisdiction may grant, such restraining orders, preliminary and permanent injunctions, and other orders as may be deemed necessary and proper to enforce a supervision order. Source: SL 1989, ch 436, 22.
58-29B-23. Violation of valid orders--Personal liability for losses suffered by insurer--Commencement of action.In the event that any person, subject to the provisions of this chapter, including those persons described in 58-29B-9 shall knowingly violate any valid order of the director issued under 58-29B-13.1 to 58-29B-23, inclusive, and, as a result of such violation, the net worth of the insurer shall be reduced or the insurer shall suffer loss it would not otherwise have suffered, that person shall be personally liable to the insurer for the amount of any such reduction or loss. The director or supervisor may bring an action on behalf of the insurer in the circuit court of Hughes County to recover the amount of the reduction or loss together with any costs. Source: SL 1989, ch 436, 23.
58-29B-24. Authority to file petition for seizure order--Grounds.For domestic insurers the director may file in the circuit court of Hughes County a petition for a seizure order:(1)That there exist any grounds that would justify a court order for a formal delinquency proceeding against an insurer under this chapter;(2)That the interest of policyholders, creditors, or the public will be endangered by delay; and(3)The contents of an order deemed necessary by the director. Source: SL 1989, ch 436, 24.
58-29B-25. Ex parte issuance of seizure order--Costs.Upon a filing under 58-29B-24, the court may issue forthwith, ex parte and without a hearing, the requested order which shall direct the director to take possession and control of all or a part of the property, books, accounts, documents, and other records of an insurer, and of the premises occupied by it for transaction of its business, and until further order of the court enjoin the insurer and its officers, managers, representatives, insurance producers, and employees from disposition of its property and from transaction of its business except with the written consent of the director. All costs and expenses incurred by the Division of Insurance, including attorney fees, associated with taking possession of the property, books, accounts, documents, and other records of the insurer and the business premises are the responsibility of the insurer and shall be paid from the insurer's funds and assets. The court may require an accounting of the costs and expenses. Source: SL 1989, ch 436, 25; SL 1991, ch 404, 2; SL 2001, ch 286, 141.
58-29B-26. Duration of order--Hearing to extend, shorten or modify--Vacation of order.The court shall specify in the order under 58-29B-25 its duration which shall be such time as the court deems necessary for the director to ascertain the condition of the insurer. On motion of either party or on its own motion, the court may from time to time hold such hearings as it considers desirable after such notice as it deems appropriate, and may extend, shorten, or modify the terms of the seizure order. The court may vacate the seizure order if the director fails to commence rehabilitation or liquidation proceedings under this chapter after having had a reasonable opportunity to do so. An order of the court pursuant to a formal proceeding under this chapter shall vacate the seizure order. Source: SL 1989, ch 436, 26.
58-29B-27. Entry of order not anticipatory breach of insurer's contracts.Entry of a seizure order under 58-29B-24 to 58-29B-26, inclusive, does not constitute an anticipatory breach of any contract of the insurer. Source: SL 1989, ch 436, 27.
58-29B-28. Petition for review of order--Procedure.An insurer subject to an ex parte order under 58-29B-25 may petition the court at any time after the issuance of such order for a hearing and review of the order. The court shall hold the hearing and review the order within fifteen days of the date of the request. A hearing under this section may be held privately in chambers and it shall be so held if the insurer proceeded against so requests. Source: SL 1989, ch 436, 28.
58-29B-29. Notice to persons not present at hearing--Effect on previously issued order.If, at any time after the issuance of an order under 58-29B-25, it appears to the court that any person whose interest is or will be substantially affected by the order did not appear at the hearing and has not been served, the court may order that notice be given. An order that notice be given does not stay the effect of any order previously issued by the court. Source: SL 1989, ch 436, 29.
58-29B-3. Definition of terms.Terms used in this chapter mean:(1)"Ancillary state," any state other than a domiciliary state;(2)"Creditor," a person having any claim, whether matured or unmatured, liquidated or unliquidated, secured or unsecured, absolute, fixed, or contingent;(3)"Delinquency proceeding," any proceeding instituted against an insurer for the purpose of liquidating, rehabilitating, reorganizing, or conserving such insurer, and any summary proceeding under 58-29B-9 or 58-29B-10. A "formal delinquency proceeding" is any liquidation or rehabilitation proceeding;(4)"Director," the director of the Division of Insurance;(5)"Doing business," includes, but is not limited to, any of the following acts, whether effected by mail or otherwise:(a)The issuance or delivery of contracts of insurance to persons resident in this state;(b)The solicitation of applications;(c)The collection of premiums, membership fees, assessments, or other consideration of such contracts, or the transaction of matters subsequent to execution of such contracts and matters arising out of the contracts;(d)Operating under a license or certificate of authority, as an insurer, issued by the Division of Insurance.(6)"Domiciliary state," the state in which an insurer is incorporated or organized, or, in the case of an alien insurer, its state of entry;(7)"Fair consideration," is given for property or obligation:(a)When in exchange for such property or obligation, as a fair equivalent therefor, and in good faith, property or services are rendered or an obligation is incurred or an antecedent debt is satisfied; or(b)When property or obligation is received in good faith to secure a present advance or antecedent debt in an amount not disproportionate when compared to the value of the property or obligation obtained;(8)"Foreign country," any other jurisdiction not in any state of the United States;(9)"General assets," all property, real, personal, or otherwise, not specifically mortgaged, pledged, deposited, or otherwise encumbered for the security or benefit of specified persons or classes of persons. As to specifically encumbered property, the term "general assets" includes all such property or its proceeds in excess of the amount necessary to discharge the sum or sums secured thereby. Assets held in trust and on deposit for the security or benefit of all policyholders in more than a single state shall be treated as general assets;(10)"Guaranty association," the South Dakota Insurance Guaranty Association created by chapter 58-29A for the payment of claims of insolvent insurers. A foreign guaranty association is any similar entity of any other state;(11)"Insolvency" or "insolvent," for an insurer issuing only assessable fire insurance policies:(a)The inability to pay any obligation within thirty days after it becomes payable, or(b)If an assessment be made within thirty days after such date, the inability to pay such obligation thirty days following the date specified in the first assessment notice issued after the date of loss.For any other insurer, "insolvency" or "insolvent" means that it is unable to pay its obligations when they are due, or when its admitted assets do not exceed its liabilities plus the greater of any capital and surplus required by law for its organization or the total par or stated value of its authorized and issued capital stock. For purposes of this section the term "liabilities" includes, but is not limited to, reserves required by statute or by insurance division general regulations or specific requirements imposed by the director upon a subject company at the time of admission or subsequent thereto.(12)"Insurer," any person who has done, purports to do, is doing or is licensed to do an insurance business, and is or has been subject to the authority of, or to liquidation, rehabilitation, reorganization, supervision, or conservation by any insurance director. For purposes of this chapter, any other person included under 58-29B-2 is an insurer;(13)"Preferred claim," any claim with respect to which the terms of this chapter accord priority of payment from the general assets of the insurer;(14)"Receiver," receiver, liquidator, rehabilitator, or conservator as the context requires;(15)"Reciprocal state," any state other than this state which has laws similar in substance to 58-29B-42, 58-29B-144 to 58-29B-150, inclusive, and 58-29B-152 to 58-29B-157, inclusive, and in which provisions are in force requiring that the director or equivalent official be the receiver of a delinquent insurer, and in which some provision exists for the avoidance of fraudulent conveyances and preferential transfers;(16)"Secured claim," any claim secured by mortgage, trust deed, pledge, deposit as security, escrow, or otherwise, but not including special deposit claims or claims against general assets. The term also includes claims which have become liens upon specific assets by reason of judicial process;(17)"Special deposit claim," any claim secured by a deposit made pursuant to statute for the security or benefit of a limited class or classes of persons, but not including any claim secured by general assets;(18)"State," any state, district or territory of the United States and the Panama Canal Zone;(19)"Transfer," includes the sale and every other and different mode, direct or indirect, of disposing of or of parting with property or with an interest therein, or with the possession thereof or of fixing a lien upon property or upon an interest therein, absolutely or conditionally, voluntarily, by or without judicial proceedings. The retention of a security title to property delivered to a debtor shall be deemed a transfer suffered by the debtor. Source: SL 1989, ch 436, 3.
58-29B-30. Records to remain confidential--Exceptions.In any proceeding and judicial review thereof under the provisions of 58-29B-13.1 to 58-29B-29, inclusive, all records of the insurer, other documents, and all Division of Insurance files and court records and papers, so far as they pertain to or are a part of the record of the proceedings, shall be and remain confidential except as is necessary to obtain compliance therewith, unless the circuit court of Hughes County, after hearing arguments from the parties in chambers, shall order otherwise, or unless the insurer requests that the matter be made public. Until such court order, all papers filed with the clerk of the circuit court of Hughes County shall be held by him in a confidential file. Source: SL 1989, ch 436, 30.
58-29B-31. Application by director for rehabilitation of insurer--Grounds.The director may apply by petition to the circuit court of Hughes County for an order authorizing him to rehabilitate a domestic insurer or an alien insurer domiciled in this state on any one or more of the following grounds:(1)The insurer is in such condition that the further transaction of business would be hazardous, financially, to its policyholders, creditors, or the public;(2)There is reasonable cause to believe that there has been embezzlement from the insurer, wrongful sequestration or diversion of the insurer's assets, forgery or fraud affecting the insurer, or other illegal conduct in, by, or with respect to the insurer that if established would endanger assets in an amount threatening the solvency of the insurer;(3)The insurer has failed to remove any person who in fact has executive authority in the insurer, whether an officer, manager, general agent, employee, or other person, if the person has been found after notice and hearing by the director to be dishonest or untrustworthy in a way affecting the insurer's business;(4)Control of the insurer, whether by stock ownership or otherwise, and whether direct or indirect, is in any person found after notice and hearing to be untrustworthy;(5)Any person who in fact has executive authority in the insurer, whether an officer, manager, general agent, director or trustee, employee, or other person, has refused to be examined under oath by the director concerning its affairs, whether in this state or elsewhere, and after reasonable notice of the fact the insurer has failed promptly and effectively to terminate the employment and status of the person and all his influence on management;(6)After demand by the director under this title, the insurer has failed to promptly make available for examination any of its own property, books, accounts, documents, or other records, or those of any subsidiary or related company within the control of the insurer, or those of any person having executive authority in the insurer so far as they pertain to the insurer;(7)Without first obtaining the written consent of the director, the insurer has transferred, or attempted to transfer, in a manner contrary to chapter 58-5 or chapter 58-5A, substantially its entire property or business, or has entered into any transaction the effect of which is to merge, consolidate, or reinsure substantially its entire property or business in or with the property or business of any other person;(8)The insurer or its property has been or is the subject of an application for the appointment of a receiver or trustee, custodian, conservator or sequestrator or similar fiduciary of the insurer or its property otherwise than as authorized under the insurance laws of this state, and such appointment has been made or is imminent, and such appointment might oust the courts of this state of jurisdiction or might prejudice orderly delinquency proceedings under this chapter;(9)Within the previous four years the insurer has willfully violated its charter or articles of incorporation, its bylaws, any insurance law of this state, or any valid order of the director under the provisions of this chapter;(10)The insurer has failed to pay within sixty days after due date any obligation to any state or any subdivision thereof or any judgment entered in any state, if the court in which such judgment was entered had jurisdiction over such subject matter except that such nonpayment is not a ground until sixty days after any good faith effort by the insurer to contest the obligation has been terminated, whether it is before the director or in the courts, or the insurer has systematically attempted to compromise or renegotiate previously agreed settlements with its creditors on the ground that it is financially unable to pay its obligation in full; (11)The insurer has failed to file its annual report or other financial report required by statute within the time allowed by law and, after written demand by the director, has failed to give an adequate explanation immediately;(12)The board of directors of the holders of a majority of the shares entitled to vote, or a majority of those individuals entitled to the control of the entities request, or consent to rehabilitation under this chapter. Source: SL 1989, ch 436, 31; SL 1991, ch 404, 3.
58-29B-32.1. Appointment of deputies--Powers and responsibilities--Employment of counsel, clerks and assistants--Compensation--Advisory committee.The director as rehabilitator may appoint one or more special deputies, who shall have all the powers and responsibilities of the rehabilitator granted under this section, and the director may employ such counsel, clerks, and assistants as he considers necessary. The compensation of the special deputy, counsel, or clerks and assistants and all expenses of taking possession of the insurer and of conducting the proceedings shall be fixed by the director, with the approval of the court and shall be paid out of the funds or assets of the insurer. Any persons appointed under this section shall serve at the pleasure of the director. In the event that the property of the insurer does not contain sufficient cash or liquid assets to defray the costs incurred, the director, with the approval of the secretary of the Department of Labor and Regulation, may advance the costs so incurred out of any appropriation for the maintenance of the Division of Insurance. Any amounts so advanced for expenses of administration shall be repaid to the director for the use of the Division of Insurance out of the first available money of the insurer. The director may, with the approval of the court, appoint an advisory committee of policyholders, claimants or other creditors including guaranty associations. The committee shall serve at the pleasure of the director and shall serve without compensation other than reimbursement for reasonable travel and per diem expenses. No other committee of any nature may be appointed by the director or the court in rehabilitation. Source: SL 1989, ch 436, 32A; SL 1992, ch 351, 3; SL 2003, ch 272 (Ex. Ord. 03-1), 20; SL 2011, ch 1 (Ex. Ord. 11-1), 162, eff. Apr. 12, 2011.
58-29B-32.2. Promulgation of rules for appointing committees.The director may promulgate rules pursuant to chapter 1-26 for appointing committees pursuant to 58-29B-32.1 and 58-29B-46 and establishing the duties to be performed by such committees. Source: SL 1992, ch 351, 14.
58-29B-32. Order of rehabilitation--Contents--Effect of filing or recording--Vesting of title--Accounting required.Except for good cause shown, an order to rehabilitate the business of a domestic insurer, or an alien insurer domiciled in this state, shall be issued within ten days of the hearing on the order to show cause and shall contain an appointment of the director and his successors in office as the rehabilitator, and shall direct the rehabilitator forthwith to take possession of the assets of the insurer, and to administer them under the general supervision of the court. The filing or recording of the order with the clerk of the circuit court of Hughes County or register of deeds of the county in which the principal business of the company is conducted, or the county in which its principal office or place of business is located, shall impart the same notice as a deed, bill of sale, or other evidence of title duly filed or recorded with that register of deeds would have imparted. The order to rehabilitate the insurer shall by operation of law vest title to all assets of the insurer in the rehabilitator. Any order issued under this section shall require an accounting to the court by the rehabilitator. Accountings shall be at such intervals as the court specifies in its order, but no less than semiannually. Entry of an order of rehabilitation does not constitute an anticipatory breach of any contracts of the insurer nor may it be grounds for retroactive revocation or cancellation of any contracts of the insurer, unless revocation or cancellation is done by the rehabilitator pursuant to 58-29B-32.1 to 58-29B-35, inclusive. Each accounting shall include a report from the rehabilitator on whether a plan pursuant to 58-29B-35 is being prepared and, if so, the timetable for the preparation. Source: SL 1989, ch 436, 32; SL 1992, ch 351, 2.
58-29B-33. Authority of rehabilitator to reform and revitalize issuer.The rehabilitator may take any action he considers appropriate to reform and revitalize the insurer. He shall have all the powers of the directors, officers, and managers, whose authority shall be suspended, except as they are redelegated by the rehabilitator. He may direct and manage, hire and discharge employees subject to any contract rights they may have, and deal with the property and business of the insurer. Source: SL 1989, ch 436, 33.
58-29B-34. Authority to pursue legal remedies on insurer's behalf.If it appears to the rehabilitator that there has been criminal or tortious conduct, or breach of any contractual or fiduciary obligation detrimental to the insurer by any officer, manager, representative, insurance producer, employee, or other person, the rehabilitator may pursue all appropriate legal remedies on behalf of the insurer. Source: SL 1989, ch 436, 34; SL 2001, ch 286, 142.
58-29B-35. Rehabilitator's plan for transformation--Application and grounds for approval--Procedure upon approval.If the rehabilitator determines that reorganization, consolidation, conversion, reinsurance, merger, sale, or other transformation of the insurer is appropriate, he shall prepare a plan to effect such changes. Upon application of the rehabilitator for approval of the plan, and after such notice and hearings as the court may prescribe, the court may either approve or disapprove the plan proposed, or may modify it and approve it as modified. Any plan approved under this section shall be, in the judgment of the court, fair and equitable to all parties concerned. If the plan is approved, the rehabilitator shall carry out the plan. In the case of a life insurer, the plan proposed may include the imposition of liens upon the policies of the company, if all rights of shareholders are first relinquished. A plan for a life insurer may also propose imposition of a moratorium upon loan and cash surrender rights under policies, for such period and to such an extent as may be necessary. The rehabilitator may under 58-29B-61 to 58-29B-65, inclusive, avoid fraudulent transfers. Source: SL 1989, ch 436, 35; SL 1991, ch 404, 4.
58-29B-36. Disposition of actions in which insurer a party pending when rehabilitation order entered.Any court in this state before which any action or proceeding in which the insurer is a party or is obligated to defend a party is pending when a rehabilitation order against the insurer is entered shall stay the action or proceeding for ninety days and such additional time as is necessary for the rehabilitator to obtain proper representation and prepare for further proceedings. The rehabilitator shall take such action respecting the pending litigation as he deems necessary in the interests of justice and for the protection of creditors, policyholders, and the public. The rehabilitator shall immediately consider all litigation pending outside this state and shall petition the courts having jurisdiction over that litigation for stays if necessary to protect the estate of the insurer. Source: SL 1989, ch 436, 36.
58-29B-37. Petition for appointment of rehabilitator--Suspension of statute of limitations, laches--Time period for commencement of actions ripe when petition is filed.No statute of limitations or defense of laches may run with respect to any action by or against an insurer between the filing of a petition for appointment of a rehabilitator for that insurer and the order granting or denying that petition. Any action by or against the insurer that might have been commenced when the petition was filed may be commenced for at least sixty days after the order of rehabilitation is entered or the petition is denied. Source: SL 1989, ch 436, 37.
58-29B-38. Guaranty associations--Standing to appear in rehabilitation proceedings.Any guaranty association or foreign guaranty association covering life or health insurance or annuities shall have standing to appear in any court proceeding concerning the rehabilitation of a life or health insurer if such association is or may become liable to act as a result of the rehabilitation. Source: SL 1989, ch 436, 38.
58-29B-39. Rehabilitation futile--Petition for liquidation--Effect--Court to permit directors or insurers to defend.If the director believes further attempts to rehabilitate an insurer would substantially increase the risk of loss to creditors, policyholders, or the public, or would be futile, the director may petition the circuit court of Hughes County for an order of liquidation. A petition under this section has the same effect as a petition under 58-29B-41. The circuit court of Hughes County shall permit the directors of the insurer to take such actions as are reasonably necessary to defend against the petition and may order payment from the estate of the insurer of such costs and other expenses of defense as justice may require. If the insurer is insolvent, the court shall issue an order for liquidation and shall set a hearing to determine the issues being asserted by the directors. Source: SL 1989, ch 436, 39; SL 1992, ch 351, 15.
58-29B-4. Delinquency proceedings sole and exclusive remedy--Commencement of proceedings by director.Delinquency proceedings pursuant to this chapter shall constitute the sole and exclusive method of liquidating, rehabilitating, reorganizing, or conserving an insurer, and no court may entertain a petition for the commencement of such proceedings, or any other similar procedure, unless it has been filed in the name of the state on the relation of the director. Source: SL 1989, ch 436, 4.
58-29B-40. Termination of rehabilitation--Procedure--Payment of costs.The rehabilitator or directors may at any time petition the circuit court of Hughes County for an order terminating rehabilitation of an insurer. The court may order payment from the estate of the insurer of such costs and other expenses of such petition as justice may require. If the court finds that rehabilitation has been accomplished and that grounds for rehabilitation under 58-29B-31 no longer exist, it shall order that the insurer be restored to possession of its property and the control of its business. The court may also on its own motion make that finding and issue an order terminating rehabilitation. Source: SL 1989, ch 436, 40.
58-29B-41. Petition for liquidation--Grounds.The director may petition the court for an order directing him to liquidate a domestic insurer or an alien insurer domiciled in this state based on the following:(1)Any ground for an order of rehabilitation as specified in 58-29B-31, whether or not there has been a prior order directing the rehabilitation of the insurer;(2)The insurer is insolvent; or(3)The insurer is in such condition that the further transaction of business would be hazardous, financially or otherwise, to its policyholders, its creditors or the public. Source: SL 1989, ch 436, 41.
58-29B-42.1. Plan for continued performance of policy claim obligations during appeal of liquidation order.If an insurer is in liquidation, within five days of July 1, 1992, or, if later, within five days after the initiation of an appeal of an order of liquidation, which order has not been stayed, the director shall present for the court's approval a plan for the continued performance of the company's policy claims obligations, including the duty to defend insureds under liability insurance policies, during the pendency of an appeal. The plan shall provide for the continued performance and payment of policy claims obligations in the normal course of events, notwithstanding the grounds alleged in support of the order of liquidation includes the ground of insolvency. If the company's financial condition does not, in the judgment of the director, support the full performance of all policy claims obligations during the appeal period, the plan may prefer the claims of certain policyholders and claimants over creditors and interested parties as well as other policyholders and claimants, as the director finds to be fair and equitable considering the relative circumstances of the policyholders and claimants. The court shall examine the plan submitted by the director and if it finds the plan to be in the best interests of the parties, the court shall approve the plan. No action may lie against the director or any of his deputies, agents, clerks, assistants, or attorneys by any party based on preference in a plan during the pendency of appeal approved by the court.The plan may not supersede or affect the obligations of any insurance guaranty association.If the liquidator pays claims from assets of the estate, which would otherwise be the obligations of any particular guaranty association but for the appeal of the order of liquidation, the plans, during the appeal period, shall provide for equitable adjustments to be made by the liquidator to any distributions of assets to guaranty associations, so that all guaranty associations equally benefit on a pro rata basis from the assets of the estate. Further, if an order of liquidation is set aside upon any appeal, the company may not be released from delinquency proceedings until all funds advanced by any guaranty association, including reasonable administrative expenses relating to obligations of the company, are repaid in full, together with interest at the judgment rate of interest or unless an arrangement for repayment has been made with the consent of all applicable guaranty associations. Source: SL 1992, ch 351, 5.
58-29B-42. Order of liquidation--Contents--Title vested in liquidator--Effect of filing or recording.An order to liquidate the business of a domestic insurer shall contain appointment of the director and his successors in office as liquidator and shall direct the liquidator forthwith to take possession of the assets of the insurer and to administer them under the general supervision of the court. The liquidator shall be vested by operation of law with the title to all property, contracts, and rights of action and all of the books and records of the insurer ordered liquidated, wherever located, as of the entry of the final order of liquidation. The filing or recording of the order with the clerk of the circuit court of Hughes County and the register of deeds of the county in which its principal office or place of business is located, or, in the case of real estate with the register of deeds of the county where the property is located, shall impart the same notice as a deed, bill of sale, or other evidence of title duly filed or recorded with that register of deeds would have imparted. Source: SL 1989, ch 436, 42.
58-29B-43. Rights and liabilities fixed upon issuance of order.Upon issuance of the order to liquidate, the rights and liabilities of any such insurer and of its creditors, policyholders, shareholders, members, and all other persons interested in its estate shall become fixed as of the date of entry of the order of liquidation, except as provided in 58-29B-47 and 58-29B-112 to 58-29B-114, inclusive. Source: SL 1989, ch 436, 43.
58-29B-44. Order to liquidate alien insurer domiciled in state--Effect.An order to liquidate the business of an alien insurer domiciled in this state shall be in the same terms and have the same legal effect as an order to liquidate a domestic insurer, except that the assets and the business in the United States shall be the only assets and business included therein. Source: SL 1989, ch 436, 44.
58-29B-45. Declaration of insurer's insolvency--Procedure.At the time of the petition for an order of liquidation, or at any time thereafter, the director, after making appropriate findings of an insurer's insolvency, may petition the court for a judicial declaration of such insolvency. After providing such notice and hearing as it deems proper the court may make the declaration. Source: SL 1989, ch 436, 45.
58-29B-46. Order of liquidation--Financial reports required--Annual filing.Any order issued under 58-29B-41 to 58-29B-45, inclusive, shall require financial reports to the court by the liquidator.Financial reports shall include, at a minimum, the assets and liabilities of the insurer and all funds received or disbursed by the liquidator during the current period. Financial reports shall be filed within one year of the liquidation order and at least annually thereafter. Source: SL 1989, ch 436, 46; SL 1992, ch 351, 4.
58-29B-47. Effect of order upon policies in effect at time of issuance.All policies, including bonds and other noncancellable business, other than life or health insurance or annuities, in effect at the time of issuance of an order of liquidation shall continue in force for the lesser of:(1)A period of thirty days from the date of entry of the liquidation orders;(2)The expiration of the policy coverage;(3)The date when the insured has replaced the insurance coverage with equivalent insurance coverage in another insurer or otherwise terminated the policy; or(4)The liquidator has effected a transfer of the policy obligation pursuant to 58-29B-49.An order of liquidation under 58-29B-41 to 58-29B-45, inclusive, shall terminate coverages at the time specified in this section for purposes of any other statute.Policies of life or health insurance or annuities shall continue in force for such period and under such terms as is provided for by any applicable guaranty association or foreign guaranty association.Policies of life or health insurance or annuities or any period or coverage of such policies not covered by a guaranty association or foreign guaranty association shall terminate according to this section. Source: SL 1989, ch 436, 47; SL 1992, ch 351, 6.
58-29B-48. Order to dissolve corporate existence--Procedure.The director may petition for an order dissolving the corporate existence of a domestic insurer or the United States branch of an alien insurer domiciled in this state at the time he applies for a liquidation order. The court shall order dissolution of the corporation upon petition by the director upon or after the granting of a liquidation order. Dissolution may also be effected by operation of law upon the discharge of the liquidator, if the insurer is insolvent and may be ordered by the court upon the discharge of the liquidator if the insurer is under a liquidation order for some other reason. Source: SL 1989, ch 436, 48.
58-29B-49. Powers of liquidator.The liquidator may:(1)Appoint a special deputy to act for the liquidator under this chapter and determine his reasonable compensation. The special deputy shall have all powers of the liquidator granted by this section. The special deputy shall serve at the pleasure of the liquidator;(2)Employ employees, representatives, insurance producers, legal counsel, actuaries, accountants, appraisers, consultants, and such other personnel as the liquidator may consider necessary to assist in the liquidation;(3)Fix the reasonable compensation of employees, representatives, insurance producers, legal counsel, actuaries, accountants, appraisers, and consultants with the approval of the court;(4)Pay reasonable compensation to persons appointed and defray from the funds or assets of the insurer all expenses of taking possession of, conserving, conducting, liquidating, disposing of, or otherwise dealing with the business and property of the insurer. If the property of the insurer does not contain sufficient cash or liquid assets to defray the costs incurred, the director may advance the costs so incurred out of any appropriation for the maintenance of the Division of Insurance. Any amounts so advanced for expenses of administration shall be repaid to the director for the use of the Division of Insurance out of the first available money of the insurer;(5)Hold hearings, subpoena witnesses to compel their attendance, administer oaths, examine any person under oath, and compel any person to subscribe to the person's testimony after it has been correctly reduced to writing, and, in connection therewith, require the production of any books, papers, records, or other documents which the liquidator considers relevant to the inquiry;(6)Collect all debts and money due and claims belonging to the insurer, wherever located, and, for this purpose:(a)To institute timely action in other jurisdictions, in order to forestall garnishment and attachment proceedings against such debts;(b)To do such other acts as are necessary or expedient to collect, conserve, or protect its assets or property, including the power to sell, compound, compromise, or assign debts for purposes of collection upon such terms and condition as the liquidator deems best; and(c)To pursue any creditor's remedies available to enforce the creditor's claims;(7)Conduct public and private sales of the property of the insurer;(8)Use assets of the estate of an insurer under a liquidation order to transfer policy obligations to a solvent assuming insurer, if the transfer can be arranged without prejudice to applicable priorities under 58-29B-124;(9)Acquire, hypothecate, encumber, lease, improve, sell, transfer, abandon, or otherwise dispose of or deal with, any property of the insurer at its market value or upon such terms and conditions as are fair and reasonable. The liquidator may also execute, acknowledge, and deliver any and all deeds, assignments, releases, and other instruments necessary or proper to effectuate any sale of property or other transaction in connection with liquidation;(10)Borrow money on the security of the insurer's assets or without security and to execute and deliver all documents necessary to that transaction for the purpose of facilitating the liquidation;(11)Enter into such contracts as are necessary to carry out the order to liquidate, and affirm or disavow any contracts to which the insurer is a party; (12)Continue to prosecute and institute in the name of the insurer or in the liquidator's name any and all suits and other legal proceedings, in this state or elsewhere, and abandon the prosecution of claims the liquidator considers unprofitable to pursue further. If the insurer is dissolved under 58-29B-48, the liquidator may apply to any court in this state or elsewhere for leave to proceed on behalf of the insurer as plaintiff;(13)Prosecute any action which may exist on behalf of the creditors, members, policyholders, or shareholders of the insurer against any officer of the insurer, or any other person;(14)Remove any or all records and property of the insurer to the offices of the director or to such other place as may be convenient for the purposes of efficient and orderly execution of the liquidation. Guaranty associations and foreign guaranty associations shall have such reasonable access to the records of the insurer as is necessary for them to carry out their statutory obligations;(15)Deposit in one or more banks in this state such sums as are required for meeting current administration expenses and dividend distributions;(16)Invest all sums not currently needed, unless the court orders otherwise;(17)File any necessary documents for record in the office of any register of deeds or record office in this state or elsewhere where property of the insurer is located;(18)Assert all defenses available to the insurer as against third persons, including statutes of limitation, statutes of frauds, and the defense of usury. A waiver of any defense by the insurer after a petition in liquidation has been filed does not bind the liquidator. If a guaranty association or foreign guaranty association has an obligation to defend any suit, the liquidator shall give precedence to such obligation and may defend only in the absence of a defense by such guaranty associations;(19)Exercise and enforce all the rights, remedies, and powers of any creditor, shareholder, policyholder, or member, including any power to avoid any transfer or lien that may be given by the general law and that is not included with 58-29B-61 to 58-29B-83, inclusive;(20)Intervene in any proceeding wherever instituted that might lead to the appointment of a receiver or trustee, and act as the receiver or trustee if the appointment is offered;(21)Enter into agreements with any receiver or director of any other state relating to the rehabilitation, liquidation, conservation, or dissolution of an insurer doing business in both states;(22)Exercise all powers conferred upon receivers by the laws of this state not inconsistent with the provisions of this chapter;(23)To appoint, with the approval of the court, an advisory committee of policyholders, claimants, or other creditors including guaranty associations. The committee shall serve at the pleasure of the director and shall serve without compensation other than reimbursement for reasonable travel and per diem living expenses. No other committee of any nature may be appointed by the director or the court in liquidation proceedings;(24)To audit the books and records of all representatives and insurance producers of the insurer insofar as those records relate to the business activities of the insurer. Source: SL 1989, ch 436, 49; SL 1992, ch 351, 7; SL 2001, ch 286, 143.
58-29B-5. Commencement of proceedings despite lack of notice to insurer.Delinquency proceedings pursuant to this chapter may be commenced by the director at any time, regardless of whether notice to an insurer has been given concerning impairment of capital or assets as provided in 58-5-114. Source: SL 1989, ch 436, 5.
58-29B-50.1. Obligations of liquidator subsequent to entry of liquidation order.Notwithstanding the powers of the liquidator as stated in 58-29B-47 and 58-29B-50, the liquidator has no obligation to defend claims or to continue to defend claims subsequent to the entry of a liquidation order. Source: SL 1992, ch 351, 8.
58-29B-50. Enumeration in 58-29B-49 not exclusive.The enumeration, in 58-29B-49, of the powers and authority of the liquidator may not be construed as a limitation upon him, nor may it exclude in any manner his right to do such other acts not herein specifically enumerated, or otherwise provided for, as may be necessary or appropriate for the accomplishment of or in aid of the purpose of liquidation. Source: SL 1989, ch 436, 50.
58-29B-51. Notice of liquidation order.Unless the court otherwise directs, the liquidator shall give notice of the liquidation order as soon as possible but in no event more than ten days from the date of entry of the order to liquidate:(1)By first class mail or by telegram or telephone to the insurance director of each jurisdiction in which the insurer is doing business;(2)By first class mail to any guaranty association or foreign guaranty association which is or may become obligated as a result of the liquidation;(3)By first class mail to any insurance producer of the insurer;(4)By first class mail to any person known or reasonably expected to have claims against the insurer including any policyholder, at the person's last known address as indicated by the records of the insurer; and(5)By publication in a newspaper of general circulation in the county in which the insurer has its principal place of business and in such other locations as the liquidator considers appropriate. Source: SL 1989, ch 436, 51; SL 2001, ch 286, 144.
58-29B-52. Duties of claimant upon notice of liquidation.Notice to any potential claimant under 58-29B-51 requires such claimant to file with the liquidator his claims together with proper proofs thereof under 58-29B-106 to 58-29B-110, inclusive, on or before a date the liquidator shall specify in the notice. The liquidator need not require any person claiming cash surrender values or other investment values in life insurance and annuities to file a claim. All claimants shall keep the liquidator informed of any changes of address. If notice is given in accordance with 58-29B-51, the distribution of assets of the insurer under this chapter shall be conclusive with respect to all claimants, whether or not they received notice. Source: SL 1989, ch 436, 52.
58-29B-53. Duties of insurance producer upon notice of liquidation.Every person who receives notice in the form prescribed in 58-29B-51 that an insurer which the person represents is the subject of a liquidation order shall, within five days of the notice, give written notice of the liquidation order by first class mail to the last known address contained in the insurance producer's records to each policyholder or other person named in any policy issued through the insurance producer by the insurer. A policy is deemed issued through an insurance producer if the insurance producer has a property interest in the expiration of the policy at any time during the life of the policy, unless the ownership of the expiration of the policy has been transferred to another. The written notice shall include the name and address of the insurer, the name and address of the insurance producer, identification of the policy impaired, and the nature of the impairment including termination of coverage, as described in 58-29B-47. Each insurance producer obligated to give notice under this section shall file a report of compliance with the liquidator within five days of the receipt of the notice from the liquidator. Source: SL 1989, ch 436, 53; SL 2001, ch 286, 145.
58-29B-54. Failure of insurance producer to comply with 58-29B-53--Penalty--Liquidator's waiver of duties.Any insurance producer failing to give notice or file a report of compliance as required in 58-29B-53 may be subject to payment of a penalty of not more than one thousand dollars and may have the insurance producer's license suspended, which may only be imposed after a hearing held by the director. The liquidator may waive the duties imposed by 58-29B-53 if he determines that other notice to the policyholders of the insurer under liquidation is adequate. Source: SL 1989, ch 436, 54; SL 2001, ch 286, 146.
58-29B-55. Appointment of liquidator--Effect upon actions and injunctions pending against insurer or liquidator--Liquidator's right to intervene.Upon issuance of an order appointing a liquidator of a domestic insurer or of an alien insurer domiciled in this state, no action at law or equity may be brought against the insurer or liquidator, whether in this state or elsewhere, nor may any such existing action be maintained or further presented after issuance of such order. The courts of this state shall give full faith and credit to injunctions against the liquidator or the company or the continuation of existing actions against the liquidator or the company, if such injunctions are included in an order to liquidate an insurer issued pursuant to corresponding provisions in other states. If in the liquidator's judgment, protection of the estate of the insurer requires intervention in an action against the insurer that is pending outside this state, he may intervene in this action. The liquidator may defend any action in which he intervenes under this section at the expense of the estate of the insurer. Source: SL 1989, ch 436, 55.
58-29B-56. Time periods in which liquidator may act for or institute action on behalf of insurer.The liquidator may, upon or after an order for liquidation, within two years or such time in addition to two years as applicable law may permit, institute an action or proceeding on behalf of the estate of the insurer upon any cause of action against which the statute of limitations has not expired at the time of the filing of the petition upon which such order is entered. If, by any agreement, a period of limitation is fixed for instituting a suit or proceeding upon any claim, or for filing any claim, proof of claim, proof of loss, demand, notice, or the like, or where in any proceeding, judicial or otherwise, a period of limitation is fixed, either in the proceeding or by applicable law, for taking any action, filing any claim or pleading, or doing any act, and where in any such case the period had not expired at the date of the filing of the petition, the liquidator may, for the benefit of the estate, take any such action or do any such act, required of or permitted to the insurer, within a period of one hundred eighty days subsequent to the entry of an order for liquidation, or within such further period as is shown to the satisfaction of the court not to be unfairly prejudicial to the other party. Source: SL 1989, ch 436, 56.
58-29B-57. Petition for liquidation--Suspension of statute of limitations, laches--Time period for commencement of actions ripe when petition filed.No statute of limitations or defense of laches may run with respect to any action against an insurer between the filing of a petition for liquidation against an insurer and the denial of the petition. Any action against the insurer that might have been commenced when the petition was filed may be commenced for at least sixty days after the petition is denied. Source: SL 1989, ch 436, 57.
58-29B-58. Guaranty associations--Standing to appear in liquidation proceedings.Any guaranty association or foreign guaranty association may appear in any court proceeding concerning the liquidation of an insurer if such association is or may become liable to act as a result of the liquidation of an insurer if such association is or may become liable to act as a result of the liquidation of an insurer. Source: SL 1989, ch 436, 58.
58-29B-59. Liquidator to prepare list of insurer's assets--Filing requirements.As soon as practicable after the liquidation order, but not later than one hundred twenty days thereafter, the liquidator shall prepare in duplicate a list of the insurer's assets. The list shall be amended or supplemented from time to time as the liquidator may determine. One copy shall be filed in the office of the clerk of the circuit court of Hughes County and one copy shall be retained for the liquidator's files. All amendments and supplements shall be similarly filed. A submission to the court for disbursement of assets in accordance with 58-29B-98 to 58-29B-100, inclusive, fulfills the requirements of this section. Source: SL 1989, ch 436, 59.
58-29B-6. Grounds for personal jurisdiction.In addition to other grounds for jurisdiction provided by the law of this state, a court of this state having jurisdiction of the subject matter has jurisdiction over a person served pursuant to chapter 15-6 or other applicable provisions of law in an action brought by the receiver of a domestic insurer or an alien insurer domiciled in this state:(1)If the person served is obligated to the insurer in any way as an incident to any agency or brokerage or other arrangement that may exist or has existed between the insurer and the insurance producer or representative of the insurer, in any action on or incident to the obligation;(2)If the person served is a reinsurer who has at any time written a policy of reinsurance for an insurer against which a rehabilitation or liquidation order is in effect when the action is commenced, or is an insurance producer or representative of or for the reinsurer, in any action on or incident to the reinsurance contract;(3)If the person served is or has been an officer, manager, trustee, organizer, promoter, or person in a position of comparable authority or influence in an insurer against which a rehabilitation or liquidation order is in effect when the action is commenced, in any action resulting from such a relationship with the insurer;(4)If the person served is an insurance producer or representative of the insurer or other person who has at any time written policies of insurance for or has acted in any manner on behalf of an insurer against which a delinquency proceeding has been instituted, in any action resulting from or incident to such a relationship with the insurer;(5)If the person served is or was at the time of the institution of the delinquency proceeding against the insurer holding assets in which the receiver claims an interest on behalf of the insurer, in any action concerning the assets; or(6)If the person served is obligated to the insurer in any way whatsoever, in any action or incident to the obligation. Source: SL 1989, ch 436, 6; SL 1992, ch 351, 1; SL 2001, ch 286, 139.
58-29B-60. Reduction of assets to appropriate degree.The liquidator shall reduce the assets to a degree of liquidity that is consistent with the execution of the liquidation. Source: SL 1989, ch 436, 60.
58-29B-61.1. Liability of beneficiary of fraudulent transfer.Any person receiving any property or benefit from the insurer which is a fraudulent transfer under 58-29B-61 is personally liable and shall account to the liquidator concerning it. Source: SL 1992, ch 351, 9.
58-29B-61. Fraudulent transfers--Avoidance by receiver--Acceptance or preservation of transfer.Every transfer made or suffered and every obligation incurred by an insurer within one year prior to the filing of a successful petition for rehabilitation or liquidation under this chapter is fraudulent as to then existing and future creditors if made or incurred without fair consideration, or with actual intent to hinder, delay, or defraud either existing or future creditors. A transfer made, or an obligation incurred, by an insurer ordered to be rehabilitated or liquidated under this chapter, which is fraudulent under this section, may be avoided by the receiver. However, a person who in good faith is a purchaser, lienor, or obligee who in good faith has given a consideration less than fair for such transfer, lien, or obligation may retain the property, lien, or obligation as security for repayment. The court may, on due notice, order any such transfer or obligation to be preserved for the benefit of the estate, and in that event, the receiver shall succeed to and may enforce the rights of the purchaser, lienor, or obligee. Source: SL 1989, ch 436, 61.
58-29B-62. Fraudulent transfers between insurer and reinsurer--Grounds for avoidance by receiver.Any transaction of the insurer with a reinsurer shall be deemed fraudulent and may be avoided by the receiver under 58-29B-61 if:(1)The transaction consists of the termination, adjustment, or settlement of a reinsurance contract in which the reinsurer is released from any part of its duty to pay the originally specified share of losses that had occurred prior to the time of the transaction, unless the reinsurer gives a present fair equivalent value for the release; and(2)Any part of the transaction took place within one year prior to the date of filing of the petition through which the receivership was commenced. Source: SL 1989, ch 436, 62.
58-29B-63. Transfers of insurer's real property after petition filed--Recording of copy of petition as constructive notice.After a petition for rehabilitation or liquidation has been filed a transfer of any of the real property of the insurer made to a person acting in good faith shall be valid against the receiver if made for a present fair equivalent value, or, if not made for a present fair equivalent value, then to the extent of the present consideration actually paid therefor, for which amount the transferee shall have a lien on the property so transferred. The commencement of a proceeding in rehabilitation or liquidation shall be constructive notice upon the recording of a copy of the petition for or order of rehabilitation or liquidation with the register of deeds in the county where any real property in question is located. The exercise by a court of the United States or any state or jurisdiction to authorize or effect a judicial sale of real property of the insurer within any county in any state may not be impaired by the pendency of such a proceeding unless the copy is recorded in the county prior to the consummation of the judicial sale. Source: SL 1989, ch 436, 63.
58-29B-64. Validity of transfers after petitions filed and before receiver takes possession or order granted.After a petition for rehabilitation or liquidation has been filed and before either the receiver takes possession of the property of the insurer or an order of rehabilitation or liquidation is granted:(1)A transfer of any of the property of the insurer, other than real property, made to a person acting in good faith shall be valid against the receiver if made for a present fair equivalent value, or, if not made for a present fair equivalent value, then to the extent of the present consideration actually paid therefor, for which amount the transferee shall have a lien on the property so transferred;(2)A person indebted to the insurer or holding property of the insurer may, if acting in good faith, pay the indebtedness or deliver the property, or any part thereof, to the insurer or upon his order, with the same effect as if the petition were not pending;(3)A person having actual knowledge of the pending rehabilitation or liquidation is deemed not to act in good faith;(4)A person asserting the validity of a transfer under this section has the burden of proof. Except as elsewhere provided in this section, no transfer by or on behalf of the insurer after the date of the petition for liquidation by any person other than the liquidator may be valid against the liquidator. Source: SL 1989, ch 436, 64.
58-29B-65. No impairment of negotiability.Nothing in this chapter may impair the negotiability of currency or negotiable instruments. Source: SL 1989, ch 436, 65.
58-29B-66. Preference defined.A preference is a transfer of any of the property of an insurer to or for the benefit of a creditor, for or on account of an antecedent debt, made or suffered by the insurer within one year before the filing of a successful petition for liquidation under this chapter, the effect of which transfer may be to enable the creditor to obtain a greater percentage of this debt than another creditor of the same class would receive. If a liquidation order is entered while the insurer is already subject to a rehabilitation order, then such transfers shall be deemed preferences if made or suffered within one year before the filing of the successful petition for rehabilitation, or within two years before the filing of the successful petition for liquidation, whichever time is shorter. Source: SL 1989, ch 436, 66.
58-29B-67. Preference--Avoidance by liquidator.Any preference may be avoided by the liquidator if:(1)The insurer was insolvent at the time of the transfer;(2)The transfer was made within four months before the filing of the petition;(3)The creditor receiving it or to be benefited thereby or his agent acting with reference thereto had, at the time when the transfer was made, reasonable cause to believe that the insurer was insolvent or was about to become insolvent; or(4)The creditor receiving it was an officer, any employee, attorney, or other person who was in a position of comparable influence in the insurer to an officer whether or not he held such position, any shareholder holding directly or indirectly more than five percent of any class of any equity security issued by the insurer, or any other person, firm, corporation, association, or aggregation of persons with whom the insurer did not deal at arm's length. Source: SL 1989, ch 436, 67.
58-29B-68. Preference voidable--Consequences.If the preference is voidable, the liquidator may recover the property or, if it has been converted, its value from any person who has received or converted the property, except where a bona fide purchaser or lienor has given less than fair equivalent value, he shall have a lien upon the property to the extent of the consideration actually given by him. If a preference by way of lien or security title is voidable, the court may on due notice order the lien or title to be preserved for the benefit of the estate, in which event the lien or title shall pass to the liquidator. Source: SL 1989, ch 436, 68.
58-29B-69. When transfer of property other than real property deemed made or suffered.For purposes of 58-29B-61 and 58-29B-66, transfer of property other than real property shall be deemed to be made or suffered when it becomes so far perfected that no subsequent lien obtainable by legal or equitable proceedings on a simple contract could become superior to the rights of the transferee. Source: SL 1989, ch 436, 69.
58-29B-7. Venue of proceedings.Any action authorized in this chapter shall be brought in the circuit court of Hughes County. Source: SL 1989, ch 436, 7.
58-29B-70. When transfer of real property deemed made or suffered.A transfer of real property shall be deemed to be made or suffered when it becomes so far perfected that no subsequent bona fide purchaser from the insurer could obtain rights superior to the rights of the transferee. Source: SL 1989, ch 436, 70.
58-29B-71. Transfer creating equitable lien--Conditions prohibiting perfection.No transfer which creates an equitable lien may be deemed to be perfected if there are available means by which a legal lien could be created. Source: SL 1989, ch 436, 71.
58-29B-72. Transfer not perfected prior to filing of petition deemed made before filing of successful petition.A transfer not perfected prior to the filing of a petition for liquidation shall be deemed to be made immediately before the filing of the successful petition. Source: SL 1989, ch 436, 72.
58-29B-73. Sections 58-29B-69 to 58-29B-72 applicable despite certain creditors or potential bona fide purchasers.The provisions of 58-29B-69 to 58-29B-72, inclusive, apply whether or not there are or were creditors who might have obtained liens or persons who might have become bona fide purchasers. Source: SL 1989, ch 436, 73.
58-29B-74. Lien obtainable by legal or equitable proceedings--Simple contract--Exclusions.A lien obtainable by legal or equitable proceedings upon a simple contract is one arising in the ordinary course of such proceedings upon the entry or docketing of a judgment or decree, or upon attachment, garnishment, execution, or like process, whether before, upon, or after judgment or decree and whether before or upon levy. It does not include liens which under applicable law are given a special priority over other liens which are prior in time. Source: SL 1989, ch 436, 74.
58-29B-75. Lien by legal or equitable proceedings--Superiority to rights of transferee.A lien obtainable by legal or equitable proceedings could become superior to the rights of a transferee, or a purchaser could obtain rights superior to the rights of a transferee within the meaning of 58-29B-69 to 58-29B-72, inclusive, if such consequences would follow only from the lien or purchase itself, or from the lien or purchaser, with or without the aid of ministerial action by public officials. Such a lien could not, however, become superior and such a purchase could not create superior rights for the purpose of 58-29B-69 to 58-29B-72, inclusive, through any acts subsequent to the obtaining of such a lien or subsequent to such a purchase which require the agreement or concurrence of any third party or which require any further judicial action or ruling. Source: SL 1989, ch 436, 75.
58-29B-76. Transfer for or on account of new and contemporaneous consideration--Transfer to secure future loan--Effects.A transfer of property for or on account of a new and contemporaneous consideration which is deemed under 58-29B-69 to 58-29B-72, inclusive, to be made or suffered after the transfer because of delay in perfecting it does not thereby become a transfer for or on account of an antecedent debt if any acts required by the applicable law to be performed in order to perfect the transfer as against liens or bona fide purchasers' rights are performed within twenty-one days or any period expressly allowed by the law, whichever is less. A transfer to secure a future loan, if such a loan is actually made, or a transfer which becomes security for a future loan, shall have the same effect as a transfer for or on account of a new and contemporaneous consideration. Source: SL 1989, ch 436, 76.
58-29B-77. Voidable lien dissolved--Indemnifying transfer or lien deemed voidable.If any lien deemed voidable under 58-29B-67 has been dissolved by the furnishing of a bond or other obligation, the surety on which has been indemnified directly or indirectly by the transfer of or the creation of a lien upon any property of an insurer before the filing of a petition under this chapter which results in a liquidation order, the indemnifying transfer or lien shall also be deemed voidable. Source: SL 1989, ch 436, 77.
58-29B-78. Property affected by voidable lien discharge--That and indemnifying property pass to liquidator--Exception.The property affected by any lien deemed voidable under 58-29B-66 to 58-29B-68, inclusive, and 58-29B-77, shall be discharged from such lien, and that property and any of the indemnifying property transferred to or for the benefit of a surety shall pass to the liquidator, except that the court may on due notice order any such lien to be preserved for the benefit of the estate and the court may direct that such conveyance be executed as may be proper or adequate to evidence the title of the liquidator. Source: SL 1989, ch 436, 78.
58-29B-79. Summary jurisdiction of Hughes county circuit court--Notice--Valuation of certain property or liens--Election of transferee or lienholder.The circuit court of Hughes County shall have summary jurisdiction of any proceeding by the liquidator to hear and determine the rights of any parties under 58-29B-71 to 58-29B-88, inclusive. Reasonable notice of any hearing in the proceeding shall be given to all parties in interest, including the obligee of a releasing bond or other like obligation. If an order is entered for the recovery of indemnifying property in kind or for the avoidance of an indemnifying lien, the court, upon application of any party in interest, shall in the same proceeding ascertain the value of the property or lien, and if the value is less than the amount for which the property is indemnified or than the amount of the lien, the transferee or lienholder may elect to retain the property or lien upon payment of its value, as ascertained by the court, to the liquidator, within such reasonable times as the court shall fix. Source: SL 1989, ch 436, 79.
58-29B-8. Receiver authorized to grant certain orders.Any receiver appointed in a proceeding under this chapter, may at any time apply for and the court may grant, such restraining orders, preliminary and permanent injunctions, and other orders as may be deemed necessary and proper to prevent:(1)The transaction of further business;(2)The transfer of property;(3)Interference with the receiver or with a proceeding under this chapter;(4)Waste of the insurer's assets;(5)Dissipation and transfer of bank accounts;(6)The institution or further prosecution of any actions or proceedings;(7)The obtaining of preferences, judgments, attachments, garnishments, or liens against the insurer, its assets or its policyholders;(8)The levying of execution against the insurer, its assets or its policyholders;(9)The making of any sale or deed for nonpayment of taxes or assessments that would lessen the value of the assets of the insurer;(10)The withholding from the receiver of books, accounts, documents, or other records relating to the business of the insurer; or(11)Any other threatened or contemplated action that might lessen the value of the insurer's assets or prejudice the rights of policyholders, creditors, or shareholders, or the administration of any proceeding under this chapter.The receiver may apply to any court outside of the state for the relief described in this section. Source: SL 1989, ch 436, 8.
58-29B-80. Extent of surety discharge under releasing bond or similar obligation.The liability of a surety under a releasing bond or other like obligation shall be discharged to the extent of the value of the indemnifying property recovered or the indemnifying lien nullified and avoided by the liquidator or, if the property is retained under 58-29B-79, to the extent of the amount paid to the liquidator. Source: SL 1989, ch 436, 80.
58-29B-81. Preferred creditor--Setoff for new credit issued in good faith.If a creditor has been preferred, and afterward in good faith gives the insurer further credit without security of any kind, for property which becomes a part of the insurer's estate, the amount of the new credit remaining unpaid at the time of the petition may be set off against the preference which would otherwise be recoverable from him. Source: SL 1989, ch 436, 81.
58-29B-82. Transfers by insurer to attorney for services within four months of filing petition--Examination by court.If an insurer shall, directly or indirectly, within four months before the filing of a successful petition for liquidation under this chapter, or at any time in contemplation of a proceeding to liquidate it, pay money or transfer property to an attorney-at-law for services rendered or to be rendered, the transaction may be examined by the court on its own motion or shall be examined by the court on petition of the liquidator and shall be held valid only to the extent of a reasonable amount to be determined by the court, and the excess may be recovered by the liquidator for the benefit of the estate. However, if the attorney is in a position of influence in the insurer or an affiliate thereof, payment of any money or the transfer of any property to the attorney-at-law for services rendered or to be rendered shall be governed by the provision of subdivision 58-29B-67(4). Source: SL 1989, ch 436, 82.
58-29B-83. Conditions creating personal liability to liquidator for amount of preference.Every officer, manager, employee, shareholder, member, subscriber, attorney, or any other person acting on behalf of the insurer who knowingly participates in giving any preference when he has reasonable cause to believe the insurer is or is about to become insolvent at the time of the preference shall be personally liable to the liquidator for the amount of the preference. Reasonable cause may be inferred if the transfer was made within four months before the date of filing of the successful petition for liquidation. Every person receiving any property from the insurer or the benefit thereof as a preference voidable under this section is personally liable therefore and shall be bound to account to the liquidator. Nothing in this section may prejudice any other claim by the liquidator. Source: SL 1989, ch 436, 83.
58-29B-84. Claims of creditor who has received or acquired a voidable preference, lien, conveyance, transfer, assignment, or encumbrance.No claims of a creditor who has received or acquired a preference, lien, conveyance, transfer, assignment, or encumbrance, voidable under this chapter, may be allowed unless he surrenders the preference, lien, conveyance, transfer, assignment, or encumbrance. If the avoidance is effected by a proceeding in which a final judgment has been entered, the claim may not be allowed unless the money is paid or the property is delivered to the liquidator within thirty days from the date of the entering of the final judgment. However, the court having jurisdiction over the liquidation may allow further time if there is an appeal or other continuation of the proceeding. Source: SL 1989, ch 436, 84.
58-29B-85. Filing of claims under 58-29B-84.A claim allowable under 58-29B-84 by reason of avoidance, whether voluntary or involuntary, or a preference, lien, conveyance, transfer, assignment, or encumbrance, may be filed as an excused late filing under 58-29B-102 to 58-29B-105, inclusive, if filed within thirty days from the date of the avoidance, or within the further time allowed by the court under 58-29B-84. Source: SL 1989, ch 436, 85.
58-29B-86. Mutual debts or credits between insurer and another set off.Mutual debts or mutual credits between the insurer and another person in connection with any action or proceeding under this chapter shall be set off and the balance only shall be allowed or paid, except as provided in 58-29B-87, and 58-29B-95 to 58-29B-97, inclusive. Source: SL 1989, ch 436, 86.
58-29B-87. Setoff or counterclaim not allowed.No setoff or counterclaim may be allowed in favor of any person if:(1)The obligation of the insurer to the person would not at the date of the filing of a petition for liquidation entitle the person to share as a claimant in the assets of the insurer; or(2)The obligation of the insurer to the person was purchased by or transferred to the person with a view to its being used as a setoff; or(3)The obligation of the person is to pay an assessment levied against the members or subscribers of the insurer, or is to pay a balance upon a subscription to the capital stock of the insurer, or is in any other way in the nature of a capital contribution. Source: SL 1989, ch 436, 87; SL 1995, ch 288, 1.
58-29B-88. Liquidator's report to court--Time limit--Content.As soon as practicable, but not more than two years from the date of an order of liquidation under 58-29B-41 to 58-29B-45, inclusive, of an insurer issuing assessable policies, the liquidator shall make a report to the court setting forth:(1)The reasonable value of the assets of the insurer;(2)The insurer's probable total liabilities;(3)The probable aggregate amount of the assessment necessary to pay all claims of creditors and expenses in full, including expenses of administration and costs of collecting the assessment; and(4)A recommendation as to whether or not an assessment should be made and in what amount. Source: SL 1989, ch 436, 88.
58-29B-89. Court to levy assessments--Amount.Upon the basis of the report provided in 58-29B-88, including any supplements and amendments thereto, the court may levy one or more assessments against all members of the insurer who are subject to assessment. Subject to any applicable legal limits on assessability, the aggregate assessment shall be for the amount that the sum of the probable liabilities, the expenses of administration, and the estimated cost of collection of the assessment, exceeds the value of existing assets, with due regard being given to assessments that cannot be collected economically. Source: SL 1989, ch 436, 89.
58-29B-9. Persons to cooperate in proceedings and preliminary investigations.Any officer, manager, director, trustee, owner, employee, representative, or insurance producer of any insurer, or any other persons with authority over or in charge of any segment of the insurer's affairs, shall cooperate with the director in any proceeding under this chapter or any investigation preliminary to the proceeding. The term, person, as used in this section, includes any person who exercises control directly or indirectly over activities of insurer through any holding company or other affiliate of the insurer. The term, to cooperate, includes the following:(1)To reply promptly in writing to any inquiry from the director requesting such a reply; and(2)To make available to the director any books, accounts, documents, or other records or information or property of or pertaining to the insurer and in the insurer's possession, custody, or control. Source: SL 1989, ch 436, 9; SL 2001, ch 286, 140.
58-29B-90. Issuance of show cause order upon failure to pay assessment.After levy of assessment under 58-29B-89, the liquidator shall issue an order directing each member who has not paid the assessment pursuant to the order to show cause why the liquidator should not pursue a judgment therefor. Source: SL 1989, ch 436, 90.
58-29B-91. Notice of show cause order.The liquidator shall give notice of the order to show cause by legal publication in the county of the principal place of business of the insurer and by first class mail to each member liable thereunder mailed to his last known address as it appears on the insurer's records, at least twenty days before the return day of the order to show cause. Source: SL 1989, ch 436, 91.
58-29B-92. Failure to appear and serve objections on or before return day of order--Procedure on timely appearance.If a member does not appear and serve duly verified objections upon the liquidator on or before the return day of the order to show cause under 58-29B-90, the court shall make an order adjudging the member liable for the amount of the assessment against him, pursuant to 58-29B-89, together with costs, and the liquidator shall have a judgment against the member therefor. If on or before such return day, the member appears and serves duly verified objections upon the liquidator, the director may hear and determine the matter or may appoint a referee to hear it and make such order as the facts warrant. In the event that the director determines that such objections do not warrant relief from assessment, the member may request the court to review the matter and vacate the order to show cause. Source: SL 1989, ch 436, 92.
58-29B-93. Enforcement of order or judgment under 58-29B-92.The liquidator may enforce any order or collect any judgment under 58-29B-92, by any lawful means. Source: SL 1989, ch 436, 93.
58-29B-94.1. Association election to succeed to rights and obligations of insolvent insurer under reinsurance contract--Reinsurer's liability to pay claims.Notwithstanding 58-29B-94, if a life and health insurance guaranty association has made the election to succeed to the rights and obligations of the insolvent insurer under the contract of reinsurance, the reinsurer's liability to pay covered reinsured claims continues under the contract of reinsurance, subject to the payment to the reinsurer of the reinsurance premiums for such coverage. Payment for such reinsured claims may only be made by the reinsurer pursuant to the direction of the guaranty association or its designated successor. Any payment made at the direction of the guaranty association or its designated successor by the reinsurer discharges the reinsurer of any further liability to any other party for the claim payment. Source: SL 2005, ch 274, 2. 
58-29B-94. No reductions in amounts recoverable from reinsurers--Exception--Payments.The amount recoverable by the liquidator from reinsurers may not be reduced as a result of delinquency proceedings, unless the reinsurance contract provides, in substance, that in the event of the insolvency of the ceding insurer, the reinsurance is payable under a contract reinsured by the reinsurer on the basis of reported claims allowed in the liquidation proceeding or proof of payment of the claim by a guaranty association, without diminution because of the insolvency of the ceding insurer. Such payments shall be made directly to the ceding insurer or to its domiciliary liquidator unless:(1)The contract or other written agreement specifically provides another payee of such reinsurance in the event of the insolvency of the ceding insurer; or(2)The reinsurer, with the consent of the direct insured, has assumed such policy obligations of the ceding insurer as direct obligations of the reinsurer to the payees under such policies and in substitution for the obligations of the ceding insurer to such payees. The consent of the liquidator is required for any such assumption of policy obligations effected after an order of liquidation. Source: SL 1989, ch 436, 94; SL 2005, ch 274, 1.  
58-29B-95. No liability for unearned premiums or uncollected earned premiums before declaration of insolvency--Recovery of unearned premium representing commission--Credits or setoffs--Obligations of uninsured.No insurance producer, premium finance company, or any other person, responsible for the payment of a premium at the time of the declaration of insolvency, may be held liable for payment of collected or uncollected unearned premiums or for uncollected earned premiums as shown on the records of the insurer. The liquidator has the right to recover from the person any part of an unearned premium that represents commission of the person. Credits or setoffs or both may not be allowed to an insurance producer, or premium finance company for any amounts advanced to the insurer by the insurance producer or premium finance company on behalf of, but in the absence of a payment by, the insured. An insured is obligated to pay any unpaid earned premium due the insurer at the time of the declaration of insolvency, as shown on the records of the insurer. Source: SL 1989, ch 436, 95; SL 1990, ch 403; SL 1995, ch 288, 2; SL 2001, ch 286, 147.
58-29B-96. Course of action upon violation of 58-29B-95--Director's options.Upon satisfactory evidence of a violation of 58-29B-95, the director may pursue either one or both of the following courses of action; suspend, revoke, or refuse to renew the licenses of such offending party or parties or impose a penalty of not more than one thousand dollars for each and every act in violation of 58-29B-95, by the party or parties. Source: SL 1989, ch 436, 96.
58-29B-97. Notice and hearings required before impositions of penalties.Before the director shall take any action as set forth in 58-29B-96, he shall give written notice to the person, company, association, or exchange accused of violating the law, stating specifically the nature of the alleged violation, and fixing a time and place, at least ten days thereafter, when a hearing on the matter shall be held. After such hearing, or upon failure of the accused to appear at such hearing, the director, if he shall find such violation, shall impose such of the penalties under 58-29B-96, as he deems advisable. If the director shall take action in any or all of the ways set out in 58-29B-96, the party aggrieved may appeal as provided by chapter 1-26. Source: SL 1989, ch 436, 97.
58-29B-98. Application for approval of proposal to disburse assets.Within one hundred twenty days of a final determination of insolvency of an insurer by the court, the liquidator shall make application to the court for approval of a proposal to disburse assets out of marshaled assets, from time to time as such assets become available, to a guaranty association or foreign guaranty association having obligations because of such insolvency. If the liquidator determines that there are insufficient assets to disburse, the application required by this section shall be considered satisfied by a filing by the liquidator stating the reasons for this determination. Source: SL 1989, ch 436, 98.
58-29B-99. Proposal to disburse assets--Contents.The proposal under 58-29B-98 shall include, but is not limited to, provisions for:(1)Reserving amounts for the payment of expenses of administration and the payment of claims of secured creditors to the extent of the value of the security held, and claims falling within the priorities established in subdivisions 58-29B-124(1) and (2);(2)Disbursement of the assets marshaled to date and subsequent disbursement of assets as they become available;(3)Equitable allocation of disbursements to each of the guaranty associations and foreign guaranty associations entitled thereto;(4)The securing by the liquidator from each of the associations entitled to disbursements pursuant to this section of an agreement to return to the liquidator such assets, together with income earned on assets previously disbursed, as may be required to pay claims of secured creditors and claims falling within the priorities established in 58-29B-124, in accordance with such priorities. No bond is required of any such association; and(5)A full report to be made by each association to the liquidator accounting for all assets so disbursed to the association, all disbursements made therefrom, any interest earned by the association on such assets and any other matter as the court may direct. Source: SL 1989, ch 436, 99.
58-29C-44. Short title.This chapter shall be known and may be cited as the South Dakota Life and Health Insurance Guaranty Association Act. Source: SL 2003, ch 252, 1.
58-29C-45. Purpose of chapter--Creation of association.A. The purpose of this chapter is to protect, subject to certain limitations, the persons specified in subpart A of 58-29C-46 against failure in the performance of contractual obligations, under life, health, and annuity policies, plans, or contracts specified in subpart B of 58-29C-46, because of the impairment or insolvency of the member insurer that issued the policies, plans, or contracts.B. To provide this protection, an association of member insurers is organized to pay benefits and to continue coverages as limited by this chapter, and members of the association are subject to assessment to provide funds to carry out the purpose of this chapter. Source: SL 2003, ch 252, 2; SL 2020, ch 210,  1.
58-29C-46. Persons provided with coverage--Policies and portions of policies not covered.A. This chapter shall provide coverage for the policies and contracts specified in subpart B:(1)To persons who, regardless of where they reside (except for nonresident certificate holders under group policies or contracts), are the beneficiaries, assignees, or payees of the persons covered under subdivision (2);(2)To persons who are owners of or certificate holders under the policies or contracts (other than structured settlement annuities) and in each case who:(a)Are residents; or(b)Are not residents, but only under all of the following conditions:(i)The member insurer that issued the policies or contracts is domiciled in this state;(ii)The states in which the persons reside have associations similar to the association created by this chapter; and(iii)The persons are not eligible for coverage by an association in any other state due to the fact that the insurer was not licensed in the state at the time specified in the state's guaranty association law;(3)For structured settlement annuities specified in subpart B, subdivisions (1) and (2) of this subpart do not apply, and this chapter shall (except as provided in subdivisions (4) and (5) of this subpart) provide coverage to a person who is a payee under a structured settlement annuity (or beneficiary of a payee if the payee is deceased), if the payee:(a)Is a resident, regardless of where the contract owner resides; or(b)Is not a resident, but only under both of the following conditions:(i)(I)The contract owner of the structured settlement annuity is a resident, or(II)The contract owner of the structured settlement annuity is not a resident, but the insurer that issued the structured settlement annuity is domiciled in this state and the state in which the contract owner resides has an association similar to the association created by this chapter; and(ii)Neither the payee (or beneficiary) nor the contract owner is eligible for coverage by the association of the state in which the payee or contract owner resides;(4)This chapter does not provide coverage to a person who is a payee (or beneficiary) of a contract owner resident of this state, if the payee (or beneficiary) is afforded any coverage by the association of another state;(5)This chapter is intended to provide coverage to a person who is a resident of this state and, in special circumstances, to a nonresident. In order to avoid duplicate coverage, if a person who would otherwise receive coverage under this chapter is provided coverage under the laws of any other state, the person may not be provided coverage under this chapter. In determining the application of the provisions of this paragraph in situations where a person could be covered by the association of more than one state, whether as an owner, payee, beneficiary, or assignee, this chapter shall be construed in conjunction with other state laws to result in coverage by only one association.B. (1) This chapter shall provide coverage to the persons specified in subpart A for the policies or contracts of direct, nongroup life insurance, health insurance, or annuities, and for certificates under direct group policies and contracts, and for supplemental contracts to any of these, in each case except as limited by this chapter. Annuity contracts and certificates under group annuity contracts include allocated funding agreements, structured settlement annuities, and any immediate or deferred annuity contracts.(2)Except as otherwise provided in subdivision (3) of this subpart, this chapter may not provide coverage for:(a)A portion of a policy or contract not guaranteed by the member insurer, or under which the risk is borne by the policy or contract owner;(b)A policy or contract of reinsurance, unless assumption certificates have been issued pursuant to the reinsurance policy or contract;(c)A portion of a policy or contract to the extent that the rate of interest on which it is based, or the interest rate, crediting rate, or similar factor determined by use of an index or other external reference stated in the policy or contract employed in calculating returns or changes in value:(i)Averaged over the period of four years prior to the date on which the member insurer becomes an impaired or insolvent insurer under this chapter, whichever is earlier, exceeds the rate of interest determined by subtracting two percentage points from Moody's Corporate Bond Yield Average averaged for that same four-year period or for such lesser period if the policy or contract was issued less than four years before the member insurer becomes an impaired or insolvent insurer under this chapter, whichever is earlier; and(ii)On and after the date on which the member insurer becomes an impaired or insolvent insurer under this chapter, whichever is earlier, exceeds the rate of interest determined by subtracting three percentage points from Moody's Corporate Bond Yield Average as most recently available;(d)A portion of a policy or contract issued to a plan or program of an employer, association, or other person to provide life, health, or annuity benefits to its employees, members, or others, to the extent that the plan or program is self-funded or uninsured, including benefits payable by an employer, association, or other person under:(i)A multiple employer welfare arrangement as defined in section 3(40) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1002(40));(ii)A minimum premium group insurance plan;(iii)A stop-loss group insurance plan; or(iv)An administrative services only contract;(e)A portion of a policy or contract to the extent that it provides for:(i)Dividends or experience rating credits;(ii)Voting rights; or(iii)Payment of any fees or allowances to any person, including the policy or contract owner, in connection with the service to or administration of the policy or contract;(f)A policy or contract issued in this state by a member insurer at a time when it was not licensed or did not have a certificate of authority to issue the policy or contract in this state;(g)A portion of a policy or contract to the extent that the assessments required by 58-29C-52 with respect to the policy or contract are preempted by federal or state law;(h)An obligation that does not arise under the express written terms of the policy or contract issued by the member insurer to the certificate holder, contract owner or policy owner, including without limitation:(i)Claims based on marketing materials;(ii)Claims based on side letters, riders, or other documents that were issued by the member insurer without meeting applicable policy or contract form filing or approval requirements;(iii)Misrepresentations of or regarding policy or contract benefits;(iv)Extra-contractual claims; or(v)A claim for penalties or consequential or incidental damages;(i)A contractual agreement that establishes the member insurer's obligations to provide a book value accounting guaranty for defined contribution benefit plan participants by reference to a portfolio of assets that is owned by the benefit plan or its trustee, which in each case is not an affiliate of the member insurer;(j)An unallocated annuity contract;(k)A portion of a policy or contract to the extent it provides for interest or other changes in value to be determined by the use of an index or other external reference stated in the policy or contract, but which have not been credited to the policy or contract, or as to which the policy or contract owner's rights are subject to forfeiture, as of the date the member insurer becomes an impaired or insolvent insurer under this chapter, whichever is earlier. If a policy's or contract's interest or changes in value are credited less frequently than annually, for purposes of determining the values that have been credited and are not subject to forfeiture under this subsection, the interest or change in value determined by using the procedures defined in the policy or contract shall be credited as if the contractual date of crediting interest or changing values was the date of impairment or insolvency, whichever is earlier, and will not be subject to forfeiture; and(l)A policy or contract providing any hospital, medical, prescription drug, or other health care benefits pursuant to Part C or Part D of Subchapter XVIII Chapter 7 of Title 42 of the United States Code (commonly known as Medicare Part C & D), or Subchapter XIX, Chapter 7 Title 42 of the United States Code (commonly known as Medicaid), or any regulations issued pursuant thereto.(3)The exclusion from coverage under subsection (2)(c) of this subdivision does not apply to any portion of a policy or contract, including a rider, that provides long-term care or any other health insurance benefits.C. The benefits that the association may become obligated to cover may in no event exceed the lesser of:(1)The contractual obligations for which the member insurer is liable or would have been liable if it were not an impaired or insolvent insurer; or(2)(a)With respect to one life, regardless of the number of policies or contracts:(i)Three hundred thousand dollars in life insurance death benefits, but not more than one hundred thousand dollars in net cash surrender and net cash withdrawal values for life insurance;(ii)For health insurance benefits:(I)One hundred thousand dollars for coverages not described in clauses (II) and (III) below, including any net cash surrender and net cash withdrawal values;(II)Three hundred thousand dollars for disability income insurance as defined in 58-17-108, and three hundred thousand dollars for long-term care insurance as defined in subdivision 58-17B-2(6);(III)Five hundred thousand dollars for health benefit plans; or(iii)Two hundred fifty thousand dollars in the present value of annuity benefits, including net cash surrender and net cash withdrawal values; or(b)With respect to each payee of a structured settlement annuity (or beneficiary or beneficiaries of the payee if deceased), two hundred fifty thousand dollars in present value annuity benefits, in the aggregate, including net cash surrender and net cash withdrawal values, if any;(c)However, in no event may the association be obligated to cover more than (i) an aggregate of three hundred thousand dollars in benefits with respect to any one life under subsections 2(a) and 2(b) of subpart C of this section except with respect to benefits for health benefit plans under subparagraph 2(a)(ii) of this section, in which case the aggregate liability of the association may not exceed five hundred thousand dollars with respect to any one individual, or (ii) with respect to one owner of multiple nongroup policies of life insurance, whether the policy or contract owner is an individual, firm, corporation, or other person, and whether the persons insured are officers, managers, employees, or other persons, more than five million dollars in benefits, regardless of the number of policies and contracts held by the owner;(d)The limitations set forth in this section are limitations on the benefits for which the association is obligated before taking into account either its subrogation and assignment rights or the extent to which those benefits could be provided out of the assets of the impaired or insolvent insurer attributable to covered policies. The costs of the association's obligations under this chapter may be met by the use of assets attributable to covered policies or reimbursed to the association pursuant to its subrogation and assignment rights; and(e)For the purposes of this chapter, benefits provided by a long-term care rider to a life insurance policy or annuity contract are considered the same type of benefits as the base life insurance policy or annuity contract to which it relates.D. In performing its obligations to provide coverage under 58-29C-51, the association may not be required to guarantee, assume, reinsure, reissue, or perform, or cause to be guaranteed, assumed, reinsured, reissued, or performed, the contractual obligations of the insolvent or impaired insurer under a covered policy or contract that do not materially affect the economic values or economic benefits of the covered policy or contract. Source: SL 2003, ch 252, 3; SL 2010, ch 240, 1; SL 2012, ch 247, 1, eff. Jan. 1, 2012; SL 2013, ch 252, 1; SL 2020, ch 210,  2.
58-29C-47. Construction of chapter.This chapter shall be construed to effect the purpose under 58-29C-45. Source: SL 2003, ch 252, 4.
58-29C-48. Definitions.Terms used in this chapter mean:(1)"Account," either of the two accounts created under 58-29C-49;(2)"Association," the South Dakota Life and Health Insurance Guaranty Association described in 58-29C-49;(3)"Authorized assessment" or the term "authorized" when used in the context of assessments, means a resolution by the board of directors has been passed whereby an assessment will be called immediately or in the future from member insurers for a specified amount. An assessment is authorized when the resolution is passed;(4)"Benefit plan," a specific employee, union, or association of natural persons benefit plan;(5)"Called assessment" or the term "called" when used in the context of assessments, means that a notice has been issued by the association to member insurers requiring that an authorized assessment be paid within the time frame set forth within the notice. An authorized assessment becomes a called assessment when notice is mailed by the association to member insurers;(6)"Contractual obligation," an obligation under a policy or contract or certificate under a group policy or contract, or portion thereof for which coverage is provided under 58-29C-46;(7)"Covered contract" or "covered policy," a policy or contract or portion of a policy or contract for which coverage is provided under 58-29C-46;(8)"Extra-contractual claims," include, for example, claims relating to bad faith in the payment of claims, punitive or exemplary damages, or attorneys' fees and costs;(9)"Health benefit plan," any hospital or medical expense policy or certificate. This term does not include:(a)Accident only insurance;(b)Credit insurance;(c)Dental only insurance;(d)Vision only insurance;(e)Medicare supplement insurance;(f)Benefits for long-term care, home health care, community-based care, or any combination thereof;(g)Disability income insurance;(h)Coverage for on-site medical clinics; or(i)Specified disease, hospital confinement indemnity, or limited benefit health insurance if the types of coverage do not provide coordination of benefits and are provided under separate policies or certificates;(10)"Impaired insurer," a member insurer which, after July 1, 2003, is not an insolvent insurer, and is placed under an order of rehabilitation or conservation by a court of competent jurisdiction;(11)"Insolvent insurer," a member insurer which after July 1, 2003, is placed under an order of liquidation by a court of competent jurisdiction with a finding of insolvency;(12)"Member insurer," an insurer licensed or that holds a certificate of authority to transact in this state any kind of insurance for which coverage is provided under 58-29C-46, and includes an insurer whose license or certificate of authority in this state may have been suspended, revoked, not renewed, or voluntarily withdrawn, but does not include:(a)A hospital or medical service organization, whether for profit or nonprofit;(b)A health maintenance organization;(c)A fraternal benefit society;(d)A mandatory state pooling plan;(e)A mutual assessment company or other person that operates on an assessment basis;(f)An insurance exchange;(g)An organization engaged in the issuance of charitable gift annuities, which is described in 58-1-16; or(h)An entity similar to any of the above;(13)"Moody's Corporate Bond Yield Average," the Monthly Average Corporates as published by Moody's Investors Service, Inc., or any successor thereto;(14)"Owner" of a policy or contract, "policyholder," "policy owner," and "contract owner," the person who is identified as the legal owner under the terms of the policy or contract or who is otherwise vested with legal title to the policy or contract through a valid assignment completed in accordance with the terms of the policy or contract and properly recorded as the owner on the books of the member insurer. The terms owner, contract owner, policyholder, and policy owner do not include persons with a mere beneficial interest in a policy or contract;(15)"Person," an individual, corporation, limited liability company, partnership, association, governmental body or entity, or voluntary organization;(16)"Premiums," amounts or considerations (by whatever name called) received on covered policies or contracts less returned premiums, considerations, and deposits and less dividends and experience credits. The term, premiums, does not include amounts or considerations received for policies or contracts or for the portions of policies or contracts for which coverage is not provided under subpart B of 58-29C-46 except that assessable premium may not be reduced on account of subsection 58-29C-46B(2)(c) relating to interest limitations and subdivision 58-29C-46C(2) relating to limitations with respect to one individual, one participant, and one policy or contract owner. Premiums do not include:(a)Premiums on an unallocated annuity contract; or(b)With respect to multiple nongroup policies of life insurance owned by one owner, whether the policy or contract owner is an individual, firm, corporation, or other person, and whether the persons insured are officers, managers, employees, or other persons, premiums in excess of five million dollars with respect to these policies or contracts, regardless of the number of policies or contracts held by the owner;(17)"Principal place of business" of a plan sponsor or a person other than a natural person, the single state in which the natural persons who establish policy for the direction, control, and coordination of the operations of the entity as a whole primarily exercise that function, determined by the association in its reasonable judgment by considering the following factors:(a)The state in which the primary executive and administrative headquarters of the entity is located;(b)The state in which the principal office of the chief executive officer of the entity is located;(c)The state in which the board of directors (or similar governing person or persons) of the entity conducts the majority of its meetings;(d)The state in which the executive or management committee of the board of directors (or similar governing person or persons) of the entity conducts the majority of its meetings;(e)The state from which the management of the overall operations of the entity is directed; and(f)In the case of a benefit plan sponsored by affiliated companies comprising a consolidated corporation, the state in which the holding company or controlling affiliate has its principal place of business as determined using the above factors. However, in the case of a plan sponsor, if more than fifty percent of the participants in the benefit plan are employed in a single state, that state is determined to be the principal place of business of the plan sponsor.The principal place of business of a plan sponsor of a benefit plan is determined to be the principal place of business of the association, committee, joint board of trustees, or other similar group of representatives of the parties who establish or maintain the benefit plan that, in lieu of a specific or clear designation of a principal place of business, is determined to be the principal place of business of the employer or employee organization that has the largest investment in the benefit plan in question;(18)"Receivership court," the court in the insolvent or impaired insurer's state having jurisdiction over the conservation, rehabilitation, or liquidation of the member insurer;(19)"Resident," a person to whom a contractual obligation is owed and who resides in this state on the date of entry of a court order that determines a member insurer to be an impaired insurer or a court order that determines a member insurer to be an insolvent insurer. A person may be a resident of only one state, which in the case of a person other than a natural person is its principal place of business. Citizens of the United States that are either (i) residents of foreign countries, or (ii) residents of United States possessions, territories, or protectorates that do not have an association similar to the association created by this chapter, are determined to be residents of the state of domicile of the member insurer that issued the policies or contracts;(20)"Structured settlement annuity," an annuity purchased in order to fund periodic payments for a plaintiff or other claimant in payment for or with respect to personal injury suffered by the plaintiff or other claimant;(21)"State," a state, the District of Columbia, Puerto Rico, and a United States possession, territory, or protectorate;(22)"Supplemental contact," a written agreement entered into for the distribution of proceeds under a life, health, or annuity policy or contract;(23)"Unallocated annuity contract," an annuity contract or group annuity certificate that is not issued to and owned by an individual, except to the extent of any annuity benefits guaranteed to an individual by an insurer under the contract or certificate. Source: SL 2003, ch 252, 5; SL 2013, ch 252, 2; SL 2020, ch 210,  3.
58-29C-49. Continuation of association--Membership--Function and organization--Accounts--Supervision--Meetings.A. There is hereby continued the nonprofit legal entity known as the South Dakota Life and Health Insurance Guaranty Association as created by former 58-29C-1. All member insurers shall be and remain members of the association as a condition of their authority to transact insurance in this state. The association shall perform its functions under the plan of operation established and approved under 58-29C-53 and shall exercise its powers through a board of directors established under 58-29C-50. For purposes of administration and assessment, the association shall maintain two accounts:(1)The life insurance and annuity account which includes the following subaccounts:(a)Life insurance account; and(b)Annuity account; and(2)The health insurance account.B. The association shall come under the immediate supervision of the director and shall be subject to the applicable provisions of the insurance laws of this state. Meetings or records of the association may be opened to the public upon majority vote of the board of directors of the association. Source: SL 2003, ch 252, 6; SL 2013, ch 252, 3.
58-29C-50. Board of directors--Appointment and term--Vacancies--Compensation.A. The board of directors of the association shall consist of not less than seven nor more than eleven member insurers serving terms as established in the plan of operation. The insurer members of the board shall be elected by member insurers subject to the approval of the director. Vacancies on the board shall be filled for the remaining period of the term by a majority vote of the remaining board members, subject to the approval of the director.B. In approving selections or in appointing members to the board, the director may consider whether all member insurers are fairly represented.C. Members of the board may be reimbursed from the assets of the association for expenses incurred as members of the board of directors, but members of the board may not otherwise be compensated by the association for services rendered. Source: SL 2003, ch 252, 7; SL 2020, ch 210,  4.
58-29C-51. Impaired or insolvent member--Actions authorized.A. If a member insurer is an impaired insurer, the association may, in its discretion, and subject to any conditions imposed by the association that do not impair the contractual obligations of the impaired insurer and that are approved by the director:(1)Guarantee, assume, reissue, or reinsure, or cause to be guaranteed, assumed, reissued, or reinsured, any or all of the policies or contracts of the impaired insurer; and(2)Provide any moneys, pledges, loans, notes, guarantees, or other means as is proper to effectuate subdivision (1) and assure payment of the contractual obligations of the impaired insurer pending action under subdivision (1).B. If a member insurer is an insolvent insurer, the association shall, in its discretion, either:(1)(a)(i)Guarantee, assume, reissue, or reinsure, or cause to be guaranteed, assumed, reissued, or reinsured, the policies or contracts of the insolvent insurer; or(ii)Assure payment of the contractual obligations of the insolvent insurer; and(b)Provide moneys, pledges, loans, notes, guarantees, or other means reasonably necessary to discharge the association's duties; or(2)Provide benefits and coverages in accordance with the following provisions:(a)With respect to policies and contracts, assure payment of benefits that would have been payable under the policies or contracts of the insolvent insurer, for claims incurred:(i)With respect to group policies and contracts, not later than the earlier of the next renewal date under those policies or contracts or forty-five days, but in no event less than thirty days, after the date on which the association becomes obligated with respect to the policies and contracts;(ii)With respect to nongroup policies, contracts, and annuities not later than the earlier of the next renewal date, if any, under the policies or contracts or one year, but in no event less than thirty days, from the date on which the association becomes obligated with respect to the policies or contracts;(b)Make diligent efforts to provide all known insureds or annuitants (for nongroup policies and contracts), or group policy or contract owners with respect to group policies and contracts, thirty days notice of the termination (pursuant to subsection (a) of this subdivision) of the benefits provided;(c)With respect to nongroup policies and contracts covered by the association, make available to each known insured or annuitant, or owner if other than the insured or annuitant, and with respect to an individual formerly an insured or annuitant under a group policy or contract who is not eligible for replacement group coverage, make available substitute coverage on an individual basis in accordance with the provisions of subsection (d), if the insureds or annuitants had a right under law or the terminated policy, contract, or annuity to convert coverage to individual coverage or to continue an individual policy, contract, or annuity in force until a specified age or for a specified time, during which the insurer had no right unilaterally to make changes in any provision of the policy, contract, or annuity or had a right only to make changes in premium by class;(d)(i)In providing the substitute coverage required under subsection (c), the association may offer either to reissue the terminated coverage or to issue an alternative policy or contract at the actuarially justified rates subject to prior approval of the director;(ii)Alternative or reissued policies or contracts shall be offered without requiring evidence of insurability, and may not provide for any waiting period or exclusion that would not have applied under the terminated policy or contract;(iii)The association may reinsure any alternative or reissued policy or contract;(e)(i)Alternative policies or contracts adopted by the association are subject to the approval of the director. The association may adopt alternative policies or contracts of various types for future issuance without regard to any particular impairment or insolvency;(ii)Alternative policies or contracts shall contain at least the minimum statutory provisions required in this state and provide benefits that are not unreasonable in relation to the premium charged. The association shall set the premium in accordance with a table of rates that it shall adopt. The premium shall reflect the amount of insurance to be provided and the age and class of risk of each insured, but may not reflect any changes in the health of the insured after the original policy or contract was last underwritten;(iii)Any alternative policy or contract issued by the association shall provide coverage of a type similar to that of the policy or contract issued by the impaired or insolvent insurer, as determined by the association;(f)If the association elects to reissue terminated coverage at a premium rate different from that charged under the terminated policy or contract, the premium shall be actuarially justified and set by the association in accordance with the amount of insurance or coverage provided and the age and class of risk, subject to prior approval of the director;(g)The association's obligations with respect to coverage under any policy or contract of the impaired or insolvent insurer or under any reissued or alternative policy or contract shall cease on the date the coverage or policy or contract is replaced by another similar policy or contract by the policy or contract owner, the insured, or the association;(h)When proceeding under subdivision B(2) with respect to a policy or contract carrying guaranteed minimum interest rates, the association shall assure the payment or crediting of a rate of interest consistent with subsection 58-29C-46(B)(2)(c).C. Nonpayment of premiums within thirty-one days after the date required under the terms of any guaranteed, assumed, alternative, or reissued policy or contract or substitute coverage shall terminate the association's obligations under the policy, contract, or coverage under this chapter with respect to the policy, contract, or coverage, except with respect to any claims incurred or any net cash surrender value which may be due in accordance with the provisions of this chapter.D. Premiums due for coverage after entry of an order of liquidation of an insolvent insurer shall belong to and be payable at the direction of the association. If the liquidator of an insolvent insurer requests, the association shall provide a report to the liquidator regarding any premium collected by the association. The association shall be liable for unearned premiums due to policy or contract owners arising after the entry of the order.E. The protection provided by this chapter does not apply if any guaranty protection is provided to residents of this state by the laws of the domiciliary state or jurisdiction of the impaired or insolvent insurer other than this state.F. In carrying out its duties under subpart B, the association may:(1)Subject to approval by a court in this state, impose permanent policy or contract liens in connection with a guarantee, assumption, or reinsurance agreement, if the association finds that the amounts that can be assessed under this chapter are less than the amounts needed to assure full and prompt performance of the association's duties under this chapter, or that the economic or financial conditions affecting member insurers are sufficiently adverse to render the imposition of such permanent policy or contract liens, to be in the public interest;(2)Subject to approval by a court in this state, impose temporary moratoriums or liens on payments of cash values and policy loans, or any other right to withdraw funds held in conjunction with policies or contracts, in addition to any contractual provisions for deferral of cash or policy loan value. In addition, in the event of a temporary moratorium or moratorium charge imposed by the receivership court on payment of cash values or policy loans, or on any other right to withdraw funds held in conjunction with policies or contracts, out of the assets of the impaired or insolvent insurer, the association may defer the payment of cash values, policy loans, or other rights by the association for the period of the moratorium or moratorium charge imposed by the receivership court, except for claims covered by the association to be paid in accordance with a hardship procedure established by the liquidator or rehabilitator and approved by the receivership court.G. A deposit in this state, held pursuant to law or required by the director for the benefit of creditors, including policy or contract owners, not turned over to the domiciliary liquidator upon the entry of a final order of liquidation or order approving a rehabilitation plan of a member insurer domiciled in this state or in a reciprocal state, pursuant to 58-29B-144 and 58-29B-149, shall be promptly paid to the association. The association shall be entitled to retain a portion of any amount so paid to it equal to the percentage determined by dividing the aggregate amount of policy or contract owners' claims related to that insolvency for which the association has provided statutory benefits by the aggregate amount of all policy or contract owners' claims in this state related to that insolvency and shall remit to the domiciliary receiver the amount paid to the association less the amount retained pursuant to this subpart. Any amount paid to the association and retained by the association shall be treated as a distribution of estate assets pursuant to 58-29B-98 or similar provision of the state of domicile of the impaired or insolvent insurer.H. If the association fails to act within a reasonable period of time with respect to an insolvent insurer, as provided in subpart B of this section, the director shall have the powers and duties of the association under this chapter with respect to the insolvent insurer.I. The association may render assistance and advice to the director, upon the director's request, concerning rehabilitation, payment of claims, continuance of coverage, or the performance of other contractual obligations of an impaired or insolvent insurer.J. The association shall have standing to appear or intervene before a court or agency in this state with jurisdiction over an impaired or insolvent insurer concerning which the association is or may become obligated under this chapter or with jurisdiction over any person or property against which the association may have rights through subrogation or otherwise. Standing extends to all matters germane to the powers and duties of the association, including proposals for reinsuring, reissuing, modifying, or guaranteeing the policies or contracts of the impaired or insolvent insurer and the determination of the policies or contracts and contractual obligations. The association also has the right to appear or intervene before a court or agency in another state with jurisdiction over an impaired or insolvent insurer for which the association is or may become obligated or with jurisdiction over any person or property against whom the association may have rights through subrogation or otherwise.K. (1) A person receiving benefits under this chapter is determined to have assigned the rights under, and any causes of action against any person for losses arising under, resulting from, or otherwise relating to, the covered policy or contract to the association to the extent of the benefits received because of this chapter, whether the benefits are payments of or on account of contractual obligations, continuation of coverage, or provision of substitute or alternative policies, contracts, or coverages. The association may require an assignment to the association of the rights and cause of action by any payee, policy, or contract owner, beneficiary, insured, or annuitant as a condition precedent to the receipt of any right or benefits conferred by this chapter upon the person.(2)The subrogation rights of the association under this subpart have the same priority against the assets of the impaired or insolvent insurer as that possessed by the person entitled to receive benefits under this chapter.(3)In addition to subdivisions (1) and (2) of this subpart, the association shall have all common law rights of subrogation and any other equitable or legal remedy that would have been available to the impaired or insolvent insurer or owner, beneficiary, or payee of a policy or contract with respect to the policy or contracts.(4)If the preceding provisions of this subpart are invalid or ineffective with respect to any person or claim for any reason, the amount payable by the association with respect to the related covered obligations shall be reduced by the amount realized by any other person with respect to the person or claim that is attributable to the policies or contracts (or portion thereof) covered by the association.(5)If the association has provided benefits with respect to a covered obligation and a person recovers amounts as to which the association has rights as described in the preceding subdivisions of this subpart, the person shall pay to the association the portion of the recovery attributable to the policies or contracts (or portion thereof) covered by the association.L. In addition to the rights and powers elsewhere in this chapter, the association may:(1)Enter into such contracts as are necessary or proper to carry out the provisions and purposes of this chapter;(2)Sue or be sued, including taking any legal actions necessary or proper to recover any unpaid assessments under 58-29C-52 and to settle claims or potential claims against it;(3)Borrow money to effect the purposes of this chapter; any notes or other evidence of indebtedness of the association not in default are legal investments for domestic member insurers and may be carried as admitted assets;(4)Employ or retain any persons as necessary or appropriate to handle the financial transactions of the association, and to perform other functions as become necessary or proper under this chapter;(5)Take legal action as may be necessary or appropriate to avoid or recover payment of improper claims;(6)Exercise, for the purposes of this chapter and to the extent approved by the director, the powers of a domestic life insurer or health insurer, but in no case may the association issue policies or contracts other than those issued to perform its obligations under this chapter;(7)Organize the association as a corporation or in other legal form permitted by the laws of the state;(8)Request information from a person seeking coverage from the association in order to aid the association in determining its obligations under this chapter with respect to the person, and the person shall promptly comply with the request;(9)Unless prohibited by law, in accordance with the terms and conditions of the policy or contract, file for actuarially justified rate or premium increases for any policy or contract for which the association provides coverage under this chapter; and(10)Take other necessary or appropriate action to discharge the duties and obligations of the association as provided in this chapter or to exercise its powers under this chapter.M. The association may join an organization of one or more other state associations of similar purposes to further the purposes and administer the powers and duties of the association.N. (1)(a) At any time within one hundred eighty days of the date of the order of liquidation, the association may elect to succeed to the rights and obligations of the ceding member insurer that relate to policies, contracts, or annuities covered, in whole or in part, by the association, in each case under any one or more reinsurance contracts entered into by the insolvent insurer and its reinsurers and selected by the association. Any election shall be effective as of the date of the order of liquidation. The election shall be effected by the association or the National Organization of Life and Health Insurance Guaranty Associations (NOLHGA) on its behalf sending written notice, return receipt requested, to the affected reinsurers.(b)To facilitate the earliest practicable decision about whether to assume any of the contracts of reinsurance, and in order to protect the financial position of the estate, the receiver and each reinsurer of the ceding member insurer shall make available upon request to the association or to NOLHGA on its behalf as soon as possible after commencement of formal delinquency proceedings:(i)Copies of in-force contracts of reinsurance and all related files and records relevant to the determination of whether contracts should be assumed; and(ii)Notices of any defaults under the reinsurance contracts or any known event or condition which with the passage of time could become a default under the reinsurance contracts.(c)Subparagraphs (i) to (iv) apply to reinsurance contracts so assumed by the association:(i)The association is responsible for all unpaid premiums due under the reinsurance contracts for periods both before and after the date of the order of liquidation, and is responsible for the performance of all other obligations to be performed after the date of the order of liquidation, in each case which relate to policies, contracts, or annuities covered, in whole or in part, by the association. The association may charge policies, contracts, or annuities covered in part by the association, through reasonable allocation methods, the costs for reinsurance in excess of the obligations of the association and shall provide notice and an accounting of these charges to the liquidator;(ii)The association is entitled to any amounts payable by the reinsurer under the reinsurance contracts with respect to losses or events that occur in periods after the date of the order of liquidation and that relate to policies, contracts, or annuities covered, in whole or in part, by the association, provided that, upon receipt of any amounts, the association is obliged to pay to the beneficiary under the policy, contract, or annuity on account of which the amounts were paid a portion of the amount equal to the lesser of:(A)The amount received by the association; and(B)The excess of the amount received by the association, over the amount equal to the benefits paid by the association on account of the policy, contract, or annuity less the retention of the insurer applicable to the loss or event.(iii)Within thirty days following the association's election (the "election date"), the association and each reinsurer under contracts assumed by the association shall calculate the net balance due to or from the association under each reinsurance contract as of the election date with respect to policies, contracts, or annuities covered, in whole or in part, by the association, which calculation shall give full credit to all items paid by either the member insurer or its receiver or the reinsurer prior to the election date. The reinsurer shall pay the receiver any amounts due for losses or events prior to the date of the order of liquidation, subject to any set-off for premiums unpaid for periods prior to the date, and the association or reinsurer shall pay any remaining balance due the other, in each case within five days of the completion of the aforementioned calculation. Any disputes over the amounts due to either the association or the reinsurer shall be resolved by arbitration pursuant to the terms of the affected reinsurance contracts or, if the contract contains no arbitration clause, as otherwise provided by law. If the receiver has received any amounts due the association pursuant to subparagraph (1)(c)(ii), the receiver shall remit the amounts to the association as promptly as practicable.(iv)If the association or receiver, on the association's behalf, within sixty days of the election date, pays the unpaid premiums due for periods both before and after the election date that relate to policies, contracts, or annuities covered, in whole or in part by the association, the reinsurer may not terminate the reinsurance contracts for failure to pay premium insofar as the reinsurance contracts relate to policies, contracts, or annuities covered, in whole or in part, by the association, and may not set off any unpaid amounts due under other contracts, or unpaid amounts due from parties other than the association, against amounts due the association.(2)During the period from the date of the order of liquidation until the election date (or, if the election date does not occur, until one hundred eighty days after the date of the order of liquidation);(a)(i)Neither the association nor the reinsurer has any rights or obligations under reinsurance contracts that the association has the right to assume under subdivision (1), whether for periods prior to or after the date of the order of liquidation; and(ii)The reinsurer, the receiver, and the association shall, to the extent practicable, provide each other data and records reasonably requested;(b)Provided that once the association elects to assume a reinsurance contract, the parties' rights and obligations shall be governed by subdivision (1).(3)If the association does not elect to assume a reinsurance contract by the election date pursuant to subdivision (1), the association shall have no rights or obligations, in each case for periods both before and after the date of the order of liquidation, with respect to the reinsurance contract.(4)When policies, contracts, or annuities, or covered obligations with respect thereto, are transferred to an assuming insurer, reinsurance on the policies, contracts, or annuities may also be transferred by the association, in the case of contracts assumed under subdivision (1), subject to the following:(a)Unless the reinsurer and the assuming insurer agree otherwise, the reinsurance contract transferred may not cover any new policies of insurance or annuities in addition to those transferred;(b)The obligations described in subdivision (1) of this section no longer apply with respect to matters arising after the effective date of the transfer; and(c)The transferring party shall give notice in writing, return receipt requested, to the affected reinsurer not less than thirty days prior to the effective date of the transfer;(5)The provisions of subpart N supersede the provisions of any state law or of any affected reinsurance contract that provides for or requires any payment of reinsurance proceeds, on account of losses or events that occur in periods after the date of the order of liquidation, to the receiver of the insolvent insurer or any other person. The receiver remains entitled to any amounts payable by the reinsurer under the reinsurance contracts with respect to losses or events that occur in periods prior to the date of the order of liquidation, subject to applicable setoff provisions; and(6)Except as otherwise provided in this section, nothing in subpart N alters or modifies the terms and conditions of any reinsurance contract. Nothing in this section abrogates or limits any rights of any reinsurer to claim that the reinsurer is entitled to rescind a reinsurance contract. Nothing in this section gives a policyholder, policy owner, contract owner, certificate holder, or beneficiary an independent cause of action against a reinsurer that is not otherwise set forth in the reinsurance contract. No provision in this section limits or affects the association's rights as a creditor of the estate against the assets of the estate. No provision in this section applies to reinsurance agreements covering property or casualty risks.O. The board of directors of the association shall have discretion and may exercise reasonable business judgment to determine the means by which the association is to provide the benefits of this chapter in an economical and efficient manner.P. If the association has arranged or offered to provide the benefits of this chapter to a covered person under a plan or arrangement that fulfills the association's obligations under this chapter, the person is not entitled to benefits from the association in addition to or other than those provided under the plan or arrangement.Q. Venue in a suit against the association arising under the chapter is in Hughes County. The association may not be required to give an appeal bond in an appeal that relates to a cause of action arising under this chapter.R. In carrying out the association's duties in connection with guaranteeing, assuming, reissuing, or reinsuring policies or contracts under subpart A or B of this section, the association may issue substitute coverage for a policy or contract that provides an interest rate, crediting rate, or similar factor determined by use of an index or other external reference stated in the policy or contract employed in calculating returns or changes in value by issuing an alternative policy or contract in accordance with the following provisions:(1)In lieu of the index or other external reference provided for in the original policy or contract, the alternative policy or contract provides for (i) a fixed interest rate or (ii) payment of dividends with minimum guarantees or (iii) different methods for calculating interest or changes in value;(2)There is no requirement for evidence of insurability, waiting period, or other exclusion that would not have applied under the replaced policy or contract; and(3)The alternative policy or contract is substantially similar to the replaced policy or contract in all other material terms. Source: SL 2003, ch 252, 8; SL 2013, ch 252, 4; SL 2020, ch 210,  5.
58-29C-52. Funding provided by assessment of members--Classification of assessments--Amounts of assessments--Abatements--Refunds.A. For the purpose of providing the funds necessary to carry out the powers and duties of the association, the board of directors shall assess the member insurers, separately for each account, at the time and for the amounts as the board finds necessary. Assessments are due not less than thirty days after prior written notice to the member insurers and accrue interest at ten percent per annum on and after the due date.B. There are two classes of assessments, as follows:(1)Class A assessments are authorized and called for the purpose of meeting administrative and legal costs and other expenses. Class A assessments may be authorized and called whether or not related to a particular impaired or insolvent insurer.(2)Class B assessments are authorized and called to the extent necessary to carry out the powers and duties of the association under 58-29C-51 with regard to an impaired or an insolvent insurer.C. (1) The amount of a Class A assessment shall be determined by the board and may be authorized and called on a pro rata or non-pro rata basis. If pro rata, the board may provide that it be credited against future Class B assessments.(2)The amount of a Class B assessment, except for assessments related to long-term care insurance shall be allocated for assessment purposes between the accounts and among the subaccounts of the life insurance and annuity account, pursuant to an allocation formula which may be based on the premiums or reserves of the impaired or insolvent insurer or any other standard the board in its sole discretion determines is fair and reasonable under the circumstances.(3)The amount of the Class B assessment for long-term care insurance written by the impaired or insolvent insurer shall be allocated according to a methodology included in the association's plan of operation and approved by the director. The methodology shall provide for fifty percent of the assessment to be allocated to accident and health member insurers and fifty percent to be allocated to life and annuity member insurers.(4)Class B assessments against member insurers for each account and subaccount shall be in the proportion that the premiums received on business in this state by each assessed member insurer on policies or contracts covered by each account for the three most recent calendar years for which information is available preceding the year in which the member insurer became insolvent (or, in the case of an assessment with respect to an impaired insurer, the three most recent calendar years for which information is available preceding the year in which the member insurer became impaired) bears to premiums received on business in this state for those calendar years by all assessed member insurers.(5)Assessments for funds to meet the requirements of the association with respect to an impaired or insolvent insurer may not be authorized or called until necessary to implement the purposes of this chapter. Classification of assessments under subpart B and computation of assessments under this subpart shall be made with a reasonable degree of accuracy, recognizing that exact determinations may not always be possible. The association shall notify each member insurer of the member insurer's anticipated pro rata share of an authorized assessment not yet called within one hundred eighty days after the assessment is authorized.D. The association may abate or defer, in whole or in part, the assessment of a member insurer if, in the opinion of the board, payment of the assessment would endanger the ability of the member insurer to fulfill its contractual obligations. In the event an assessment against a member insurer is abated, or deferred in whole or in part, the amount by which the assessment is abated or deferred may be assessed against the other member insurers in a manner consistent with the basis for assessments set forth in this section. Once the conditions that caused a deferral have been removed or rectified, the member insurer shall pay all assessments that were deferred pursuant to a repayment plan approved by the association.E. (1)(a) Subject to the provisions of subsection (b) of this subdivision, the total of all assessments authorized by the association with respect to a member insurer for each subaccount of the life insurance and annuity account and for the health account may not in one calendar year exceed two percent of that member insurer's average annual premiums received in this state on the policies and contracts covered by the subaccount or account during the three calendar years preceding the year in which the member insurer became an impaired or insolvent insurer.(b)If two or more assessments are authorized in one calendar year with respect to member insurers that become impaired or insolvent in different calendar years, the average annual premiums for purposes of the aggregate assessment percentage limitation referenced in subsection (a) of this subdivision shall be equal and limited to the higher of the three-year average annual premiums for the applicable subaccount or account as calculated pursuant to this section.(c)If the maximum assessment, together with the other assets of the association in an account, does not provide in one year in either account an amount sufficient to carry out the responsibilities of the association, the necessary additional funds shall be assessed as soon thereafter as permitted by this chapter.(2)The board may provide in the plan of operation a method of allocating funds among claims, whether relating to one or more impaired or insolvent insurers, when the maximum assessment will be insufficient to cover anticipated claims.(3)If the maximum assessment for a subaccount of the life and annuity account in one year does not provide an amount sufficient to carry out the responsibilities of the association, then pursuant to subdivision C(4), the board shall assess the other subaccounts of the life and annuity account for the necessary additional amount, subject to the maximum stated in subdivision (1) of this section.F. The board may, by an equitable method as established in the plan of operation, refund to member insurers, in proportion to the contribution of each member insurer to that account, the amount by which the assets of the account exceed the amount the board determines is necessary to carry out during the coming year the obligations of the association with regard to that account, including assets accruing from assignment, subrogation, net realized gains, and income from investments. A reasonable amount may be retained in any account to provide funds for the continuing expenses of the association and for future claims.G. It is proper for any member insurer, in determining the member insurer's premium rates and policy owner dividends as to any kind of insurance within the scope of this chapter, to consider the amount reasonably necessary to meet the member insurer's assessment obligations under this chapter.H. The association shall issue to each member insurer paying an assessment under this chapter, other than a Class A assessment, a certificate of contribution, in a form prescribed by the director, for the amount of the assessment paid. All outstanding certificates are of equal dignity and priority without reference to amounts or dates of issue. The member insurer in its financial statement may show a certificate of contribution as an asset in the form, amount, and period of time as approved by the director.I. (1) A member insurer that wishes to protest all or part of an assessment shall pay when due the full amount of the assessment as set forth in the notice provided by the association. The payment is available to meet association obligations during the pendency of the protest or any subsequent appeal. Payment shall be accompanied by a statement in writing that the payment is made under protest and setting forth a brief statement of the grounds for the protest.(2)Within sixty days following the payment of an assessment under protest by a member insurer, the association shall notify the member insurer in writing of the association's determination with respect to the protest unless the association notifies the member insurer that additional time is required to resolve the issues raised by the protest.(3)Within thirty days after a final decision has been made, the association shall notify the protesting member insurer in writing of that final decision. Within sixty days of receipt of notice of the final decision, the protesting member insurer may appeal that final action to the director.(4)In the alternative to rendering a final decision with respect to a protest based on a question regarding the assessment base, the association may refer protests to the director for a final decision, with or without a recommendation from the association.(5)If the protest or appeal on the assessment is upheld, the amount paid in error or excess shall be returned to the member insurer. Interest on a refund due a protesting member insurer shall be paid at the rate actually earned by the association.J. The association may request information of member insurers in order to aid in the exercise of the association's power under this section and member insurers shall promptly comply with a request. Source: SL 2003, ch 252, 9; SL 2013, ch 252, 5; SL 2020, ch 210,  6.
58-29C-53. Plan of operation--Effective date--Requirements--Delegation of powers.A. (1) The association shall submit to the director a plan of operation and any amendments thereto necessary or suitable to assure the fair, reasonable, and equitable administration of the association. The plan of operation and any amendments thereto shall become effective upon the director's written approval or unless it has not been disapproved within thirty days.(2)If the association fails to submit a suitable plan of operation within one hundred twenty days following July 1, 2003, or if at any time thereafter the association fails to submit suitable amendments to the plan, the director shall, after notice and hearing, adopt and promulgate such reasonable rules as are necessary or advisable to effectuate the provisions of this chapter. The rules shall continue in force until modified by the director or superseded by a plan submitted by the association and approved by the director.B. All member insurers shall comply with the plan of operation.C. The plan of operation shall, in addition to requirements enumerated elsewhere in this chapter:(1)Establish procedures for handling the assets of the association;(2)Establish the amount and method of reimbursing members of the board of directors under 58-29C-50;(3)Establish regular places and times for meetings including telephone conference calls of the board of directors;(4)Establish procedures for records to be kept of all financial transactions of the association, its agents, and the board of directors;(5)Establish the procedures whereby selections for the board of directors will be made and submitted to the director;(6)Establish any additional procedures for assessments under 58-29C-52;(7)Contain additional provisions necessary or proper for the execution of the powers and duties of the association;(8)Establish procedures whereby a director may be removed for cause, including in the case where a member insurer director becomes an impaired or insolvent insurer;(9)Require the board of directors to establish a policy and procedures for addressing conflicts of interests.D. The plan of operation may provide that any or all powers and duties of the association, except those under subdivision 58-29C-51L(3) and 58-29C-52, are delegated to a corporation, association, or other organization which performs or will perform functions similar to those of this association, or its equivalent, in two or more states. Such a corporation, association, or organization shall be reimbursed for any payments made on behalf of the association and shall be paid for its performance of any function of the association. A delegation under this subpart shall take effect only with the approval of both the board of directors and the director, and may be made only to a corporation, association, or organization which extends protection not substantially less favorable and effective than that provided by this chapter. Source: SL 2003, ch 252, 10; SL 2013, ch 252, 6.
58-29C-54. Duties and powers of director.In addition to the duties and powers enumerated elsewhere in this chapter,A. The director shall:(1)Upon request of the board of directors, provide the association with a statement of the premiums in this and any other appropriate states for each member insurer;(2)When an impairment is declared and the amount of the impairment is determined, serve a demand upon the impaired insurer to make good the impairment within a reasonable time; notice to the impaired insurer shall constitute notice to its shareholders, if any; the failure of the insurer to promptly comply with such demand shall not excuse the association from the performance of its powers and duties under this chapter.B. The director may suspend or revoke, after notice and hearing, the certificate of authority to transact insurance in this state of any member insurer which fails to pay an assessment when due or fails to comply with the plan of operation. As an alternative the director may levy a forfeiture on any member insurer that fails to pay an assessment when due. The forfeiture may not exceed five percent of the unpaid assessment per month, but no forfeiture shall be less than one hundred dollars per month.C. A final action of the board of directors or the association may be appealed to the director by a member insurer if the appeal is taken within sixty days of its receipt of notice of the final action being appealed. A final action or order of the director shall be subject to judicial review in a court of competent jurisdiction in accordance with the laws of this state that apply to the actions or orders of the director.D. The liquidator, rehabilitator, or conservator of an impaired or insolvent insurer may notify all interested persons of the effect of this chapter. Source: SL 2003, ch 252, 11; SL 2013, ch 252, 7.
58-29C-55. Detection and prevention of insurer insolvencies or impairments--Reports by board.To aid in the detection and prevention of member insurer insolvencies or impairments,A. It is the duty of the director:(1)To notify the directors of all the other states, territories of the United States and the District of Columbia within thirty days following the action taken or the date the action occurs, when the director takes any of the following actions against a member insurer:(a)Revocation of license;(b)Suspension of license; or(c)Makes a formal order that the member insurer restrict its premium writing, obtain additional contributions to surplus, withdraw from the state, reinsure all or any part of the member insurer's business, or increase capital, surplus, or any other account for the security of policy owners, contract owners, certificate holders, or creditors.(2)To report to the board of directors when the director has taken any of the actions set forth in subdivision (1) or has received a report from any other director indicating that any action has been taken in another state. The report to the board of directors shall contain all significant details of the action taken or the report received from another director.(3)To report to the board of directors when the director has reasonable cause to believe from an examination, whether completed or in process, of any member insurer that the insurer may be an impaired or insolvent insurer.(4)To furnish to the board of directors the National Association of Insurance Commissioners Insurance Regulatory Information System (IRIS) ratios and listings of companies not included in the ratios developed by the National Association of Insurance Commissioners, and the board may use the information contained therein in carrying out the board's duties and responsibilities under this section. The report and the information contained therein shall be kept confidential by the board of directors until the report is made public by the director or other lawful authority.B. The director may seek the advice and recommendations of the board of directors concerning any matter affecting the duties and responsibilities of the director regarding the financial condition of member insurers and companies seeking admission to transact insurance business in this state.C. The board of directors may, upon majority vote, make reports and recommendations to the director upon any matter germane to the solvency, liquidation, rehabilitation, or conservation of any member insurer or germane to the solvency of any company seeking to do insurance business in this state. The reports and recommendations are not public documents.D. The board of directors may, upon majority vote, notify the director of any information indicating a member insurer may be an impaired or insolvent insurer.E. The board of directors may, upon majority vote, make recommendations to the director for the detection and prevention of member insurer insolvencies. Source: SL 2003, ch 252, 12; SL 2020, ch 210,  7.
58-29C-56. Member assessment as offset against premium tax liability.A. A member insurer may offset against its premium tax liability to this state an assessment described in subpart 58-29C-52H to the extent of twenty percent of the amount of the assessment for each of the five calendar years following the year in which the assessment was paid. If the assessment is five hundred dollars or less, the member insurer shall take the total offset in the first year following the year in which the assessment was paid. However, total assessments offset against premium taxes may not exceed two million dollars in any year. If offsets exceed the annual limitation in this section, the excess may be carried forward to a subsequent year in which the annual limitation has not been exceeded. Any excess shall be apportioned among the contributing insurers in relation to their assessment that caused the limit to be exceeded. In the event a member insurer should cease doing business, all uncredited assessments may be credited against its premium tax liability for the year it ceases doing business.B. Any sums that are acquired by refund, pursuant to subpart 58-29C-52F, from the association by member insurers, and that have been offset against premium taxes as provided in subpart A of this section, shall be paid by the insurers to this state in such manner as the tax authorities may require. The association shall notify the director that refunds have been made. Source: SL 2003, ch 252, 13.
58-29C-57. Liability for unpaid assessment--Records of meetings--Association as creditor of impaired or insolvent insurer--Liquidation, rehabilitation, or conservation proceedings.A. This chapter may not be construed to reduce the liability for unpaid assessments of the insureds of an impaired or insolvent insurer operating under a plan with assessment liability.B. Records shall be kept of all meetings of the board of directors to discuss the activities of the association in carrying out the board's powers and duties under 58-29C-51. The records of the association with respect to an impaired or insolvent insurer may not be disclosed prior to the termination of a liquidation, rehabilitation, or conservation proceeding involving the impaired or insolvent insurer, except (i) upon the termination of the impairment or insolvency of the insurer, or (ii) upon the order of a court of competent jurisdiction. Nothing in this subpart limits the duty of the association to render a report of its activities under 58-29C-58.C. For the purpose of carrying out the association's obligations under this chapter, the association is a creditor of the impaired or insolvent insurer to the extent of assets attributable to covered policies reduced by any amounts to which the association is entitled as subrogee pursuant to subpart 58-29C-51K. Assets of the impaired or insolvent insurer attributable to covered policies or contracts shall be used to continue all covered policies and pay all contractual obligations of the impaired or insolvent insurer as required by this chapter. Assets attributable to covered policies or contracts, as used in this subpart, are that proportion of the assets which the reserves that should have been established for the policies or contracts bear to the reserves that should have been established for all policies of insurance or health benefit plans written by the impaired or insolvent insurer.D. As a creditor of the impaired or insolvent insurer as established in subpart C of this section and consistent with 58-29B-98, the association and other similar associations are entitled to receive a disbursement of assets out of the marshaled assets, from time to time as the assets become available to reimburse the association, as a credit against contractual obligations under this chapter. If the liquidator has not, within one hundred twenty days of a final determination of insolvency of a member insurer by the receivership court, made an application to the court for the approval of a proposal to disburse assets out of marshaled assets to guaranty associations having obligations because of the insolvency, the association is entitled to make application to the receivership court for approval of the association's own proposal to disburse these assets.E. (1) Prior to the termination of any liquidation, rehabilitation, or conservation proceeding, the court may take into consideration the contributions of the respective parties, including the association, the shareholders, contract owners, certificate holders, and policy owners of the insolvent insurer, and any other party with a bona fide interest, in making an equitable distribution of the ownership rights of the insolvent insurer. In a determination, consideration must be given to the welfare of the policy owners, contract owners, and certificate holders of the continuing or successor member insurer.(2)An impaired or insolvent insurer may not make a distribution to stockholders until and unless the total amount of valid claims of the association with interest thereon for funds expended in carrying out the association's powers and duties under 58-29C-51 with respect to the member insurer have been fully recovered by the association.F. (1) If an order for liquidation or rehabilitation of a member insurer domiciled in this state has been entered, the receiver appointed under the order has a right to recover on behalf of the member insurer, from any affiliate that controlled it, the amount of distributions, other than stock dividends paid by the member insurer on its capital stock, made at any time during the five years preceding the petition for liquidation or rehabilitation subject to the limitations of subdivisions (2) to (4), inclusive.(2)No distribution is recoverable if the member insurer shows that when paid the distribution was lawful and reasonable, and that the member insurer did not know and could not reasonably have known that the distribution might adversely affect the ability of the member insurer to fulfill the member insurer's contractual obligations.(3)Any person who was an affiliate that controlled the member insurer at the time the distributions were paid is liable up to the amount of distributions received. Any person, who was an affiliate that controlled the member insurer at the time the distributions were declared, shall be liable up to the amount of distributions which would have been received if the distributions had been paid immediately. If two or more persons are liable with respect to the same distributions, the persons shall be jointly and severally liable.(4)The maximum amount recoverable under this subpart is the amount needed in excess of all other available assets of the insolvent insurer to pay the contractual obligations of the insolvent insurer.(5)If any person liable under subdivision (3) is insolvent, all the member insurer's affiliates that controlled the member insurer at the time the distribution was paid, shall be jointly and severally liable for any resulting deficiency in the amount recovered from the insolvent affiliate. Source: SL 2003, ch 252, 14; SL 2013, ch 252, 8; SL 2020, ch 210,  8.
58-29C-58. Association subject to regulation by director--Financial report.The association is subject to examination and regulation by the director. The board of directors shall submit to the director each year, not later than one hundred twenty days after the association's fiscal year, a financial report in a form approved by the director and a report of its activities during the preceding fiscal year. Upon the request of a member insurer, the association shall provide the member insurer with a copy of the report. Source: SL 2003, ch 252, 15.
58-29C-59. Association's tax exemption status.The association shall be exempt from payment of all fees and all taxes levied by this state or any of its subdivisions, except taxes levied on real property. Source: SL 2003, ch 252, 16.
58-29C-60. No liability for performance of powers and duties of association or its members.There is no liability on the part of and no cause of action of any nature may arise against any member insurer or its agents or employees, the association or its agents or employees, members of the board of directors, or the director or the director's representatives, for any action or omission by them in the performance of their powers and duties under this chapter. This immunity shall extend to the participation in any organization of one or more other state associations of similar purposes and to any such organization and its agents or employees. Source: SL 2003, ch 252, 17; SL 2013, ch 252, 9.
58-29C-61. Stay of proceedings against insolvent insurer--Default judgment set aside.All proceedings in which the insolvent insurer is a party in any court in this state shall be stayed one hundred eighty days from the date an order of liquidation, rehabilitation, or conservation is final to permit proper legal action by the association on any matters germane to its powers or duties. As to judgment under any decision, order, verdict, or finding based on default the association may apply to have such judgment set aside by the same court that made such judgment and shall be permitted to defend against such suit on the merits. Source: SL 2003, ch 252, 18; SL 2013, ch 252, 10.
58-29C-62. Use of existence of association for sales, solicitation, or inducement to purchase insurance prohibited--Summary document of purposes and limitations of chapter--Disclaimer.A. No person, including a member insurer, agent, or affiliate of a member insurer may make, publish, disseminate, circulate, or place before the public, or cause directly or indirectly, to be made, published, disseminated, circulated, or placed before the public, in any newspaper, magazine, or other publication, or in the form of a notice, circular, pamphlet, letter, or poster, or over any radio station or television station, or in any other way, any advertisement, announcement, or statement, written or oral, which uses the existence of the Life and Health Insurance Guaranty Association of this state for the purpose of sales, solicitation, or inducement to purchase any form of insurance covered by the South Dakota Life and Health Insurance Guaranty Association chapter. However, this section does not apply to the South Dakota Life and Health Insurance Guaranty Association or any other entity which does not sell or solicit insurance.B. Within one hundred eighty days of July 1, 2003, the association shall prepare a summary document describing the general purposes and current limitations of the chapter and complying with subpart C of this section. This document shall be submitted to the director for approval. At the expiration of the sixtieth day after the date on which the director approves the document, a member insurer may not deliver a policy or contract to a policy owner, contract owner, or certificate owner unless the summary document is delivered to the policy owner, contract owner, or certificate holder at the time of delivery of the policy or contract. The document shall also be available upon request by a policy owner, contract owner, or certificate holder. The distribution, delivery, or contents or interpretation of this document does not guarantee that either the policy or the contract or the policy owner, contract owner, or certificate holder is covered in the event of the impairment or insolvency of a member insurer. The description document shall be revised by the association as amendments to the chapter may require. Failure to receive this document does not give the policy owner, contract owner, certificate holder, or insured any greater rights than those stated in this chapter.C. The document prepared under subpart B shall contain a clear and conspicuous disclaimer on its face. The director shall establish the form and content of the disclaimer. The disclaimer shall:(1)State the name and address of the Life and Health Insurance Guaranty Association and insurance department;(2)Prominently warn the policy owner, contract owner, or certificate holder that the Life and Health Insurance Guaranty Association may not cover the policy or, if coverage is available, it shall be subject to substantial limitations and exclusions and conditioned on continued residence in this state;(3)State the types of policies or contracts for which guaranty funds will provide coverage;(4)State that the member insurer and the member insurer's agents are prohibited by law from using the existence of the Life and Health Insurance Guaranty Association for the purpose of sales, solicitation, or inducement to purchase any form of insurance;(5)State that the policy owner, contract owner, or certificate holder should not rely on coverage under the Life and Health Insurance Guaranty Association when selecting an insurer;(6)Explain rights available and procedures for filing a complaint to allege a violation of any provisions of this chapter; and(7)Provide other information as directed by the director including sources for information about the financial condition of insurers provided that the information is not proprietary and is subject to disclosure under that state's public records law.D. A member insurer shall retain evidence of compliance with subpart B as long as the policy or contract for which the notice is given remains in effect. Source: SL 2003, ch 252, 19; SL 2013, ch 252, 11; SL 2020, ch 210,  9.
58-29D-1. Definition of terms.Terms used in this chapter mean:(1)"Affiliate" or "affiliated," any entity or person who directly or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with, a specified entity or person;(2)"Underwrites" or "underwriting," the acceptance of employer or individual applications for coverage of individuals in accordance with the written rules of the insurer; the overall planning and coordinating of an insurance program; and the ability to procure bonds and excess insurance. Source: SL 1992, ch 352, 1.
58-29D-10. Insurer's ownership of administrator's records.The insurer shall own the records generated by the administrator pertaining to the insurer. However, the administrator shall retain the right to continuing access to books and records to permit the administrator to fulfill all of its contractual obligations to insured parties, claimants, and the insurer. Source: SL 1992, ch 352, 10.
58-29D-11. Transfer of records to new administrator.In the event the insurer and the administrator cancel their agreement, notwithstanding the provisions of 58-29D-8, the administrator may, by written agreement with the insurer, transfer all records to a new administrator rather than retain them for five years. In such cases, the new administrator shall acknowledge, in writing, that it is responsible for retaining the records for the prior administrator as required in 58-29D-8. Source: SL 1992, ch 352, 11.
58-29D-12. Advertising--Approval of insurer.An administrator may use only such advertising pertaining to the business underwritten by an insurer as has been approved in writing by the insurer in advance of its use. Source: SL 1992, ch 352, 12.
58-29D-13. Insurer responsibility for procedures and administration of its programs--Review and audit of administrator.If an insurer utilizes the services of an administrator, the insurer shall be responsible for determining the benefits, premium rates, underwriting criteria and claims payment procedures applicable to such coverage and for securing reinsurance, if any. The rules pertaining to these matters shall be provided, in writing, by the insurer to the administrator. The responsibilities of the administrator as to any of these matters shall be set forth in the written agreement between the administrator and the insurer. It is the sole responsibility of the insurer to provide for competent administration of its programs.In cases where an administrator administers benefits for more than one hundred certificate holders on behalf of an insurer, the insurer shall, at least semiannually, conduct a review of the operations of the administrator. At least one such review shall be an on-site audit of the operations of the administrator. Source: SL 1992, ch 352, 13.
58-29D-14. Fiduciary capacity of administrator--Accounting of underwriting transactions.All insurance charges or premiums collected by an administrator on behalf of or for an insurer or insurers, and the return of premiums received from that insurer or insurers, shall be held by the administrator in a fiduciary capacity. Such funds shall be immediately remitted to the person or persons entitled to them or shall be deposited promptly in a fiduciary account established and maintained by the administrator in a federally or state insured financial institution. The written agreement between the administrator and the insurer shall provide for the administrator to periodically render an accounting to the insurer detailing all transactions performed by the administrator pertaining to the business underwritten by the insurer. Source: SL 1992, ch 352, 14.
58-29D-15. Records of deposits and withdrawals from fiduciary account.If charges or premiums deposited in a fiduciary account have been collected on behalf of or for one or more insurers, the administrator shall keep records clearly recording the deposits in and withdrawals from the account on behalf of each insurer. The administrator shall keep copies of all the records and, upon request of an insurer, shall furnish the insurer with copies of the records pertaining to such deposits and withdrawals. Source: SL 1992, ch 352, 15.
58-29D-16. Provisions in written agreement as to withdrawals from fiduciary account. The administrator may not pay any claim by withdrawals from a fiduciary account in which premiums or charges are deposited. Withdrawals from such account shall be made as provided in the written agreement between the administrator and the insurer. The written agreement shall address the following:(1)Remittance to an insurer entitled to remittance;(2)Deposit in an account maintained in the name of the insurer;(3)Transfer to and deposit in a claims-paying account;(4)Payment to a group policyholder for remittance to the insurer entitled to such remittance;(5)Payment to the administrator of its commissions, fees or charges; or(6)Remittance of return premium to the person or persons entitled to such return premium. Source: SL 1992, ch 352, 16; SL 2021, ch 210,  19.
58-29D-18. Compensation of administrator.An administrator may not enter into any agreement or understanding with an insurer in which the effect is to make the amount of the administrator's commissions, fees, or charges contingent upon savings effected in the adjustment, settlement, and payment of losses covered by the insurer's obligations. This section may not prevent the compensation of an administrator from being based on premiums or charges collected or the number of claims paid or processed. This section does not prohibit an administrator from receiving performance-based compensation for providing hospital and other auditing services. Source: SL 1992, ch 352, 18; SL 2013, ch 253, 1.
58-29D-19. Notice of use of administrator to policyholder--Itemized charges--Disclosure of fees or commissions.When the services of an administrator are utilized, the administrator shall provide a written notice approved by the insurer to covered individuals advising them of the identity of, and relationship among, the administrator, the policyholder, and the insurer.When an administrator collects funds, the reason for collection of each item must be identified to the insured party and each item must be shown separately from any premium. Additional charges may not be made for services to the extent the services have been paid for by the insurer.The administrator shall disclose to the insurer all charges, fees, and commissions received from all services in connection with the provision of administrative services for such insurer, including any fees or commissions paid by insurers providing reinsurance. Source: SL 1992, ch 352, 19.
58-29D-2. Administrator defined--Exceptions.For the purposes of this chapter, an administrator or third-party administrator or TPA is a person who directly or indirectly solicits or effects coverage of, underwrites, collects charges or premiums from, or adjusts or settles claims on residents of this state, or residents of another state from offices in this state, in connection with workers' compensation, life or health insurance coverage or annuities, except any of the following:(1)An employer on behalf of its employees or the employees of one or more subsidiary or affiliated corporations of such employer;(2)A union on behalf of its members;(3)An insurer which is authorized to transact insurance in this state with respect to a policy lawfully issued and delivered in and pursuant to the laws of this state or another state;(4)An insurance producer licensed to sell workers' compensation, life or health insurance in this state, whose activities are limited exclusively to the sale of insurance;(5)A creditor on behalf of its debtors with respect to insurance covering a debt between the creditor and its debtors;(6)A trust and its trustees, agents and employees acting pursuant to such trust established in conformity with 29 U.S.C. 186;(7)A trust exempt from taxation under 501(a) of the Internal Revenue Code, its trustees and employees acting pursuant to such trust, or a custodian and the custodian's agents or employees acting pursuant to a custodian account which meets the requirements of 401(f) of the Internal Revenue Code;(8)A financial institution which is subject to supervision or examination by federal or state banking authorities, or a mortgage lender, to the extent they collect and remit premiums to licensed insurance producers or authorized insurers in connection with loan payments;(9)A credit card issuing company which advances for and collects premiums or charges from its credit card holders who have authorized collection if the company does not adjust or settle claims;(10)A person who adjusts or settles claims in the normal course of that person's practice or employment as an attorney at law and who does not collect charges or premiums in connection with workers' compensation, life or health insurance coverage or annuities;(11)An adjuster whose activities are limited to adjustment of claims;(12)A person who acts solely as an administrator of one or more bona fide employee benefit plans established by an employer or an employee organization, or both, for which the insurance laws of this state are preempted pursuant to the Employee Retirement Income Security Act of 1974. Such person shall comply with the requirements of 58-29D-27;(13)A licensed managing general agency;(14)A licensed reinsurance intermediary; or(15)A person regulated under the Broker Controlled Act.This chapter applies to any third party administrator who performs administration functions on behalf of any workers' compensation insurer or employer with a self-funded workers' compensation program. Source: SL 1992, ch 352, 2; SL 2001, ch 285, 1; SL 2001, ch 286, 152.
58-29D-20.1. Annual report to employer of self-funded health benefit plan claims experience.Any administrator for an employer self-funded health benefit plan shall provide, at the written request of the employer, annual reports of the claims experience of that employer for the immediate past policy period and for any time frame that is not more than three years prior to the policy period in which the request was made. No administrator is required to provide any claims information that pertains to a prior administrator's experience with that employer. The claims report shall be of sufficient detail so as to provide the employer with the data necessary to assess the employer's future health benefit coverage needs and shall be provided to the employer within thirty days of receipt of the written request of the employer. Source: SL 2006, ch 261, 1.
58-29D-20. Delivery of written communications from insurer.Any policies, certificates, booklets, termination notices, or other written communications delivered by the insurer to the administrator for delivery to insured parties or covered individuals shall be delivered by the administrator promptly after receipt of instructions from the insurer to deliver them. Source: SL 1992, ch 352, 20.
58-29D-21. Administrator's license or registration required.No person may act as, or offer to act as, or hold himself out to be an administrator in this state without a valid license or registration as an administrator issued by the director. Source: SL 1992, ch 352, 21; SL 2001, ch 285, 3.
  58-29D-22.1  .  Annual financial statement--Contents of application--Required audit.   Any annual financial statement or report required under 58-29D-22 must be audited. The applicant is presumed to be solvent if the applicant has a positive net worth.   If the applicant has been in existence for less than two fiscal years, the applicant shall include in the application all financial statements or reports, certified by an officer of the applicant and prepared in accordance with generally accepted accounting principles, for any completed fiscal year and for any month during the current fiscal year for which the financial statements or reports have been completed. If information provided pursuant to this section is prepared on a consolidated or combined basis, the applicant shall include a columnar consolidating or combining worksheet with the report or renewal and shall include in the worksheet the following:   (1) Amounts shown on the consolidated audited financial report or renewal;   (2) Amounts for each entity stated separately; and   (3) Explanations of consolidating and eliminating entries.     Source:  SL 2020, ch 211,  1. 
58-29D-22. Application by administrator--Contents--Fee.An administrator shall apply to the director upon a form to be furnished by the director. The application shall include or be accompanied by the following information and documents:(1)All basic organizational documents of the administrator, including any articles of incorporation, articles of association, partnership agreement, trade name certificate, trust agreement, shareholder agreement, and other applicable documents, and all amendments to such documents;(2)The bylaws, rules, regulations, or similar documents regulating the internal affairs of the administrator;(3)The names, addresses, official positions, and professional qualifications of the individuals who are responsible for the conduct of affairs of the administrator; including all members of the board of directors, board of trustees, executive committee, or other governing board or committee; the principal officers in the case of a corporation or the partners or members in the case of a partnership or association; shareholders holding directly or indirectly ten percent or more of the voting securities of the administrator; and any other person who exercises control or influence over the affairs of the administrator;(4)Annual financial statements or reports for the two most recent years which prove that the applicant is solvent and such information as the director may require in order to review the current financial condition of the applicant;(5)A statement describing the business plan including information on staffing levels and activities proposed in this state and nationwide. The plan shall provide details setting forth the administrator's capability for providing a sufficient number of experienced and qualified personnel in the areas of claims processing, record keeping, and underwriting;(6)If the applicant will be managing the solicitation of new or renewal business, proof that it employs or has contracted with an insurance producer licensed by this state for solicitation and taking of applications. Any applicant shall provide proof that it has a license as a life and health insurance producer in this state; and(7)Information regarding administrative actions, criminal convictions, or guilty pleas.The director may request additional information if the information provided pursuant to this section is inaccurate, incomplete, or unclear. If an applicant fails to provide the requested information within thirty days of the receipt of the any written request pursuant to subdivisions (1) to (7), inclusive, it is grounds for denial of an application.Any material change in the above information shall be filed with the director within thirty days. A filing fee of five hundred dollars shall accompany the application. Source: SL 1992, ch 352, 22; SL 2001, ch 286, 153; SL 2013, ch 253, 2.
58-29D-23. Inspection of applicant's contracts.The applicant shall make available for inspection by the director copies of all contracts with insurers or other persons utilizing the services of the administrator. Source: SL 1992, ch 352, 23.
58-29D-24. Denial of license.The director may not issue a license if the director determines that the administrator, or any individual responsible for the conduct of affairs of the administrator as defined in subdivision 58-29D-22(3), is not qualified for licensure by reason of 58-30-167. Source: SL 1992, ch 352, 24; SL 2002, ch 240, 1.
58-29D-25. Validity of license.A license issued under this chapter shall remain valid, unless surrendered, suspended, or revoked by the director, for so long as the administrator continues in business in this state and remains in compliance with this chapter. Source: SL 1992, ch 352, 25.
58-29D-26. Conditions not requiring license.An administrator is not required to hold a license as an administrator in this state if all of the following conditions are met:(1)The administrator has its principal place of business in another state;(2)The administrator is not soliciting business as an administrator in this state;(3)In the case of any group policy or plan of insurance serviced by the administrator and less than one hundred certificate holders reside in this state. Source: SL 1992, ch 352, 26.
58-29D-27. Servicer of certain employee benefit plans--Exempt from licensure--Requirements.A person is not required to hold a license as an administrator in this state if the person exclusively provides services to one or more bona fide employee benefit plans, each of which is established by an employer or an employee organization, or both, and for which the insurance laws of this state are preempted pursuant to the Employee Retirement Income Security Act of 1974. Any person not required to hold a license shall register with the director annually, verifying the person's status if the person directly or indirectly underwrites, collects charges or premiums from, or adjusts or settles claims of residents of this state in connection with a self-funded plan other than a governmental or church plan offering life, annuity, or health coverage. Source: SL 1992, ch 352, 27; SL 2020, ch 211,  2.
58-29D-28. Notice of administrator's change in circumstance.An administrator shall immediately notify the director of any material change in its ownership, control, or other fact or circumstance affecting its qualification for a license in this state. Source: SL 1992, ch 352, 28.
58-29D-29. Waiver of application requirements.Upon request from an administrator, the director may waive the application requirements of 58-29D-22 if the administrator has a valid license as an administrator issued in a state which has standards for administrators that are at least as stringent as those contained in this chapter. If waived, the administrator shall register with the director in this state. The waiver shall automatically lapse if the third party administrator granted a waiver is no longer licensed in the state for which the waiver was granted. Any waiver given by this section does not extend to any suspension or revocation of licensure or registration pursuant to 58-29D-31. Source: SL 1992, ch 352, 29; SL 2001, ch 285, 4.
58-29D-3. Insurer defined.For the purposes of this chapter, an insurer is any person undertaking to provide workers' compensation, life or health insurance coverage in this state. An insurer includes a licensed insurance company, a prepaid hospital or medical care plan, a health maintenance organization, a multiple employer welfare arrangement, or any other person providing a plan of insurance subject to state insurance regulation. The term, insurer, does not include a bona fide employee benefit plan established by an employer or an employee organization, or both, for which the insurance laws of this state are preempted pursuant to the Employee Retirement Income Security Act of 1974. Source: SL 1992, ch 352, 3; SL 2001, ch 285, 2.
58-29D-30. Annual renewal of administrator--Fee--Lapse of license or registration.Each administrator licensed or registered shall file an annual renewal for the preceding calendar year with the director on or before July first of each year, or within such extension of time as the director for good cause may grant. The renewal shall be in the form and contain such matters as the director prescribes and shall be verified by at least two officers of the administrator. The annual renewal shall include the complete names and addresses of all insurers with which the administrator had an agreement during the preceding fiscal year. At the time of filing its annual renewal, the administrator shall pay a filing fee of two hundred fifty dollars. Failure to file such renewal shall result in lapsing of the license or registration of the administrator. Source: SL 1992, ch 352, 30; SL 1999, ch 255, 1; SL 2012, ch 248, 1.
58-29D-31. Grounds for denial, suspension, or revocation of license or registration.The application or annual renewal shall be denied and the license or registration of an administrator shall be suspended or revoked if the director finds that the administrator or applicant:(1)Is in an unsound financial condition;(2)Is using such methods or practices in the conduct of its business so as to render its further transaction of business in this state hazardous or injurious to insured persons or the public;(3)Has failed to pay any judgment rendered against it in this state within sixty days after the judgment has become final;(4)Has violated any lawful rule or order of the director or any provision of the insurance laws of this state;(5)Has refused to be examined or to produce its accounts, records, and files for examination, or if any of its officers has refused to give information with respect to its affairs or has refused to perform any other legal obligation as to such examination, if required by the director;(6)Has, without just cause, refused to pay proper claims or perform services arising under its contracts or has, without just cause, caused covered individuals to accept less than the amount due them or caused covered individuals to employ attorneys or bring suit against the administrator to secure full payment or settlement of such claims;(7)Is affiliated with or under the same general management or interlocking directorate or ownership as another administrator or insurer which unlawfully transacts business in this state without having a license;(8)At any time fails to meet any qualification for which issuance of the certificate could have been refused had such failure then existed and been known to the Division of Insurance;(9)Has been convicted of, or has entered a plea of guilty or nolo contendere to, a felony without regard to whether adjudication was withheld;(10)Is under suspension or revocation in another state; or(11)Has supplied false information to the director. Source: SL 1992, ch 352, 31; SL 2001, ch 285, 5; SL 2013, ch 253, 3.
58-29D-32.1. Notice of denial of application or renewal--Request for hearing--Hearing on suspension or revocation--Notice.If the director denies an application or annual renewal for a license or registration, the director shall notify the applicant or licensee and advise, in writing, the applicant or licensee of the reason for the denial. The applicant or licensee may make a written request to the director within thirty days of the date of the denial for a hearing to determine the reasonableness of the director's action. A notice of hearing shall be issued within thirty days of receipt of a written request.The director shall suspend for not more than twelve months, or may revoke or refuse to continue, any license or registration issued under this chapter after a hearing. Notice of such hearing and of the charges against the licensee or registrant pursuant to 58-29D-31 shall be given at least twenty days before a hearing. Notice of hearing shall be issued within twenty days of the director's suspension under 58-29D-32 which shall include the reasons for suspension and may include grounds for revocation under 58-29D-31. Any hearing under 58-29D-32 shall be held within thirty days of the date of the director's suspension.Any hearing under the provisions of this section shall be held pursuant to chapter 1-26. Nothing in this section or 58-29D-31 applies to a renewal which is lapsed pursuant to 58-29D-30. Source: SL 2013, ch 253, 4.
58-29D-32. Immediate suspension of license--No notice required.The director may, in his discretion and without advance notice of hearing thereon, immediately suspend the certificate of any administrator if the director finds that one or more of the following circumstances exist:(1)The administrator is insolvent or impaired;(2)A proceeding for receivership, conservatorship, rehabilitation, or other delinquency proceeding regarding the administrator has been commenced in any state;(3)The financial condition or business practices of the administrator otherwise pose an imminent threat to the public health, safety, or welfare of the residents of this state. Source: SL 1992, ch 352, 32.
58-29D-33. Money penalty in lieu of suspension or revocation.If the director finds that one or more grounds exist for the denial of an application, suspension, or revocation of a license issued under this chapter, the director may, in lieu of denial, suspension, or revocation, impose a money penalty pursuant to 58-4-28.1. Source: SL 1992, ch 352, 33; SL 2000, ch 235, 2.
58-29D-34. Promulgation of rules.The director may promulgate rules pursuant to chapter 1-26 to provide for the enforcement and administration necessary to administer this chapter. Source: SL 1992, ch 352, 34.
58-29D-4. Written agreement between administrator and insurer.No administrator may act as such without a written agreement between the administrator and the insurer, and such written agreement shall be retained as part of the official records of both the insurer and the administrator for the duration of the agreement and for five years thereafter. The agreement shall contain all provisions required by this chapter, except insofar as those requirements do not apply to the functions performed by the administrator. Source: SL 1992, ch 352, 4.
58-29D-5. Provisions of written agreement.The written agreement shall include a statement of duties which the administrator is expected to perform on behalf of the insurer and the lines, classes, or types of insurance for which the administrator is to be authorized to administer. The agreement shall make provision with respect to underwriting or other standards pertaining to the business underwritten by such insurer. Source: SL 1992, ch 352, 5.
58-29D-6. Termination of written agreement--Suspension of underwriting authority--Dispute.The insurer or administrator may, with written notice, terminate the written agreement for cause as provided in the agreement. The insurer may suspend the underwriting authority of the administrator during the pendency of any dispute regarding the cause for termination of the written agreement. The insurer must fulfill any lawful obligations with respect to policies affected by the written agreement, regardless of any dispute between the insurer and the administrator. The insurer must file the notice and the reason for termination with the director within thirty days of such termination. Source: SL 1992, ch 352, 6.
58-29D-7. Status of payment of premiums and return premiums or claim payments to administrator.If an insurer utilizes the services of an administrator, the payment to the administrator of any premiums or charges for insurance by or on behalf of the insured party shall be deemed to have been received by the insurer, and the payment of return premiums or claim payments forwarded by the insurer to the administrator may not be deemed to have been paid to the insured party or claimant until such payments are received by the insured party or claimant. Nothing in this section limits any right of the insurer against the administrator resulting from the failure of the administrator to make payments to the insurer, insured parties or claimants. Source: SL 1992, ch 352, 7.
58-29D-8. Recordkeeping by administrator.Every administrator shall maintain and make available to the insurer complete books and records of all transactions performed on behalf of the insurer. The books and records shall be maintained in accordance with prudent standards of insurance record keeping and must be maintained for a period of not less than five years from the date of their creation. Source: SL 1992, ch 352, 8.
58-29D-9. Director's access to administrator's records--Confidentiality.The director shall have access to books and records maintained by an administrator for the purposes of examination, audit, and inspection. Any trade secrets contained in such books and records, including the identity and addresses of policyholders and certificate holders, shall be kept confidential, except that the director may use such information in any proceeding instituted against the administrator. Source: SL 1992, ch 352, 9.
58-29E-1. Definition of terms.Terms used in this chapter mean:(1)"Covered entity," a nonprofit hospital or medical service corporation, health insurer, health benefit plan, or health maintenance organization; a health program administered by a department or the state in the capacity of provider of health coverage; or an employer, labor union, or other group of persons organized in the state that provides health coverage to covered individuals who are employed or reside in the state. The term does not include a self-funded plan that is exempt from state regulation pursuant to ERISA, a plan issued for coverage for federal employees, or a health plan that provides coverage only for accidental injury, specified disease, hospital indemnity, medicare supplement, disability income, long- term care, or other limited benefit health insurance policies and contracts;(2)"Covered individual," a member, participant, enrollee, contract holder, policy holder, or beneficiary of a covered entity who is provided health coverage by the covered entity. The term includes a dependent or other person provided health coverage through a policy, contract, or plan for a covered individual;(3)"Director," the director of the Division of Insurance;(4)"Generic drug," a chemically equivalent copy of a brand-name drug with an expired patent;(5)"Labeler," an entity or person that receives prescription drugs from a manufacturer or wholesaler and repackages those drugs for later retail sale and that has a labeler code from the federal Food and Drug Administration under 21 C.F.R. 270.20 (1999);(6)"Pharmacy benefits management," the procurement of prescription drugs at a negotiated rate for dispensation within this state to covered individuals, the administration or management of prescription drug benefits provided by a covered entity for the benefit of covered individuals, or any of the following services provided with regard to the administration of the following pharmacy benefits:(a)Mail service pharmacy;(b)Claims processing, retail network management, and payment of claims to pharmacies for prescription drugs dispensed to covered individuals;(c)Clinical formulary development and management services;(d)Rebate contracting and administration;(e)Certain patient compliance, therapeutic intervention, and generic substitution programs; and(f)Disease management programs involving prescription drug utilization;(7)"Pharmacy benefits manager," an entity that performs pharmacy benefits management. The term includes a person or entity acting for a pharmacy benefits manager in a contractual or employment relationship in the performance of pharmacy benefits management for a covered entity and includes mail service pharmacy. The term does not include a health carrier licensed pursuant to Title 58 when the health carrier or its subsidiary is providing pharmacy benefits management to its own insureds; or a public self-funded pool or a private single employer self-funded plan that provides such benefits or services directly to its beneficiaries;(8)"Proprietary information," information on pricing, costs, revenue, taxes, market share, negotiating strategies, customers, and personnel held by private entities and used for that private entity's business purposes;(9)"Trade secret," information, including a formula, pattern, compilation, program, device, method, technique, or process, that:(a)Derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use; and (b)Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy. Source: SL 2004, ch 311, 1.
58-29E-10. Civil action--Enforcement of chapter--Damages.Any covered entity may bring a civil action to enforce the provisions of this chapter or to seek civil damages for the violation of its provisions. Source: SL 2004, ch 311, 10.
58-29E-11. Application of chapter to certain contracts.The provisions of this chapter apply only to pharmacy benefits management services contracts entered into or renewed after June 30, 2004. Source: SL 2004, ch 311, 11.
58-29E-12. Requiring pharmacy to charge cost share that exceeds amount retained by pharmacy prohibited.No pharmacy benefit manager shall contractually require a pharmacy, who is a participating provider in a health plan provided by a covered entity, to charge or collect from an insured a cost share for a prescription or pharmacy service that exceeds the amount retained by the pharmacist or pharmacy from all payment sources for the filling of the prescription or providing the pharmacy service. Source: SL 2019, ch 213, 1.
58-29E-13. Certain claims adjustments prohibited.No pharmacy benefit manager contracting with a covered entity shall retroactively adjust a claim for reimbursement submitted by a pharmacy for a prescription drug unless the adjustment is a result of either of the following:(1)A pharmacy audit conducted in accordance with chapter 58-29F; or(2)A technical billing error. Source: SL 2019, ch 213, 2.
58-29E-14. Adjustment of claim due to error in adjudication permitted.Nothing in 58-29E-12 to 58-29E-15, inclusive, shall prohibit a pharmacy benefit manager from adjusting claim payment for the benefit of a covered individual if there was an error in the adjudication of a claim submitted by or on behalf of the covered individual. Source: SL 2019, ch 213, 3.
58-29E-15. Discrimination prohibited against pharmacy participating in health plan under Public Health Service Act.No pharmacy benefit manager may discriminate against a pharmacy participating in a health plan as an entity authorized to participate under section 340B of the Public Health Service Act, as amended to January 1, 2019, or any pharmacy under contract with such an entity to provide prescriptions. For the purposes of this chapter, a retail pharmacy is any pharmacy licensed under the laws of this state, and no pharmacy benefit manager may, by contract, modify that definition. Source: SL 2019, ch 213, 4.
58-29E-2. Pharmacy benefits manager licensed as third party administrator.No person or entity may perform or act as a pharmacy benefits manager in this state without a valid license to operate as a third party administrator pursuant to chapter 58-29D. Sections 58-29D-26 and 58-29D-29 do not apply to pharmacy benefits managers. Source: SL 2004, ch 311, 2; SL 2013, ch 253, 5.
58-29E-3. Manager to perform duties in good faith.Each pharmacy benefits manager shall perform its duties exercising good faith and fair dealing toward the covered entity. Source: SL 2004, ch 311, 3.
58-29E-4. Disclosure by manager of revenues received from pharmaceutical manufacturer or labeler under contract with manager--Content--Fees.A covered entity may request that any pharmacy benefits manager with which it has a pharmacy benefits management services contract disclose to the covered entity, the amount of all rebate revenues and the nature, type, and amounts of all other revenues that the pharmacy benefits manager receives from each pharmaceutical manufacturer or labeler with whom the pharmacy benefits manager has a contract. The pharmacy benefits manager shall disclose in writing:(1)The aggregate amount, and for a list of drugs to be specified in the contract, the specific amount, of all rebates and other retrospective utilization discounts received by the pharmacy benefits manager directly or indirectly, from each pharmaceutical manufacturer or labeler that are earned in connection with the dispensing of prescription drugs to covered individuals of the health benefit plans issued by the covered entity or for which the covered entity is the designated administrator;(2)The nature, type, and amount of all other revenue received by the pharmacy benefits manager directly or indirectly from each pharmaceutical manufacturer or labeler for any other products or services provided to the pharmaceutical manufacturer or labeler by the pharmacy benefits manager with respect to programs that the covered entity offers or provides to its enrollees; and(3)Any prescription drug utilization information requested by the covered entity relating to covered individuals.A pharmacy benefits manager shall provide such information requested by the covered entity for such disclosure within thirty days of receipt of the request. If requested, the information shall be provided no less than once each year. The contract entered into between the pharmacy benefits manager and the covered entity shall set forth any fees to be charged for drug utilization reports requested by the covered entity. Source: SL 2004, ch 311, 4.
58-29E-5. Permission of entity required to contact covered individual--Exception.A pharmacy benefits manager, unless authorized pursuant to the terms of its contract with a covered entity, may not contact any covered individual without express written permission of the covered entity. Source: SL 2004, ch 311, 5.
58-29E-6. Confidentiality of information--Injunction--Damages.Except for utilization information, a covered entity shall maintain any information disclosed in response to a request pursuant to 58-29E-4 as confidential and proprietary information, and may not use such information for any other purpose or disclose such information to any other person except as provided in this chapter or in the pharmacy benefits management services contract between the parties. Any covered entity who discloses information in violation of this section is subject to an action for injunctive relief and is liable for any damages which are the direct and proximate result of such disclosure. Nothing in this section prohibits a covered entity from disclosing confidential or proprietary information to the director, upon request. Any such information obtained by the director is confidential and privileged and is not open to public inspection or disclosure. Source: SL 2004, ch 311, 6.
58-29E-7. Audits of manager's books and records.The covered entity may have the pharmacy benefits manager's books and records related to the rebates or other information described in subdivisions 58-29E-4(1), (2), and (3), to the extent the information relates directly or indirectly to such covered entity's contract, audited in accordance with the terms of the pharmacy benefits management services contract between the parties. However, if the parties have not expressly provided for audit rights and the pharmacy benefits manager has advised the covered entity that other reasonable options are available and subject to negotiation, the covered entity may have such books and records audited as follows:(1)Such audits may be conducted no more frequently than once in each twelve-month period upon not less than thirty business days' written notice to the pharmacy benefits manager;(2)The covered entity may select an independent firm to conduct such audit, and such independent firm shall sign a confidentiality agreement with the covered entity and the pharmacy benefits manager ensuring that all information obtained during such audit will be treated as confidential. The firm may not use, disclose, or otherwise reveal any such information in any manner or form to any person or entity except as otherwise permitted under the confidentiality agreement. The covered entity shall treat all information obtained as a result of the audit as confidential, and may not use or disclose such information except as may be otherwise permitted under the terms of the contract between the covered entity and the pharmacy benefits manager or if ordered by a court of competent jurisdiction for good cause shown;(3)Any such audit shall be conducted at the pharmacy benefits manager's office where such records are located, during normal business hours, without undue interference with the pharmacy benefits manager's business activities, and in accordance with reasonable audit procedures. Source: SL 2004, ch 311, 7.
58-29E-8.1. Cost-sharing information not to be restricted.A pharmacy benefits manager may neither prohibit nor penalize a pharmacist or pharmacy for providing cost-sharing information on the amount a covered individual may pay for a particular prescription drug. Source: SL 2018, ch 281, 1.
58-29E-8. Dispensation of substitute prescription drug for prescribed drug.With regard to the dispensation of a substitute prescription drug for a prescribed drug to a covered individual, when the pharmacy benefits manager requests a substitution, the following provisions apply:(1)The pharmacy benefits manager may request the substitution of a lower- priced generic and therapeutically equivalent drug for a higher-priced prescribed drug;(2)With regard to substitutions in which the substitute drug's net cost is more for the covered individual or the covered entity than the prescribed drug, the substitution must be made only for medical reasons that benefit the covered individual. If a substitution is being requested pursuant to this subdivision, the pharmacy benefits manager shall obtain the approval of the prescribing health professional.Nothing in this section permits the substitution of an equivalent drug product contrary to 36-11-46.2 Source: SL 2004, ch 311, 8.
58-29E-9. Rules--Content.The Division of Insurance shall promulgate rules, pursuant to chapter 1-26, to carry out the issuance of the license required by 58-29E-2 and the enforcement provisions of this chapter. The rules may include the following:(1)Definition of terms;(2)Use of prescribed forms;(3)Reporting requirements;(4)Enforcement procedures; and(5)Protection of proprietary information and trade secrets. Source: SL 2004, ch 311, 9.
58-29F-1. Pharmacy audit integrity program established.The pharmacy audit integrity program is hereby established to provide standards for an audit of pharmacy records carried out by a pharmacy benefits manager or any entity that represents the pharmacy benefits manager. Source: SL 2013, ch 254, 1.
58-29F-10. Plan sponsor.If contractually required, an auditing entity shall provide a copy of the claims included in the audit to the plan sponsor, and any recouped money shall be returned to the plan sponsor. Source: SL 2013, ch 254, 10.
58-29F-11. Chapter not applicable to investigative audits.The provisions of this chapter do not apply to any investigative audit that involves fraud, willful misrepresentation, or on any audit completed by the State of South Dakota on health care programs operated by the state. Source: SL 2013, ch 254, 11.
58-29F-12. Civil action by pharmacy.In addition to the remedies otherwise provided for in this chapter, in chapter 58-29E, or under general South Dakota law, any pharmacy subject to an audit procedure may bring a civil action to enforce the provisions of this chapter and to seek damages from the pharmacy benefits manager and any person or organization representing the entity during the audit process for the violation of the provisions of this chapter. Source: SL 2013, ch 254, 12.
58-29F-2. Definitions.Term used in this chapter mean:(1)"Entity," a pharmacy benefits manager or any person or organization that represents these companies, groups, or organizations in any capacity;(2)"Plan sponsor," the employer in the case of an employee benefit plan established or maintained by a single employer or the employee organization in the case of a plan established or maintained by an employee organization, an association, joint board, trustee, committee, or other similar group that establishes or maintains the plan. Source: SL 2013, ch 254, 2.
58-29F-3. Time for disclosing proposed change in pharmacy audit terms.The pharmacy benefits manager shall disclose an amendment to the pharmacy audit terms in a contract between a pharmacy and a pharmacy benefits manager to the pharmacy at least sixty days prior to the effective date of the proposed change. Source: SL 2013, ch 254, 3.
58-29F-4. Requirements for conducting pharmacy audit.Unless otherwise prohibited by federal statutes or regulations, any entity conducting a pharmacy audit shall:(1)Give a pharmacy a minimum fourteen days written notice before conducting initial on-site audit;(2)Conduct an audit that involves clinical or professional judgment in consultation with a licensed pharmacist; and(3)Audit each pharmacy under the same standards and parameters as other similarly situated pharmacies. Source: SL 2013, ch 254, 4.
58-29F-5. Audit terms.Unless otherwise prohibited by federal statutes or regulations, for any entity conducting a pharmacy audit the following audit items apply:(1)The period covered by the audit may not exceed twenty-four months from the date that the claim was submitted to or adjudicated by the entity, unless a longer period is required under state or federal law;(2)If an entity uses random sampling as a method for selecting a set of claims for examination, the sample size shall be appropriate for a statistically reliable sample. Notwithstanding any other provision, the auditing entity shall provide the pharmacy a masked list that provides a prescription number or date range that the auditing entity is seeking to audit;(3)An on-site audit may not take place during the first five business days of the months of December and January unless the pharmacy consents;(4)An auditor may not enter any portion of the pharmacy area where patient-specific information is available unless escorted, and to the extent possible shall remain out of sight and hearing range of the pharmacy patients;(5)Any recoupment may not be deducted against future remittances until final completion of any appeals process and both parties have received the results of the final audit;(6)A pharmacy benefits manager may not require information to be written on a prescription unless the information is required to be written on the prescription by state or federal law. Recoupment may be assessed for items not written on the prescription if:(a)Additional information is required in the provider manual; or(b)The information is required by the Food and Drug Administration; or(c)The information is required by the drug manufacturer's product safety program; and(d)The information in subsections (a), (b), or (c) is not readily available for the auditor at the time of the audit;(7)The auditing company or agent may not receive payment based on a percentage of the amount recovered. This section does not prevent the entity conducting the audit from charging or assessing the responsible party, directly or indirectly, based on amounts recouped if:(a)The plan sponsor and the entity conducting the audit have a contract that explicitly states the percentage charge or assessment to the plan sponsor; and(b)A commission to an agent or employee of the entity conducting the audit is not based, directly or indirectly, on amounts recouped. Source: SL 2013, ch 254, 5.
58-29F-6. Recoupment or chargeback criteria.For recoupment or chargeback, the following criteria apply:(1)Audit parameters shall consider consumer-oriented parameters based on manufacturer listings;(2)A pharmacy's usual and customary price for compounded medications is considered the reimbursable cost unless the pricing methodology is outlined in the provider contract;(3)A finding of overpayment or underpayment can only be based on the actual overpayment or underpayment and not a projection based on the number of patients served having a similar diagnosis or on the number of similar orders or refills for similar drugs;(4)The entity conducting the audit may not use extrapolation in calculating the recoupment or penalties for audits unless required by state or federal law or regulation;(5)Calculations of overpayments may not include dispensing fees unless:(a)A prescription was not actually dispensed;(b)The prescriber denied authorization;(c)The prescription dispensed was a medication error by the pharmacy; or(d)The identified overpayment is solely based on an extra dispensing fee;(6)An entity may not consider any clerical or record-keeping error, such as a typographical error, scrivener's error, or computer error regarding a required document or record as fraud. However, such errors may be subject to recoupment;(7)In the case of errors that have no actual financial harm to the patient or plan, the pharmacy benefits manager may not assess any chargebacks. Errors that are a result of the pharmacy's failing to comply with a formal corrective action plan may be subject to recovery; and(8)Interest may not accrue during the audit period for either party. The audit period begins with the notice of the audit and ends with the final audit report. Source: SL 2013, ch 254, 6.
58-29F-7. Validation of pharmacy record and delivery.To validate the pharmacy record and delivery, the pharmacy may use authentic and verifiable statements or records including medication administration records of a nursing home, assisted living facility, hospital, physician, or other authorized practitioner or additional audit documentation parameters located in the provider manual. Any legal prescription that meets the requirements in this chapter may be used to validate claims in connection with prescriptions, refills, or changes in prescriptions, including medication administration records, faxes, e-prescriptions, or documented telephone calls from the prescriber or the prescriber's agents. Source: SL 2013, ch 254, 7.
58-29F-8. Preliminary and final audit reports.A preliminary audit report shall be delivered to the pharmacy within sixty days after the conclusion of the audit. A pharmacy shall be allowed at least forty-five days following receipt of the preliminary audit, to provide documentation to address any discrepancy found in the audit. A final audit report shall be delivered to the pharmacy within one hundred twenty days after receipt of the preliminary audit report or final appeal, whichever is later. An entity shall remit any money due to a pharmacy or pharmacist as a result of an underpayment of a claim within forty-five days after the appeals process has been exhausted and the final audit report has been issued. Source: SL 2013, ch 254, 8.
58-29F-9. Appeals process.The entity conducting the audit shall establish a written appeals process which shall include appeals of preliminary reports and final reports. Source: SL 2013, ch 254, 9.
58-30-1.1. Excess business defined.Excess business is that portion of a risk which is in excess of the amount that an insurer then represented by the insurance producer will accept. Source: SL 1982, ch 365, 6; SL 2001, ch 286, 154.
58-30-10. Rights of insurance producer after termination of appointment inapplicable to employer and employee relationship.The provisions of 58-30-9 do not apply as to any insurer and insurance producer between whom the relationship of employer and employee exists. Source: SL 1966, ch 111, ch 9, 22 (2); SL 2001, ch 286, 161.
58-30-108. Suspension, revocation, or refusal to renew one license affects all other licenses of licensee.Suspension, revocation, or refusal to renew of any one license held by the licensee under this title shall automatically likewise, suspend, revoke, or refuse renewal of all other licenses held by the licensee under this title. Source: SL 1966, ch 111, ch 9, 34 (2).
58-30-110. Suspension, revocation, or refusal to renew license--Notice by director.Upon suspension, revocation, or refusal to renew any license, the director shall notify the licensee thereof and give like notice to the insurers represented in case of an insurance producer's license. Source: SL 1966, ch 111, ch 9, 34 (1); SL 2001, ch 286, 183.
58-30-111. Waiting period for new license after revocation.The director may not again issue a license under this title to any person whose license has been revoked, until after expiration of one year from the date of such revocation or if judicial review of such revocation is sought, then within one year from the date of final court order or decree affirming the revocation. If the former licensee again files application for a license under this title, the director may require the applicant to show good cause why the prior revocation should not be a bar to the issuance of a new license. Source: SL 1966, ch 111, ch 9, 34 (4); SL 2002, ch 240, 4.
58-30-112. Licenses are property of South Dakota--Delivery to director on termination.All licenses, although issued and delivered as to the licensee insurance producer or surplus lines broker, shall, at all times, be the property of the State of South Dakota. Upon any expiration, termination, suspension, or revocation of the license, the licensee or other person having possession or custody of the license shall forthwith deliver it to the director either by personal delivery or by mail. Source: SL 1966, ch 111, ch 9, 35 (1); SL 2001, ch 286, 184.
58-30-113. Affidavit as to lost, stolen, or destroyed license.As to any license lost, stolen, or destroyed while in the possession of any such licensee, the director may accept in lieu of return of the license the affidavits of the licensee or other person responsible for or involved in the safekeeping of such license, concerning the facts of such loss, theft, or destruction. Source: SL 1966, ch 111, ch 9, 35 (2).
58-30-114. Continuing education requirements--Definitions.Terms, as used in 58-30-114 to 58-30-121, inclusive, mean:(1)"Director," the director of the Division of Insurance;(2)"Instructor," any individual who teaches, lectures, or otherwise instructs an insurance education offering;(3)"Licensee," any individual who is licensed by the Division of Insurance as a resident insurance producer; and(4)"Sponsor," any person, offering or providing insurance education or related activity. Source: SL 1984, ch 331, 1; SL 1989, ch 438, 1; SL 1990, ch 406, 1; SL 1994, ch 411, (Ex. Ord. 94-3), 17; SL 1999, ch 258, 1; SL 2001, ch 286, 185; SL 2010, ch 233, 7.
58-30-115.1. Renewal of license by persons over age sixty-five.Any licensee meeting the exception under subdivision 58-30-115(2) shall renew his or her license pursuant to 58-30-121. Nothing in that subdivision requires a licensee who has reached the age of sixty-five prior to July 1, 2006, and, as of July 1, 2006, has been licensed for at least ten years, to meet the continuing education requirements of this chapter. Source: SL 2006, ch 262, 2; SL 2015, ch 260, 8.
58-30-115.2. Renewal of limited or restricted licenses.Any licensee meeting the exception pursuant to subdivision 58-30-115(3) shall renew the license pursuant to 58-30-121. Source: SL 2009, ch 269, 1; SL 2015, ch 260, 9.
58-30-115. Resident insurance producers--Continuing education requirements--Exceptions.The provisions of 58-30-114 to 58-30-121, inclusive, do not apply to the following persons:(1)Licensees for whom an examination is not required under the laws of this state. However, persons who are excused from the examination under subdivision 58-30-52(1) may not be exempt;(2)Licensees over age sixty-five, if they have been licensed with the Division of Insurance for a period of at least ten years, and do not sell, solicit, or negotiate insurance; and(3)Licensees holding limited or restricted licenses, as the director of the Division of Insurance may determine except as provided by subdivision 58-30-116(2). Source: SL 1984, ch 331, 2; SL 2006, ch 262, 1; SL 2010, ch 233, 8; SL 2012, ch 249, 1.
58-30-116. Minimum continuing education requirements--Furnishing evidence of completion.Biennially, beginning April 1, 2012, on the last day of the licensee's birth month, the licensee shall furnish evidence to the director of the Division of Insurance that the licensee has satisfactorily completed the following continuing education requirements:(1)Any licensee who holds a property casualty life, accident/health, or variable contract qualification shall obtain a minimum of ten continuing education credit hours in courses certified for each such classification. However, no more than twenty hours of continuing education may be required of any licensee holding multiple insurance producer licenses; and(2)Any licensee who holds only a crop hail qualification shall obtain a minimum of four credit hours certified for that line. Source: SL 1984, ch 331, 3; SL 2001, ch 286, 186; SL 2002, ch 240, 5; SL 2010, ch 233, 9.
58-30-117. Continuing education rules.The director of the Division of Insurance, may promulgate, pursuant to chapter 1-26, rules as are necessary for effective administration of continuing education for insurance producers. The rules may include provisions concerning continuing education requirements, exemptions, programs, courses, sponsors, definitions, extensions, fees and funding, instructors, applications, advertising, and administration. Source: SL 1984, ch 331, 4; SL 1986, ch 22, 38; SL 1990, ch 406, 4; SL 1994, ch 411, (Ex. Ord. 94-3), 17; SL 2001, ch 286, 187.
58-30-118. Continuing education activities--Approval by director--Hours certified by director.The director of the Division of Insurance shall certify as approved continuing education activities those courses, lectures, seminars, or other instructional programs, including insurance company education programs, which he determines are beneficial in improving the product knowledge or service capability of licensees. The director may require descriptive information about any continuing education activity and refuse approval of any continuing education activity that does not advance the purposes of 58-30-114 to 58-30-121, inclusive. The director shall certify the number of hours to be awarded for participation in an approved continuing education activity based upon contact or classroom hours. The director shall certify the number of hours to be awarded for successful completion of a correspondence course or program of independent study, based upon the number of hours which would be awarded in an equivalent classroom course or program. Source: SL 1984, ch 331, 5.
58-30-119. Extension of time for completing continuing education requirements.For good cause shown, the director of the Division of Insurance may grant an extension of time during which the requirements imposed by 58-30-114 to 58-30-121, inclusive, may be completed, but such extension of time may not exceed one year. Source: SL 1984, ch 331, 6.
58-30-120. Continuing education prerequisite for license issuance or renewal--Exemptions.The director of the Division of Insurance may not renew a license or issue a new license in those lines for which the licensee has failed to comply with the requirements set forth in 58-30-114 to 58-30-121, inclusive. However, the licensee is exempt from the examination requirement pursuant to subdivision 58-30-52(1). If the licensee is not exempt from the examination requirement pursuant to subdivision 58-30-52(1), the director may renew or issue a new license without the licensee complying with 58-30-114 to 58-30-121, inclusive, if he meets all statutory requirements for licensing, including examination. Source: SL 1984, ch 331, 7; SL 1989, ch 438, 2.
58-30-121. Additional fee for renewal of license.The Division of Insurance shall charge each licensee an additional fee of twenty dollars upon renewal of the license. Beginning April 1, 2012, the fee as defined in 58-2-29 is due on the last day of the licensee's birth month and for each succeeding twenty-four month period. The fee shall be deposited in a separate account, entitled the South Dakota insurance producer's continuing education fund, as funding for the administration of the continuing education program. The director may withhold or not renew the license of any licensee who fails to tender timely payment of the fee. Source: SL 1984, ch 331, 8; SL 2001, ch 286, 188; SL 2002, ch 229, 2; SL 2007, ch 291, 2; SL 2010, ch 233, 10.
58-30-122. Conduct of sponsors and instructors--Approval or disapproval by director--Rules.The director may approve or disapprove sponsors or instructors. Each sponsor is responsible for the actions of the sponsor's instructors. Sponsors and instructors shall conduct themselves in a professional manner and may not offer or teach any course not approved by the director or not complying with any insurance statute or rule, may not deviate from approved course outlines, and may not misrepresent any course material or other information. The director may promulgate rules, pursuant to chapter 1-26, establishing the necessary criteria for disapproval of a sponsor or instructor. Source: SL 1990, ch 406, 2.
58-30-123. Director's action upon violation or nonconformity by sponsor or instructor.If the director determines that a course sponsor or instructor has violated the provisions of 58-30-117 or 58-30-122, the director may withdraw approval of the course sponsor or instructor or may order a refund of course fees to licensees who attended the course, or both. The director may also refuse to approve courses conducted by specific sponsors or instructors if the director determines that past offerings by those sponsors or instructors have not been in compliance with insurance continuing education laws and rules. Source: SL 1990, ch 406, 3.
58-30-124. Definition of terms.Terms as used in 58-30-124 to 58-30-139, inclusive, mean:(1)"Actuary," any person who is a member in good standing of the American Academy of Actuaries;(2)"Managing general agent," any person:(a)Who manages all or part of the insurance business of an insurer, including the management of a separate division, department, or underwriting office; and(b)Acts as an agent for the insurer or who, with or without the authority, either separately or together with affiliates, produces, directly or indirectly, and underwrites an amount of gross written premium of five percent or more of the policyholder surplus as reported in the last annual statement of the insurer in any one quarter or year and either:(i)Adjusts or pays claims; or(ii)Negotiates reinsurance on behalf of the insurer;(3)"Underwrite," the authority to accept or reject risk on behalf of the insurer. Source: SL 1992, ch 353, 1.
58-30-125. Persons not managing general agents.The following persons are not managing general agents for the purposes of 58-30-124 to 58-30-139, inclusive:(1)Any employee of the insurer;(2)Any United States manager of the United States branch of an alien insurer;(3)Any underwriting manager who, pursuant to contract, manages all the insurance operations of the insurer, is under common control with the insurer, subject to the holding company regulatory act, and whose compensation is not based on the volume of premiums written; or(4)Any attorney-in-fact authorized by and acting for the subscribers of a reciprocal insurer or interinsurance exchange under powers of attorney. Source: SL 1992, ch 353, 2.
58-30-126. License required--Bond or errors and omissions policy.No person may act in the capacity of a managing general agent with respect to risks located in this state for an insurer licensed in this state unless the person is a licensed insurance producer in this state. No person may act in the capacity of a managing general agent representing an insurer domiciled in this state with respect to risks located outside this state unless the person is licensed as an insurance producer in this state. The license may be a nonresident license.The director may require the managing general agent to obtain a bond or an errors and omissions policy in an amount acceptable to the director for the protection of the insurer. Source: SL 1992, ch 353, 3; SL 2001, ch 286, 189.
58-30-127. Written contract between managing general agent and insurer.No managing general agent may place business with an insurer unless there is in force a written contract between the parties which sets forth the responsibilities of each party and specifies the division of common or shared responsibilities. The contract shall contain the following minimum provisions:(1)The insurer may terminate the contract for cause upon written notice to the managing general agent. The insurer may suspend the underwriting authority of the managing general agent during the pendency of any dispute regarding the cause for termination;(2)The managing general agent shall render accounts to the insurer detailing all transactions and remit all funds due under the contract to the insurer on not less than a monthly basis;(3)All funds collected for the account of an insurer shall be held by the managing general agent in an escrow account in a bank which is a qualified United States financial institution as defined in 58-30-139. This account shall be used for all payments on behalf of the insurer. The managing general agent may retain no more than three months estimated claims payments and allocated loss adjustment expenses;(4)Separate records of business written by the managing general agent shall be maintained. The insurer shall have access and right to copy all accounts and records related to its business in a form usable by the insurer and the director shall have access to all books, bank accounts, and records of the managing general agent in a form usable to the director. Records shall be retained for five years;(5)The contract may not be assigned in whole or part by the managing general agent;(6)Appropriate underwriting guidelines including:(a)The maximum annual premium volume;(b)The basis of the rates to be charged;(c)The types of risks which may be written;(d)Maximum limits of liability;(e)Applicable exclusions;(f)Territorial limitations;(g)Policy cancellation provisions; and(h)The maximum policy period; and(7)Timely transmission of electronic claims files.The insurer may cancel or nonrenew any policy of insurance subject to the applicable laws and regulations concerning the cancellation and nonrenewal of insurance policies. Source: SL 1992, ch 353, 4; SL 2002, ch 241, 1.
58-30-128. Settling claims--Content of contract.If the managing general agent may settle claims on behalf of the insurer, the following shall be included in the contract:(1)All claims shall be reported to the company in a timely manner;(2)A copy of the claim file shall be sent to the insurer at its request or as soon as it becomes known that the claim:(a)Involves a coverage dispute;(b)May exceed the managing general agent's claims settlement authority;(c)Is open for more than six months; or(d)Is closed by payment of an amount set by the company;(3)All claim files are the joint property of the insurer and managing general agent. Upon an order of liquidation of the insurer, the files shall become the sole property of the insurer or its estate and the managing general agent shall have reasonable access to and the right to copy the files on a timely basis;(4)Any settlement authority granted to the managing general agent may be terminated for cause upon the insurer's written notice to the managing general agent or upon the termination of the contract. The insurer may suspend the settlement authority during the pendency of any dispute regarding the cause for termination;(5)The claims settlement authority and limitations of the managing general agent.The director may initially and at least annually review the amount for settling claims or payment of claims and direct the amount be changed. Source: SL 1992, ch 353, 5.
58-30-129. Sharing interim profits.If the contract provides for a sharing of interim profits by the managing general agent, and the managing general agent may determine the amount of the interim profits by establishing loss reserves or controlling claim payments, or in any other manner, interim profits may not be paid to the managing general agent until one year after they are earned on property insurance business and five years after they are earned on casualty business and not until the profits have been verified pursuant to 58-30-131. Source: SL 1992, ch 353, 6.
58-30-130. Restrictions on managing general agents.A managing general agent may not:(1)Bind reinsurance or retrocessions on behalf of the insurer, except that the managing general agent may bind facultative reinsurance contracts pursuant to obligatory facultative agreements if the contract with the insurer contains reinsurance underwriting guidelines including, for both reinsurance assumed and ceded, a list of reinsurers with which automatic agreements are in effect, the coverages and amounts or percentages that may be reinsured and commission schedules;(2)Commit the insurer to participate in insurance or reinsurance syndicates;(3)Appoint any insurance producer without assuring that the insurance producer is lawfully licensed to transact the type of insurance for which the insurance producer is appointed;(4)Without prior approval of the insurer, pay or commit the insurer to pay a claim over a specified amount, net of reinsurance, which may not exceed one percent of the insurer's policyholder's surplus as of December thirty-first of the last completed calendar year;(5)Collect any payment from a reinsurer or commit the insurer to any claim settlement with a reinsurer, without prior approval of the insurer. If prior approval is given, a report shall be promptly forwarded to the insurer;(6)Permit its subagent to serve on the insurer's board of directors;(7)Jointly employ an individual who is employed with the insurer; or(8)Appoint a submanaging general agent. Source: SL 1992, ch 353, 7; SL 2001, ch 286, 190.
58-30-131. Duties of insurer working with managing general agent.The insurer has the following duties:(1)The insurer shall review and have on file an annual independent financial examination done by a person acceptable to the director, of each managing general agent with which it has done business;(2)If a managing general agent establishes loss reserves, the insurer shall annually obtain the opinion of an actuary attesting to the adequacy of loss reserves established for losses incurred and outstanding on business produced by the managing general agent. This is in addition to any other required loss reserve certification;(3)The insurer shall at least semiannually conduct an on-site review of the underwriting and claims processing operations of the managing general agent;(4)Binding authority for all reinsurance contracts or participation in insurance or reinsurance syndicates shall rest with an officer of the insurer, who may not be affiliated with the managing general agent;(5)Within thirty days of entering into or termination of a contract with a managing general agent, the insurer shall provide written notification of the appointment or termination to the director. Notices of appointment of a managing general agent shall include a statement of duties which the applicant is expected to perform on behalf of the insurer, the lines of insurance for which the applicant is to be authorized to act, and any other information the director may request;(6)An insurer shall review its books and records each quarter to determine if any insurance producer is a managing general agent as defined in 58-30-124. If the insurer determines that an insurance producer has become a managing general agent, the insurer shall promptly notify the insurance producer and the director within thirty days of the determination. The insurer and an insurance producer shall fully comply with the provisions of 58-30-124 to 58-30-139, inclusive, within thirty days of notification to the director; and(7)An insurer may not appoint to its board of directors an officer, director, employee, insurance producer, or controlling shareholder of its managing general agents. This subdivision does not apply to relationships governed by chapters 58-5A and 58-44. Source: SL 1992, ch 353, 8; SL 2001, ch 286, 191.
58-30-132. Acts of managing general agent--Examination by director--Costs.The acts of the managing general agent are considered to be the acts of the insurer on whose behalf it is acting. A managing general agent is subject to examination by the director pursuant to chapter 58-3. Unless otherwise set forth in the contract between the insurer and the managing general agent, the insurer shall pay the costs and expenses of the examination pursuant to 58-3-15. Source: SL 1992, ch 353, 9.
58-30-133. Penalties for violation by managing general agent.If the director finds after hearing that any person has violated any provision of 58-30-124 to 58-30-139, inclusive, the director may order one or all of the following:(1)For each separate violation, a penalty in an amount of not more than twenty-five thousand dollars;(2)Revocation or suspension of the license or authority; or(3)The managing general agent to reimburse the insurer, the rehabilitator or liquidator of the insurer for any losses incurred by the insurer caused by a violation of 58-30-124 to 58-30-139, inclusive, committed by the managing general agent.Nothing contained in this section affects the right of the director to impose any other penalties provided for in the insurance law. Source: SL 1992, ch 353, 10.
58-30-134. Rights of policyholders, claimants, and auditors.Nothing contained in 58-30-124 to 58-30-139, inclusive, limits or restricts the rights of policyholders, claimants, and auditors. Source: SL 1992, ch 353, 11.
58-30-135. Rules for implementation and administration of 58-30-124 to 58-30-139.The director may adopt rules, pursuant to chapter 1-26, for the implementation and administration of the provisions of 58-30-124 to 58-30-139, inclusive. The rules may include definitions, licensure, contract provisions, accounting, recordkeeping, examinations, claims, procedures and settlement, insurer and managing general agent duties, and the amount and kind of business a managing general agent may perform for an insurer. Source: SL 1992, ch 353, 12.
58-30-136. Utilization of managing general agent after July 1, 1992.No insurer may continue to utilize the services of a managing general agent on and after July 1, 1992, unless the utilization is in compliance with 58-30-124 to 58-30-139, inclusive. Source: SL 1992, ch 353, 13.
58-30-137. Filing and approval of contract.The contract between the insurer and the managing general agent shall be filed and approved by the director and is subject to 58-5-85 to 58-5-87, inclusive. Source: SL 1992, ch 353, 14.
58-30-138. Application of 58-30-124 to 58-30-139.Sections 58-30-124 to 58-30-139, inclusive, apply to all persons doing insurance business notwithstanding any provision exempting them from other insurance laws except any insurer licensed pursuant to chapter 58-35 which does not have more than one million dollars in direct written premiums and more than one thousand policyholders in any calendar year. Source: SL 1992, ch 353, 15.
58-30-139. Qualified United States financial institution defined.The term, a qualified United States financial institution, means an institution that:(1)Is organized or, in the case of a United States office of a foreign banking organization, licensed under the laws of the United States or any state thereof;(2)Is regulated, supervised, and examined by United States federal or state authorities having regulatory authority over banks and trust companies; and(3)Has been determined by either the director, or the Securities Valuation Office of the National Association of Insurance Commissioners, to meet such standards of financial condition and standing as are considered necessary and appropriate to regulate the quality of financial institutions whose letters of credit will be acceptable to the director. Source: SL 1992, ch 353, 16.
58-30-140. Agents not to obtain loans from clients--Exceptions.No insurance producer may obtain a loan from an existing or former client, other than a lending institution authorized by state or federal law, unless there is a written contract establishing the terms for repayment of the loan and the contract is filed with the division within thirty days of its effective date. This section does not apply to any loans transacted between an insurance producer and that insurance producer's spouse, parents, children, aunts, uncles, or grandparents. Source: SL 1999, ch 257, 1; SL 2001, ch 286, 192.
58-30-141. Application of reciprocity provisions to surplus lines brokers.Except as to the underlying requirements of a surplus lines broker holding an insurance producer license in the applicable lines and except as provided in 58-30-159 to 58-30-162, inclusive, 58-30-142 to 58-30-195, inclusive, do not apply to surplus lines brokers licensed pursuant to chapter 58-32. Source: SL 2001, ch 286, 1.
58-30-142. Definitions.Terms used in 58-30-141 to 58-30-195, inclusive, and in 58-30-209 to 58-30-218, inclusive mean:(1)"Agent of the insurer," any insurance producer who is compensated directly or indirectly by an insurer and sells, solicits, or negotiates any product of that insurer;(2)"Agent of insured," any insurance producer or person who secures compensation from an insured or insurance customer only and receives no compensation directly or indirectly from an insurer for a transaction with that insured or insurance customer;(3)"Business entity," a corporation, association, partnership, limited liability company, limited liability partnership, or other legal entity;(3A)"Consultant," an agent of the insured who sells, solicits, or negotiates insurance on behalf of an insured or prospective insured or who assists an insured or prospective insured in the procurement of insurance;(4)"Credit insurance," insurance that includes credit life, credit disability, credit property, credit unemployment, involuntary unemployment, mortgage life, mortgage guaranty, mortgage disability, guaranteed automobile protection insurance, and any other form of insurance offered in connection with an extension of credit that is limited to partially or wholly extinguishing that credit obligation that the director determines should be designated a form of limited line credit insurance;(5)"Crop insurance," insurance providing protection against damage to crops from unfavorable weather conditions, fire or lightening, flood, hail, insect infestation, disease or other yield-reducing conditions or perils provided by the private insurance market, or that is subsidized by the Federal Crop Insurance Corporation, including Multi-Peril Crop Insurance;(6)"Home state," the District of Columbia and any state or territory of the United States in which an insurance producer maintains the insurance producer's principal place of residence or principal place of business and is licensed to act as an insurance producer;(7)"Limited lines producer," any person authorized by the director to sell, solicit, or negotiate limited lines insurance;(8)"Negotiate," the act of conferring directly with or offering advice directly to a purchaser or prospective purchaser of a particular contract of insurance concerning any of the substantive benefits, terms, or conditions of the contract if the person engaged in that act either sells insurance or obtains insurance from insurers for purchasers;(9)"Sell," to exchange a contract of insurance by any means, for money or its equivalent, on behalf of an insurance company;(10)"Solicit," attempting to sell insurance or asking or urging a person to apply for a particular kind of insurance from a particular company;(11)"Terminate," the cancellation of the relationship between an insurance producer and the insurer or the termination of an insurance producer's authority to transact insurance;(12)"Travel insurance," a limited line of insurance as defined in 58-30-209 to 58-30-217, inclusive. Source: SL 2001, ch 286, 2; SL 2004, ch 295, 3; SL 2010, ch 233, 11; SL 2013, ch 255, 1; SL 2014, ch 241, 4.
58-30-143. Sale, solicitation or negotiation limited to licensed line of insurance only.No person may sell, solicit, or negotiate insurance in this state for any line of insurance unless the person is licensed for that line of authority in accordance with 58-30-141 to 58-30-195, inclusive. Source: SL 2001, ch 286, 3.
58-30-144.1. License required for acting as consultant.Any person acting as a consultant shall be licensed as an agent pursuant to this chapter. A consultant may collect a fee from an insurance customer for services provided as a consultant but may not collect a fee for any insurance placed with that insurance customer if a commission is payable to that consultant. A consultant may act as a consultant and collect a fee from an insurance customer and also receive a commission for insurance sold, solicited, or negotiated with that same insurance customer provided that the fee and commission are for separate and distinct insurance products. The term, fee, as used in this section, does not include a fee that is payable pursuant to the terms or conditions of an insurance policy, contract, or certificate or that are required to be paid for reasons other than the services provided by the consultant.A separate license for acting as a consultant is not required of a licensed agent. Any consultant collecting a fee from an insurance customer shall set forth the fee to be charged to that insurance customer and the terms and conditions of the services provided to that insurance customer in the form of a written agreement with that insurance customer. Source: SL 2013, ch 255, 2.
58-30-144. License not required under certain circumstances.Nothing in 58-30-141 to 58-30-195, inclusive, requires an insurer to obtain an insurance producer license. In this section, the term, insurer, does not include an insurer's officers, directors, employees, subsidiaries, or affiliates.A license as an insurance producer is not required of the following:(1)The officer, director, or employee of an insurer or of an insurance producer, if the officer, director, or employee does not receive any commission on policies written or sold to insure risks residing, located, or to be performed in this state and:(a)The officer's, director's, or employee's activities are executive, administrative, managerial, clerical, or a combination of these, and are only indirectly related to the sale, solicitation, or negotiation of insurance;(b)The officer's, director's, or employee's function relates to underwriting, loss control, inspection or the processing, adjusting, investigating, or settling of a claim on a contract of insurance; or(c)The officer, director, or employee is acting in the capacity of a special agent or agency supervisor assisting insurance producers, if the person's activities are limited to providing technical advice and assistance to licensed insurance producers and do not include the sale, solicitation, or negotiation of insurance;(2)Any person who secures and furnishes information for the purpose of group life insurance, group property and casualty insurance, group annuities, group or blanket accident and health insurance; or for the purpose of enrolling individuals under plans, issuing certificates under plans, or otherwise assisting in administering plans; or who performs administrative services related to mass marketed property and casualty insurance, if no commission is paid to the person for the service;(3)Any employer or association or its officers, directors, employees, or the trustees of an employee trust plan, to the extent that the employers, officers, employees, director, or trustees are engaged in the administration or operation of a program of employee benefits for the employer's or association's own employees or the employees of its subsidiaries or affiliates, which program involves the use of insurance issued by an insurer, as long as the employers, associations, officers, directors, employees, or trustees are not in any manner compensated, directly or indirectly, by the company issuing the contracts;(4)Any employee of an insurer or an organization employed by an insurer who is engaging in the inspection, rating, or classification of risks, or in the supervision of the training of insurance producers and who is not individually engaged in the sale, solicitation, or negotiation of insurance;(5)Any person whose activities in this state are limited to advertising without the intent to solicit insurance in this state through communications in printed publications or other forms of electronic mass media whose distribution is not limited to residents of the state, if the person does not sell, solicit, or negotiate insurance that would insure risks residing, located, or to be performed in this state;(6)Any person who is not a resident of this state who sells, solicits, or negotiates a contract of insurance for commercial property and casualty risks to an insured with risks located in more than one state insured under that contract, if that person is otherwise licensed as an insurance producer to sell, solicit, or negotiate that insurance in the state where the insured maintains its principal place of business and the contract of insurance insures risks located in that state;(7)Any salaried full-time employee who counsels or advises his or her employer relative to the insurance interests of the employer or of the subsidiaries or business affiliates of the employer, if the employee does not sell or solicit insurance or receive a commission; (8)Any person engaged in the business of fur storage who delivers to customers certificates or policies providing insurance on specified furs, garments trimmed with fur, or other garments accepted for storage and who collects the premium therefor, if the person receives no commissions for such service; or(9)Any person engaged in the sale or issuance by motor vehicle dealers licensed under chapter 32-6B of motor vehicle service contracts, extended service agreements, mechanical breakdown insurance, or insurance of the mechanical condition, or freedom from defective or worn parts or equipment of motor vehicles. Source: SL 2001, ch 286, 4; SL 2010, ch 241, 1.
58-30-145. Written examination required for resident applicants.A resident individual applying for an insurance producer license shall pass a written examination unless exempt pursuant to 58-30-52. The examination shall test the knowledge of the individual concerning the lines of authority for which application is made, the duties and responsibilities of an insurance producer, and the insurance laws and rules of this state. Source: SL 2001, ch 286, 5.
58-30-146. Arrangements for administration of examinations and collection of fee.The director may make arrangements, including contracting with an outside testing service, for administering examinations and collecting the fee set forth in 58-2-29. Source: SL 2001, ch 286, 6.
58-30-147. Payment of examination fees required.Each individual applying for an examination shall remit a fee as prescribed by the director as set forth in 58-2-29 and pay any fees charged by the outside testing service. Source: SL 2001, ch 286, 7.
58-30-148. Resident application for insurance producer license--Requirements for application.A person applying for a resident insurance producer license shall make application to the director on an application form or format as prescribed by the director and declare under penalty of refusal, suspension, or revocation of the license that the statements made in the application are true, correct, and complete to the best of the individual's knowledge and belief. The director shall consider the use of a uniform application form or format.Before approving the application, the director shall find that the individual:(1)Is at least eighteen years of age;(2)Has not committed any act that is a ground for denial, suspension, or revocation set forth in 58-30-167;(3)Has paid the fees set forth in 58-2-29; and(4)Has successfully passed the examinations for the lines of authority for which the person has applied. Source: SL 2001, ch 286, 8; SL 2002, ch 240, 6.
58-30-149. Application by business entity for insurance producer license--Requirements.A business entity acting as an insurance producer is required to obtain an insurance producer license. Application shall be made using a form or format prescribed by the director. The director shall consider the use of a uniform form or format. Before approving the application, the insurance director shall find that the business entity has paid the fees set forth in 58-2-29. Source: SL 2001, ch 286, 9; SL 2007, ch 291, 1.
58-30-150.1. Incomplete application--Deemed withdrawn--Not a refusal or reportable administrative action.An application for an insurance producer license must be deemed withdrawn if the director contacts an applicant under this chapter in writing regarding an incomplete application and the director does not receive a response from the applicant within sixty days of the date of the written communication. A withdrawn application under this section is not a refusal to issue a producer license and is not an administrative action reportable to other states. Source: SL 2022, ch 184, 1.
58-30-150. Verification of application information.The director may require any documents reasonably necessary to verify the information contained in an application. Source: SL 2001, ch 286, 10.
58-30-151. Program of instruction required for licensed insurance producers--Approval by director.Each insurer that sells, solicits, or negotiates any form of limited line credit insurance shall provide a program of instruction to each business entity acting as a licensed insurance producer for the insurer. Using the insurer's program of instruction, the insurer or the business entity shall train any employee of the business entity whose duties include selling, soliciting, or negotiating limited credit line insurance. Upon request by the director, the program of instruction is subject to approval by the director. Source: SL 2001, ch 286, 11.
58-30-152. Issuance of insurance producer license--Permitted lines of authority.Unless denied licensure pursuant to 58-30-167, any person who has met the requirements of 58-30-145 to 58-30-151, inclusive, shall be issued an insurance producer license. An insurance producer may receive qualification for a license in one or more of the following lines of authority:(1)Life--insurance coverage on human lives including benefits of endowment and annuities and may include benefits in the event of death or dismemberment by accident and benefits for disability income;(2)Accident and health or sickness--insurance coverage for sickness, bodily injury, or accidental death and may include benefits in the event of death or dismemberment by accident and for disability income;(3)Property--insurance coverage for the direct or consequential loss or damage to property of every kind;(4)Casualty--insurance coverage against legal liability, including that for death, injury, or disability, damage to real or personal property, or fidelity and surety bonds;(5)Variable life and variable annuity products--insurance coverage provided under variable life insurance contracts and variable annuities;(6)Personal lines--property and casualty insurance coverage sold to individuals and families for primarily noncommercial purposes;(7)Limited lines;(8)Any other line of insurance permitted under state laws or rules. Source: SL 2001, ch 286, 12; SL 2010, ch 233, 12.
58-30-153. Term of insurance producer license.An insurance producer license shall remain in effect unless revoked, suspended, or expired as long as the fee set forth in 58-2-29 is paid and the education requirements for resident individual insurance producers are met by the due date. Source: SL 2001, ch 286, 13.
58-30-154. Reinstatement of lapsed insurance producer license.An individual insurance producer who allows his or her license to lapse may, within twelve months from the due date of the renewal fee apply to reinstate the same license without the necessity of passing a written examination. A penalty in the amount of double the unpaid renewal fee shall be required for any license reinstatement. This section only applies to renewals if the continuing education due date was missed or timely payment of the fee was not made. Source: SL 2001, ch 286, 14.
58-30-155. Waiver of insurance producer license renewal requirements.A licensed insurance producer who is unable to comply with license renewal procedures due to military service or some other extenuating circumstance, such as a long-term medical disability, may request a waiver of those procedures. The producer may also request a waiver of any examination requirement or any other monetary penalty or sanction imposed for failure to comply with renewal procedures. The director may promulgate rules pursuant to chapter 1-26 for determining what constitutes extenuating circumstances if the director finds that application of this section or the imposition of sanctions would create an unreasonable hardship. Source: SL 2001, ch 286, 15.
58-30-156. Information contained on insurance producer license.The license shall contain the licensee's name, address, personal identification number, the date of issuance, the lines of authority, the expiration date, and any other information the director determines to be necessary. Source: SL 2001, ch 286, 16.
58-30-157. Notification of change of address by insurance producer.A licensee shall inform the director in a form or format prescribed by the director of a change of address within thirty days of the change. Source: SL 2001, ch 286, 17.
58-30-158. Authority of director to contract with nongovernmental entities for ministerial functions relating to insurance producer licensing.In order to assist in the performance of the director's duties, the director may contract with nongovernmental entities, including the National Association of Insurance Commissioners (NAIC) or any affiliates or subsidiaries that the NAIC oversees to perform any ministerial functions, including the collection of fees, related to insurance producer licensing that the director and the nongovernmental entity may deem appropriate. Source: SL 2001, ch 286, 18.
58-30-159. Requirements for nonresident insurance producer license.Unless denied licensure pursuant to 58-30-167, a nonresident person is entitled to receive a nonresident insurance producer license if:(1)The person is currently licensed as a resident insurance producer and in good standing in the person's home state;(2)The person has submitted the proper request for licensure and has paid the fees required by 58-2-29;(3)The person has submitted or transmitted to the director the application for licensure that the person submitted to the person's home state or the application required by 58-30-148; and(4)Except for fees, the person's home state issues nonresident insurance producer licenses to residents of this state on the same basis. Source: SL 2001, ch 286, 19.
58-30-160. Nonresident insurance producer required to hold equivalent license in home state.A licensee as nonresident insurance producer shall at all times be qualified for and hold in the licensee's home state of domicile the license of that home state as a resident insurance producer covering all kinds of insurance covered or to be covered under the South Dakota nonresident license. A hearing is not necessary in order to revoke, suspend, terminate, or nonrenew a nonresident insurance producer's license in this state if that insurance producer no longer has a producer license in the insurance producer's home state of domicile. Source: SL 2001, ch 286, 20; SL 2002, ch 240, 7.
58-30-161. Verification of nonresident's licensing status.The director may verify the insurance producer's licensing status through databases maintained by the National Association of Insurance Commissioners, its affiliates, or subsidiaries. Source: SL 2001, ch 286, 21.
58-30-162. Change of address required for interstate move.A nonresident insurance producer who moves from one state to another state or a resident insurance producer who moves from this state to another state shall file a change of address and provide certification from the new resident state within thirty days of the change of legal residence. No fee or license application is required. Source: SL 2001, ch 286, 22.
58-30-163. Nonresident license applicant--Reciprocity--Exception.The director shall waive any requirements for a nonresident license applicant with a valid license from the applicant's home state, except for the requirements imposed by 58-30-159, if the applicant's home state awards nonresident licenses to residents of this state on the same basis. The director may issue a resident license for a type of license not specified in this title to a person for insurance activities which do not require licensure in this state provided that another state which that person does insurance business in requires such license. Source: SL 2001, ch 286, 23; SL 2010, ch 233, 13.
58-30-164. Notification of use of assumed name by insurance producer.An insurance producer doing business under any name other than the insurance producer's legal name is required to notify the director prior to using the assumed name. Source: SL 2001, ch 286, 24.
58-30-165. Temporary insurance producer license.The director may issue a temporary insurance producer license for a period not to exceed one hundred eighty days without requiring an examination if the director determines that the temporary license is necessary for the servicing of an insurance business in the following cases:(1)To the surviving spouse or court-appointed personal representative of a licensed insurance producer who dies or becomes mentally or physically disabled to allow adequate time for the sale of the insurance business owned by the insurance producer or for the recovery or return of the insurance producer to the business or to provide for the training and licensing of new personnel to operate the insurance producer's business;(2)To a member or employee of a business entity licensed as an insurance producer, upon the death or disability of an individual designated in the business entity application or the license;(3)To the designee of a licensed insurance producer entering active service in the armed forces of the United States of America; or(4)In any other circumstance where the director determines that the public interest will be best served by the issuance of this license. Source: SL 2001, ch 286, 25.
58-30-166. Limits on temporary insurance producer license--Revocation of temporary license.The director may by order limit the authority of any temporary licensee in any way determined to be necessary to protect insureds and the public. The director may require the temporary licensee to be under the supervision of a licensed insurance producer or insurer who assumes responsibility for all acts of the temporary licensee and may impose other similar requirements designed to protect insureds and the public. The director may by order revoke a temporary license if the interest of insureds or the public are endangered. A temporary license does not continue after the owner or the personal representative disposes of the business. Source: SL 2001, ch 286, 26.
58-30-167.1. Termination of producer for receipt of hearing notice prohibited.No insurer may terminate the appointment of a producer based solely on the receipt of a notice of hearing pursuant to 58-30-167 involving that producer. Source: SL 2006, ch 263, 2.
58-30-167. Causes for suspension, revocation, refusal to issue or renew license, or monetary penalty--Notice--Hearing--Final determination.The director may suspend for not more than twelve months, or may revoke or refuse to continue, any license issued under this chapter, or any license of a surplus lines broker after a hearing. Notice of such hearing and of the charges against the licensee shall be given to the licensee and to the insurers represented by such licensee or to the appointing agent of a producer at least twenty days before the hearing. The director may suspend, revoke, or refuse to issue or renew an insurance producer's license or may accept a monetary penalty in accordance with 58-4-28.1 or any combination thereof, for any one or more of the following causes:(1)Providing incorrect, misleading, incomplete, or materially untrue information in the license application;(2)Violating any insurance laws or rules, subpoena, or order of the director or of another state's insurance director, commissioner, or superintendent;(3)Obtaining or attempting to obtain a license through misrepresentation or fraud;(4)Withholding, misappropriating, or converting any monies or properties received in the course of doing insurance business;(5)Intentionally misrepresenting the terms of an actual or proposed insurance contract or application for insurance;(6)Having been convicted of a felony;(7)Having admitted or been found to have committed any insurance unfair trade practice or fraud;(8)Using fraudulent, coercive, or dishonest practices, or demonstrating incompetence, untrustworthiness, or financial irresponsibility in the conduct of business in this state or elsewhere;(9)Having an insurance producer license, or its equivalent, denied, suspended, or revoked in any other state, province, district, or territory;(10)Forging another's name to an application for insurance or to any document related to an insurance transaction;(11)Using notes or any other reference material to complete an examination for an insurance license;(12)Knowingly accepting insurance business from an individual who sells, solicits, or negotiates insurance and is not licensed; or(13)Failing to comply with an administrative or court order imposing a child support obligation.At the conclusion of the matter, the director shall send a letter to the licensee, the insurers represented by such licensee, and the appointing agent of a producer, stating the final determination of the matter. Source: SL 2001, ch 286, 27; SL 2002, ch 240, 8; SL 2006, ch 263, 1.
58-30-168. Written reasons for denial or nonrenewal required--Request for hearing--Notice of hearing.If the director denies an application for a license or does not renew a license, the director shall notify the applicant or licensee and advise, in writing, the applicant or licensee of the reason for the denial or nonrenewal of the applicant's or licensee's license. The applicant or licensee may make a written request to the director within thirty days of the date of the nonrenewal or denial for a hearing to determine the reasonableness of the director's action. A notice of hearing shall be issued within thirty days of receipt of a written request. A hearing shall be held pursuant to chapter 1-26. This section does not apply to emergency suspensions pursuant to 1-26-29 or cease and desist orders in 58-4-7. Source: SL 2001, ch 286, 28.
58-30-169. Unreported knowledge by partners, officers, or managers of violation as grounds for penalty.The license of a business entity may be suspended, revoked, refused, or the director may accept a monetary penalty in accordance with 58-4-28.1, or any combination thereof, if the director finds, after hearing, that an individual licensee's violation was known or should have been known by one or more of the partners, officers, or managers acting on behalf of the partnership or corporation and the violation was neither reported to the director nor corrected. Source: SL 2001, ch 286, 29.
58-30-170. Authority of director to impose penalty or remedy.The director retains the authority to enforce the provisions of and impose any penalty or remedy authorized by 58-30-141 to 58-30-195, inclusive, and Title 58 against any person who is under investigation for or charged with any violation of 58-30-141 to 58-30-195, inclusive, or Title 58 even if the person's license or registration has been surrendered or has lapsed by operation of law. Source: SL 2001, ch 286, 30.
58-30-171.1. Insurer may prohibit consultant fees.An insurer may by contract prohibit an insurance producer from collecting a fee from an insurance customer for services provided as a consultant. Source: SL 2013, ch 255, 3.
58-30-171. Payment to unlicensed insurance producer prohibited.No insurer or insurance producer may pay a commission, service fee, brokerage, or other valuable consideration to a person for selling, soliciting, or negotiating insurance in this state if that person is required to be licensed under 58-30-141 to 58-30-195, inclusive, and is not so licensed. Nothing in this section allows an insurer to pay commissions to a nonappointed insurance producer if an appointment is otherwise required. Source: SL 2001, ch 286, 31.
58-30-172. Acceptance of payment by unlicensed insurance producer prohibited.No person may accept a commission, service fee, brokerage, or other valuable consideration for selling, soliciting, or negotiating insurance in this state if that person is required to be licensed or appointed under 58-30-141 to 58-30-195, inclusive, and is not so licensed or appointed. Source: SL 2001, ch 286, 32.
58-30-173. Renewal or deferred commissions approved if license held at time of transaction.Renewal or other deferred commissions may be paid to a person for selling, soliciting, or negotiating insurance in this state if the person was required to be licensed under 58-30-141 to 58-30-195, inclusive, at the time of the sale, solicitation, or negotiation and was so licensed at that time. Source: SL 2001, ch 286, 33.
58-30-174. Payment, assignment, or sharing of commissions and fees--Limitations.No insurer or insurance producer may pay or assign a commission, service fee, brokerage fee, or any other valuable consideration for a referral to any person not appropriately licensed pursuant to this chapter unless the payment or assignment is a fixed dollar amount that is not related to the amount of commission or premium for an insurance transaction and that is not dependent upon whether the referral results in a transaction. Nothing in this chapter prohibits a licensed and appointed producer upon receiving a commission from sharing this compensation with other insurance producers if those insurance producers are licensed in the line of business for which the original commission was received. However, no insurance producer who is not appointed may act as an agent of an insurer. An insurer who pays a commission to an appointed insurance producer is not responsible for any act, statement, or omission made by an insurance producer who is not appointed, but who receives compensation from an appointed insurance producer. Source: SL 2001, ch 286, 34; SL 2004, ch 295, 2; SL 2005, ch 275, 1; SL 2015, ch 255, 1.
58-30-175. Requirements for acting as agent of insurer.No insurance producer or business entity may act as an agent of an insurer unless the insurance producer becomes an appointed insurance producer of that insurer. An insurance producer who is not acting as an agent of an insurer is not required to become appointed. This section does not apply to property and casualty insurance producers who sell, solicit, or negotiate and place insurance with admitted insurers although the insurance producer is not appointed with the insurer if all insurance business placed by the unappointed insurance producer is through a licensed insurance producer who is appointed by the insurer involved in the transaction and if the coverage is not reasonably available through the insurance producer's existing appointed insurers for placements made as authorized by this section. The unappointed insurance producer may receive compensation from the insurer or a resident appointed insurance producer. Source: SL 2001, ch 286, 35; SL 2010, ch 241, 2.
58-30-176. Appointment of insurance producer or business entity as agent of insurer--Submission of notice of appointment.To appoint an insurance producer or business entity as its agent, the appointing insurer shall file, in a format approved by the director, a notice of appointment within fifteen days from the date the agency contract is executed or the first insurance application is submitted. An insurer may also elect to appoint an insurance producer to all or some insurers within the insurer's holding company system or group by the filing of a single appointment request. The insurer is responsible for the acts of its representatives and insurance producers, including those acts where the insurance producer has solicited, sold, or negotiated insurance on behalf of that insurer prior to the date of appointment. Source: SL 2001, ch 286, 36.
58-30-177. Verification of eligibility of insurance producer for appointment as agent of insurer.Upon receipt of the notice of appointment, the director shall verify within a reasonable time, not to exceed thirty days, that the insurance producer is eligible for appointment. If the insurance producer is determined to be ineligible for appointment, the director shall notify the insurer within five days of its determination. Source: SL 2001, ch 286, 37.
58-30-178. Appointment fee required.An insurer shall pay an appointment fee in the amount as set forth in 58-2-29 in a manner prescribed by the director for each insurance producer appointed by the insurer. Source: SL 2001, ch 286, 38.
58-30-179. Renewal appointment fee.An insurer shall remit, in a manner prescribed by the director, a renewal appointment fee in the amount set forth in 58-2-29. Source: SL 2001, ch 286, 39.
58-30-180. Termination of relationship between insurer and insurance producer.An insurer or authorized representative of the insurer that terminates the appointment, employment, contract, or other insurance business relationship with an insurance producer shall notify the director within thirty days following the effective date of the termination, using a format prescribed by the director. In addition, an insurer or authorized representative of the insurer that terminates the appointment, employment, contract, or other insurance business relationship with a producer shall notify the director within thirty days following the effective date of the termination, using a format prescribed by the director, if a reason for termination is one of the reasons set forth in 58-30-167 or the insurer has knowledge the producer was found by a court, government body, or self-regulatory organization authorized by law to have engaged in any of the activities in 58-30-167. Upon the written request of the director, the insurer shall provide additional information, documents, records, or other data pertaining to the termination or activity of the insurance producer. Such information, documents, records, or other data are confidential pursuant to 58-30-187. Source: SL 2001, ch 286, 40; SL 2007, ch 291, 3; SL 2010, ch 233, 14.
58-30-181. Prompt notification of additional information regarding termination of insurance producer.The insurer or authorized representative of the insurer shall promptly notify the director in a written or electronic format if, upon further review or investigation, the insurer discovers additional information that would have been reportable to the director in accordance with 58-30-180 had the insurer then known of its existence. Source: SL 2001, ch 286, 41.
58-30-182. Notification to insurance producer of termination by insurer.Within fifteen days after making the notification required by 58-30-180 and 58-30-181, the insurer shall mail, or if acceptable, send by electronic means, a copy of the notification to the insurance producer at the insurance producer's last known address. If the insurance producer is terminated for any of the reasons listed in 58-30-167, the insurer shall provide a copy of the notification to the insurance producer at the insurance producer's last known address by certified mail, return receipt requested and postage prepaid, by overnight delivery using a nationally recognized carrier, or if acceptable, by electronic means. Source: SL 2001, ch 286, 42.
58-30-183. Submission of written comments by insurance producer regarding termination.Within thirty days after the insurance producer has received the original or additional notification, the insurance producer may file written comments concerning the substance of the notification with the director. The insurance producer shall simultaneously send a copy of the comments to the reporting insurer, and the comments shall become a part of the director's file and accompany every copy of a report distributed or disclosed for any reason about the insurance producer as permitted under 58-30-187. Source: SL 2001, ch 286, 43.
58-30-184. Liability for information relating to termination.In the absence of actual malice, an insurer, the authorized representative of the insurer, an insurance producer, the director, or an organization of which the director is a member that compiles the information and makes it available to other insurance directors, commissioners, or superintendents, or regulatory or law enforcement agencies, is not subject to civil liability, and no civil cause of action of any nature may arise against these entities or their respective agents or employees, as a result of any statement or information required by or provided pursuant to 58-30-180 to 58-30-193, inclusive, or any information relating to any statement that may be requested in writing by the director, from an insurer or insurance producer; or any statement by a terminating insurer or insurance producer to an insurer or insurance producer limited solely and exclusively to whether a termination for cause under 58-30-180 was reported to the director, if the propriety of any termination for cause under 58-30-180 is certified in writing by an officer or authorized representative of the insurer or insurance producer terminating the relationship. Source: SL 2001, ch 286, 44.
58-30-185. Pleadings in action brought against provider of information regarding termination of insurance producer.In any action brought against a person that may have immunity under 58-30-184 for making any statement required by 58-30-180 to 58-30-193, inclusive, providing any information relating to any statement that may be requested by the director, the party bringing the action shall plead specifically in any allegation that 58-30-184 does not apply because the person making the statement or providing the information did so with actual malice. Source: SL 2001, ch 286, 45.
58-30-186. Application of common law to action regarding insurance producer's termination.The provisions of 58-30-184 and 58-30-185 do not abrogate or modify any existing statutory or common law privileges or immunities. Source: SL 2001, ch 286, 46.
58-30-187. Confidentiality of information gathered in termination investigation.Any documents, materials, or other information in the control or possession of the Division of Insurance that is furnished by the insurer, insurance producer, or an employee or agent thereof acting on behalf of the insurer or insurance producer, or obtained by the director in an investigation pursuant to 58-30-180 to 58-30-193, inclusive, are confidential by law and privileged, are not subject to open records, freedom of information, sunshine, or other related laws, are not subject to subpoena, and are not subject to discovery or admissible in evidence in any private civil action. The director is authorized to use the documents, materials, or other information in the furtherance of any regulatory function or legal action brought as a part of the director's duties. Source: SL 2001, ch 286, 47.
58-30-188. Testimony in private civil action prohibited.Neither the director nor any person who received documents, materials, or other information while acting under the authority of the director may testify in any private civil action concerning any confidential documents, materials, or information subject to 58-30-187. Source: SL 2001, ch 286, 48.
58-30-189. Director's duties in regard to confidential and privileged documents.In order to assist in the performance of the director's duties under 58-30-141 to 58-30-195, inclusive, the director may:(1)Share documents, materials, or other information, including the confidential and privileged documents, materials, or information subject to 58-30-187, with other state, federal, and international regulatory agencies, with the National Association of Insurance Commissioners, its affiliates, or subsidiaries, and with state, federal, and international law enforcement authorities, if the recipient agrees to maintain the confidentiality and privileged status of the document, material, or other information;(2)Receive documents, materials, or information, including otherwise confidential and privileged documents, materials, or information from the National Association of Insurance Commissioners, its affiliates, or subsidiaries and from regulatory and law enforcement officials of other foreign or domestic jurisdictions, and shall maintain as confidential or privileged any document, material, or information received with notice or the understanding that it is confidential or privileged under the laws of the jurisdiction that is the source of the document, material, or information; and(3)Enter into agreements governing sharing and use of information consistent with this section. Source: SL 2001, ch 286, 49.
58-30-190. Waiver of privilege or claim of confidentiality. No waiver of any applicable privilege or claim of confidentiality in the documents, materials, or information occurs as a result of disclosure to the director under  58-30-180 to 58-30-192, inclusive, or as a result of sharing as authorized in 58-30-187. Source: SL 2001, ch 286, 50; SL 2021, ch 210,  20.
58-30-191. Release of final orders allowed.Nothing in 58-30-141 to 58-30-195, inclusive, prohibits the director from releasing final orders, including for cause terminations that are open to public inspection pursuant to Title 58 and chapters 1-26 and 1-27, to a database or other clearinghouse service maintained by the National Association of Insurance Commissioners, its affiliates, or its subsidiaries. Source: SL 2001, ch 286, 51.
58-30-192. Penalties for failure to report.An insurer, the authorized representative of the insurer, or insurance producer that fails to report as required under the provisions of 58-30-141 to 58-30-195, inclusive, or that is found to have reported with actual malice by a court of competent jurisdiction may, after notice and hearing, have its license or certificate of authority suspended or revoked and may be assessed a monetary penalty in accordance with 58-4-28.1. Source: SL 2001, ch 286, 52.
58-30-193. Report by insurance producer of any administrative action taken against insurance producer.An insurance producer shall report to the director any administrative action taken against the insurance producer in another jurisdiction or by another governmental agency in this state within thirty days of the final disposition of the matter. This report shall include a copy of the order, consent order, or other relevant legal documents. Source: SL 2001, ch 286, 53.
58-30-194. Report by insurance producer of any felony criminal prosecution of insurance producer.Within thirty days of the initial pretrial hearing date, an insurance producer shall report to the director any felony criminal prosecution of the insurance producer taken in any jurisdiction. The report shall include a copy of the initial complaint filed, the order resulting from the hearing, and any other relevant legal documents. Source: SL 2001, ch 286, 54.
58-30-195. Promulgation of licensure rules.The director may promulgate rules pursuant to chapter 1-26 to provide for:(1)Qualifications for licensure;(2)Exceptions to licensure;(3)Application for licensure;(4)Rights and obligations of licensure;(5)Temporary licenses;(6)Nonresident licensing;(7)Denial, nonrenewal, or revocation of license;(8)Application for examination and examination procedures;(9)Exemption from examination;(10)Commissions;(11)Appointments and termination thereof;(12)Reciprocity;(13)Reporting of actions;(14)Definition of terms; and(15)Required forms or procedures. Source: SL 2001, ch 286, 55.
58-30-196. Influencing witness testimony in examination or investigation.No insurance producer may attempt to influence a witness to decline to testify or to testify falsely or withhold any testimony, information, document, or thing in any examination or investigation by the division or hearing pursuant to Title 58 if the insurance producer has prior notice of the examination, investigation, or hearing. Source: SL 2005, ch 276, 1. 
58-30-197. Rental car insurance--Definition of terms.Terms used in this section and 58-30-198 to 58-30-208, inclusive, mean:(1)"Director," the director of insurance;(2)"Endorsee," an unlicensed employee or agent of a rental car agent who offers, sells, or solicits rental car insurance and meets the requirements of 58-30-198 to 58-30-208, inclusive;(3)"Rental agreement," any written master, corporate, group, or individual agreement setting forth the terms and conditions governing the use of a rental car rented or leased by a rental car company;(4)"Rental car," any motor vehicle that is intended to be rented for a period of twenty-eight consecutive days or less, by a driver who is not required to possess a commercial driver's license to operate the motor vehicle and the motor vehicle is either of the following:(a)A private passenger motor vehicle, including a passenger van, minivan, or sports utility vehicle; or(b)A cargo vehicle, including a cargo van, pickup truck, or truck with a gross vehicle weight of less than twenty-six thousand pounds;(5)"Rental car agent," any company that is licensed to offer, sell, or solicit rental car insurance pursuant to 58-30-198 to 58-30-208, inclusive;(6)"Rental car company," any person in the business of providing rental cars to the public, including a franchisee;(7)"Renter," any person who executes a rental agreement to obtain the use of a vehicle from a rental car company. Source: SL 2001, ch 272, 1; SDCL 58-9-34; SL 2010, ch 233, 2.
58-30-198. Rental car insurance defined.For the purposes of 58-30-197 to 58-30-208, inclusive, rental car insurance is insurance offered, sold, or solicited in connection with and incidental to the rental of rental cars, other than waiver of the rental car company's right of indemnity for damages to the rental car, whether at the rental office or by pre-selection of coverage in master, corporate, group, or individual agreements, that:(1)Is nontransferable;(2)Applies only to the rental car that is the subject of the rental agreement; and(3)Is limited to the following kinds of insurance:(a)Personal accident insurance for renters and other rental car occupants, for accidental death or dismemberment, and for medical expenses resulting from an accident that occurs with the rental car during the rental period;(b)Liability insurance, which includes uninsured or underinsured motorist coverage, that is not less than the minimum financial responsibility limits required by the law, whether offered separately or in combination with other liability insurance, that provides protection to the renters and to other authorized drivers of a rental car for liability arising from the operation of the rental car during the rental period;(c)Personal effects insurance that provides coverage to renters and other occupants of the rental car for loss of, or damage to, personal effects in the rental car during the rental period;(d)Roadside assistance and emergency sickness protection insurance; and(e)Such other travel or vehicle-related coverage that a rental car company may offer in connection with and incidental to the rental of a rental car as may be approved by the director in rules promulgated pursuant to chapter 1-26. Source: SL 2001, ch 272, 2; SDCL 58-9-35; SL 2010, ch 233, 2.
58-30-199. License needed for offering, selling, or soliciting purchase of rental car insurance.No rental car company, and no officer, director, employee, or agent of a rental car company, may offer, sell, or solicit the purchase of rental car insurance unless the person is licensed as an insurance producer or there has been compliance with the requirements of 58-30-197 to 58-30-208, inclusive. Source: SL 2001, ch 272, 3; SDCL 58-9-36; SL 2010, ch 233, 2.
58-30-20. Licensing provisions inapplicable to title insurance.The provisions of 58-30-12.1, 58-30-143, and 58-30-169 to 58-30-176, inclusive, do not apply to title insurance. Source: SL 1966, ch 111, ch 9, 7 (6); SL 2001, ch 286, 163.
58-30-200. Licensing of rental car agent for authorized rental car insurer.The director may issue to a rental car company that has complied with the requirements of 58-30-197 to 58-30-208, inclusive, a license that authorizes the rental car company to act as a rental car agent in accordance with the provisions of 58-30-197 to 58-30-208, inclusive, in connection with and incidental to rental agreements, on behalf of any insurer authorized to write such insurance in this state. Source: SL 2001, ch 272, 4; SDCL 58-9-37; SL 2010, ch 233, 2.
58-30-201. Rental car company as limited lines insurance producer--License requirements.A rental car company may apply to be licensed as a limited lines insurance producer under the terms of 58-30-197 to 58-30-208, inclusive, if it satisfies all of the requirements of 58-30-197 to 58-30-208, inclusive, and if it files the following documents with the director:(1)A written application for licensure, signed by the applicant or by an officer of the applicant, in the form or format prescribed by the director that includes a listing of all locations at which the rental car company intends to offer, sell, or solicit rental car insurance;(2)A certificate, by the insurer that is to be named in the rental car agent license, stating that the insurer has satisfied itself that the named applicant is trustworthy and competent to act as its rental car agent limited to this purpose; that the insurer has reviewed the endorsee training and education program required by 58-30-203 and believes that it satisfies the statutory requirements; and that the insurer will appoint the applicant to act as its rental car agent to offer, sell, or solicit rental car insurance if the license for which the applicant is applying is issued by the director. The certification shall be subscribed by an officer or managing agent of the insurer on a form or format prescribed by the director. Source: SL 2001, ch 272, 5; SDCL 58-9-38; SL 2010, ch 233, 2.
58-30-202. Conditions for becoming endorsee authorized to offer, sell, or solicit rental car insurance.An employee or agent of a rental car agent may be an endorsee authorized to offer, sell, or solicit rental car insurance under the authority of the rental car agent license if all of the following conditions have been satisfied:(1)The employee or agent is eighteen years of age or older;(2)The employee or agent has not committed any act set forth in this chapter;(3)The employee or agent has completed a training and education program;(4)The rental car company, at the time it submits its rental car agent license application pursuant to 58-30-201, also submits a list of the names of all endorsees to its rental car agent license. The list shall be updated and submitted to the director quarterly. However, endorsees may sell, offer, and solicit rental car insurance as soon as they meet the requirements as set forth in this section. Each list shall be retained by the rental car company for a period of five years from submission; and(5)The rental car company submits to the director with its initial rental car agent license application and annually thereafter a certification, subscribed by an officer of the rental car company on a form or format prescribed by the director, stating both of the following:(a)That no person other than an endorsee offers, sells, or solicits rental car insurance on its behalf or while working as an employee or agent of the rental car agent; and(b)That all endorsees have completed the training and education program required by 58-30-197 to 58-30-208, inclusive. Source: SL 2001, ch 272, 6; SDCL 58-9-39; SL 2010, ch 233, 2.
58-30-203. Training of rental car insurance endorsee.Each rental car agent shall provide a training and education program for each endorsee prior to allowing an endorsee to offer, sell, or solicit rental car insurance. The training and education program may be conducted at remote locations or through videotape or any means approved by the director in rules promulgated pursuant to chapter 1-26. The training and education program shall meet the following minimum standards:(1)Each endorsee shall receive instruction about the kinds of insurance specified in 58-30-197 to 58-30-208, inclusive, that are offered for sale to prospective renters;(2)Each endorsee shall receive training about the requirements and limitations imposed on car rental agents and endorsees by 58-30-197 to 58-30-208, inclusive. That training shall include specific instruction that the endorsee is prohibited by law from making any statement or engaging in any conduct, express or implied, that would lead a renter to believe:(a)That the purchase of rental car insurance is required in order for the renter to rent a motor vehicle;(b)That the renter does not have insurance policies in place that already provide the coverage being offered by the rental car company pursuant to 58-30-197 to 58-30-208, inclusive; and(c)That the endorsee is qualified to evaluate the adequacy of the renter's existing insurance coverages.The director may request to review the training and education program at any time. Source: SL 2001, ch 272, 7; SDCL 58-9-40; SL 2010, ch 233, 2.
58-30-204. Expiration of rental car insurance endorsee license.An endorsee's authorization to offer, sell, or solicit rental car insurance expires when the endorsee's employment with the rental car company is terminated. Source: SL 2001, ch 272, 8; SDCL 58-9-41; SL 2010, ch 233, 2.
58-30-205. Retention of rental car insurance transaction records.The rental car agent shall retain for a period of five years from the date of each transaction records which enable it to identify the name of the endorsee involved in each rental transaction in which a renter purchased rental car insurance. Source: SL 2001, ch 272, 9; SDCL 58-9-42; SL 2010, ch 233, 2.
58-30-206. Rental car insurance agreement.No insurance may be offered, sold, or solicited pursuant to 58-30-197 to 58-30-208, inclusive, unless:(1)The rental period of the rental car agreement is twenty-eight consecutive days or less;(2)At every location where rental agreements are executed, the rental car agent or endorsee prominently displays and makes available brochures or other written materials to each renter who purchases rental car insurance that:(a)Summarize the material terms, exclusions, limitations, and conditions of coverage offered to renters, including the identity of the insurer;(b)Describe the process for filing a claim if the renter elects to purchase coverage;(c)Make information available to the consumer that the rental car insurance offered, sold, or solicited by the rental car agent may provide a duplication of coverage already provided by other sources of the renter's, and that such insurance is not required as a condition of renting the motor vehicle;(d)Provide the rental car agent's name, address, telephone number, and license number;(e)Makes available information that, if purchased, the insurance offered by the limited lines producer to the renter is primary coverage over any other insurance coverages applicable to the renter;(3)Evidence of the rental car insurance coverage is stated in the rental agreement;(4)Any cost for the rental car insurance is separately itemized in the rental agreement unless preselection of coverage is made in a master, corporate, or group agreement. Source: SL 2001, ch 272, 10; SDCL 58-9-43; SL 2010, ch 233, 2.
58-30-207. Rental car insurance advertising and compensation restrictions.No rental car agent may:(1)Advertise, represent, or otherwise portray itself or any of its employees or agents as licensed insurers or insurance producers; or(2)Pay any person, including a rental car agent endorsee, any compensation, fee, or commission that is dependent solely on the placement of insurance under the license issued pursuant to 58-30-197 to 58-30-208, inclusive. Nothing in 58-30-197 to 58-30-208, inclusive, prohibits production payments or incentive payments that are not dependent solely upon the sale of rental car insurance. Source: SL 2001, ch 272, 11; SDCL 58-9-44; SL 2010, ch 233, 2.
58-30-208. Revocation of rental car company license.If a rental car company violates any provision of 58-30-197 to 58-30-207, inclusive, the director may revoke or suspend the license of a rental car company or take other action as authorized under this title. Source: SL 2001, ch 272, 12; SDCL 58-9-45; SL 2010, ch 233, 2.
58-30-209.1. Application of travel insurance laws.The requirements of 58-30-209 to 58-30-217.1, inclusive, apply to travel insurance that covers any resident of this state, and is sold, solicited, negotiated, or offered in this state, and policies and certificates that are delivered or issued for delivery in this state. The requirements do not apply to cancellation fee waivers or travel assistance services, except as expressly provided in this chapter. All other applicable provisions of this states insurance laws shall continue to apply to travel insurance except that the specific provisions of 58-30-209 to 58-30-217.1, inclusive, shall supersede any general provisions of law that would otherwise be applicable to travel insurance. Source: SL 2022, ch 185, 2.
58-30-209.2. Licensed producers may sell travel insurance--Appointment not required.Any person licensed as an insurance producer in a line of authority as specified in subdivisions 58-30-152(1), (2), (3), (4), (5), and (6), is authorized to sell, solicit, and negotiate travel insurance. A property and casualty insurance producer is not required to become appointed by an insurer in order to sell, solicit, or negotiate travel insurance. Source: SL 2022, ch 185, 3.
58-30-209.3. Travel administrators.Notwithstanding any other provisions of chapter 58-30, no person may act or represent oneself as a travel administrator for travel insurance in this state unless that person:(1)Is a licensed property and casualty insurance producer in this state for activities permitted under that producer license;(2)Holds a valid managing general agent license in this state; or(3)Holds a valid third-party administrator license in this state.An insurer is responsible for the acts of a travel administrator administering travel insurance underwritten by the insurer, and is responsible for ensuring that the travel administrator maintains all books and records relevant to the insurer to be made available by the travel administrator to the director upon request. Source: SL 2022, ch 185, 4.
58-30-209. Definitions regarding travel insurance.Terms used in 58-30-209 to 58-30-217.1, inclusive, mean:(1)Aggregator site, a website that provides access to information regarding insurance products from more than one insurer, including product and insurer information, for use in comparison shopping;(2)Blanket travel insurance, a policy of travel insurance issued to any eligible group providing coverage for specific classes of persons defined in the policy, with coverage provided to all members of the eligible group without a separate charge to individual members of the eligible group;(3)Cancellation fee waiver, a contractual agreement between a supplier of travel services and its customer to waive some or all of the non-refundable cancellation fee provisions of the suppliers underlying travel contract with or without regard to the reason for the cancellation or form of reimbursement;(4)Eligible group, for the purposes of 58-30-209 to 58-30-217.1, inclusive, only, two or more persons who are engaged in a common enterprise, or have an economic, educational, or social affinity or relationship, including, but not limited to:(a)An entity engaged in the business of providing travel or travel services, including, but not limited to, tour operators, lodging providers, vacation property owners, hotels and resorts, travel clubs, travel agencies, property managers, cultural exchange programs, and common carriers or the operator, owner, or lessor of a means of transportation of passengers, including but not limited to airlines, cruise lines, railroads, steamship companies, and public bus carriers, wherein with regard to any particular travel or type of travel or travelers, all members or customers of the group must have a common exposure to risk in the travel;(b)A college, school, or other institution of learning, covering students, teachers, employees, or volunteers;(c)An employer covering any group of employees, volunteers, contractors, board of directors, dependents, or guests;(d)A sports team, camp, or sponsor thereof, covering participants, members, campers, employees, officials, supervisors, or volunteers;(e)A religious, charitable, recreational, educational, or civic organization, or branch thereof, covering any group of members, participants, or volunteers;(f)A financial institution or financial institution vendor, or parent holding company, trustee, or agent of or designated by one or more financial institutions or financial institution vendors, including accountholders, credit card holders, debtors, guarantors, or purchasers;(g)An incorporated or unincorporated association, including labor unions, having a common interest, constitution and bylaws, and organized and maintained in good faith for purposes other than obtaining insurance for members or participants of such association covering its members;(h)A trust or the trustees of a fund established, created or maintained for the benefit of and covering members, employees or customers, subject to the directors permitting the use of a trust and the states premium tax provisions in 10-44-2, of one or more associations meeting the above requirements of (g) of this section;(i)An entertainment production company covering any group of participants, volunteers, audience members, contestants, or workers;(j)A volunteer fire department, ambulance, rescue, police, court, or any first aid, civil defense, or other such volunteer group;(k)A preschool, daycare institution for children or adults, and senior citizen club;(l)An automobile or truck rental or leasing company covering a group of individuals who may become renters, lessees, or passengers defined by their travel status on the rented or leased vehicles. The common carrier, the operator, owner or lessor of a means of transportation, or the automobile or truck rental or leasing company, is the policyholder for group coverage under this subdivision; or(m)Another group where the director has determined that the members are engaged in a common enterprise, or have an economic, educational, or social affinity or relationship, and that issuance of the policy would not be contrary to the public interest;(5)Fulfillment materials, documentation sent to the purchaser of a travel protection plan confirming the purchase and providing the travel protection plans coverage and assistance details;(6)Group travel insurance, travel insurance issued to any eligible group;(7)"Limited lines travel insurance producer," a:(a)Licensed managing general underwriter;(b)Licensed managing general agent or third party administrator;(c)Licensed insurance producer, including a limited lines producer; or(d)Travel administrator;(8)"Offer and disseminate," providing general information, including a description of the coverage and price, as well as processing the application, collecting premiums, and performing other activities permitted by the state;(9)Primary certificate holder, an individual person who elects and purchases travel insurance under a group travel insurance policy;(10)Primary policyholder, an individual person who elects and purchases individual travel insurance;(11)Travel administrator, a person who directly or indirectly underwrites; collects charges, collateral, or premiums from; or adjusts or settles claims on; residents of this state, in connection with travel insurance, except that a person is not a travel administrator if that persons only actions that would otherwise cause the person to be considered a travel administrator are the following:(a)A person working for a travel administrator to the extent that the persons activities are subject to the supervision and control of the travel administrator;(b)An insurance producer selling insurance or engaged in administrative and claims-related activities within the scope of the producers license;(c)A travel retailer offering and disseminating travel insurance and registered under the license of a limited lines travel insurance producer in accordance with 58-30-211;(d)An individual adjusting or settling claims in the normal course of the individuals practice or employment as an attorney-at-law and who does not collect charges or premiums in connection with insurance coverage; or(e)A business entity that is affiliated with a licensed insurer while acting as a travel administrator for the direct and assumed insurance business of an affiliated insurer;(12)Travel assistance services, non-insurance services unrelated to insurance for which the consumer is not indemnified based on a fortuitous event, and where providing the service does not result in transfer or shifting of risk that would constitute the business of insurance. Travel assistance services include but are not limited to:(a)Security advisories;(b)Destination information;(c)Vaccination and immunization information services;(d)Travel reservation services;(e)Entertainment;(f)Activity and event planning;(g)Translation assistance;(h)Emergency messaging;(i)International legal and medical referrals;(j)Medical case monitoring;(k)Coordination of transportation arrangements;(l)Emergency cash transfer assistance;(m)Medical prescription replacement assistance;(n)Passport and travel document replacement assistance;(o)Lost luggage assistance;(p)Concierge services; and(q)Any other service that is furnished in connection with planned travel;(13)"Travel insurance," insurance coverage for personal risks incident to planned travel, including:(a)Interruption or cancellation of a trip or event;(b)Loss of baggage or personal effects;(c)Damages to accommodations or rental vehicles;(d)Sickness, accident, disability, or death occurring during travel;(e)Emergency evacuation;(f)Repatriation of remains; or(g)Any other contractual obligations to indemnify or pay a specified amount to the traveler upon determinable contingencies related to travel as approved by the director.Travel insurance does not include major medical plans providing comprehensive medical protection for persons with trips or overseas residence or deployment lasting six months or longer, or any other product that requires a specific insurance producer license;(14)Travel protection plan, a plan that provides travel insurance, travel assistance services, or cancellation fee waivers, or any combination thereof;(15)"Travel retailer," a business entity that makes, arranges, or offers planned travel and may offer and disseminate travel insurance as a service to its customers on behalf of and under the direction of a limited lines travel insurance producer. Source: SL 2014, ch 241, 5; SL 2022, ch 185, 1.
58-30-210. Limited lines travel insurance producer license authorized.The director may issue to an individual or business entity that has filed with the director an application for such limited license in a form and manner prescribed by the director, a limited lines travel insurance producer license, which authorizes the limited lines travel insurance producer to sell, solicit, or negotiate travel insurance through a licensed insurer. Source: SL 2014, ch 241, 6.
58-30-211.Conditions for offering and disseminating travel insurance under business entity license.A travel retailer may offer and disseminate travel insurance under a limited lines travel insurance producer business entity license only if the entity meets the following conditions:(1)The limited lines travel insurance producer or travel retailer provides to purchasers of travel insurance:(a)A description of the material terms or the actual material terms of the insurance coverage;(b)A description of the process for filing a claim;(c)A description of the review or cancellation process for the travel insurance policy; and(d)The identity and contact information of the insurer and limited lines producer;(2)At the time of licensure, the limited lines travel insurance producer shall establish and maintain a register on a form prescribed by the director of each travel retailer that offers travel insurance on the limited lines producer's behalf. The limited lines travel insurance producer shall maintain and update the register annually and shall include the name, address, and contact information of the travel retailer and an officer or person who directs or controls the travel retailer's operations, and the travel retailer's federal tax identification number. The limited lines travel insurance producer shall submit such register to the division of insurance upon reasonable request. The limited lines producer shall certify that the travel retailer registered complies with 18 U.S. C. 1033;(3)The limited lines travel insurance producer shall designate an employee who is a licensed individual producer as a designated responsible producer, or DRP. The DRP is responsible for the limited lines travel insurance producer's compliance with the travel insurance laws and rules of this state;(4)The limited lines travel insurance producer pays all applicable insurance producer licensing fees;(5)The limited lines travel insurance producer requires each employee and authorized representative of the travel retailer whose duties include offering and disseminating travel insurance to receive a program of instruction or training, which is subject to review by the director. The training material shall, at a minimum, contain instructions on the types of insurance offered, ethical sales practices, and required disclosures to prospective customers; and(6)Limited lines travel insurance producers, and those registered under its license, are exempt from any examination and continuing education requirements under this chapter. Source: SL 2014, ch 241, 7.
58-30-212.1. Required provisions and disclosures for travel insurance.The following standards apply to the sale, solicitation, and negotiation of travel insurance:(1)All documents provided to consumers prior to the purchase of travel insurance, including but not limited to sales materials, advertising materials, and marketing materials, must be consistent with the travel insurance policy itself, including but not limited to, forms, endorsements, policies, rate filings, and certificates of insurance;(2)For travel insurance policies or certificates that contain pre-existing condition exclusions, information and an opportunity to learn more about the pre-existing condition exclusions must be provided any time prior to the time of purchase, and in the coverages fulfillment materials;(3)The person shall disclose in the policy documentation and fulfillment materials whether the travel insurance is primary or secondary to other applicable coverage;(4)No person offering, soliciting, or negotiating travel insurance or travel protection plans on an individual or group basis may do so by using negative option or opt out, which would require a consumer to take an affirmative action to deselect coverage, such as unchecking a box on an electronic form, when the consumer purchases a trip; and(5)The fulfillment materials and the information described in subdivision 58-30-211(1) must be provided to a policyholder or certificate holder as soon as practicable, following the purchase of a travel protection plan. Unless the insured has started a covered trip or filed a claim under the travel insurance coverage, a policyholder or certificate holder may cancel a policy or certificate for a full refund of the travel protection plan price from the date of purchase of a travel protection plan until at least:(a)Fifteen days following the date of delivery of the travel protection plans fulfillment materials by postal mail; or(b)Ten days following the date of delivery of the travel protection plans fulfillment materials by means other than postal mail.For the purposes of this section, the term delivery means handing fulfillment materials to the policyholder or certificate holder or sending fulfillment materials by postal mail or electronic means to the policyholder or certificate holder. Source: SL 2022, ch 185, 5.
58-30-212. Statements required in travel retailer's written materials.Any travel retailer offering or disseminating travel insurance shall make available to prospective purchasers, brochures or other written materials that clearly display the following:(1)Provide the identity and contact information of the insurer and the limited lines travel insurance producer;(2)Explain that the purchase of travel insurance is not required in order to purchase any other product or service from the travel retailer; and(3)Explain that an unlicensed travel retailer is permitted to provide general information about the insurance offered by the travel retailer, including a description of the coverage and price, but is not qualified or authorized to answer technical questions about the terms and conditions of the insurance offered by the travel retailer or to evaluate the adequacy of the customer's existing insurance coverage. Source: SL 2014, ch 241, 8.
58-30-213. Limitations on travel retailer's unlicensed employee or authorized representative.A travel retailer's employee or authorized representative who is not licensed as an insurance producer may not:(1)Evaluate or interpret the technical terms, benefits, or conditions of the offered travel insurance coverage;(2)Evaluate or provide advice concerning a prospective purchaser's existing insurance coverage; or(3)Hold oneself out as a licensed insurer, licensed producer, or insurance expert. Source: SL 2014, ch 241, 9.
58-30-214. Registered travel retailers authorized to offer and disseminate travel insurance and receive compensation.Notwithstanding any other provision of law, a travel retailer whose activities related to insurance, and those of its employees and authorized representatives, are limited to offering and disseminating travel insurance on behalf of and under the direction of a limited lines travel insurance producer meeting the conditions stated in 58-30-209 to 58-30-218, inclusive, is authorized to do so and receive related compensation for such services, upon registration by the limited lines travel insurance producer as described in subdivision 58-30-211(2). Source: SL 2014, ch 241, 10.
58-30-215.1. Travel protection plans.Travel protection plans may be offered for one price for the combined features that the travel protection plan offers in this state if:(1)The travel protection plan clearly discloses to the consumer, at or prior to the time of purchase, that it includes travel insurance, travel assistance services, and cancellation fee waivers, as applicable, and provides information and an opportunity, at or prior to the time of purchase, for the consumer to obtain additional information regarding the features and pricing of each; and(2)The fulfillment materials:(a)Describe and delineate the travel insurance, travel assistance services, and cancellation fee waivers in the travel protection plan; and(b)Include the travel insurance disclosures and the contact information for persons providing travel assistance services, and cancellation fee waivers, as applicable. Source: SL 2022, ch 185, 7.
58-30-215.2. Travel insurance rates and policy forms--Eligibility, underwriting, distribution, and marketing.Notwithstanding any other provision of this title, travel insurance must be classified and filed for purposes of rates and forms under an inland marine line of insurance, provided that travel insurance coverages for sickness, accident, disability or death occurring during travel, either exclusively, or in conjunction with related coverages of emergency evacuation or repatriation of remains, or incidental limited property and casualty benefits such as baggage or trip cancellation, may be filed under either an accident and health line of insurance or an inland marine line of insurance.Eligibility and underwriting standards for travel insurance may be developed and provided based on travel protection plans designed for individual or identified marketing or distribution channels, if those standards also meet the states underwriting standards for inland marine. Source: SL 2022, ch 185, 8.
58-30-215. Individual and group travel insurance policies authorized--Services excluded.Travel insurance may be provided under an individual policy or under a group, blanket, or master policy. Travel assistance services and cancellation fee waivers are not insurance and not related to insurance. Source: SL 2014, ch 241, 11; SL 2022, ch 185, 6.
58-30-216. Limited lines travel insurance producer responsible for acts of travel retailer.As the insurer designee, the limited lines travel insurance producer is responsible for the acts of the travel retailer and shall use reasonable means to ensure compliance by the travel retailer with this chapter. Source: SL 2014, ch 241, 12.
58-30-217.1. Certain acts not unfair trade practices.The following acts are not unfair trade practices under this chapter or chapter 58-33:(1)If travel insurance is marketed directly to a consumer through an insurers website or by others through an aggregator site, it shall not be an unfair trade practice or other violation of law where an accurate summary of coverage is provided on the web page, so long as the consumer has access to the full provisions of the policy through electronic means; and(2)If a consumers destination jurisdiction requires insurance coverage, it shall not be an unfair trade practice to require that a consumer choose one of the following options as a condition of purchasing a trip or travel package:(a)Purchasing the coverage required by the destination jurisdiction through the travel retailer or limited lines travel insurance producer supplying the trip or travel package; or(b)Agreeing to obtain and provide proof of coverage that meets the destination jurisdictions requirements prior to departure. Source: SL 2022, ch 185, 10.
58-30-217. Compliance with chapters 58-30 and 58-33--Travel insurance sales practices.The limited lines travel insurance producer and any travel retailer offering and disseminating travel insurance under the limited lines travel insurance producer license shall comply with chapter 58-30 and chapter 58-33. In the event of a conflict between chapters 58-30 and 58-33 and the provisions of 58-30-209 to 58-30-217.1, inclusive, regarding the sale and marketing of travel insurance and travel protection plans, the provisions of 58-30-209 to 58-30-217.1, inclusive, shall control. The following acts constitute unfair trade practices under chapter 58-33:(1)Offering or selling illusory travel insurance, meaning a travel insurance policy that could never result in payment of any claims for any insured under the policy; and(2)Marketing blanket travel insurance coverage as free. Source: SL 2014, ch 241, 13; SL 2022, ch 185, 9.
58-30-218. Promulgation of rules on training for travel retailer employees.The director may promulgate rules, pursuant to chapter 1-26, relating to the program of instruction or training as set forth in subdivision 58-30-211(5). Source: SL 2014, ch 241, 14.
58-30-23.6. Criminal files check.For the purposes of 58-30-23.7 and 58-30-170 and 58-30-180, the division may access the criminal files of any licensee convicted of a felony or crime of moral turpitude without any authorization from the licensee. Any law enforcement agency that possesses criminal records shall provide reasonable access by the division to the records. The provisions of this section do not affect the division's ability to otherwise exchange information or cooperate with any law enforcement agency or other authorized agency. Source: SL 1998, ch 297, 5; SL 2001, ch 286, 164.
58-30-23.7.Joint issuance of waivers.The division may participate with the National Association of Insurance Commissioners and the insurance regulatory offices of other states regarding the issuance of waivers pursuant to 18 U.S. C. 1033 and 1034 as amended to January 1, 1998. The issuance of a waiver by any state is not in any manner binding upon any licensing determination made or to be made by the division. Source: SL 1998, ch 297, 6.
58-30-27. Licenses to insurance producers of domestic insurer insuring members of armed forces and dependents outside territorial limits.If any domestic company is engaged in writing insurance on the lives or property of the members of the military forces of the United States, and dependents of the members while stationed outside the continental and territorial limits of the United States, the director, if otherwise satisfied as to the qualifications of applicants for licenses as insurance producers to write the business outside the continental and territorial limits of the United States, for the companies, may issue the same type of license to the insurance producers as to any resident insurance producer. Source: SL 1966, ch 111, ch 9, 9 (7); SL 2001, ch 286, 165.
58-30-29. License not issued in trade name--Exception as to firm or corporation.No license may be issued in a trade name except to a business entity and upon proof satisfactory to the director that the trade name has been lawfully registered. Source: SL 1966, ch 111, ch 9, 10 (3); SL 2001, ch 286, 166.
58-30-31. Firms and corporations--Business within scope of agreement or articles of incorporation.No firm or corporation shall be so licensed unless the business to be transacted thereunder is within the scope of the partnership agreement or articles of incorporation. Source: SL 1966, ch 111, ch 9, 10 (4).
58-30-33. Changes in personnel employed by firm--Notice to director.A licensed business entity shall promptly notify the director of all changes. Source: SL 1966, ch 111, ch 9, 10 (5); SL 2001, ch 286, 167.
58-30-52. Exemption from examination requirements.No examination is required of:(1)An applicant for the same kind of license as that which the applicant has previously held in this state for at least one year within the five years next preceding the date of application and who is deemed by the director to be fully qualified and competent;(2)A travel retailer or applicant for a limited line travel insurance license under 58-30-209 to 58-30-217, inclusive;(3)Attorneys licensed to practice law in this state;(4)Insurance producers outside the United States or its territories;(5)Insurance producers applying for a limited license to sell, solicit, or negotiate limited line credit or limited line insurance exclusively;(6)Employees of trade associations for the issuance of surety bonds to their association members only;(7)Travel accident agents of motor service clubs;(8)A person who applies for an insurance producer license in this state who was previously licensed for the same lines of authority in another state. This exemption is available if the person is currently licensed in that state or if the application is received within ninety days of the cancellation of the applicant's previous license as long as the applicant was in good standing in that state and the state's insurance producer database records, maintained by the National Association of Insurance Commissioners, its affiliates, or its subsidiaries, indicate that the insurance producer is or was licensed in good standing for the line of authority requested;(9)A person licensed as an insurance producer in another state who moves to this state and makes application within ninety days of establishing legal residence to become a resident licensee pursuant to 58-30-148 to 58-30-151, inclusive. An examination may be required of that person to obtain any line of authority previously held in the prior state unless the director determines otherwise by rule. Source: SL 1966, ch 111, ch 9, 13; SL 1978, ch 365, 9; SL 1987, ch 381, 1; SL 1988, ch 387, 3; SL 2001, ch 286, 168; SL 2014, ch 241, 1.
58-30-54. Information to applicants as to subjects covered and reference sources.The director shall prepare and make available to applicants for license information as to the general scope of, and principal subjects to be covered by, the examination for a particular license, together with information as to published books and other reference sources which may be studied by the applicant in preparation for the examination; but the director shall not furnish lists of examination questions and answers nor select examination questions from any list thereof furnished applicants. Source: SL 1966, ch 111, ch 9, 14 (2).
58-30-58. Failure to pass examination--Waiting period for re-examination.The director may require a reasonable waiting period before reexamination of an applicant who has taken and failed to pass a previous examination covering the same kind or kinds of insurance. Source: SL 1966, ch 111, ch 9, 15 (4).
58-30-6. Appointment of insurance producer by insurer--Filing with director--Statement of kinds of insurance to be transacted--Payment of fee--Reasons for denying appointment.The director may deny an appointment or withhold processing an appointment for reasons of protection of the public health, welfare, or safety including the following:(1)The insurance producer to be appointed is not properly licensed; or(2)A notice of hearing from the Division of Insurance seeking revocation or suspension of the insurance producer or insurer has been issued. Source: SL 1966, ch 111, ch 9, 20 (1); SL 1995, ch 289, 1; SL 2001, ch 286, 156.
58-30-68. Limited lines insurance producer's license--Types of insurance.The director may issue to an applicant qualified therefor under this title a limited lines insurance producer's license for the following types of insurance:(1)Credit insurance as defined in 58-30-142;(2)Crop insurance as defined in 58-30-142;(3)Rental car insurance as defined in 58-30-198; and(4)Travel insurance as defined in 58-30-209 to 58-30-217, inclusive. Source: SL 1966, ch 111, ch 9, 18 (1); SL 1987, ch 381, 2; SL 2001, ch 286, 169; SL 2002, ch 240, 3; SL 2010, ch 233, 4; SL 2014, ch 241, 2.
58-30-69. Examination not required for travel insurance.Applicants for limited license as to travel insurance under subdivision 58-30-68(4) are exempt from examination, as provided in 58-30-52, and the fee for each such license, including issuance thereof and the appointment by the insurer, shall be in the amount specified in 58-2-29. Source: SL 1966, ch 111, ch 9, 18 (2); SL 2014, ch 241, 3.
58-30-73. Refusal of temporary license where purpose unlawful.The director may refuse to issue a temporary license to any applicant, when it appears that the purpose of obtaining such temporary license is part of a program by an insurer to evade the other provisions of this chapter. Source: SL 1966, ch 111, ch 9, 23 (3).
58-30-74.1. Continuing appointments--Annual renewal fee.Any insurance producer's appointment not terminated prior to April first of each year is subject to an annual renewal fee as stated in 58-2-29. The appointing insurer shall pay the renewal fee. Source: SL 1996, ch 300, 4; SL 2001, ch 286, 171.
58-30-74.2. Renewal of license by business entity.Each business entity licensed under this chapter shall file a biennial license renewal with the director on or before July first or within an extension of time granted by the director for good cause. The renewal application shall be in the form prescribed by the director. Source: SL 2018, ch 282, 1.
58-30-74.3. Lapsing and reinstatement of license.Failure to file a timely renewal application shall result in lapsing of the license. A business entity may reinstate its license in the same manner as an individual insurance producer as provided in 58-30-154. Source: SL 2018, ch 282, 2.
58-30-74.4. Designation of individual licensed insurance producer in business entity renewal application.In the license renewal application, each business entity shall designate an individual licensed insurance producer responsible for the business entity's compliance with the insurance laws of this state. Source: SL 2018, ch 282, 3.
58-30-74. Renewal of license or appointment--Fee.Each license or appointment issued under this title shall continue in force until expired, suspended, revoked, or otherwise terminated, whichever is applicable, but is subject to renewal by payment to the director annually or biennially of the applicable fee as stated in 58-2-29 upon notice by the director. Source: SL 1966, ch 111, ch 9, 19 (1); SL 1978, ch 365, 16, 17; SL 1995, ch 289, 5; SL 1996, ch 300, 3; SL 2001, ch 286, 170; SL 2004, ch 295, 5; SL 2010, ch 233, 5.
58-30-8.1. Notice required for termination of agency contract for fire and casualty lines--Extension of coverage on previous policies.No insurance company may terminate the agency contract of an insurance producer writing fire and casualty lines of insurance except upon ninety days' notice in writing given by the company to the insurance producer. The company shall, upon a terminated insurance producer's request, extend the coverage of any policy which has been written by the insurance producer in the company and which expires or has its anniversary date during the ninety-day period to the end of the ninety-day period if the insured pays the premium therefor. The company may terminate an insurance policy on its anniversary date if the anniversary date occurs after the expiration of the ninety-day period. Source: SL 1971, ch 271; SL 2001, ch 286, 158.
58-30-8.2. Notice requirements inapplicable to exclusive agencies or termination for cause.The provisions of 58-30-8.1 do not apply to those agency contracts in which the insurance producer agrees to represent exclusively one company or a group of companies under common management or to the termination of an insurance producer's contract for insolvency, abandonment, gross and willful misconduct, or failure to pay over to the company moneys due to the company after the insurance producer's receipt of a written demand therefor, or after revocation of the insurance producer's license by the director. Source: SL 1971, ch 271; SL 2001, ch 286, 159.
58-30-84. Travel insurance vending machines, approval by director.An insurance producer licensed as to limited lines insurance or limited lines credit insurance may solicit applications for and issue policies of personal travel accident insurance by means of mechanical vending machines and kiosks supervised by the insurance producer and placed at airports, railroad stations, bus stations, and similar places where transportation tickets are sold to the traveling public, if the director finds:(1)That the policy to be so sold provides reasonable coverage and benefits, is reasonably suited for sale and issuance through vending machines, and that use of such a machine therefor in a particular proposed location would be of material convenience to the public;(2)That the type of vending machine and kiosk proposed to be used is reasonably suitable and practical for the purpose;(3)That reasonable means are provided for informing the prospective purchaser of any such policy of the coverage and restrictions of the policy; and(4)That reasonable means are provided for refund to the applicants of money inserted in defective machines and for which no insurance, or a less amount than paid for, is actually received. Source: SL 1966, ch 111, ch 9, 25 (1); SL 2001, ch 286, 172.
58-30-88. Premiums received by agent as trust funds--Accounting and payment.All premiums or return premiums received by an insurance producer shall be trust funds received by the licensee in a fiduciary capacity, and the insurance producer or soliciting insurance producer shall account for and pay the same to the insured, insurer, or insurance producer entitled thereto. Source: SL 1966, ch 111, ch 9, 28 (1); SL 2001, ch 286, 173.
58-30-89. Misappropriation of funds by agent as theft.Any agent or soliciting agent who, not being lawfully entitled thereto, diverts or appropriates trust funds referred to in 58-30-88 or any portion thereof to his own use shall upon conviction be guilty of theft and shall be punished as provided by law. Source: SL 1966, ch 111, ch 9, 28 (2).
58-30-9. Rights of insurance producer following termination of appointment.Following termination of an agency appointment as to property, casualty, or surety insurance, and subject to the terms of any agreement between the insurance producer and the insurer, the insurance producer may continue to service and receive from the insurer commissions or other compensation relative to business written by him the insurance producer during the existence of the appointment, so long as the insurance producer is licensed as an insurance producer. Source: SL 1966, ch 111, ch 9, 22 (1); SL 2001, ch 286, 160.
58-30-90. Deposit of trust funds in separate account--Records and account.If an insurance producer establishes a separate account in which to deposit trust funds in order to avoid a commingling of trust funds with the insurance producer's own funds, the insurance producer may deposit and commingle in such account all such funds but the amount of such funds held for each respective other person must be reasonably ascertainable from the records and accounts of the insurance producer. Source: SL 1966, ch 111, ch 9, 28 (1); SL 2001, ch 286, 174.
58-30-91. Records to be maintained by insurance producer--Violation as misdemeanor.The insurance producer shall keep at the insurance producer's place of business records pertaining to transactions under the insurance producer's license and the licenses of the insurance producer's soliciting insurance producers, for a period of at least five years after completion of such transactions. Such records shall show, as to each policy, the name and address of the insured, the form, number, and term of the policy, the general subject of the insurance, and the general nature of the coverage. Nothing in this section precludes a home, zone, or regional office of the insurer from maintaining such business records in lieu of an insurance producer maintaining the records so long as the insurance producer receives compensation substantially in the form of a salary or produces seventy-five percent or more of his or her insurance business, based on gross premiums written, with one insurer or group of insurers subject to common management or ownership.Any violation of this section is a Class 2 misdemeanor. Source: SL 1966, ch 111, ch 9, 26 (3); SL 1978, ch 359, 2; SL 2001, ch 286, 175; SL 2009, ch 268, 1.
58-30-92. Companies prohibited from issuing policy in this state except through licensed agent--Violation as misdemeanor.No authorized insurer may issue or cause to be issued any policy, duplicate policy, or insurance contract covering a subject of insurance that is resident, located or to be performed in this state through any person who is not licensed as an agent under this chapter. Violation of this section is a Class 2 misdemeanor. Source: SL 1966, ch 111, ch 9, 32 (1); SL 1978, ch 359, 2; SL 1978, ch 365, 24; SL 1983, ch 378, 1.
58-30-93. Suspension or revocation of certificate for unauthorized issuance of policies.The director may suspend or revoke the certificate of authority of any insurer violating 58-30-92. Source: SL 1966, ch 111, ch 9, 32 (2).
58-30-95. Director as attorney for service of process on nonresident insurance producer.Each licensed nonresident insurance producer shall appoint the director as the insurance producer's attorney to receive service of legal process issued against the agent in this state upon causes of action arising within this state out of transactions under the license. Source: SL 1966, ch 111, ch 9, 31 (1); SL 1978, ch 365, 24; SL 2001, ch 286, 176.
58-30-96. Duration of appointment of director as attorney for service of process.The appointment required by 58-30-95 is irrevocable for as long as there could be any cause of action against the insurance producer arising out of the insurance producer's insurance transactions in or with respect to this state. Source: SL 1966, ch 111, ch 9, 31 (2); SL 1978, ch 365, 24; SL 2001, ch 286, 177.
58-30-97. Service on director of process against nonresident insurance producer--Fee.Duplicate copies of legal process against the insurance producer shall be served on the director by registered or certified mail. At the time of service the plaintiff shall pay the director the fee set forth in subdivision 58-2-29(12)(c), which is taxable as costs in the action. Source: SL 1966, ch 111, ch 9, 31 (3); SL 1978, ch 365, 22; SL 1982, ch 28, 18; SL 2001, ch 286, 178.
58-30-98. Receipt by director of process against nonresident insurance producer--Copy mailed to defendant.Upon receiving such service, the director shall send one of the copies of the process, by registered or certified mail with return receipt requested, to the defendant insurance producer at the insurance producer's last address of record with the director. Source: SL 1966, ch 111, ch 9, 31 (4); SL 1978, ch 365, 24; SL 1982, ch 28, 18; SL 2001, ch 286, 179.
58-30-99. Director's record of process against nonresident insurance producers.The director shall keep a record of the day when served with all such legal process. Source: SL 1966, ch 111, ch 9, 31 (5); SL 2001, ch 286, 180.
58-32-1. Purposes of chapter.It is declared that the purposes of this chapter are to provide orderly access for the insuring public of South Dakota to insurers not authorized to transact insurance in this state, through licensed surplus line brokers in South Dakota for insurance coverages not procurable from authorized insurers; to protect such authorized insurers, which must meet certain standards as to policy forms and rates, from unwarranted competition by unauthorized insurers who, in the absence of this chapter, would not be subject to similar requirements; and for other purposes as set forth in this chapter. Source: SL 1966, ch 111, ch 11, 1 (2); SL 2001, ch 286, 193.
58-32-10.1. Bond of resident surplus line broker--Amount--Conditions--Termination.Within thirty days of issuance of a license as a resident surplus line broker and before procuring any insurance coverage for an insured, the broker shall file with the director, and thereafter for as long as the license remains in effect the broker shall keep in force, a bond in favor of the State of South Dakota in the penal sum of two thousand dollars with an authorized corporate surety approved by the director. The bond shall be conditioned upon the broker conducting business under the license in accordance with the provisions of this chapter and promptly remitting the taxes pursuant to 58-32-44 and 58-32-45. No such bond may be terminated unless at least thirty days' prior written notice of the termination is given to the broker and filed with the director. Source: SL 2003, ch 253, 1.
58-32-11. Suspension or revocation of license of surplus line broker--Grounds.The director may suspend or revoke any surplus line broker's license:(1)If the broker fails to file his annual statement or to remit the tax as required by this chapter; or(2)If the broker fails to keep records, or to allow the director to examine his records as required by this chapter; or(3)If the broker knowingly or negligently places a surplus line coverage in an insurer that is in unsound financial condition in violation of 58-32-25; or(4)For any other cause for which a general lines agent's license may be suspended or revoked. Source: SL 1966, ch 111, ch 11, 13 (1); SL 2001, ch 286, 197.
58-32-12. Procedure for suspension or revocation of license.The procedures provided by chapter 58-30 for suspension or revocation of licenses shall apply to suspension or revocation of a surplus line broker's license. Source: SL 1966, ch 111, ch 11, 13 (2).
58-32-13. Suspension or revocation of surplus line license affects all other licenses.Upon suspending or revoking a broker's surplus line license, the director shall also suspend or revoke all other licenses of the same individual under this title. Source: SL 1966, ch 111, ch 11, 13 (3).
58-32-14. Revival of suspended or revoked broker's surplus line license--Payment of fine and delinquent taxes--Waiting period.No broker whose license has been so suspended or revoked shall again be so licensed until any fines or delinquent taxes owing by him have been paid, and, in case of revocation, until expiration of one year from the date that the revocation became final. Source: SL 1966, ch 111, ch 11, 13 (4).
58-32-15. Acceptance of business from licensed insurance producer.A licensed surplus line broker may accept and place surplus line business for any insurance producer licensed in this state for the kind of insurance involved, and may compensate the insurance producer for it. Source: SL 1966, ch 111, ch 11, 15; SL 1982, ch 366; SL 2001, ch 286, 198.
58-32-16.1. Certain unauthorized insurers to submit annual report.On or before April first, each unauthorized insurer writing insurance business in South Dakota shall annually file with the director, on a form approved by the director, a true statement of all insurance business written in South Dakota in the preceding calendar year. Source: SL 1990, ch 407, 1.
58-32-16. Impossibility of procuring coverage from authorized insurers--Procurement from unauthorized insurers.If certain insurance coverages cannot be procured from authorized insurers, the coverages, hereinafter designated, surplus lines, may be procured from unauthorized insurers, subject to the conditions set forth in 58-32-17 to 58-32-19, inclusive. The provisions of 58-32-16 to 58-32-18, inclusive, do not apply to exempt commercial lines policyholders as defined in 58-24-68 and 58-24-69 if:(1)The broker procuring or placing the surplus lines insurance has disclosed to the exempt commercial purchaser that the insurance may or may not be available from the admitted market that may provide greater protection with more regulatory oversight; and(2)The exempt commercial purchaser has subsequently requested in writing the broker to procure or place the insurance from a nonadmitted insurer. Source: SL 1966, ch 111, ch 11, 4; SL 2011, ch 223, 2.
58-32-17. Conditions for export--Amount not procurable from authorized insurers.The full amount of insurance required must not be procurable, after diligent effort has been made to do so, from insurers authorized to transact and actually writing that kind and class of insurance in this state, and the amount of insurance exported shall be only the excess over the amount procurable from authorized insurers. Source: SL 1966, ch 111, ch 11, 4 (2).
58-32-18. Export of insurance where coverage available from authorized insurer prohibited--Exception.Insurance must not be exported pursuant to 58-32-16 if there is coverage readily available from an authorized insurer, unless the authorized insurer quotes a premium or terms not competitive with the premium or terms quoted by an unauthorized insurer. If one portion of the risk is acceptable to an authorized insurer, but another portion of the same risk is not acceptable, the entire coverage may be placed with an eligible unauthorized insurer, if it can be shown that an eligible unauthorized insurer will accept the entire coverage but not the rejected portion alone. Source: SL 1966, ch 111, ch 11, 4 (3); SL 1987, ch 382.
58-32-19. Procurement of exported insurance through licensed surplus line broker.Insurance under 58-32-16 must be procured through a licensed surplus line broker, subject to the provisions of 58-32-47 to 58-32-55, inclusive. Source: SL 1966, ch 111, ch 11, 4 (1).
58-32-2. Broker defined."Broker" as used in this chapter means a surplus line broker duly licensed as such under this chapter. Source: SL 1966, ch 111, ch 11, 3 (1).
58-32-20. Affidavit of broker as to exported insurance.At the time of procuring, effecting, and issuing any such surplus line insurance, the broker shall execute an affidavit, in such form as is prescribed by the director, setting forth facts from which it can be determined whether such insurance was eligible for export under 58-32-16 to 58-32-19, inclusive. The broker shall file, or cause to be filed, this affidavit with the director within thirty days after the insurance was so procured. Source: SL 1966, ch 111, ch 11, 5.
58-32-21. Placement in authorized insurer--Violation as misdemeanor.The broker shall place surplus line insurance only in an insurer which meets the requirements of 58-32-22 to 58-32-24, inclusive. Violation of this section is a Class 2 misdemeanor. Source: SL 1966, ch 111, ch 11, 6 (2); SL 1978, ch 359, 2.
58-32-22. Requirements for placing surplus lines insurance.Surplus lines insurance may be placed by a surplus lines licensee if the insurer is authorized to write the type of insurance in its domiciliary jurisdiction, and either meets the criteria established through a multi-state agreement pursuant to 58-32-45 or meets one of the following criteria:(1)The insurer has capital and surplus or its equivalent under the laws of its domiciliary jurisdiction which equals the greater of:(a)The minimum capital and surplus requirements under 58-6-23; or(b)Fifteen million dollars; or(2)The insurer is a nonadmitted insurer domiciled outside the United States that is listed on the Quarterly Listing of Alien Insurers maintained by the International Insurers Department of the National Association of Insurance Commissions.The requirements of subdivision (1) of this section may be satisfied by an insurer's possessing less than the minimum capital and surplus upon an affirmative finding of acceptability by the director. The finding shall be based upon such factors as quality of management, capital and surplus of any parent company, company underwriting profit and investment income trends, market availability, and company record and reputation within the industry. The director may not make an affirmative finding of acceptability if the nonadmitted insurer's capital and surplus is less than four million five hundred thousand dollars. Source: SL 1966, ch 111, ch 11, 6(2); SL 1986, ch 420; SL 1990, ch 407, 2; SL 2011, ch 223, 3.
58-32-23. Financial condition of surplus line insurer--Director not required to determine.Subdivision 58-32-22(3) shall not be deemed to place upon the director any duty or responsibility to determine the actual financial condition or claims practices of any unauthorized insurer; and the eligibility of an insurer hereunder shall indicate only that the insurer appears to be sound financially and to have satisfactory claims practices, and that the director has no credible evidence to the contrary. Source: SL 1966, ch 111, ch 11, 6 (3).
58-32-24. Ineligibility of surplus line insurer because of financial condition--Order of director--Grounds.The insurer with which surplus line insurance is placed shall be in compliance with either subdivision 58-32-22(1), (2), or (3) and not be ineligible as a surplus line insurer by order of the director received by or known to the broker. The director may issue such an order of ineligibility if the director finds, after a hearing conducted pursuant to chapter 1-26, that the insurer:(1)Does not meet the requirements of 58-32-21 to 58-32-25, inclusive;(2)Has without just cause refused to pay claims arising under its contracts in the United States or has otherwise conducted its affairs in such manner as to result in injury or loss to the insuring public of the United States;(3)Has failed to file the annual statement required in 58-32-16.1;(4)Has failed to provide information within twenty days of a request from the division;(5)Has utilized surplus lines brokers who were not properly licensed in this state; or(6)Has failed, within thirty days after notice, to provide the name of the broker that placed the insurance and the name of the insured. Source: SL 1966, ch 111, ch 11, 6 (2) (d); SL 1990, ch 407, 3; SL 2000, ch 249, 1; SL 2002, ch 243, 1.
58-32-25. Financial condition of surplus line insurer--Ascertainment by broker--Violation as misdemeanor.A broker shall not knowingly place surplus line insurance with an insurer that is unsound financially, or that is ineligible under 58-32-21 to 58-32-24, inclusive. The broker shall ascertain the financial condition of the unauthorized insurer to the extent that the same is shown by recent financial statements of the insurer filed with public authorities or published, or as otherwise known to the broker, before placing insurance therewith. Violation of this section is a Class 2 misdemeanor. Source: SL 1966, ch 111, ch 11, 6 (1); SL 1978, ch 359, 2.
58-32-26. Violation as misdemeanor--Revocation of licenses after hearing--Waiting period for new license.A broker who violates any provision in 58-32-21 to 58-32-25, inclusive, is guilty of a Class 2 misdemeanor. If the director finds, after hearing conducted pursuant to chapter 1-26, that the broker has violated any of such sections he shall revoke all licenses held by him under this title, and shall not again license such individual under this title within a period of two years after such revocation became final. Source: SL 1966, ch 111, ch 11, 7; SL 1978, ch 359, 6.
58-32-27. Evidence of insurance--Certificate, execution, content.Upon placing a surplus line coverage, the broker shall promptly issue and deliver to the insured evidence of the insurance consisting either of the policy as issued by the insurer or, if such policy is not then available, the surplus line broker's certificate of insurance. Such a certificate shall be executed by the broker and shall show the description and location of the subject of the insurance, coverage, conditions and term of the insurance, the premium and rate charged and taxes collected from the insured, and the name and address of the insured and insurer. If the direct risk is assumed by more than one insurer, the certificate shall state the name and address and proportion of the entire direct risk assumed by each such insurer. Source: SL 1966, ch 111, ch 11, 8 (1).
58-32-28. Authority of broker to make certificate as to insurance granted by unauthorized insurer.No broker shall issue any such certificate or purport or represent that insurance will be or has been granted by any unauthorized insurer, unless he has prior written authority from the insurer, or has received information from the insurer in the regular course of business that such insurance has been granted. Source: SL 1966, ch 111, ch 11, 8 (2).
58-32-29. Change in evidence of insurance--Substitute certificate by broker.If after the issuance and delivery of any such certificate there is any change as to the identity of the insurers, or the proportion of the direct risk assumed by an insurer as stated in the broker's original certificate, or in any other material respect as to the insurance coverage evidenced by the certificate, the broker shall promptly issue and deliver to the insured a substitute certificate accurately showing the current status of the coverage and the insurers responsible thereunder. Source: SL 1966, ch 111, ch 11, 8 (3).
58-32-3.1. Home state defined.The term, home state, as used in this chapter, means, with respect to an insured:(1)The state in which an insured maintains its principal place of business or, in the case of an individual, the individual's principal residence; or(2)If one hundred percent of the insured risk is located out of the state referred to in subdivision (1) of this section, the state to which the greatest percentage of the insured's taxable premium for the insurance contract is allocated.If more than one insured from an affiliated group are named insureds on a single nonadmitted insurance contract, the term means the home state as determined under subdivision (1) of this section of the member of the affiliated group that has the largest percentage of premium attributable to it under the contract. Source: SL 2011, ch 223, 6.
58-32-3. Export defined.To "export" means to place in an unauthorized insurer under this chapter insurance covering a subject of insurance resident, located, or to be performed in South Dakota. Source: SL 1966, ch 111, ch 11, 3 (2).
58-32-30. False certificate by broker--Failure to notify insured as to material change--Misdemeanor.Any surplus line broker who knowingly or negligently issues a false certificate, or who fails promptly to notify the insured of any material change with respect to such insurance by delivery to the insured of a substitute certificate as provided in 58-32-29, commits a Class 2 misdemeanor. Source: SL 1966, ch 111, ch 11, 8 (5); SL 1978, ch 359, 2.
58-32-31. Replacement of broker's certificate when policy issued.If a policy issued by the insurer is not available upon placement of the insurance and the broker has issued and delivered his certificate as provided in 58-32-27, upon request therefor by the insured, the broker shall as soon as reasonably possible procure from the insurer its policy evidencing such insurance and deliver such policy to the insured in replacement of the broker's certificate theretofore issued. Source: SL 1966, ch 111, ch 11, 8 (4).
58-32-32. Endorsement of contract--Violation as misdemeanor.Every insurance contract procured and delivered as a surplus line coverage pursuant to this chapter shall have stamped upon it, and be initialed by or bear the name of the surplus line broker who procured it in ten point or larger, boldface type, the following:"THIS INSURANCE CONTRACT IS ISSUED BY A NONADMITTED INSURER WHICH IS NOT LICENSED BY NOR UNDER THE JURISDICTION OF THE SOUTH DAKOTA INSURANCE DIRECTOR."Violation of this section is a Class 2 misdemeanor. Source: SL 1966, ch 111, ch 11, 9; SL 1978, ch 359, 2.
58-32-33. Surplus line insurance valid.Insurance contracts procured as surplus line coverage from unauthorized insurers shall be valid and enforceable as to all parties, the same as like contracts issued by authorized insurers. Source: SL 1966, ch 111, ch 11, 10.
58-32-34. Liability of insurer as to losses and unearned premiums.As to a surplus line risk which has been assumed by an unauthorized insurer and for which the premium has been received by the surplus line broker who placed such insurance, the insurer shall be deemed to have received the premium due to it for such coverage, and for unearned premiums which may become payable to the insured upon cancellation of such insurance, whether or not the broker is indebted to the insurer with respect to such insurance or for any other cause. Source: SL 1966, ch 111, ch 11, 11 (1).
58-32-35. Assumption of surplus line direct risk--Extent of liability.Each unauthorized insurer assuming a surplus line direct risk shall be deemed thereby to have subjected itself to the terms of 58-32-34. Source: SL 1966, ch 111, ch 11, 11 (2).
58-32-36. Venue of action against unauthorized insurer.Any cause of action against an unauthorized insurer arising in this state on a surplus line contract shall be brought in the circuit court for the county in which the cause of action arose. Source: SL 1966, ch 111, ch 11, 20 (1).
58-32-37. Action against unauthorized insurer--Service of process on director--Jurisdiction of court.Service of legal process against the insurer may be made in any such action by service upon the director as provided in 58-6-39. The director shall forthwith mail a copy of the process served to the person designated by the insurer in the policy for the purpose, by prepaid registered or certified mail with return receipt requested. The insurer shall have thirty days from the date of service upon the director within which to plead, answer, or otherwise defend the action. Upon service of process upon the director in accordance with this provision, the court shall be deemed to have jurisdiction in personam of the insurer. Source: SL 1966, ch 111, ch 11, 20 (2); SL 1982, ch 28, 18.
58-32-38. Director appointed process agent--Policy provision--Mailing of process to defendant.An unauthorized insurer issuing such policy shall be deemed thereby to have authorized service of process against it in the manner and to the effect as provided in 58-32-37. Any such policy shall contain a provision stating the substance of 58-32-36 to 58-32-38, inclusive, and designating the person to whom the director shall mail process as provided in 58-32-37. Source: SL 1966, ch 111, ch 11, 20 (3).
58-32-39. Record by broker of each surplus line coverage--Violation as misdemeanor.Each broker shall keep in the broker's office a record of each surplus line coverage procured by the broker, including a copy of each daily report, if any; a copy of each certificate issued by the broker; and the following items as may be applicable:(1)Amount of the insurance;(2)Gross premium charged;(3)Return premium paid, if any;(4)Rate of premium charged upon the several items of property;(5)Effective date of the contract, and the terms thereof;(6)Name and address of each insurer on the direct risk and the proportion of the entire risk assumed by such insurer if less than the entire risk;(7)Name and address of the insured;(8)Brief general description of the property or risk insured and where located or to be performed; and(9)Other information as may be required by the director.A violation of this section is a Class 2 misdemeanor. Source: SL 1966, ch 111, ch 11, 16 (1); SL 1978, ch 359, 2; SL 2015, ch 260, 10.
58-32-4. Chapter not applicable to life and health insurance, annuities, and reinsurance--Exceptions.The provisions of this chapter do not apply to life and health insurance, annuities, or reinsurance. This section does not prohibit the procurement of coverage otherwise complying with the export requirements of this chapter for:(1)Disability insurance that has a benefit limit in excess of any benefit limit available from an admitted insurer; or(2)Health insurance for an individual traveling or temporarily living outside the United States for health care costs incurred abroad. Source: SL 1966, ch 111, ch 11, 2 (1); SL 2015, ch 256, 1; SL 2019, ch 214, 1.
58-32-40. Record open to examination by director--Violation as misdemeanor.The record shall at all times within five years after issuance of the coverage to which it relates be open to examination by the director. A violation of this section is a Class 2 misdemeanor. Source: SL 1966, ch 111, ch 11, 16 (2); SL 1978, ch 359, 2; SL 2015, ch 260, 11.
58-32-41. Annual statement of broker--Filing with director--Violation as misdemeanor.Each broker shall before the first day of April of each year file with the director a verified statement of all surplus line insurance transacted by him during the preceding calendar year. Violation of this section is a Class 2 misdemeanor. Source: SL 1966, ch 111, ch 11, 17 (1); SL 1978, ch 359, 2.
58-32-42.1. Uniform report may be prescribed in lieu of annual statement or affidavit as to exported insurance.The director may prescribe the use of a nationally recognized uniform report for the filing of information contained in affidavits, annual statements, and other reports for surplus lines brokers. If prescribed by the director, the uniform report shall be used in lieu of and satisfies the provisions of 58-32-20, 58-32-41, and 58-32-42. The uniform report shall contain information sufficient to determine the amount and type of surplus lines insurance written in this state and sufficient to determine the appropriate amount of tax to be paid pursuant to this title. Source: SL 2010, ch 242, 1.
58-32-42. Annual statement of broker--Form and contents.The statement shall be on forms furnished by the director and shall show:(1)Gross amount of each kind of insurance transacted;(2)Aggregate gross premiums charged;(3)Aggregate of returned premiums paid to insureds;(4)Aggregate of net premiums; and(5)Additional information as required by the director. Source: SL 1966, ch 111, ch 11, 17 (2).
58-32-43. Records of interstate commerce coverage--Report to director--Violation as misdemeanor.Licensed insurance producers and brokers placing any insurance enumerated in subdivisions 58-32-5(1) to (4), inclusive, with an authorized insurer shall keep a record of each such coverage in detail as required of surplus line insurance under this chapter. The record shall be preserved for not less than five years from the effective date of the insurance and shall be kept available in this state for examination by the director. The broker shall furnish to the director at the director's request and on forms furnished by the director a report of all such coverages so placed in a designated calendar year. Any violation of this section is a Class 2 misdemeanor. Source: SL 1966, ch 111, ch 11, 2 (2); SL 1978, ch 359, 2; SL 2001, ch 286, 199.
58-32-44. Tax on premiums--Time for remittance--Credit to general fund.Before the first day of April of each year, each broker shall remit to the state treasurer, through the director of the Division of Insurance, a tax on the premiums, exclusive of sums collected to cover federal and state taxes and examination fees, on surplus line insurance transacted by the broker at the rate and in the manner provided by 10-44-2. If in any prior calendar year a broker collects and remits in excess of five thousand dollars of surplus lines premium tax, the broker shall in the following year remit the tax on a quarterly basis. The tax is in lieu of all other taxes upon such insurers with respect to the business so reported. When collected, the tax shall be credited to the general fund. If the director has entered into an agreement as provided for by 58-32-45, taxes may be required to be remitted as may be specified by such an agreement. Source: SL 1966, ch 111, ch 11, 18 (1); SL 1980, ch 360; SL 2011, ch 223, 4.
58-32-45. Premium tax when only part of risk in state--Multi-state agreement--Apportionment.For a surplus lines policy issued to an insured whose home state is this state and where only a portion of the risk is located in this state, the entire premium tax shall be paid to the director in accordance with 58-32-44. If the director finds it would increase the efficiency of the surplus lines insurance marketplace as well as the regulation of the surplus lines market, the director may enter into a multi-state surplus lines agreement for the eligibility for placement of surplus lines insurance and the payment, reporting, collection, and apportionment of surplus lines premium taxes. If a surplus line policy covers risks or exposures only partially in this state and the director has entered into agreement with other states for the apportionment of premium taxes for multi-state risks, the tax payable under 58-32-44 shall be computed and paid upon the proportion of the premium which is properly allocable to the risks or exposures located in this state according to the terms of any such agreement. The multi-state agreement may also include the eligibility for placement of surplus lines insurance and the payment, reporting, collection, and apportionment of surplus lines premium taxes for risks that are not multi-state and for independently procured surplus lines pursuant to 58-32-47 to 58-32-55, inclusive. Source: SL 1966, ch 111, ch 11, 18 (2); SL 2011, ch 223, 5.
58-32-46. Fine for failure to remit tax or to file annual statement or uniform report--Collection.A broker is liable for a fine of twenty-five dollars for each day of delinquency commencing with the first day of April if any of the following apply:(1)The broker fails to remit the tax provided by 58-32-44 prior to the first day of April;(2)The broker fails to file the annual statement, unless a uniform report has been prescribed pursuant to 58-32-42.1; or(3)The broker fails to file the uniform report pursuant to 58-32-42.1.The tax may be collected by distraint, or the tax and fine may be recovered by an action instituted by the director in any court of competent jurisdiction. Any fine collected by the director shall be paid to the state treasurer and credited to the general fund. Source: SL 1966, ch 111, ch 11, 19; SL 2010, ch 242, 2.
58-32-47. Report of independently procured coverages--Violation as misdemeanor.Every insured who in this state procures or causes to be procured or continues or renews insurance in an unauthorized foreign insurer, or any self-insurer who in this state so procures or continues excess loss, catastrophe or other insurance, upon a subject of insurance resident, located or to be performed within this state, other than insurance procured through a surplus line broker subject to 58-32-44 and 58-32-45, shall within thirty days after the date such insurance was so procured, continued or renewed file a written report of the same with the director on forms furnished by the director to the insured, giving the name and address of the insurer, the subject of the insurance, a general description of the coverage, the amount of premium currently charged therefor, and such additional pertinent information as the director reasonably requests. If the insurance covers also a subject of insurance resident, located or to be performed outside this state a proper prorata portion of the entire premium payable for all such insurance shall be allocated to this state for the purposes of 58-32-50.Violation of this section is a Class 2 misdemeanor. Source: SL 1966, ch 111, ch 11, 22 (1); SL 1978, ch 359, 2.
58-32-48. Negotiations, application, or premium payment bringing independently procured coverages within jurisdiction.Any insurance in an unauthorized insurer procured through negotiations or an application in whole or in part occurring or made within or from within this state, or for which premiums in whole or in part are remitted directly or indirectly from within this state, shall be deemed to be insurance procured or continued or renewed in this state within the intent of 58-32-47. Source: SL 1966, ch 111, ch 11, 22 (2).
58-32-49. Production of records of insured for examination--Refusal to obey order of director as misdemeanor.In order that the director may effectively administer the various provisions of this chapter, every person as to whom insurance has been placed with an unauthorized insurer shall, upon the director's order, produce for his examination all policies and other documents evidencing the insurance, and shall disclose to the director the amount of premiums paid or agreed to be paid for the insurance. Each refusal to obey such order is a Class 2 misdemeanor. Source: SL 1966, ch 111, ch 11, 23 (1); SL 1978, ch 359, 2.
58-32-5. Exemption of interstate commerce.The provisions of this chapter do not apply, except as to 58-32-43, to the following insurances if so placed by licensed insurance producers or surplus line brokers of this state:(1)Ocean marine and foreign trade insurances;(2)Insurance on subjects located, resident, or to be performed wholly outside of this state, or on vehicles or aircraft owned and principally garaged outside this state;(3)Insurance on operations of railroads engaged in transportation in interstate commerce and their property used in such operations;(4)Insurance of aircraft owned or operated by manufacturers of aircraft, or of aircraft operated in commercial interstate flight, or cargo of such aircraft, or against liability, other than workers' compensation and employer's liability, arising out of the ownership, maintenance, or use of such aircraft. Source: SL 1966, ch 111, ch 11, 2 (1); SL 2001, ch 286, 194.
58-32-50. Tax on independently procured coverages--Payment to director, time.For the general support of the government of this state there is levied upon the insured with respect to the obligation, chose in action, or rights represented by insurance described in 58-32-47, a tax at the rate of two and one-half percent of the gross amount of the premium charged for the insurance. Within thirty days after the insurance was so procured, continued or renewed, and coincidentally with the filing with the director of the report provided for in 58-32-47, the insured shall pay the amount of the tax to the director. Source: SL 1966, ch 111, ch 11, 22(3); SL 1986, ch 99, 2.
58-32-51. Interest on delinquent tax on independently procured coverages.The tax imposed under 58-32-50, if delinquent, shall bear interest at the Category D rate of interest as established in 54-3-16, compounded annually. Source: SL 1966, ch 111, ch 11, 22 (4); SL 1983, ch 28, 67; SL 1984, ch 319, 33.
58-32-52. Insured's liability for tax on independently procured coverages.The tax imposed by 58-32-50 shall be collectible from the insured by civil action brought by the director, or by distraint. Source: SL 1966, ch 111, ch 11, 22 (5).
58-32-53. Deposits of taxes and interest collected on independently procured coverage.The director shall promptly deposit all taxes and interest collected under 58-32-50 to 58-32-52, inclusive, with the state treasurer to the credit of the state's general fund. Source: SL 1966, ch 111, ch 11, 22 (6).
58-32-54. Provisions on independently procured coverages do not affect unauthorized insurers.Sections 58-32-47 to 58-32-53, inclusive, do not abrogate or modify any provision of this title covering unauthorized insurers or suits against unauthorized insurers. Source: SL 1966, ch 111, ch 11, 22 (7).
58-32-55. Provisions on independently procured coverages inapplicable to life or health insurance, or annuities.Sections 58-32-47 to 58-32-53, inclusive, do not apply as to life or health insurances, or annuities. Source: SL 1966, ch 111, ch 11, 22 (8), 23 (2).
58-32-56. Rules and regulations--Adoption by director.The director may adopt reasonable rules and regulations, consistent with this chapter, for any or all of the following purposes:(1)Effectuation of such chapter;(2)Establishment of procedures through which determination is to be made as to the eligibility of particular proposed coverages for export; and(3)Establishment, procedures, and operations of any voluntary organization of brokers or others designated to assist such brokers to comply with such chapter. Source: SL 1966, ch 111, ch 11, 21 (1).
58-32-58. Citation of chapter.This chapter constitutes and may be cited as the Surplus Line Law. Source: SL 1966, ch 111, ch 11, 1 (1).
58-32-6. Unauthorized acts constituting misdemeanors--Additional forfeiture.Unless performed by a licensed surplus line broker, the following acts are Class 2 misdemeanors if done in this state:(1)Acting as insurance producer for a nonadmitted insurer in the transaction of insurance business in this state;(2)In any manner advertising a nonadmitted insurer in this state;(3)In any other manner aiding a nonadmitted insurer to transact insurance business in this state.In addition to any penalty provided for commission of misdemeanors, a person violating any provision of this section shall forfeit to this state the sum of five hundred dollars, together with one hundred dollars for each month or fraction thereof during which the person continues such violation. Source: SL 1966, ch 111, ch 11, 24; SL 1978, ch 359, 2; SL 2001, ch 286, 195.
58-32-7. Qualifications for surplus line broker's license--Out-of-state sales.Any individual who is licensed in this state as an insurance producer and who is determined by the director to be competent and trustworthy with respect to the handling of surplus lines may be licensed as a surplus line broker. No individual is required to be licensed pursuant to this chapter as a surplus lines broker if the selling, soliciting, or negotiating of surplus lines insurance takes place in an insured's home state and the home state of the insured is a state other than South Dakota. Source: SL 1966, ch 111, ch 11, 12 (1); SL 2001, ch 286, 196; SL 2011, ch 223, 1.
58-32-8. Application for surplus line license--Fee.Application for license as a surplus lines broker shall be made to the director on forms furnished by the director. The license fee shall be as specified in 58-2-29. Source: SL 1966, ch 111, ch 11, 12 (2), (3).
58-32-9. Licensing provisions applicable.The surplus line broker license and licensee shall be subject to the applicable provisions of chapter 58-30. Source: SL 1966, ch 111, ch 11, 12 (4).
58-33-1.Purposes of chapter.The purpose of this chapter is to regulate trade practices in the business of insurance in accordance with the intent of Congress as expressed in the act of Congress of March 9, 1945, (Public Law 15, 79th Congress, ch. 20, 50 U. S. Stat. at Large 33), by defining, or providing for determination of, all such practices in this state which constitute unfair methods of competition or unfair or deceptive acts or practices and by prohibiting the trade practices so defined or determined. Source: SL 1966, ch 111, ch 13, 1.
58-33-10. False financial statement as misdemeanor.No person shall file with any supervisory or other public official, or make, publish, disseminate, circulate, or deliver to any person, or place before the public, or cause directly or indirectly, to be made, published, disseminated, circulated, delivered to any person, or placed before the public, any false statement of financial condition of an insurer with intent to deceive. Violation of this section is a Class 2 misdemeanor. Source: SL 1966, ch 111, ch 13, 10 (1); SL 1978, ch 359, 2.
58-33-100. Confidentiality of notifications--Use of information in legal and regulatory actions.Any notification made pursuant to 58-33-98 is confidential and privileged from disclosure in response to a subpoena or otherwise, and is not subject to discovery or admissible in evidence in any private action. Nothing in 58-33-93 to 58-33-116, inclusive, limits the director's authority to use a report filed or information provided pursuant to 58-33-93 to 58-33-116, inclusive, in the furtherance of any legal or regulatory action that the director, in the director's sole discretion, determines to be necessary to further the purposes of 58-33-93 to 58-33-116, inclusive. Source: SL 2007, ch 292, 8.
58-33-101. Disclosure of information to agencies of other states or federal government--Conditions--Immunity from civil liability.Nothing in 58-33-93 to 58-33-116, inclusive, prevents the director from disclosing the contents of a report or notification filed under this section to the insurance division of any other state or agency of the federal government at any time, or any other regulatory or law enforcement agency if the agency or office receiving the report or matters relating thereto agrees to hold it confidential and in a manner consistent with 58-33-93 to 58-33-116, inclusive. A report filed or notification provided under 58-33-93 to 58-33-116, inclusive, is confidential and privileged from disclosure in response to a subpoena or otherwise except to the extent the director determines disclosure is appropriate to accomplish a regulatory purpose. There is no civil liability imposed on and no cause of action arises from a person's furnishing information pursuant to 58-33-93 to 58-33-116, inclusive, concerning suspected, anticipated, or completed acts, if the information is provided to or received from:(1)The director or the director's employees, agents, or representatives;(2)Federal, state, or local law enforcement or regulatory officials or their employees, agents, or representatives;(3)A person involved in the prevention and detection of fraudulent insurance acts or that person's agents, employees, or representatives; or(4)The NAIC or its employees, agents, or representatives. Source: SL 2007, ch 292, 9.
58-33-102. Due diligence investigation required of insurance producer before offering health benefit plan.An insurance producer, prior to engaging in or assisting any person to engage in offering a health benefit plan to an employer or person located in this state, shall carry out appropriate due diligence to establish that the health benefit plan is not unauthorized health insurance, including those measures reasonably appropriate to establish:(1)For any insurance coverage that is represented as issued relating to the health benefit plan:(a)The insurer issued the policy;(b)The coverage is as represented;(c)The insurer is an admitted insurer in this state; and(d)The policy has been filed with, and approved by, the division or is exempt from filing requirements;(2)For any health benefit plan that is represented as established or maintained pursuant to a collective bargaining agreement, the health benefit plan is established or maintained under or pursuant to a collective bargaining agreement under the criteria provided under 29 CFR 2510.3-40 as of January 1, 2007;(3)For any health benefit plan that is represented as established or maintained by an employee leasing arrangement or professional employer organization, the health benefit plan is fully insured; or(4)For any health benefit plan that is represented as established by a single employer, the health benefit plan is covering solely employees and their dependents, and the employer controls and directs the work of the employee. Source: SL 2007, ch 292, 10.
58-33-103. Due diligence investigation required of insurance producer before submitting stop loss policy application for health benefit plan.An insurance producer, prior to submitting an application for a stop loss policy to an insurer for a health benefit plan offered to employees, employee dependents, or a person located in this state, shall carry out appropriate due diligence to establish that the health benefit plan is not unauthorized health insurance, including measures reasonably appropriate to establish:(1)For any health benefit plan that is represented as established or maintained pursuant to a collective bargaining agreement, the health benefit plan is established or maintained under or pursuant to a collective bargaining agreement under the criteria provided under 29 CFR 2510.3-40 as of January 1, 2007;(2)The health benefit plan that is not offered by an employee leasing arrangement or professional employer organization to client employers; or(3)For any health benefit plan that is represented as established by a single employer, that the health benefit plan is covering solely employees, and dependents of employees, of the employer and the employer controls and directs the work of the employee. Source: SL 2007, ch 292, 11.
58-33-104. Due diligence investigation required of third party administrator before entering into any administrative contract for health benefit plan.A third party administrator, prior to entering into any administrative contract for a health benefit plan, and prior to assisting any person with administration of a health benefit plan, covering employees of an employer or a person located in this state, shall carry out appropriate due diligence to establish that the health benefit plan is not unauthorized health insurance, including those measures reasonably appropriate to establish:(1)Through initial inquiry, contract provisions and measures to monitor and enforce compliance with the contract provisions, that for any insurance coverage that is represented as issued relating to the health benefit plan:(a)The insurer issued the policy;(b)The coverage is as represented;(c)The insurer is an admitted insurer in this state; and(d)The policy has been filed with, and approved by, the division or is exempt from filing requirements;(2)For any health benefit plan that is represented as established or maintained pursuant to a collective bargaining agreement, the health benefit plan is established or maintained under or pursuant to a collective bargaining agreement under the criteria provided under 29 CFR 2510.3-40 as of January 1, 2007;(3)For any health benefit plan that is represented as established or maintained by an employee leasing arrangement or professional employer organization, the health benefit plan is fully insured; or(4)For any health benefit plan that is represented as established by a single employer, that the health benefit plan is covering solely employees and their dependents, and the employer controls and directs the work of the employee. Source: SL 2007, ch 292, 12.
58-33-105. Due diligence investigation required of insurer before issuing stop loss policy for health benefit plan.An insurer, prior to issuing a stop loss policy for a health benefit plan covering employees, employee dependents, or individuals located in this state, shall carry out appropriate due diligence to establish that the health benefit plan is not unauthorized health insurance, including those measures reasonably appropriate to establish:(1)For any health benefit plan that is represented as established or maintained pursuant to a collective bargaining agreement, the health benefit plan is established or maintained under or pursuant to a collective bargaining agreement under the criteria provided under 29 CFR 2510.3-40 as of January 1, 2007;(2)The health benefit plan is not offered by an employee leasing arrangement or professional employer organization to client employers; or(3)For any health benefit plan that is represented as established by a single employer, the health benefit plan is covering solely employees, and dependents of employees, of the employer and the employer controls and directs the work of the employee. Source: SL 2007, ch 292, 13.
58-33-106. Requirements for engaging in transacting of insurance by issuing stop loss policy.No insurer may engage in the transacting of insurance by issuing a stop loss policy unless the insurer is an admitted insurer in this state and the stop loss policy form has been filed and approved by the division, unless the form is exempt by law from filing. The transacting of insurance includes:(1)Issuing a stop loss policy covering an employer located in this state. Coverage of an employer for claims incurred under the employer's self-funded health benefit plan with a stop loss policy is insurance, not reinsurance, regardless of whether the contract is described by the insurer as reinsurance; or(2)Issuing a stop loss policy to a trust or trustee, whether the trust or trustee is located in this state or otherwise, if an employer located in this state is directly or indirectly the beneficiary of the trust. Source: SL 2007, ch 292, 14.
58-33-107. Written disclosures required before issuing contract for stop loss policy.No insurer may engage in the transacting of insurance in this state by issuing a stop loss policy unless, prior to issuing a contract for the stop loss policy, the insurer discloses clearly and conspicuously to the employer, in writing the following:(1)The employer is not covered for claims below the stop loss attachment point;(2)A description of the attachment point, including the specific and aggregate attachment points; and(3)The insurer provides no other coverage of the employer's retention. Source: SL 2007, ch 292, 15.
58-33-108. Due diligence investigation required of preferred provider organization before contracting with offeror or provider of health benefit plan.A preferred provider organization, prior to entering into any contract with a person offering or providing a health benefit plan in this state, shall carry out appropriate due diligence to establish that the health benefit plan is not unauthorized health insurance, including those measures reasonably appropriate to establish:(1)Through initial inquiry, contract provisions, and measures to monitor and enforce compliance with the contract provisions, that for any insurance coverage that is represented as issued relating to the health benefit plan:(a)The insurer issued the policy;(b)The coverage is as represented;(c)The insurer is an admitted insurer in this state; and(d)The policy has been filed with and approved by the division or is exempt from filing requirements;(2)For any health benefit plan that is represented as established or maintained pursuant to a collective bargaining agreement, the health benefit plan is established or maintained under or pursuant to a collective bargaining agreement under the criteria provided under 29 CFR 2510.3-40 as of January 1, 2007;(3)For any health benefit plan that is represented as established or maintained by an employee leasing arrangement or professional employer organization, the health benefit plan is fully insured; or(4)For any health benefit plan that is represented as established by a single employer, the health benefit plan is covering solely employees, and dependents of employees, of the employer and the employer controls and directs the work of the employee. Source: SL 2007, ch 292, 16.
58-33-109. Defenses available to person who acts according to written advice of MEWA contact.A licensee or other person who acts according to the written advice of the MEWA contact has a defense to any violation of 58-33-103 to 58-33-108, inclusive, if the information provided by the licensee or other person to the MEWA contact, to the extent material to the MEWA contact's advice, is accurate and complete.For the purpose of 58-33-93 to 58-33-116, inclusive, the division's published list of admitted insurers on its web site is deemed to be accurate. A licensee or other person has a defense to any allegation that a listed insurer is not an admitted insurer. Nothing in 58-33-93 to 58-33-116, inclusive, requires a licensee or other person to notify the division of an unauthorized product or insurer if that licensee or person has reviewed the division's website and the unauthorized insurer is listed as an admitted insurer. Source: SL 2007, ch 292, 17.
58-33-11. Stock operations and advisory board contracts as inducement--Misdemeanor.No person may issue or deliver or permit its insurance producers, officers, or employees to issue or deliver, agency company stock or other capital stock, or benefit certificates or shares in any common law corporation, or any advisory board contract or other similar contract of any kind promising returns and profits as an inducement to insurance. Any violation of this section is a Class 2 misdemeanor. Source: SL 1966, ch 111, ch 13, 11; SL 1978, ch 359, 2; SL 2001, ch 286, 200.
58-33-110. Circumstances mitigating violation of 58-33-102 to 58-33-108.Any violation of 58-33-102 to 58-33-108, inclusive, is mitigated, and the division shall reduce or eliminate any sanction otherwise applicable, if a licensee or other person demonstrates all of the following:(1)The licensee or other person maintained supervisory procedures and controls that complied with 58-33-112;(2)The violation occurred despite the maintenance of those procedures and controls;(3)The licensee or other person promptly reported the health benefit plan to the MEWA contact once the licensee or other person had actual knowledge that it was unauthorized health insurance; and(4)The licensee or other person took prompt corrective action. Source: SL 2007, ch 292, 18.
58-33-111. Due diligence not required with respect to unassisted health benefit plan where not engaged in transacting of insurance.Nothing in 58-33-109 or 58-33-110 requires a producer, third party administrator, insurer, or preferred provider organization to conduct due diligence with respect to a health benefit plan that it is not assisting and with respect to which it does not engage in the transacting of insurance. Source: SL 2007, ch 292, 19.
58-33-112. Documented supervision procedures and controls.An insurance producer, third party administrator, insurer, preferred provider organization, or an agent of the same shall establish and maintain documented supervision procedures and controls that are reasonably designed to achieve compliance with 58-33-93 to 58-33-116, inclusive. The supervisory procedures shall include:(1)Training;(2)Internal controls;(3)Periodic audits;(4)Supervisory review; and(5)Monitoring and enforcement of contractual provisions established under 58-33-104 and 58-33-108.The extent of the supervisory procedures and controls a producer is required to maintain under this section may appropriately reflect the size and complexity of the producer's operations and the scope and nature of the producer's insurance activities. Source: SL 2007, ch 292, 20.
58-33-113. Continuing education--Summary of supervision procedures and controls.An insurer providing health insurance in this state shall require its listed producers to obtain not less than one hour of continuing education every four years covering:(1)Identification of unauthorized health insurance; and(2)The producer's responsibilities under 58-33-93 to 58-33-116, inclusive.A third party administrator, preferred provider organization, or insurer shall include in its application for a license a brief summary of its procedures and controls required under 58-33-112. A license or registration application may be denied if the applicant fails to demonstrate that the applicant maintains the required procedures and controls. Source: SL 2007, ch 292, 21.
58-33-114. Suspension or revocation of registration of preferred provider organization for violation--Other action to assure future compliance.If a preferred provider organization violates a provision of 58-33-93 to 58-33-116, inclusive, the organization's registration may be suspended or revoked or other action may be taken by the director as is otherwise authorized by this title to ensure that compliance with 58-33-93 to 58-33-116, inclusive, will be achieved in the future. Source: SL 2007, ch 292, 22.
58-33-115. Inapplicability to joint powers agreements.Nothing in 58-33-93 to 58-33-116, inclusive, applies to a joint powers agreement authorized pursuant to chapter 1-24. Source: SL 2007, ch 292, 23.
58-33-116. Inapplicability to arrangements not issued to person in state or solicited in state.Nothing in 58-33-93 to 58-33-116, inclusive, applies to an admitted insurer, nonadmitted insurer, or a MEWA if the arrangement is neither issued to a person in this state nor solicited in this state. For purposes of this section, the phrase, issued to a person, does not include providing a certificate of coverage, evidence of coverage, or other similar documents to an employee, participant, or dependent showing coverage under an employer's health benefit plan or arrangement. Source: SL 2007, ch 292, 24.
58-33-117. Definition of terms.Terms in this section and 58-33-118 to 58-33-130, inclusive, mean:(1)"Active duty," full-time duty in the active military service of the United States and includes members of the reserve component (National Guard and Reserve) while serving under published orders for active duty or full-time training. The term does not include members of the reserve component who are performing active duty or active duty for training under military calls or orders specifying periods of less than thirty-one calendar days;(2)"Armed forces of the United States," all components of the Army, Navy, Air Force, Marine Corps, and Coast Guard;(3)"Department of Defense (DoD) personnel," all active duty service members and all civilian employees, including nonappropriated fund employees and special government employees, of the Department of Defense;(4)"Door to door," a solicitation or sales method whereby an insurance producer proceeds randomly or selectively from household to household without prior specific appointment;(5)"General advertisement," an advertisement having as its sole purpose the promotion of the reader's or viewer's interest in the concept of insurance, or the promotion of the insurer or the insurance producer;(6)"Known" or "knowingly," the insurance producer or insurer had actual awareness, or in the exercise of ordinary care should have known, at the time of the act or practice complained of, that the person solicited:(a)Is a service member; or(b)Is a service member with a pay grade of E-4 or below;(7)"Military installation," any federally owned, leased, or operated base, reservation, post, camp, building, or other facility to which service members are assigned for duty, including barracks, transient housing, and family quarters;(8)"MyPay," a defense finance and accounting service internet-based system that enables service members to process certain discretionary pay transactions or provide updates to personal information data elements without using paper forms;(9)"Service member," any active duty officer (commissioned and warrant) or enlisted member of the armed forces of the United States;(10)"Side fund," a fund or reserve that is part of or otherwise attached to a life insurance policy (excluding individually issued annuities) by rider, endorsement or other mechanism which accumulates premium or deposits with interest or by other means. The term does not include:(a)Accumulated value or cash value or secondary guarantees provided by a universal life policy;(b)Cash values provided by a whole life policy which are subject to standard nonforfeiture law for life insurance; or(c)A premium deposit fund which:(i)Contains only premiums paid in advance which accumulate at interest;(ii)Imposes no penalty for withdrawal;(iii)Does not permit funding beyond future required premiums;(iv)Is not marketed or intended as an investment; and(v)Does not carry a commission, either paid or calculated;(11)"Specific appointment," a prearranged appointment agreed upon by both parties and definite as to place and time. Source: SL 2008, ch 272, 1.
58-33-118. Solicitation or sale of life insurance or annuity to active duty service member.Sections 58-33-117 to 58-33-130, inclusive, apply only to the solicitation or sale of any life insurance or annuity product by an insurer or insurance producer to an active duty service member of the armed forces of the United States.Nothing in 58-33-117 to 58-33-130, inclusive, creates a private cause of action for a violation of 58-33-117 to 58-33-130, inclusive. Source: SL 2008, ch 272, 2.
58-33-119. Certain solicitations and sales excluded.Sections 58-33-117 to 58-33-130, inclusive, do not apply to solicitations or sales involving:(1)Credit insurance;(2)Group life insurance or group annuities where there is no in-person, face-to-face solicitation of individuals by an insurance producer or where the contract or certificate does not include a side fund;(3)An application to the existing insurer that issued the existing policy or contract if a contractual change or a conversion privilege is being exercised; or, if the existing policy or contract is being replaced by the same insurer pursuant to a program filed with and approved by the director; or, if a term conversion privilege is exercised among corporate affiliates;(4)Individual stand-alone health policies, including disability income policies;(5)Contracts offered by Servicemembers' Group Life Insurance or Veterans' Group Life Insurance;(6)Life insurance contracts offered through or by a nonprofit military association, qualifying under Section 501 (c) (23) of the Internal Revenue Code (IRC) as of January 1, 2008, and which are not underwritten by an insurer; or(7)Contracts used to fund:(a)An employee pension or welfare benefit plan that is covered by the Employee Retirement and Income Security Act as of January 1, 2008;(b)A plan described by Sections 401(a), 401(k), 403(b), 408(k) or 408(p) of the IRC, as of January 1, 2008, if established or maintained by an employer;(c)A government or church plan defined in Section 414 of the IRC as of January 1, 2008, a government or church welfare benefit plan, or a deferred compensation plan of a state or local government or tax exempt organization under Section 457 of the IRC as of January 1, 2008;(d)A nonqualified deferred compensation arrangement established or maintained by an employer or plan sponsor;(e)Settlements of or assumptions of liabilities associated with personal injury litigation or any dispute or claim resolution process; or(f)Prearranged funeral contracts. Source: SL 2008, ch 272, 3; SL 2018, ch 278, 3.
58-33-12.1. Blindness as basis for life insurance termination, modification or refusal--Unfair practice.It is an unfair or discriminatory practice for an insurance company to terminate, or to modify coverage or to refuse to issue or refuse to renew any life policy or contract of life insurance solely because the applicant or insured or any employee of either is blind or partially blind. This section does not apply to accident and health insurance. This section may not be interpreted to prohibit the termination, modification, issuance, or renewal of any insurance policy or contract if the action is based on sound actuarial principles or is related to actual or reasonable anticipated experience. Source: SL 1983, ch 373.
58-33-12. Unfair discrimination as misdemeanor--Life insurance and annuities.No person shall make or permit any unfair discrimination between individuals of the same class and equal expectation of life in the rates charged for any contract of life insurance or of life annuity or in the dividends or other benefits payable thereon, or in any other of the terms and conditions of such contract. Violation of this section is a Class 2 misdemeanor. Source: SL 1966, ch 111, ch 13, 12 (1); SL 1978, ch 359, 2.
58-33-120. Education of members of armed forces in accordance with Department of Defense instruction permitted.Nothing in 58-33-117 to 58-33-130, inclusive, abrogates the ability of nonprofit organizations or other organizations to educate members of the armed forces of the United States in accordance with Department of Defense DoD Instruction 1344.07--PERSONAL COMMERCIAL SOLICITATION ON DOD INSTALLATIONS as of January 1, 2008. Source: SL 2008, ch 272, 4.
58-33-121. Certain advertisements and marketing exempt--Face-to-face meetings not exempt.For purposes of 58-33-117 to 58-33-130, inclusive, general advertisements, direct mail and internet marketing does not constitute solicitation. Telephone marketing does not constitute solicitation if the caller explicitly and conspicuously discloses that the product concerned is life insurance and makes no statements that avoid a clear and unequivocal statement that life insurance is the subject matter of the solicitation. However, nothing in this section exempts an insurer or insurance producer from 58-33-117 to 58-33-130, inclusive, in any in-person, face-to-face meeting established as a result of the solicitation exemptions identified in this section. Source: SL 2008, ch 272, 5.
58-33-122. Life insurance solicitation practices on military installation considered false, misleading, deceptive, or unfair.The following acts or practices, if committed on a military installation by an insurer or insurance producer with respect to the in-person, face-to-face solicitation of life insurance, are declared to be false, misleading, deceptive, or unfair:(1)Knowingly soliciting the purchase of any life insurance product door to door or without first establishing a specific appointment for each meeting with the prospective purchaser;(2)Soliciting service members in a group or mass audience or in a captive audience where attendance is not voluntary;(3)Knowingly making appointments with or soliciting service members during their normally scheduled duty hours;(4)Making appointments with or soliciting service members in barracks, day rooms, unit areas, or transient personnel housing or other areas where the installation commander has prohibited solicitation;(5)Soliciting the sale of life insurance without first obtaining permission from the installation commander or the commander's designee;(6)Posting unauthorized bulletins, notices, or advertisements;(7)Failing to present DD Form 2885, Personal Commercial Solicitation Evaluation as of January 1, 2008, to service members solicited or encouraging service members solicited not to complete or submit the form; or(8)Knowingly accepting an application for life insurance or issuing a policy of life insurance on the life of an enlisted member of the armed forces of the United States without first obtaining for the insurer's files a completed copy of any required form which confirms that the applicant has received counseling or fulfilled any other similar requirement for the sale of life insurance established by regulations, directives, or rules of the Department of Defense or any branch of the armed forces of the United States. Source: SL 2008, ch 272, 6.
58-33-123. Insurer practices using armed forces personnel or programs considered false, misleading, deceptive, or unfair.The following acts or practices, if committed on a military installation by an insurer or insurance producer, constitute corrupt practices or improper influences or inducements and are declared to be false, misleading, deceptive, or unfair:(1)Using Department of Defense personnel, directly or indirectly, as a representative or agent in any official or business capacity with or without compensation with respect to the solicitation or sale of life insurance to service members; or(2)Using an insurance producer to participate in any education or orientation program sponsored by the armed forces of the United States. Source: SL 2008, ch 272, 7.
58-33-124.Additional practices using personnel, services, or programs of the armed forces or depository institutions considered false, misleading, deceptive, or unfair.The following acts or practices by an insurer or insurance producer constitute corrupt practices or improper influences or inducements and are declared to be false, misleading, deceptive, or unfair:(1)Submitting, processing, or assisting in the submission or processing of any allotment form or similar device used by the armed forces of the United States to direct a service member's pay to a third party for the purchase of life insurance. The foregoing includes using or assisting in using a service member's MyPay account or other similar internet or electronic medium for such purposes. This subdivision does not prohibit assisting a service member by providing insurer or premium information necessary to complete any allotment form;(2)Knowingly receiving funds from a service member for the payment of premium from a depository institution with which the service member has no formal banking relationship. For purposes of this section, a formal banking relationship is established when the depository institution:(a)Provides the service member a deposit agreement and periodic statements and makes the disclosures required by the Truth in Savings Act, 12 U.S. C. 4301 et seq., as of January 1, 2008, and the regulations promulgated thereunder as of January 1, 2008; and(b)Permits the service member to make deposits and withdrawals unrelated to the payment or processing of insurance premiums;(3)Employing any device or method or entering into any agreement whereby funds received from a service member by allotment for the payment of insurance premiums are identified on the service member's leave and earnings statement or equivalent or successor form as, savings, or, checking, and where the service member has no formal banking relationship;(4)Entering into any agreement with a depository institution for the purpose of receiving funds from a service member whereby the depository institution, with or without compensation, agrees to accept direct deposits from a service member with whom it has no formal banking relationship;(5)Using Department of Defense personnel, directly or indirectly, as a representative or agent in any official or unofficial capacity with or without compensation with respect to the solicitation or sale of life insurance to service members who are junior in rank or grade, or to the family members of such personnel;(6)Offering or giving anything of value, directly or indirectly, to Department of Defense personnel to procure their assistance in encouraging, assisting or facilitating the solicitation or sale of life insurance to another service member;(7)Knowingly offering or giving anything of value to a service member with a pay grade of E-4 or below for his or her attendance to any event where an application for life insurance is solicited; or(8)Advising a service member with a pay grade of E-4 or below to change his or her income tax withholding or state of legal residence for the sole purpose of increasing disposable income to purchase life insurance. Source: SL 2008, ch 272, 8.
58-33-125. Misleading as to endorsement, sponsorship, or recommendation by armed forces or government agency considered false, misleading, deceptive, or unfair.The following acts or practices by an insurer or insurance producer are declared to be false, misleading, deceptive, or unfair:(1)Making any representation, or using any device, title, descriptive name or identifier that has the tendency or capacity to confuse or mislead a service member into believing that the insurer, insurance producer or product offered is affiliated, connected or associated with, endorsed, sponsored, sanctioned or recommended by the United States government, the armed forces of the United States, or any state or federal agency or government entity. Examples of prohibited insurance producer titles include Battalion Insurance Counselor, Unit Insurance Advisor, Servicemen's Group Life Insurance Conversion Consultant, or Veteran's Benefits Counselor. Nothing in this subdivision prohibits a person from using a professional designation awarded after the successful completion of a course of instruction in the business of insurance by an accredited institution of higher learning. Such designations include Chartered Life Underwriter, Chartered Financial Consultant, Certified Financial Planner, Master of Science In Financial Services, or Masters of Science Financial Planning; or(2)Soliciting the purchase of any life insurance product through the use of or in conjunction with any third party organization that promotes the welfare of or assists members of the armed forces of the United States in a manner that has the tendency or capacity to confuse or mislead a service member into believing that either the insurer, insurance producer, or insurance product is affiliated, connected, or associated with, or endorsed, sponsored, sanctioned, or recommended by the United States government or the armed forces of the United States. Source: SL 2008, ch 272, 9.
58-33-126. Using the credited interest rate as net return or misrepresenting mortality costs considered false, misleading, deceptive, or unfair.The following acts or practices by an insurer or insurance producer are declared to be false, misleading, deceptive, or unfair:(1)Using or describing the credited interest rate on a life insurance policy in a manner that implies that the credited interest rate is a net return on premium paid; or(2)Excluding individually issued annuities, misrepresenting the mortality costs of a life insurance product, including, stating, or implying that the product costs nothing or is free. Source: SL 2008, ch 272, 10.
58-33-127. Practices regarding Servicemembers' Group Life Insurance or Veterans' Group Life Insurance considered false, misleading, deceptive, or unfair.The following acts or practices by an insurer or insurance producer regarding Servicemembers' Group Life Insurance (SGLI) or Veterans' Group Life Insurance (VGLI) are declared to be false, misleading, deceptive, or unfair:(1)Making any representation regarding the availability, suitability, amount, cost, exclusions, or limitations to coverage provided to a service member or dependents by SGLI or VGLI, which is false, misleading, or deceptive;(2)Making any representation regarding conversion requirements, including the costs of coverage, or exclusions or limitations to coverage of SGLI or VGLI to private insurers which is false, misleading or deceptive; or(3)Suggesting, recommending, or encouraging a service member to cancel or terminate his or her SGLI policy or issuing a life insurance policy which replaces an existing SGLI policy unless the replacement takes effect upon or after the service member's separation from the United States Armed Forces. Source: SL 2008, ch 272, 11.
58-33-128. Certain disclosure practices considered false, misleading, deceptive, or unfair.The following acts or practices by an insurer and or insurance producer regarding disclosure are declared to be false, misleading, deceptive, or unfair:(1)Deploying, using, or contracting for any lead-generating materials designed exclusively for use with service members that do not clearly and conspicuously disclose that the recipient will be contacted by an insurance producer, if that is the case, for the purpose of soliciting the purchase of life insurance;(2)Failing to disclose that a solicitation for the sale of life insurance will be made when establishing a specific appointment for an in-person, face-to-face meeting with a prospective purchaser;(3)Excluding individually issued annuities, failing to clearly and conspicuously disclose the fact that the product being sold is life insurance;(4)Failing to make, at the time of sale or offer to an individual known to be a service member, the written disclosures required by section 10 of the Military Personnel Financial Services Protection Act, Pub. L. No. 109-290, as of January 1, 2008; or(5)Excluding individually issued annuities, if the sale is conducted in-person face-to-face with an individual known to be a service member, failing to provide the applicant at the time the application is taken:(a)An explanation of any free look period with instructions on how to cancel if a policy is issued; and(b)Either a copy of the application or a written disclosure. The copy of the application or the written disclosure shall clearly and concisely set out the type of life insurance, the death benefit applied for and its expected first year cost. A basic illustration that meets the requirements as adopted by rule pursuant to 58-33-5.1 is sufficient to meet this requirement for a written disclosure. Source: SL 2008, ch 272, 12.
58-33-129. Certain additional life insurance sales practices considered false, misleading, deceptive, or unfair.The following acts or practices by an insurer or insurance producer with respect to the sale of certain life insurance products are declared to be false, misleading, deceptive, or unfair:(1)Excluding individually issued annuities, recommending the purchase of any life insurance product which includes a side fund to a service member in pay grades E-4 and below unless the insurer has reasonable grounds for believing that the life insurance death benefit, standing alone, is suitable;(2)Offering for sale or selling a life insurance product which includes a side fund to a service member in pay grades E-4 and below who is currently enrolled in Servicemembers' Group Life Insurance (SGLI), is presumed unsuitable unless, after the completion of a needs assessment, the insurer demonstrates that the applicant's SGLI death benefit, together with any other military survivor benefits, savings and investments, survivor income, and other life insurance are insufficient to meet the applicant's insurable needs for life insurance;For the purposes of this subdivision, insurable needs, are the risks associated with premature death taking into consideration the financial obligations and immediate and future cash needs of the applicant's estate and survivors or dependents.For the purposes of this subdivision, other military survivor benefits, include the death gratuity, funeral reimbursement, transition assistance, survivor and dependents' educational assistance, dependency and indemnity compensation, federal TRICARE health care benefits, survivor housing benefits and allowances, federal income tax forgiveness, and social security survivor benefits; or(3)Excluding individually issued annuities, offering for sale or selling any life insurance contract which includes a side fund:(a)Unless interest credited accrues from the date of deposit to the date of withdrawal and permits withdrawals without limit or penalty;(b)Unless the applicant has been provided with a schedule of effective rates of return based upon cash flows of the combined product. For this disclosure, the effective rate of return shall consider all premiums and cash contributions made by the policyholder and all cash accumulations and cash surrender values available to the policyholder in addition to life insurance coverage. This schedule shall be provided for at least each policy year from one to ten and for every fifth policy year thereafter ending at age one hundred, policy maturity, or final expiration; and(c)Which by default diverts or transfers funds accumulated in the side fund to pay, reduce or offset any premiums due;(4)Excluding individually issued annuities, offering for sale or selling any life insurance contract which after considering all policy benefits, including endowment, return of premium, or persistency, does not comply with standard nonforfeiture law for life insurance; or(5)Selling any life insurance product to a person known to be a service member that excludes coverage if the insured's death is related to war, declared or undeclared, or any act related to military service except for an accidental death coverage, which may be excluded. Source: SL 2008, ch 272, 13.
58-33-13.1. Sex or marital status discrimination prohibited--Exceptions.An insurance contract may not be denied to an insured or prospective insured on the basis of his or her sex or marital status. The amount of benefits payable, or any term, conditions, or type of coverage shall not be restricted, modified, excluded, or reduced on the basis of the sex or marital status of the insured or prospective insured except to the extent the amount of benefits, term, conditions, or type of coverage vary as a result of the application of rate differentials permitted under this title. However, an insurer may take marital status into account for the purpose of defining persons eligible for dependents benefits. This section shall not affect the right of fraternal benefit societies to determine eligibility requirements for membership. This section shall apply to all contracts delivered or issued for delivery in this state by an insurer on or after July 1, 1980 and to all existing group contracts which are amended on or after July 1, 1980. Source: SL 1979, ch 341, 19, 20.
58-33-13.2. Definition of sex or marital status discrimination terms.When used in this section and 58-33-13.1:(1)"Contract" means any insurance policy, plan, or binder, including any rider or endorsement thereto offered by an insurer;(2)"Insurer" means any insurance company, association, reciprocal or inter-insurance exchange, nonprofit hospital plan, nonprofit professional health service plan, health maintenance organization, fraternal benefit society, or beneficial association. Source: SL 1979, ch 341, 17, 18.
58-33-13.3. Domestic violence victim discrimination prohibited.No insurer may ask any questions about an individual's status as a victim of domestic violence for the purposes of offering, selling, or renewing coverage; limiting coverage; or charging a rate different from that normally charged for the same coverage under any life or health insurance policy. Source: SL 2010, ch 243, 1.
58-33-13. Unfair discrimination as misdemeanor--Health insurance.No person may make or permit any unfair discrimination between individuals of the same class and of essentially the same hazard in the amount of premium, policy fees, or rates charged for any policy or contract of health insurance or in the benefits payable thereunder, or in any of the terms or conditions of such contract, or in any other manner whatever. Violation of this section is a Class 2 misdemeanor. Nothing in this section prohibits different rates charged, or benefits payable, or different underwriting procedures used for individuals insured under a franchise plan or provided discounts based upon administrative savings or incentives for additional family members to purchase insurance. Source: SL 1966, ch 111, ch 13, 12 (2); SL 1978, ch 359, 2; SL 2000, ch 241, 3.
58-33-130. Promulgation of rules.The director may, by rules promulgated pursuant to chapter 1-26, adopt:(1)Revisions of the Internal Revenue Code and the regulations promulgated pursuant thereto which are in substantial compliance with the intent of subdivisions 58-33-119(6) and (7);(2)Revisions of the Employee Retirement and Income Security Act which are in substantial compliance with the intent of subdivision 58-33-119(7);(3)Revisions or replacement forms or instructions from the Department of Defense which are in substantial compliance with the intent of 58-33-120 and 58-33-122; and(4)Revisions of the Military Personnel Financial Services Protection Act which are in substantial compliance with the intent of subdivision 58-33-128(4). Source: SL 2008, ch 272, 14.
58-33-131. Employer insurance assistance program defined.For purposes of 58-33-132 to 58-33-134, inclusive, the term, employer insurance assistance program, means a service, which is directly related to insurance purchased by an employer, that enhances that employer's ability to purchase insurance or assists in the administration of any insurance purchased by the employer. Source: SL 2009, ch 270, 1.
58-33-132. Construction with statutes regarding rebates, discounts, and special advantages.Nothing in 58-33-14 or 58-33-24 may be construed to prohibit the offering of an employer insurance assistance program by an insurance agent or an insurer to an employer if the employer insurance assistance program complies with 58-33-133 and 58-33-134. Source: SL 2009, ch 270, 2.
58-33-133. Employer insurance assistance program offerings to be in writing--Certain monetary payments prohibited.No employer insurance assistance program may be offered by an agent unless the program is specified in writing to the employer. The employer assistance program may not consist of any monetary payments made to the employer or made on behalf of the employer for the purchase of insurance or any other goods or services. Source: SL 2009, ch 270, 3.
58-33-134. Promulgation of rules for employer insurance assistance programs.The director may promulgate rules pursuant to chapter 1-26 to establish standards for employer insurance assistance programs consistent with the provisions of 58-33-131 to 58-33-133, inclusive. The rules shall be limited to:(1)Definition of terms;(2)Employer insurance assistance program content and marketing; and(3)Exceptions. Source: SL 2009, ch 270, 4.
58-33-135. Unfair or deceptive practices by pharmacy benefits manager.The following acts or practices by a pharmacy benefits manager are declared to be false, misleading, deceptive, or unfair:(1)Prohibiting a pharmacist or pharmacy for providing cost-sharing information on the amount that a covered individual may pay for a particular prescription drug by a pharmacist or pharmacy; or(2)Penalizing a pharmacist or pharmacy for providing cost-sharing information on the amount that a covered individual may pay for a particular prescription drug by a pharmacist or pharmacy. Source: SL 2018, ch 281, 2.
58-33-14. Rebate as misdemeanor--Life, disability and annuity contracts.Except as otherwise provided by law, no person shall knowingly permit or offer to make or make any contract of life insurance, life annuity or health insurance, or agreement as to such contract other than is plainly expressed in the contract issued thereon, or pay or allow, or give or offer to pay, allow, or give, directly or indirectly, as inducement to such insurance, or annuity, any rebate of premiums payable on the contract, or any special favor or advantage in the dividends or other benefits thereon, or any paid employment or contract for services of any kind, or any valuable consideration or inducement whatever not specified in the contract; or directly or indirectly give or sell, or purchase or offer or agree to give, sell, purchase, or allow as inducement to such insurance or annuity or in connection therewith, and whether or not to be specified in the policy or contract, any agreement of any form or nature promising returns and profits, or any stocks, bonds, or other securities, or interest present or contingent therein or as measured thereby, of any insurance company or other corporation, association, or partnership, or any dividends or profits accrued or to accrue thereon; or offer, promise or give anything of value whatsoever not specified in the contract. Violation of this section is a Class 2 misdemeanor. Source: SL 1966, ch 111, ch 13, 13; SL 1978, ch 359, 2.
58-33-15. Insurance not to be used to induce purchases of commodities or services--Misdemeanor.No insurer may, directly or indirectly through its insurance producers or representatives, participate in any plan to offer or effect any kind or kinds of life insurance, health insurance, property insurance, casualty insurance, surety insurance, or annuities in this state as an inducement to, or in combination with, the purchase by the public of any goods, securities, commodities, services, or subscriptions to periodicals, except upon the payment of a bona fide premium by the insured. Any violation of this section is a Class 2 misdemeanor. Source: SL 1966, ch 111, ch 13, 14 (1); SL 1967, ch 132; SL 1978, ch 359, 2; SL 2001, ch 286, 201.
58-33-16. Credit life insurance permitted as inducement for purchases.Section 58-33-15 shall not apply to insurance on the life of a debtor pursuant to or in connection with a specific loan or other credit transaction, or insurance on a debtor to provide indemnity for payments becoming due on a specific loan or other credit transaction while the debtor is disabled as defined in the policy. Source: SL 1966, ch 111, ch 13, 14 (2).
58-33-17. Bonus to policyholder from accumulated surplus on life or annuity policy not discrimination or rebate.Nothing in 58-33-14 and 58-33-15 shall be construed as including within the definition of discrimination or rebates, in the case of any contract of life insurance or life annuity, paying bonuses to policyholders or otherwise abating their premiums in whole or in part out of surplus accumulated from nonparticipating insurance, provided that any such bonuses, or abatement of premiums shall be fair and equitable to policyholders and for the best interests of its policyholders. Source: SL 1966, ch 111, ch 13, 15 (1).
58-33-18. Allowance to industrial policyholder for making payments to office of insurer permitted.Nothing in 58-33-14 and 58-33-15 shall be construed as including within the definition of discrimination or rebates, in the case of life insurance and health insurance policies issued on the industrial debit, preauthorized check, bank draft, or similar plans, making allowance to policyholders who have continuously for a specified period made premium payments directly to an office of the insurer or by preauthorized check, bank draft, or similar plans, in an amount which fairly represents the saving in collection expense. Source: SL 1966, ch 111, ch 13, 15 (2).
58-33-19. Readjustment of premium rate permitted for group policy based on loss or expense experience.Nothing in 58-33-14 and 58-33-15 shall be construed as including within the definition of discrimination or rebates, readjustment of the rate of premium for a group insurance policy based on the loss or expense experience thereunder, at the end of the first or any subsequent policy year of insurance thereunder, which may be made retroactive only for such policy year. Source: SL 1966, ch 111, ch 13, 15 (3).
58-33-2. Unfair method or deceptive act as misdemeanor.No person shall engage in this state in any trade practice which is defined in this chapter as, or determined pursuant to this chapter to be, an unfair method of competition or an unfair or deceptive act or practice in the business of insurance. Violation of this section is a Class 2 misdemeanor. Source: SL 1966, ch 111, ch 13, 2; SL 1978, ch 359, 2.
58-33-20. Reduction of premium rate permitted for large policies.Nothing in 58-33-14 and 58-33-15 shall be construed as including within the definition of discrimination or rebates, reduction of premium rate for policies of large amount but not exceeding savings in issuance and administration expenses reasonably attributable to such policies as compared with policies of similar plan issued in smaller amounts. Source: SL 1966, ch 111, ch 13, 15 (4).
58-33-21. Reduced rate permitted for life or health insurance policies or annuity contracts on payroll deduction plan.Nothing in 58-33-14 and 58-33-15 shall be construed as including within the definition of discrimination or rebates, issuing life or health insurance policies or annuity contracts on a salary savings or payroll deduction plan or other distribution plan at reduced rate reasonably commensurate with the savings made by the use of such plan. Source: SL 1966, ch 111, ch 13, 15 (5).
58-33-22. Increase in health insurance benefits by maintaining policy in force permitted.Nothing in 58-33-14 and 58-33-15 shall be construed as including within the definition of discrimination or rebates, issuance of health insurance policies which provide for increases in benefits to policyholders who maintain their policies continuously in force without lapse for specified periods. Source: SL 1966, ch 111, ch 13, 15 (6).
58-33-23. Life insurance benefits paid to beneficiary--Payment to tradesman or businessman as misdemeanor--Use of life insurance to pay costs of funeral--Fraternal benefit societies.All life insurance benefits shall be paid in cash to the beneficiary. No insurer engaged in the business of life insurance shall contract to pay or pay such insurance benefits to any funeral director, undertaker, or undertaking business. Violation of this section is a Class 2 misdemeanor. This section does not prohibit an insurer from paying life insurance benefits to a funeral director, undertaker, or undertaking business, whether or not an assignment of the policy has been made pursuant to 58-11-36, if the insurer makes the payment pursuant to an assignment made by the beneficiary of the insurance benefits to a person or entity which performed burial or funeral services for the insured or contracted after the death of the insured to perform burial or funeral services for the insured. If the cost of the burial or funeral services performed is less than the benefit amount to be paid under the life insurance policy, the insurer shall pay the excess to the named beneficiary in accordance with the terms of the contract.This section does not prohibit a fraternal benefit society from paying the proceeds of a life insurance policy in accordance with the provisions of 58-37A-17. An insurer that is not a fraternal benefit society may pay the proceeds of a life insurance policy in the same manner and subject to the same restrictions as provided for by 58-37A-17. Source: SL 1966, ch 111, ch 13, 22; SL 1978, ch 359, 2; SL 1995, ch 290; SL 2005, ch 278, 2. 
58-33-24. Rebate, discount, or special advantage as misdemeanor--Exception.No insurer or any employee or representative thereof, and no insurance producer may pay, allow, or give, or offer to pay, allow or give, directly or indirectly, as an inducement to insurance, or after insurance has been effected, any rebate, discount, abatement, credit, or reduction of the premium named in the policy of insurance, or any special favor or advantage in the dividends or other benefits to accrue thereon, or any valuable consideration or inducement whatever, not specified in the policy, except to the extent provided for in an applicable filing with the director as provided by law. Any violation of this section is a Class 2 misdemeanor. Source: SL 1966, ch 111, ch 13, 16 (1); SL 1978, ch 359, 2; SL 2001, ch 286, 202.
58-33-25. Acceptance by insured of rebate, discount or special advantage as misdemeanor.No insured named in a policy, nor any employee of such insured shall knowingly receive or accept directly or indirectly, any such rebate, discount, abatement, credit or reduction of premium, or any such special favor or advantage or valuable consideration or inducement. Violation of this section is a Class 2 misdemeanor. Source: SL 1966, ch 111, ch 13, 16 (2); SL 1978, ch 359, 2.
58-33-26. Unfair discrimination as to terms and conditions of insurance as misdemeanor.No insurer shall make or permit any unfair discrimination between insureds or property having like insuring or risk characteristics, in the premium or rates charged for insurance, or in the dividends or other benefits payable thereon, or in any other of the terms and conditions of the insurance. Violation of this section is a Class 2 misdemeanor. Source: SL 1966, ch 111, ch 13, 16 (3); SL 1978, ch 359, 2.
58-33-27. Compensation to insurance producers permitted--Allowance or return of dividends, savings, or unabsorbed premium deposits permitted.Nothing in 58-33-24 to 58-33-26, inclusive, prohibits the payment of commissions or other compensation to duly licensed insurance producers, or prohibits any insurer from allowing or returning to its participating policyholders, members or subscribers, lawful dividends, savings, or unabsorbed premium deposits. Source: SL 1966, ch 111, ch 13, 16 (4); SL 2001, ch 286, 203.
58-33-3. Acts constituting unfair methods of competition and unfair or deceptive practices.The following are hereby defined as unfair methods of competition and unfair and deceptive acts or practices in the business of insurance, viz: The commission of any one or more of the acts prohibited by 58-33-4 to 58-33-37, inclusive. Source: SL 1966, ch 111, ch 13, 3.
58-33-30. Provisions not applicable to life or health insurance or annuities.Sections 58-33-24 to 58-33-27, inclusive, do not apply to life insurance, health insurance, or annuity contracts. Source: SL 1966, ch 111, ch 13, 16 (5), 21 (3); SL 1979, ch 341, 8.
58-33-31. Favored insurance producer or insurer as misdemeanor.No person may require as a condition precedent to loaning money upon the security of any real or personal property, or to the renewal or extension of any loan or mortgage, or to the selling of any property under contract, that the owner of the property to whom the money is to be loaned, or the vendee of the property being sold, shall place, continue, or renew any policy of insurance covering or to cover such property or covering any liability relating to such property or the use thereof, through a particular insurance producer or in a particular insurer or type of insurer or insurance producer. However, this provision does not prevent the reasonable exercise by any such the lender or vendor of the right to approve or disapprove of the insurer selected to underwrite the insurance on a reasonably nondiscriminatory basis. Any violation of this section is a Class 2 misdemeanor. Source: SL 1966, ch 111, ch 13, 18; SL 1978, ch 359, 2; SL 2001, ch 286, 204.
58-33-32. Boycott, coercion, or intimidation as misdemeanor.No persons shall enter into any agreement to commit, or by any concerted action commit, any act of boycott, coercion, or intimidation resulting in or tending to result in unreasonable restraint of, or monopoly in, the business of insurance. Violation of this section is a Class 2 misdemeanor. Source: SL 1966, ch 111, ch 13, 9; SL 1978, ch 359, 2.
58-33-33. Interlocking ownership or management permitted.Any insurer may retain, invest in or acquire the whole or any part of the capital stock of any other insurer or insurers, or have a common management with any other insurer or insurers, unless such retention, investment, acquisition, or common management is inconsistent with any other provision of this title, or unless by reason thereof the business of such insurers with the public is conducted in a manner which substantially lessens competition generally in the insurance business or tends to create a monopoly therein. Source: SL 1966, ch 111, ch 13, 19 (1).
58-33-34. Directorship in two or more insurers permitted.Any person otherwise qualified may be director of two or more insurers which are competitors, unless the effect thereof is to lessen substantially competition between insurers generally or tends materially to create a monopoly. Source: SL 1966, ch 111, ch 13, 19 (2).
58-33-35. Collection of premium for insurance not provided as misdemeanor.No person shall willfully collect any sum as premium or charge for insurance, which insurance is not then provided or is not in due course to be provided, subject to acceptance of the risk by the insurer, by an insurance policy issued by an insurer as authorized by this title. Violation of this section is a Class 2 misdemeanor. Source: SL 1966, ch 111, ch 13, 20 (1); SL 1978, ch 359, 2.
58-33-36. Illegal dealing in premiums and improper charges as misdemeanors.No person may willfully collect as premium or charge for insurance any sum in excess of or less than the premium or charge applicable to such insurance, and as specified in the policy in accordance with the applicable classifications and rates as filed with and approved by the director; or, in cases where classifications, premiums, or rates are not required by this title to be so filed and approved, such premiums and charges may not be in excess of or less than those specified in the policy and as fixed by the insurer. Any violation of this section is a Class 2 misdemeanor. This section does not prohibit the charging and collection, by surplus line brokers licensed under chapter 58-32, of the amount of applicable state and federal taxes in addition to the premium required by the insurer. Nor does it prohibit the charging and collection, by a life insurer, of amounts actually to be expended for medical examination of an applicant for life insurance or for reinstatement of a life insurance policy. Source: SL 1966, ch 111, ch 13, 20 (2); SL 1978, ch 359, 2; SL 2001, ch 286, 205.
58-33-37.1. Aggregation of false claims or applications committed pursuant to one course of conduct.Amounts involved in false claims or applications for insurance committed pursuant to one scheme or course of conduct, whether from the same person or several persons, may be aggregated in determining the degree of the offense under 58-33-37. Source: SL 1977, ch 416, 1.
58-33-37. False application as misdemeanor--False claim or proof of loss as misdemeanor or felony.Any person who knowingly makes any false or fraudulent statement or representation with reference to any application for insurance is guilty of a Class 1 misdemeanor. Any person who knowingly presents or causes to be presented a false or fraudulent claim for the purpose of obtaining any money or benefit, or who submits any proof in support of such a claim for the payment of a loss upon a contract of insurance, or who prepares, makes, or subscribes a false or fraudulent account, certificate, affidavit or proof of loss, or other document or writing, with intent that the same may be presented or used in support of such a claim, is guilty of a Class 2 misdemeanor if such claim is for an amount of four hundred dollars or less; a Class 1 misdemeanor if such claims is for an amount greater than four hundred dollars and less than one thousand dollars; and a Class 4 felony if such claim is one thousand dollars or greater. Source: SL 1966, ch 111, ch 13, 23; SL 1977, ch 416, 2; SL 1999, ch 241, 18; SL 2006, ch 130, 21.
58-33-38. Undefined unfair or deceptive practice--Findings by director.If the director believes that any person engaged in the insurance business is engaging in this state in any method of competition or in any act or practice in the conduct of such business which is not defined in this chapter, but that such method of competition is unfair or that such act or practice is unfair or deceptive and that a proceeding by him in respect thereto would be in the public interest, he shall, after a hearing of which notice of the hearing and of the charges against him are given such person, make a written report of his findings of fact relative to such charges and serve a copy thereof upon such person and any intervener at the hearing. Source: SL 1966, ch 111, ch 13, 5 (1).
58-33-39. Action to restrain violation found by director--Record of hearing received in evidence.If such report charges a violation of this chapter and if such method of competition, act or practice has not been discontinued, the director may, through the attorney general of this state, at any time after the service of such report cause an action to be instituted to enjoin and restrain such person from engaging in such method, act, or practice. In such action the court may grant a restraining order or injunction upon such terms as may be just and the director shall not be required to give security before the issuance of any such order or injunction. If a stenographic record of the hearing before the director was made, a certified transcript thereof including all evidence taken and the report and findings shall be received in such action. Source: SL 1966, ch 111, ch 13, 5 (2).
58-33-4. Use of misleading name as misdemeanor.No person who is not an insurer shall assume or use any name which deceptively infers or suggests that he is an insurer. Violation of this section is a Class 2 misdemeanor. Source: SL 1966, ch 111, ch 13, 24; SL 1978, ch 359, 2.
58-33-40. Cease and desist order of director.If, after a hearing thereon of which notice of the hearing and of the charges against him were given such person, the director of the Division of Insurance finds that any person in this state has engaged or is engaging in any act or practice defined in or prohibited under this chapter, the director may order the person to permanently cease and desist from the acts or practices. Source: SL 1966, ch 111, ch 13, 4 (1); SL 1985, ch 385, 2.
58-33-41. Appeal from director's order.If the director's report made under 58-33-38, or order on hearing made under 58-33-40 does not charge a violation of this chapter, then any intervener in the proceedings may appeal therefrom within the time and in the manner provided in chapter 1-26. Source: SL 1966, ch 111, ch 13, 5 (3).
58-33-42. Finality of cease and desist order--Appeal by intervener.A cease and desist order pursuant to 58-33-40 shall become final upon expiration of the time allowed for appeals from the director's orders, if no such appeal is taken, or, in event of such an appeal, upon final decision of the court if the court affirms the director's order or dismisses the appeal. An intervener in such hearing shall have the right to appeal as provided in 58-33-41. Source: SL 1966, ch 111, ch 13, 4 (2).
58-33-43. Affirmance of order of director--Order of court for obedience.In the event of such appeal, to the extent that the director's order is affirmed, the court shall issue its own order commanding obedience to the terms of the director's order. Source: SL 1966, ch 111, ch 13, 4 (3).
58-33-44. Liabilities and penalties not relieved by director's or court order.No order of the director pursuant to 58-33-40 or order of court to enforce it shall in any way relieve or absolve any person affected by such order from any other liability, penalty, or forfeiture under law. Source: SL 1966, ch 111, ch 13, 4 (4).
58-33-45. Violation of desist order as misdemeanor.A violation of a desist order authorized by this chapter is a Class 2 misdemeanor. Source: SL 1966, ch 111, ch 13, 4 (5); SL 1978, ch 359, 2; SL 1990, ch 158, 27.
58-33-46.1. Civil action for damages resulting from unfair or prohibited act--Attorneys' fees.Any person who claims to have been damaged by any act or practice declared to be unlawful by this chapter shall be permitted to bring a civil action for the recovery of all actual and consequential damages suffered as a result of such act or practice including reasonable attorneys' fees to be set by the court. Source: SL 1974, ch 319.
58-33-46. Imposition of penalty not prevented by cease and desist order.Sections 58-33-40 to 58-33-45, inclusive, shall not be deemed to affect or prevent the imposition of any penalty provided by this title or by other law for violation of any other provision of this chapter, whether or not any such hearing is called or held or such desist order issued. Source: SL 1966, ch 111, ch 13, 4 (6).
58-33-47. Process against unauthorized insurers for false advertising--Purpose of provisions.The purpose of 58-33-47 to 58-33-57, inclusive, is to subject to the jurisdiction of the director and to the jurisdiction of the courts of this state insurers not authorized to transact business in this state which place in or send into this state any false advertising designed to induce residents of this state to purchase insurance from insurers not authorized to transact business in this state. The Legislature declares it is in the interest of the citizens of this state who purchase insurance from insurers which solicit insurance business in this state by false advertising that such insurers be subject to the provisions of 58-33-47 to 58-33-57, inclusive. In furtherance of such state interest, the Legislature herein provides a method of substituted service of process upon such insurers and declares that in so doing, it exercises its power to protect its residents and also exercises powers and privileges available to the state by virtue of Public Law 15, 79th Congress of the United States, Chapter 20, 1st Session, S. 340, which declares that the business of insurance and every person engaged therein shall be subject to the laws of the several states; the authority provided herein to be in addition to any existing powers of this state. Source: SL 1966, ch 111, ch 13, 26 (1).
58-33-48. Definition of terms.When used in 58-33-47 to 58-33-57, inclusive:(1)"Residents" shall mean and include any person, partnership or corporation, domestic, alien or foreign.(2)"Unfair Trade Practice Act" shall mean 58-33-1 to 58-33-46.1, inclusive, relating to unfair methods of competition and unfair and deceptive acts and practices in the business of insurance. Source: SL 1966, ch 111, ch 13, 27.
58-33-49. Unlawful advertising by unauthorized insurer as misdemeanor--Notice to insurance supervisory official of domiciliary state.No unauthorized foreign or alien insurer of the kind described in 58-33-47 shall make, issue, circulate, or cause to be made, issued, or circulated, to residents of this state any estimate, illustration, circular, pamphlet, or letter, or cause to be made in any newspaper, magazine, or other publication or over any radio or television station, any announcement or statement to such residents misrepresenting its financial condition or the terms of any contracts issued or to be issued or the benefits or advantages promised thereby, or the dividends or share of the surplus to be received thereon in violation of the Unfair Trade Practice Act. Violation of this section is a Class 2 misdemeanor. Whenever the director shall have reason to believe that any such insurer is engaging in such unlawful advertising, it shall be his duty to give notice of such fact by registered or certified mail to such insurer and to the insurance supervisory official of the domiciliary state of such insurer. For the purpose of this section, the domiciliary state of an alien insurer shall be deemed to be the state of entry or the state of the principal office in the United States. Source: SL 1966, ch 111, ch 13, 28; SL 1978, ch 359, 2; SL 1982, ch 28, 18.
58-33-5.1. Rules to promote proper disclosure of terms and conditions of life insurance policies.The director of insurance shall promulgate rules pursuant to chapter 1-26 to promote the proper disclosure of the terms and conditions of life insurance policies and to prohibit the misrepresentation of life insurance policies through the establishment of minimum standards for the advertisement and solicitation of life insurance. The rules shall provide for illustration formats, prescribe standards to be followed when illustrations are used, and specify the disclosures that are required in connection with illustrations. In setting the standards, the director shall consider the models adopted by the National Association of Insurance Commissioners, including the Life Insurance Illustrations Model Regulation. Source: SL 1997, ch 296, 1.
58-33-5. Misrepresentation or false advertising of policies as misdemeanor.No person shall make, issue, circulate, or cause to be made, issued, or circulated, any estimate, circular, or statement misrepresenting the terms of any policy issued or to be issued or the benefits or advantages promised thereby or the dividends or share of the surplus to be received thereon, or make any false or misleading statement as to the dividends or share of surplus previously paid on similar policies, or make any misleading representation or any misrepresentation as to the financial condition of any insurer, or as to the legal reserve system upon which any life insurer operates, or use any name or title of any policy or class of policies misrepresenting the true nature thereof. Violation of this section is a Class 2 misdemeanor. Source: SL 1966, ch 111, ch 13, 6; SL 1978, ch 359, 2.
58-33-50. Action by director on failure of insurer to cease false advertising after notice.If after thirty days following the giving of the notice mentioned in 58-33-49 such insurer has failed to cease making, issuing, or circulating such false misrepresentations or causing the same to be made, issued or circulated in this state, and if the director has reason to believe that a proceeding by him in respect to such matters would be to the interest of the public, and that such insurer is issuing or delivering contracts of insurance to residents of this state or collecting premiums on such contracts or doing any of the acts enumerated in 58-33-49, he shall take action against such insurer under the Unfair Trade Practice Act. Source: SL 1966, ch 111, 13, 29.
58-33-51. Acts constituting appointment of director as process agent.Any of the following acts in this state, effected by mail or otherwise, by any such unauthorized foreign or alien insurer:(1)The issuance or delivery of contracts of insurance to residents of this state;(2)The solicitation of applications for such contracts;(3)The collection of premiums, membership fees, assessments, or other considerations for such contracts; or(4)Any other transaction of insurance business;is equivalent to and shall constitute an appointment by such insurer of the director to be its true and lawful attorney upon whom may be served all statements of charges, notices and lawful process in any proceedings instituted in respect to the misrepresentations set forth in 58-33-49 under the provisions of the Unfair Trade Practice Act, or in any action, suit, or proceeding for the recovery of any penalty therein provided, and any such act shall be signification of its agreement that such service of statement of charges, notices, or process is of the same legal force and validity as personal service of such statement of charges, notices, or process in this state, upon such insurer. Source: SL 1966, ch 111, ch 13, 30 (1).
58-33-52. Service of process on director, copies delivered--Mailing of copy to defendant.Service of a statement of charges and notices under said Unfair Trade Practice Act shall be made by delivering to and leaving with the director or some person in apparent charge of his office, two copies thereof. Service of process issued by any court in any action, suit, or proceeding to collect any penalty under said Unfair Trade Practice Act shall be made by delivering and leaving with the director, or some person in apparent charge of his office, two copies thereof. The director shall forthwith cause to be mailed by registered or certified mail one of the copies of such statement of charges, notices, or process to the defendant at its last known principal place of business, and shall keep a record of all statements of charges, notices, and process so served. Such service of statement of charges, notices, and process shall be sufficient provided they shall have been so mailed and the defendant's receipt or receipt issued by the post office with which the letter is registered or certified, showing the name of the sender of the letter and the name and address of the person to whom the letter is addressed, and the affidavit of the person mailing such letter showing a compliance herewith are filed with the director in the case of any statement of charges or notices, or with the clerk of the court in which such action is pending in the case of any process, on or before the date the defendant is required to appear or within such further time as the court may allow. Source: SL 1966, ch 111, ch 13, 30 (2); SL 1982, ch 28, 18.
58-33-53. Service of process on agent of insurer.Service of statement of charges, notices, and process in any such proceeding, action, or suit shall in addition to the manner provided in 58-33-52 be valid if served upon any person within this state who on behalf of such insurer is:(1)Soliciting insurance; or(2)Making, issuing, or delivering any contract of insurance; or(3)Collecting or receiving in this state any premium for insurance;and if a copy of such statement of charges, notices, or process is sent within ten days thereafter by registered or certified mail by or on behalf of the director to the defendant at the last known principal place of business of the defendant, and the defendant's receipt, or the receipt issued by the post office with which the letter is registered or certified, showing the name of the sender of the letter, the name and address of the person to whom the letter is addressed, and the affidavit of the person mailing the same showing a compliance herewith, are filed with the director in the case of any statement of charges or notices, or with the clerk of the court in which such action is pending in the case of any process, on or before the date the defendant is required to appear or within such further time as the court may allow. Source: SL 1966, ch 111, ch 13, 30 (3); SL 1982, ch 28, 18.
58-33-54. Additional method of service of process and notice.Service of process and notice under the provisions of this title shall be in addition to all other methods of service provided by law, and nothing in this chapter shall limit or prohibit the right to serve any statement of charges, notices, or process upon an insurer in any other manner now or hereafter permitted by law. Source: SL 1966, ch 111, ch 13, 30 (5).
58-33-55. Waiting period before entry of default order or judgment.No cease or desist order or judgment by default under 58-33-51 to 58-33-53, inclusive, shall be entered until the expiration of thirty days from the date of the filing of the affidavit of compliance. Source: SL 1966, ch 111, ch 13, 30 (4).
58-33-56. Liberal construction of process provisions.The provisions of 58-33-47 to 58-33-57, inclusive, shall be liberally construed. Source: SL 1966, ch 111, ch 13, 26 (2).
58-33-57. Severability of provisions.If any provision of this chapter or the application thereof to any person or circumstances is held invalid, such invalidity shall not affect other provisions or application of the chapter which can be given effect without the invalid provision or application, and to this end the provisions of this chapter are declared to be severable. Source: SL 1966, ch 111, ch 13, 31.
58-33-58. Citation of provisions for process against unauthorized insurers for false advertising.Sections 58-33-47 to 58-33-57, inclusive, may be cited as the Unauthorized Insurers False Advertising Process Act. Source: SL 1966, ch 111, ch 13, 25.
58-33-59. Cancellation of insurance--Definitions.Terms, used in this section and 58-33-60 to 58-33-65, inclusive, mean:(1)"Cancellation," termination by the insurer of insurance coverage in whole or in part during the policy term. A policy with no fixed expiration date is considered a policy period or term of one year;(2)"Insurance," includes those policies of insurance defined in 58-9-5 to 58-9-27, inclusive;(3)"Nonpayment of premium," the failure of the named insured to discharge any obligation in connection with the payment of premiums on policies of insurance subject to this section and 58-33-60 to 58-33-65, inclusive, whether such payments are directly payable to the insurer or its insurance producer or indirectly payable under a premium finance plan or extension of credit. Source: SL 1985, ch 392, 1; SL 1986, ch 27, 54; SL 1999, ch 259, 1; SL 2001, ch 286, 206.
58-33-6. False information or advertising as misdemeanor.No person shall make, publish, disseminate, circulate, or place before the public, or cause, directly or indirectly, to be made, published, disseminated, circulated, or placed before the public, in a newspaper, magazine, or other publication, or in the form of a notice, circular, pamphlet, letter, or poster, or over any radio or television station, or in any other way, an advertisement, announcement, or statement containing any assertion, representation, or statement with respect to the business of insurance or with respect to any person in the conduct of his insurance business, which is untrue, deceptive, or misleading. Violation of this section is a Class 2 misdemeanor. Source: SL 1966, ch 111, ch 13, 7; SL 1978, ch 359, 2.
58-33-60. Notice of cancellation required--Time--Contents.A notice of cancellation of insurance coverage by an insurer shall be mailed or delivered by the insurer to the named insured at least twenty days before the effective cancellation date and shall be accompanied by a written explanation of the specific reasons for the cancellation. Source: SL 1985, ch 392, 2; SL 1999, ch 259, 2.
58-33-61. Grounds for cancellation.After sixty days from the effective date of policy issuance a notice of cancellation may not be issued unless it is based upon at least one of the following reasons:(1)Nonpayment of premium;(2)Discovery of fraud or material misrepresentation made by or with the knowledge of the named insured in obtaining the policy, continuing the policy, or in presenting a claim under the policy;(3)Discovery of acts or omissions on the part of the named insured which increase any hazard insured against;(4)The occurrence of a change in the risk which substantially increases any hazard insured against after insurance coverage has been issued;(5)A violation of any local fire, health, safety, building, or construction regulation or ordinance with respect to any insured property or the occupancy thereof which substantially increases any hazard insured against;(6)A determination by the director of the Division of Insurance that the continuation of the policy would jeopardize a company's solvency or would place the insurer in violation of the insurance laws of this state;(7)Violation or breach by the insured of any policy terms or conditions; or(8)Such other reasons as are approved by the director of the Division of Insurance. Source: SL 1985, ch 392, 3; SL 1986, ch 421, 1.
58-33-62. Complaint of violation to division--Determination of reasonableness--Hearing.Upon a complaint alleging a violation of any provision of 58-33-59 to 58-33-65, inclusive, filed by a person with the Division of Insurance within sixty days after the cancellation date of the policy, the director of the Division of Insurance shall determine if the complaint is reasonably founded. If the director determines that the complaint is reasonably founded or otherwise has reason to believe that an insurer has engaged in practices that violate any provisions of 58-33-59 to 58-33-65, inclusive, a hearing on the matter shall be set pursuant to chapter 1-26. Source: SL 1985, ch 392, 4.
58-33-63. Reinstatement and money penalty for violation.If the director of the Division of Insurance determines in a final order that the insurer has violated any provision of 58-33-59 to 58-33-65, inclusive, the director shall require the insurer to reinstate insurance coverage to the end of the policy period. The director may also assess a money penalty against an insurer for each violation of any provision of 58-33-59 to 58-33-65, inclusive, in an amount set forth in 58-4-28.1 and may order the insurer to refrain from engaging in practices that violate the provisions of 58-33-59 to 58-33-65, inclusive. Source: SL 1985, ch 392, 5.
58-33-64. Immunity from liability for statements concerning cancellation.Except for knowingly supplying false information, there is no liability on the part of and no cause of action arises against the following persons for any communication giving notice of or specifying the reasons for a cancellation or for any statement made in connection with an attempt to discover or verify the existence of conditions that would provide grounds for cancellation of coverage under the provisions of 58-33-59 to 58-33-65, inclusive:(1)The director of the Division of Insurance;(2)Any insurer or its authorized representatives, insurance producers, or employees;(3)Any licensed insurance producer; or(4)Any person furnishing information to an insurer as to reasons for a cancellation. Source: SL 1985, ch 392, 6; SL 2001, ch 286, 207.
58-33-65.1. Private remedy or right of action prohibited.Nothing contained in 58-33-59 to 58-33-65, inclusive, may grant, or be construed to grant, any private remedy or right of action. Source: SL 1986, ch 421, 2.
58-33-65. Automobile policies exempt.Sections 58-33-59 to 58-33-64, inclusive, do not apply to the cancellation of automobile policies or coverages, as defined in 58-11-45. Source: SL 1985, ch 392, 7; SL 1988, ch 408.
58-33-66. Unfair or deceptive insurance practices.Unfair or deceptive acts or practices in the business of insurance include the following:(1)Failing to respond to an inquiry from or failing to supply documents requested by the Division of Insurance within twenty days of receipt of such inquiry or request;(2)Knowingly supplying the Division of Insurance with false, misleading, or incomplete information. Source: SL 1986, ch 422, 1; SL 1989, ch 439, 2.
58-33-67. Unfair or deceptive practices in dealing with insured.In dealing with the insured or representative of the insured, unfair or deceptive acts or practices in the business of insurance include, but are not limited to, the following:(1)Failing to acknowledge and act within thirty days upon communications with respect to claims arising under insurance policies and to adopt and adhere to reasonable standards for the prompt investigation of such claims;(2)Making claims payments to any claimant, insured, or beneficiary not accompanied by a statement setting forth the coverage under which the payments are being made;(3)Failing to promptly provide a reasonable explanation of the basis in the insurance policy in relation to the facts or applicable law for denial of a claim or for the offer of a compromise settlement;(4)Failing to promptly settle claims, where liability has become reasonably clear under one portion of the insurance policy coverage to influence settlements under other portions of the insurance policy coverage;(5)Requiring as a condition of payment of a claim that repairs to any damaged vehicle shall be made by a particular contractor or repair shop;(6)Failing to make a good faith assignment of the degree of contributory negligence in ascertaining the issue of liability;(7)Unless permitted by law and the insurance policy, refusing to settle a claim of an insured or claimant on the basis that the responsibility should be assumed by others. Source: SL 1986, ch 422, 2; SL 1989, ch 439, 3.
58-33-68. Factors considered in determining action taken against violator--Failure to remedy situation--Administrative action.The Division of Insurance, in interpreting and enforcing 58-33-66 and 58-33-67, shall consider all pertinent facts and circumstances to determine the severity and appropriateness of action to be taken in regard to any violation of 58-33-66 to 58-33-69, inclusive, including but not limited to, the following:(1)The magnitude of the harm to the claimant or insured;(2)Any actions by the insured, claimant, or insurer that mitigate or exacerbate the impact of the violation;(3)Actions of the claimant or insured which impeded the insurer in processing or settling the claim;(4)Actions of the insurer which increase the detriment to the claimant or insured. The director need not show a general business practice in taking administrative action for these violations.However, no administrative action may be taken by the director for a violation of this section unless the insurer has been notified of the violation and refuses to take corrective action to remedy the situation.Any administrative action taken by the director shall be pursuant to the provisions of chapter 1-26. Source: SL 1986, ch 422, 3.
58-33-69. No private right of action.Nothing in 58-33-66 to 58-33-69, inclusive, grants a private right of action. Source: SL 1986, ch 422, 4.
58-33-7. Defamation as misdemeanor.No person shall make, publish, disseminate, or circulate, directly or indirectly, or aid, abet, or encourage the making, publishing, disseminating, or circulating of any oral or written statement or any pamphlet, circular, article, or literature which is false, or maliciously critical of or derogatory to the financial condition of an insurer, or of an organization proposing to become an insurer, and which is calculated to injure any person engaged or proposing to engage in the business of insurance. Violation of this section is a Class 2 misdemeanor. Source: SL 1966, ch 111, ch 13, 8; SL 1978, ch 359, 2.
58-33-70. Definitions--Aftermarket crash parts.Terms used in 58-33-71 mean:(1)"Aftermarket crash part," a replacement for any of the nonmechanical sheet metal or plastic parts which generally constitute the exterior of a motor vehicle, including inner and outer panels;(2)"Installer," an individual who actually does the work of replacing or repairing parts of a motor vehicle;(3)"Insurer," an insurance company and any person authorized to represent the insurer with respect to a claim;(4)"Nonoriginal equipment manufacturer (non-OEM) aftermarket crash part," aftermarket crash parts not made for or by the manufacturer of the motor vehicle;(5)"Repair facility," any motor vehicle dealer, garage, body shop, or other commercial entity which undertakes the repair or replacement of those parts that generally constitute the exterior of a motor vehicle. Source: SL 1990, ch 408, 1.
58-33-71. Use of nonoriginal equipment manufacturer's aftermarket crash parts to repair vehicle--Consumer to be advised in writing--Estimate and disclosure document.No insurer may specify the use of non-OEM aftermarket crash parts in the repair of an insured's motor vehicle, nor may a repair facility or installer use non-OEM aftermarket parts to repair a vehicle, unless the consumer is advised in writing. In all instances where non-OEM aftermarket crash parts are intended for use by an insurer:(1)The written estimate shall clearly identify each such part; and(2)A disclosure document containing the following information in ten point type or larger type shall appear on or be attached to the insured's copy of the estimate: "This estimate has been prepared based on the use of crash parts supplied by a source other than the manufacturer of your motor vehicle. Warranties applicable to these replacement parts are provided by the manufacturer or distributor of these parts rather than the manufacturer of your vehicle."Any violation of this section shall be enforced through the provisions of this chapter and shall be enforced by the penalties provided for in this chapter. Source: SL 1990, ch 408, 3, 4.
58-33-74. Gifts for advertising or promotional programs.Nothing in this chapter prohibits a licensed insurer or its officers or employees or an insurance producer from giving to insureds, prospective insureds, or others for advertising purposes or promotional programs, any article of merchandise having an invoice value of not more than one hundred dollars. Source: SL 1992, ch 355; SL 2001, ch 286, 210; SL 2019, ch 215, 1.
58-33-75. Definitions.Terms used in 58-33-76 to 58-33-82, inclusive, mean:(1)"Authorized agency," the Department of Labor and Regulation, the attorney general, any state's attorney, any duly constituted criminal investigative department or agency of the United States, and any county or municipal law enforcement agency having investigative jurisdiction; and(2)"False or fraudulent claim, statement, or representation," any act of insurance fraud as defined by 58-33-37. Source: SL 1993, ch 368, 1; SL 2004, ch 17, 308; SL 2011, ch 1 (Ex. Ord. 11-1), 162, eff. Apr. 12, 2011.
58-33-76. Notification of suspected fraud.An insurer, or any person authorized to act on its behalf, which reasonably believes that a false or fraudulent claim, statement, or representation has occurred, may notify an authorized agency and provide it with all relevant information in its possession. Source: SL 1993, ch 368, 2.
58-33-77. Accessibility of information relevant to suspected fraud--Types of information.Upon request by an insurer to an authorized agency or by an authorized agency to an insurer, each may provide to the other, directly or through any person authorized to act on its behalf, all information relevant to any suspected false or fraudulent claim, statement, or representation, including the following information:(1)Insurance policy information relevant to an investigation, including any application for such a policy;(2)Available policy premium payment records;(3)History of previous claims made by an insured; and(4)Information relating to the investigation of any suspected insurance fraud, including statements of any person, proofs of loss and notice of loss. Source: SL 1993, ch 368, 3.
58-33-78. Time limit on information to and from authorized agency.An authorized agency accepting information from an insurer pursuant to 58-33-76 and 58-33-77 shall provide within thirty days of a written request therefor any information in its possession or control relevant to the suspected false or fraudulent claim, statement, or representation of which the insurer notified the agency. An authorized agency receiving information pursuant to 58-33-76 and 58-33-77 may release or provide any relevant information in its possession to any other authorized agency. Source: SL 1993, ch 368, 4.
58-33-79. Liability of supplier of information.Any insurer, authorized agency, or person authorized to act on their behalf, acting without bad faith or malice, who provides or receives information pursuant to 58-33-76 and 58-33-77 is not subject to criminal prosecution, civil penalty, or civil liability therefor, except in cases of perjury or insurance fraud. Source: SL 1993, ch 368, 5.
58-33-8. Twisting as misdemeanor.No person shall make or issue, or cause to be made or issued, any written or oral statement misrepresenting or making incomplete comparisons as to the terms, conditions, or benefits contained in any policy for the purpose of inducing or attempting or tending to induce a policyholder to lapse, forfeit, surrender, retain, exchange, or convert any insurance policy. Violation of this section is a Class 2 misdemeanor. Source: SL 1966, ch 111, ch 13, 17; SL 1978, ch 359, 2.
58-33-80. Liability of those who supply information or testify as to fraud.Any person acting without malice who provides information to, cooperates with or testifies pursuant to a subpoena for an authorized agency, an insurer, the National Association of Insurance Commissioners or any not-for-profit organization established to detect and prevent fraudulent insurance claims is not subject to criminal prosecution, civil penalty, or civil liability, except in cases of perjury or insurance fraud. Source: SL 1993, ch 368, 6.
58-33-81. Notification to policyholder of request for information.Notwithstanding the provisions of 58-33-76 to 58-33-77, inclusive, the authorized agency shall notify in writing, the policyholder of any request for information. Source: SL 1993, ch 368, 7.
58-33-82. Confidentiality of information regarding suspected fraud--Testimony by authorized agency personnel.Any authorized agency or insurer which receives any information furnished pursuant to 58-33-75 to 58-33-81, inclusive, shall hold the information in confidence until such time as its release is required pursuant to a criminal or civil proceeding. Any authorized agency, or its personnel, may be required to testify in any litigation in which the insurer at interest is named as a party. Source: SL 1993, ch 368, 8.
58-33-83. Refund of unearned life and health insurance premiums on canceled policy--Exceptions.If any life insurance policy or health insurance policy is canceled before its renewal date or expiration date, other than by the death of the insured, and the insured has paid premiums in advance on the policy, the insurer shall refund to the owner of the policy the unearned portion of the premiums paid beyond the end of the month in which the cancellation occurred.A cancellation of an automatic bank draft authorization does not constitute a request for cancellation of the policy. In the event of a cancellation of an automatic bank draft authorization without a request for cancellation of the policy, all applicable grace periods shall be provided.This section applies to all life insurance policies, except group life insurance policies, and to all health insurance policies, except medicare supplement policies as defined in 58-17A-1 and long term care policies as defined in 58-17B-2. Source: SL 1994, ch 372, 3; SL 1995, ch 291; SL 2010, ch 244, 1.
58-33-84. Refund of unearned life and health insurance premiums on canceled policy due to death of insured--Exceptions.If any life insurance policy or health insurance policy is canceled before its renewal date or expiration date because of the death of the insured and the premiums have been paid in advance on the policy, the insurer shall refund the unearned portion of the premiums paid beyond the end of the month in which the cancellation occurred to the named beneficiary or, if there is no named beneficiary, to the estate of the insured.This section applies to all life insurance policies, except group life insurance policies, and to all health insurance policies in effect on July 1, 1994, or issued thereafter. Source: SL 1994, ch 372, 4; SL 2010, ch 244, 2.
58-33-85. Health insurers prohibited from denying enrollment of dependent child on certain grounds.Any insurer subject to this chapter, including any group health plan, as defined in section 607(1) of the Employee Retirement Income Security Act of 1974, as amended to January 1, 1994, who are engaged in the business of health insurance is prohibited from denying enrollment of a dependent child under the health insurance coverage of either the child's natural, adoptive, or stepparents for any of the following reasons:(1)The child was born out of wedlock; or(2)The child is not claimed as a dependent on the parent's federal income tax return; or(3)The child does not reside with the parent or in the insurer's service area. Source: SL 1994, ch 387, 1; SL 2001, ch 274, 3.
58-33-86. Prohibitions against a health insurer from using information pertaining to medical assistance eligibility.Any insurer subject to this chapter who is engaged in the business of health insurance is prohibited from using information pertaining to medical assistance eligibility under Title XIX of the Social Security Act as amended to January 1, 1994, or any other state's equivalent medicaid program, as a factor in enrolling or underwriting any individual or in making payments for benefits to any individual or in making payments for benefits on behalf of a covered individual. Source: SL 1994, ch 387, 2.
58-33-87. Payments of health insurance benefits for medical assistance recipients.Any insurer subject to this chapter who is engaged in the business of health insurance shall provide that payment for benefits with respect to any participant who receives benefits from the Department of Social Services medical assistance program under Title XIX of the Social Security Act as amended to January 1, 1994, shall be made in accordance with the assignment of rights for medical support as required by 28-6-7.1 without additional restrictions or requirements as compared with any other agent or assignee of any other individual so covered by the insurer. Source: SL 1994, ch 387, 3.
58-33-88. Health insurance for dependent child through noncustodial parent's insurer.Any insurer subject to this chapter who is engaged in the business of health insurance is required in any case in which a dependent child has health insurance coverage through the insurer of the noncustodial parent to provide all information to the custodial parent as may be necessary for the child to obtain benefits provided by such coverage. The insurer shall accept and make direct payment on claims submitted by either the custodial parent, a provider who has received authorization from the custodial parent, or by the Department of Social Services if there is a valid order in effect for medical support for covered services rendered to a dependent child without approval or authorization of the noncustodial parent. Source: SL 1994, ch 387, 4.
58-33-89. Reporting regulatory activities and complaint handling.The Division of Insurance shall regularly report to the National Association of Insurance Commissioners regarding its regulatory activities and its complaint handling. The reports shall include information on all disciplinary actions taken and all consumer complaints received. In the reports the division shall, to the extent reasonably possible, use accepted National Association of Insurance Commissioners databases. The report may not be considered a public record open to inspection pursuant to 1-27-1. Source: SL 1995, ch 292, 1.
58-33-9. False entry with intent to deceive--Omission of true entry--Misdemeanor.No persons shall make any false entry in any book, report, or statement of any insurer with intent to deceive any agent or examiner lawfully appointed to examine into its condition or into any of its affairs, or any public official to whom such insurer is required by law to report, or who has authority by law to examine into its condition or into any of its affairs, or, with like intent, willfully omit to make a true entry of any material fact pertaining to the business of such insurer in any book, report, or statement of such insurer. Violation of this section is a Class 2 misdemeanor. Source: SL 1966, ch 111, ch 13, 10 (2); SL 1978, ch 359, 2.
58-33-90. Sale of securities by unregistered insurance producer prohibited.No insurance producer may offer or sell any security in this state unless the insurance producer is properly registered or exempt from registration pursuant to chapter 47-31B. Source: SL 2001, ch 287, 1; SL 2004, ch 278, 67.
58-33-91. Sale of unregistered securities by insurance producer prohibited.No insurance producer may offer or sell any security in this state unless the security is registered or exempt from registration pursuant to chapter 47-31B. Source: SL 2001, ch 287, 2; SL 2004, ch 278, 68.
58-33-92. Sale of unregistered business opportunity by insurance producer prohibited.No insurance producer may offer or sell any business opportunity in this state unless the business opportunity is registered or exempt from registration under chapter 37-25A. Source: SL 2001, ch 287, 3.
58-33-93. Definitions relating to multiple employer welfare arrangements.Terms used in 58-33-93 to 58-33-116, inclusive, mean:(1)"Admitted insurer," an insurer licensed to do an insurance business in this state including an entity authorized pursuant to 58-18-88, a health maintenance organization or nonprofit hospital, or medical service corporation under the laws of this state;(2)"Arrangement," a fund, trust, plan, program, or other mechanism by which a person provides, or attempts to provide, health care benefits;(3)"Employee leasing arrangement," a labor leasing, staff leasing, employee leasing, professional employer organization, contract labor, extended employee staffing or supply, or other arrangement, under contract or otherwise, whereby one business or entity represents that it leases or provides its workers to another business or entity;(4)"Employee welfare benefit plan" or "health benefit plan," a plan, fund, or program which is or was established or maintained by an employer or by an employee organization, or by both, to the extent that the plan, fund, or program is or was established or maintained for the purpose of providing for its participants or their beneficiaries, through the purchase of insurance or otherwise, medical, surgical or hospital care or benefits, or benefits in the event of sickness, accident, disability, death, or unemployment;(5)"Fully insured," for the health care benefits or coverage provided or offered by or through a health benefit plan or arrangement:(a)An admitted insurer is directly obligated by contract to each participant to provide all of the coverage under the plan or arrangement; and(b)The liability and responsibility of the admitted insurer to provide covered services or for payment of benefits is not contingent, and is directly to the individual employee, member, or dependent;(6)"Licensee," a person that is, or that is required to be, licensed or registered under the laws of this state as a producer, third party administrator, insurer, or preferred provider organization;(7)"MEWA," multiple employer welfare arrangement;(8)"MEWA contact," the individual or position designated by the division to be the MEWA contact as identified on the division web site;(9)"Nonadmitted insurer," an insurer not licensed to do insurance business in this state;(10)"Preferred provider organization," an entity that engages in the business of offering a network of health care providers, whether or not on a risk basis, to employers, insurers, or any other person who provides a health benefit plan including a managed care contractor registered or required to be registered pursuant to 58-17F-16;(11)"Producer," a person required to be licensed pursuant to chapter 58-30 of this state to sell, solicit, or negotiate insurance;(12)"Professional employer organization," an arrangement, under contract or otherwise, whereby one business or entity represents that it co-employs or leases workers to another business or entity for an ongoing and extended, rather than a temporary or project-specific, relationship;(13)"Third party administrator" or "administrator," has the meaning provided in chapter 58-29D. (SL 2012, ch 239, 1 provides: "The provisions of chapter 219 of the 2011 Session Laws shall be deemed repealed if the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010) is found to be unconstitutional in its entirety by a final decision of a federal court of competent jurisdiction and all appeals exhausted or time for appeals elapsed.") Source: SL 2007, ch 292, 1; SL 2011, ch 219, 99.
58-33-94. Acts constituting transaction of insurance business in or from state.For purposes of 58-33-93 to 58-33-116, inclusive, any of the following acts in this state effected by mail or otherwise by a nonadmitted insurer or by any person acting with the actual or apparent authority of the insurer, on behalf of the insurer, constitutes the transaction of an insurance business in or from this state:(1)The making of or proposing to make, as an insurer, an insurance contract;(2)The making of or proposing to make, as guarantor or surety, any contract of guaranty or suretyship as a vocation and not merely incidental to any other legitimate business or activity of the guarantor or surety;(3)The taking or receiving of an application for insurance;(4)The receiving or collection of any premium, commission, membership fees, assessments, dues, or other consideration for insurance or any part thereof;(5)The issuance or delivery in this state of contracts of insurance to residents of this state or to persons authorized to do business in this state;(6)The solicitation, negotiation, procurement, or effectuation of insurance or renewals thereof;(7)The dissemination of information as to coverage or rates, or forwarding of applications, or delivery of policies or contracts, or inspection of risks, the fixing of rates or investigation or adjustment of claims or losses or the transaction of matters subsequent to effectuation of the contract and arising out of it, or any other manner of representing or assisting a person or insurer in the transaction of risks with respect to properties, risks, or exposures located or to be performed in this state;(8)The transaction of any kind of insurance business specifically recognized as transacting an insurance business within the meaning of the statutes relating to insurance;(9)The offering of insurance; or(10)Offering an agreement or contract which purports to alter, amend or void coverage of an insurance contract.No provision of this section prohibits employees, officers, directors, or partners of a commercial insured from acting in the capacity of an insurance manager or buyer in placing insurance on behalf of the employer, if the person's compensation is not based on buying insurance. The venue of an act committed by mail is at the point where the matter transmitted by mail is delivered or issued for delivery or takes effect. Source: SL 2007, ch 292, 2.
58-33-95. Transacting of insurance defined.For the purposes of 58-33-93 to 58-33-116, inclusive, the term, transacting of insurance, includes:(1)Issuing a stop loss policy covering an employer located in this state. Stop loss policy coverage of an employer for claims incurred under the employer's self-funded health benefit plan is insurance, not reinsurance, regardless of whether the contract is described by the insurer as reinsurance;(2)Issuing a stop loss policy to a trust or trustee, whether the trust or trustee is located in this state or otherwise, with an employer located in this state directly or indirectly the beneficiary of the trust;(3)Agreeing to loan or advance funds to pay claims incurred under an employer's self-funded health benefit plan if the availability of funds to advance is significantly dependent on payment of contributions and the claims experience of two or more employers who have entered into similar loan or advance agreements; or(4)Engaging in a risk distribution arrangement providing for compensation of loss through the provision of services, including an arrangement established through marketing or representations to consumers, without specification in a contract. Source: SL 2007, ch 292, 3.
58-33-96. Unauthorized health insurance defined.For the purposes of 58-33-93 to 58-33-116, inclusive, the term, unauthorized health insurance, means health insurance offered by a nonadmitted insurer except to the extent the laws of this state allow the coverage to be offered by a nonadmitted insurer licensed in another state through an employer or group located out of state; and includes health care benefits or coverage offered by a professional employer organization or an employee leasing arrangement that is not:(1)Fully insured by an admitted insurer; or(2)Licensed or otherwise authorized under the laws of this state to offer a self-funded health benefit plan. Source: SL 2007, ch 292, 4.
58-33-97. Exclusions from unauthorized health insurance.Unauthorized health insurance does not include:(1)Health care benefits or coverage under an employee welfare benefit plan of the employees of two or more employers (including one or more self-employed individuals), that is established or maintained under or pursuant to a collective bargaining agreement under the criteria provided under 29 CFR 2510.3-40 as of January 1, 2007;(2)Health care benefits or coverage under an employee welfare benefit plan established or maintained by a rural electric cooperative or a rural telephone cooperative as defined under 29 U.S.C. 1002(40)(B) as of January 1, 2007;(3)Health care benefits or coverage under an employee welfare benefit plan of the employees of two or more employers but only if the employers are within the same control group so the plan is deemed to be a single employer plan under 29 U.S.C. 1002(40)(B) as of January 1, 2007; or(4)Health care benefits or coverage under a church plan as defined under 29 U.S.C 1002(33) as of January 1, 2007. Source: SL 2007, ch 292, 5.
58-33-98. Notification of division required concerning unauthorized health insurance product--Review of division website--Stop loss insurers.A licensee shall notify the division MEWA contact if the licensee knows a product is, or is about to be, offered to the public in this state, and the licensee, based on the information known to the licensee, reasonably should know the product is unauthorized health insurance. A licensee meets the requirements of this section if that licensee reviews the division's website of admitted health insurers and either does not notify the division's MEWA contact if that insurer is listed as an admitted insurer or notifies the division's MEWA contact if that insurer is not listed as an admitted insurer. For the purposes of this section an insurer does not include a stop loss insurer but a stop loss insurer is a licensee under this section. Knowledge of a producer regarding an unrelated unauthorized health insurance arrangement is not imputed to licensed insurers represented by that producer. Circumstances where a licensee knows that a product is, or is about to be, offered to the public in this state, include if the licensee knows that any person is:(1)Recruiting producers to solicit or offer, or is soliciting or offering, a health benefit plan generally to the public in this state; or(2)Seeking an administrator for, or is administering a health benefit plan that is intended to be offered generally to the public in this state.A licensee complies with this section if the licensee notifies the division within thirty days or a period reasonable under the circumstances, whichever is later. Source: SL 2007, ch 292, 6.
58-33-99. Circumstances in which licensee should know product is unauthorized health insurance.Circumstances where a licensee reasonably should know that a product is unauthorized health insurance include the following:(1)The licensee knows that the product is represented to be a self-funded plan and that it is offered widely to the multiple employers or generally to individuals;(2)The licensee knows that the product is a professional employer organization self-funded plan and that it is offered widely to multiple client employers; or(3)The licensee knows that the plan is represented to be a self-funded plan established or maintained pursuant to a collective bargaining agreement and that the plan is offered widely to multiple employers, or generally to individuals, or both, through agents who are compensated on a commission or similar basis.A licensee may provide other evidence to the division to indicate that the licensee did not reasonably know that a product is unauthorized. In making its determination regarding whether a licensee should have known the product is unauthorized and the appropriateness of any penalty for failing to notify the division of such a product, the division shall consider the prior experience and the existence or lack of training of that licensee. Source: SL 2007, ch 292, 7.
58-33A-1. Applicability of chapter.This chapter applies to all individual and group health policies which are solicited or sold in this state that are subject to chapters 58-15, 58-16, 58-17, 58-18, 58-18B, 58-37A, 58-38, 58-39, 58-40, and 58-41. However, this chapter does not apply to insurance policies and subscriber contracts subject to the medicare supplement requirements. Except for the exemptions specified in this section, this chapter applies to any solicitation, negotiation, or effectuation of life insurance occurring within this state. This chapter applies to any issuer of life insurance contracts including fraternal benefit societies. This chapter does not apply to:(1)Group annuities;(2)Credit life insurance;(3)Group life insurance (except for disclosures relating to preneed funeral contracts or prearrangements as provided by this chapter. These disclosure requirements extend to the issuance or delivery of certificates as well as to the master policy);(4)Life insurance policies issued in connection with pension and welfare plans as defined by and which are subject to the federal Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. Section 1001 et seq. as amended to January 1, 1999; or(5)Variable life insurance under which the amount or duration of the life insurance varies according to the investment experience of a separate account. Source: SL 1999, ch 240, 1; SL 2000, ch 251, 2; SL 2012, ch 250, 19.
58-33A-10. Advertisements not to be deceptive or misleading--Standard to be used in determination.Any advertisements shall be truthful and not materially misleading in fact or by implication. The form and content of an advertisement of a policy shall be sufficiently complete and clear so as to avoid deception. No advertisement may have the capacity and tendency to materially mislead or deceive. In determining whether an advertisement has the capacity and tendency to materially mislead or deceive, the director shall make the determination from the overall impression that the advertisement may be reasonably expected to create upon a person of average education or intelligence within the segment of the public to which it is directed. Source: SL 1999, ch 240, 10.
58-33A-11. Insurer to maintain file of advertisements--Division may inspect files--Period for which files must be maintained.Each insurer shall maintain at its home or principal office a complete file containing a specimen copy of every printed, published, or prepared advertisement of its policies and specimen copies of typical printed, published, or prepared advertisements of its blanket, franchise, and group policies where the content of advertisements vary dependent upon coverage options, hereafter disseminated in this state, with a notation indicating the manner and extent of distribution and the form number of any policy advertised. The file may be kept electronically. The division may inspect the file. All advertisements shall be maintained in the file for a period of either five years or until the filing of the next regular report on the examination of the insurer pursuant to chapter 58-3, whichever is the longer period of time. Source: SL 1999, ch 240, 11.
58-33A-12. Director's prior approval may be required--Other remedies not precluded.If the director has reason to believe that an advertisement has the capacity and tendency to mislead or deceive the public or otherwise does not comply with this chapter or the rules promulgated pursuant to this chapter, the director may require an insurer or insurance producer to submit all or any part of the advertising material for review or approval prior to use, in addition to any other remedies allowed by law. Source: SL 1999, ch 240, 12; SL 2000, ch 251, 8.
58-33A-13. Definition of terms.Terms used in 58-33A-14 to 58-33A-27, inclusive, mean:(1)"Annuity," an annuity that is an insurance product under state law that is individually solicited, whether the product is classified as an individual or group annuity;(2)"Cash compensation," any discount, concession, fee, service fee, commission, sales charge, loan, override, or cash benefit received by a producer in connection with the recommendation or sale of an annuity from an insurer, intermediary, or directly from the consumer;(3)"Consumer profile information," information that is reasonably appropriate to determine whether a recommendation addresses the consumers financial situation, insurance needs and financial objectives, including, at a minimum, the following:(a)Age;(b)Annual income;(c)Financial situation and needs, including debts and other obligations;(d)Financial experience;(e)Insurance needs;(f)Financial objectives;(g)Intended use of the annuity;(h)Financial objectives;(i)Existing assets or financial products, including investment, annuity and insurance holdings;(j)Liquidity needs;(k)Liquid net worth;(l)Risk tolerance, including but not limited to, willingness to accept non-guaranteed elements in the annuity;(m)Financial resources used to fund the annuity; and(n)Tax status;(4)"FINRA," the Financial Industry Regulatory Authority or a succeeding agency;(5)"Intermediary," an entity contracted directly with an insurer or with another entity contracted with an insurer to facilitate the sale of the insurers annuities by producers;(6)"Material conflict of interest," a financial interest of the producer in the sale of an annuity that a reasonable person would expect to influence the impartiality of a recommendation. Material conflict of interest does not include cash compensation or non-cash compensation;(7)"Non-cash compensation," any form of compensation that is not cash compensation including health insurance, office rent, office support, and retirement benefits;(8)"Non-guaranteed elements," the premiums, credited interest rates including any bonus, benefits, values, dividends, non-interest based credits, charges, or elements of formulas used to determine any of these, that are subject to company discretion and are not guaranteed at issue. An element is considered non-guaranteed if any of the underlying non-guaranteed elements are used in its calculation;(9)"Producer," a person or entity required to be licensed under the laws of this state to sell, solicit or negotiate insurance, including annuities. This term also includes an insurer where no producer is involved;(10)"Recommendation," advice provided by a producer to an individual consumer that was intended to result or results in a purchase, replacement, or exchange of an annuity in accordance with that advice. This term does not include general communication to the public, generalized customer services assistance or administrative support, general educational information and tools, prospectuses, or other product and sales material;(11)"Replacement, a transaction in which a new annuity is to be purchased, and it is known or should be known to the proposing producer, or to the proposing insurer whether or not a producer is involved, that by reason of the transaction, an existing annuity or other insurance policy has been or is to be any of the following:(a)Lapsed, forfeited, surrendered, partially surrendered, assigned to the replacing insurer, or otherwise terminated;(b)Converted to reduced paid-up insurance, continued as extended term insurance, or otherwise reduced in value by the use of nonforfeiture benefits or other policy values;(c)Amended so as to effect either a reduction in benefits or in the term for which coverage would otherwise remain in force or for which benefits would be paid;(d)Reissued with any reduction in cash value; or(e)Used in a financed purchase;(12)"SEC," the United States Securities and Exchange Commission. Source: SL 2008, ch 273, 1; SL 2022, ch 186, 1, eff. Jan. 1, 2023.
58-33A-14. Recommendations to purchase or exchange annuities subject to requirements.Sections 58-33A-13 to 58-33A-27, inclusive, apply to any recommendation or sale of an annuity . The purpose of chapter 186 of the 2022 Session Laws is to require producers, as defined in 58-33A-13, to act in the best interest of the consumer when making a recommendation of an annuity and to require insurers to establish and maintain a system to supervise recommendations so that the insurance needs and financial objectives of consumers at the time of the transaction are effectively addressed. Nothing in 58-33A-13 to 58-33A-27, inclusive, creates or implies a private cause of action for a violation of 58-33A-13 to 58-33A-27, inclusive, or subjects a producer to civil liability under the best interest standard of care outlined in 58-33A-16 or under standards governing the conduct of a fiduciary or a fiduciary relationship. Source: SL 2008, ch 273, 2; SL 2022, ch 186, 2, eff. Jan. 1, 2023.
58-33A-15. Exemptions from requirements.Unless otherwise specifically included, 58-33A-13 to 58-33A-27, inclusive, do not apply to any transactions involving:(1)A direct response solicitation if there is no recommendation based on information collected from the consumer pursuant to 58-33A-13 to 58-33A-27, inclusive; or(2)Any contract used to fund:(a)An employee pension or welfare benefit plan that is covered by the Employee Retirement and Income Security Act (ERISA);(b)A plan described by sections 401(a), 401(k), 403(b), 408(k), or 408(p) of the Internal Revenue Code (IRC), as of January 1, 2023, if established or maintained by an employer;(c)A government or church plan defined in section 414 of the IRC as of January 1, 2023, a government or church welfare benefit plan, or a deferred compensation plan of a state or local government or tax exempt organization under section 457 of the IRC as of January 1, 2023; or(d)A nonqualified deferred compensation arrangement established or maintained by an employer or plan sponsor;(3)A settlement of or assumption of liabilities associated with personal injury litigation or any dispute or claim resolution process; or(4)A formal prepaid funeral contract.The director may, by rules promulgated pursuant to chapter 1-26, adopt revisions of the Internal Revenue Code which are in substantial compliance with the intent of subsections (b) and (c) of this section. Source: SL 2008, ch 273, 3; SL 2022, ch 186, 3, eff. Jan. 1, 2023.
58-33A-16.1. Recommendation--Producer responsibilities.Producers must, in making a recommendation:(1)Exercise reasonable diligence, care, and skill to:(a)Know the consumers financial situation, insurance needs, and financial objectives;(b)Understand the available recommendation options after making a reasonable inquiry into options available to the producer;(c)Have a reasonable basis to believe the recommended option effectively addresses the consumers financial situation, insurance needs, and financial objectives over the life of the product as evaluated in light of the consumer profile information; and(d)Communicate the basis or bases of the recommendation;(2)Make reasonable efforts to obtain consumer profile information from the consumer prior to the recommendation of an annuity;(3)Consider the types of products the producer is authorized and licensed to recommend or sell that address the consumers financial situation, insurance needs, and financial objectives. This does not require analysis or consideration of any products outside the authority and license of the producer or other possible alternative products or strategies available in the market at the time of the recommendation. Producers must be held to standards applicable to producers with similar authority and licensure; and(4)Have a reasonable basis to believe the consumer would benefit from certain features of the annuity, such as annuitization, death or living benefit, or other insurance-related features.Factors generally relevant in making a determination whether an annuity effectively addresses the consumers financial situation, insurance needs, and financial objectives include the consumer profile information, characteristics of the insurer, product costs, rates, benefits, and features. The level of importance of each factor in this section may vary depending on the facts and circumstances of a particular case, but each factor may not be considered in isolation. Source: SL 2022, ch 186, 7, eff. Jan. 1, 2023.
58-33A-16.2. Recommendation--Producer responsibilities--Applicability and intent.The requirements of 58-33A-16.1:(1)Apply to the particular annuity as a whole, the underlying subaccounts to which funds are allocated at the time of purchase or exchange of an annuity, and riders and similar product enhancements;(2)Create a regulatory obligation but do not create a fiduciary obligation or relationship;(3)Do not mean the annuity with the lowest one-time or multiple occurrence compensation structure shall necessarily be recommended; and(4)Do not mean the producer has ongoing monitoring obligations, although such an obligation may be separately owed under the terms of a fiduciary, consulting, investment advising, or financial planning agreement between the consumer and the producer. Source: SL 2022, ch 186, 8, eff. Jan. 1, 2023.
58-33A-16.3. Considerations for annuity replacement or exchange.In the case of an exchange or replacement of an annuity, the producer shall consider the whole transaction, which include taking into consideration whether:(1)The consumer will incur a surrender charge, be subject to the commencement of a new surrender period, lose existing benefits, such as death, living, or other contractual benefits, or be subject to increased fees, investment advisory fees, or charges for riders and similar product enhancements;(2)The replacing product would substantially benefit the consumer in comparison to the replaced product over the life of the product; and(3)The consumer has had another annuity exchange or replacement and, in particular, an exchange or replacement within the preceding sixty months. Source: SL 2022, ch 186, 9, eff. Jan. 1, 2023.
58-33A-16.4. Recommendation--Sale of annuity--Informed consumer.Prior to or at the time of the recommendation or sale of an annuity, the producer shall have a reasonable basis to believe the consumer has been informed of various features of the annuity including the potential surrender period and surrender charge, potential tax penalty if the consumer sells, exchanges, surrenders, or annuitizes the annuity, mortality and expense fees, investment advisory fees, any annual fees, potential charges for and features of riders or other options of the annuity, limitations on interest returns, potential changes in non-guaranteed elements of the annuity, insurance and investment components, and market risk. Source: SL 2022, ch 186, 11, eff. Jan. 1, 2023.
58-33A-16.5. Recommendation--Sale of annuity--Disclosure to consumer.Prior to or at the time of the recommendation or sale of an annuity, the producer shall prominently disclose to the consumer on a form substantially similar to the form prescribed by the director and available on the divisions website:(1)A description of the scope and terms of the relationship with the consumer and the role of the producer in the transaction;(2)An affirmative statement on whether the producer is licensed and authorized to sell the following products:(a)Fixed annuities;(b)Fixed indexed annuities;(c)Variable annuities;(d)Life insurance;(e)Mutual funds;(f)Stocks and bonds; and(g)Certificates of deposit;(3)An affirmative statement describing the insurers the producer is authorized, contracted, appointed, or otherwise able to sell insurance products for using the following descriptions:(a)From one insurer;(b)From two or more insurers; or(c)From two or more insurers although primarily contracted with one insurer;(4)A description of the sources and types of cash compensation and non-cash compensation to be received by the producer, including whether the producer is to be compensated for the sale of a recommended annuity by commission as part of premium or other remuneration received from the insurer, intermediary, or other producer or by fee as a result of a contract for advice or consulting services; and(5)A notice of the consumers right to request additional information regarding cash compensation described in 58-33A-16.6. Source: SL 2022, ch 186, 12, eff. Jan. 1, 2023.
58-33A-16.6. Additional disclosure upon request.Upon request of the consumer or the consumers designated representative, the producer shall disclose:(1)A reasonable estimate of the amount of cash compensation to be received by the producer, which may be stated as a range of amounts or percentages; and(2)Whether the cash compensation is a one-time or multiple occurrence amount, and if a multiple occurrence amount, the frequency and amount of the occurrence, which may be stated as a range of amounts or percentages. Source: SL 2022, ch 186, 13, eff. Jan. 1, 2023.
58-33A-16.7. Disclosure of producer conflicts of interest required.A producer shall identify and avoid or reasonably manage and disclose material conflicts of interest, including material conflicts of interest related to an ownership interest. Source: SL 2022, ch 186, 14, eff. Jan. 1, 2023.
58-33A-16. Annuity best interest standard.A producer, when making a recommendation of an annuity, shall act in the best interest of the consumer under the circumstances known at the time the recommendation is made, without placing the producers or the insurers financial interest ahead of the consumers interest. For purposes of this section, a producer has acted in the best interest of the consumer by satisfying the obligations regarding care in 58-33A-16.1 to 58-33A-16.3, inclusive, disclosure in 58-33A-16.4 to 58-33A-16.6, inclusive, conflict of interest in 58-33A-16.7, and documentation in 58-33A-19.2. Any requirement applicable to a producer under 58-33A-13 to 58-33A-27, inclusive, must apply to every producer who has exercised material control or influence in the making of a recommendation and has received direct compensation as a result of the recommendation or sale, regardless of whether the producer has had any direct contact with the consumer. Activities such as providing or delivering marketing or educational materials, product wholesaling or other back office product support, and general supervision of a producer do not, in and of themselves, constitute material control or influence. Source: SL 2008, ch 273, 4; SL 2012, ch 250, 1; SL 2022, ch 186, 4, eff. Jan. 1, 2023.
58-33A-18. Conditions resulting in no obligation to consumer.Except as provided pursuant to 58-33A-19, a producer has no obligation to a consumer under 58-33A-16.1 to 58-33A-16.3, inclusive, and 58-33A-17 related to any annuity transaction if:(1)A consumer refuses to provide relevant consumer profile information and the annuity transaction is not recommended;(2)A consumer decides to enter into an annuity transaction that is not based on a recommendation of the producer;(3)A recommendation was made and was later found to have been prepared based on materially inaccurate information provided by the consumer; or(4)No recommendation is made. Source: SL 2008, ch 273, 6; SL 2012, ch 250, 4; SL 2022, ch 186, 10, eff. Jan. 1, 2023.
58-33A-19.2. Producer obligations--Documentation--Time of recommendation or sale.A producer shall, at the time of the recommendation or sale:(1)Make a written record of any recommendation and the basis for the recommendation subject to the obligations required in 58-33A-13 to 58-33A-27, inclusive;(2)Obtain a consumer signed statement on a form substantially similar to the form prescribed by the director and available on the divisions website documenting:(a)A customers refusal to provide the consumer profile information, if any;(b)A customers understanding of the ramifications of not providing his or her consumer profile information or providing insufficient consumer profile information; and(3)Obtain a consumer signed statement acknowledging the annuity transaction is not recommended if a customer decides to enter into an annuity transaction that is not based on the producers recommendation on a form substantially similar to a form prescribed by the director. Source: SL 2022, ch 186, 15, eff. Jan. 1, 2023.
58-33A-19.3. Issuance by insurer to be reasonable and address consumer needs.Except as permitted under 58-33A-18 and 58-33A-19, an insurer may not issue an annuity recommended to a consumer unless there is a reasonable basis to believe the annuity would effectively address the particular consumers financial situation, insurance needs, and financial objectives based on the consumers profile information. Source: SL 2022, ch 186, 19, eff. Jan. 1, 2023.
58-33A-19. Reasonableness under circumstances known to insurer.An insurer's issuance of an annuity subject to 58-33A-18 shall be reasonable under all the circumstances actually known to the insurer at the time the annuity is issued. Source: SL 2008, ch 273, 7; SL 2012, ch 250, 5; SL 2022, ch 186, 17, eff. Jan. 1, 2023.
58-33A-2. Purpose of chapter.The purpose of this chapter is to establish guidelines and permissible and impermissible standards of conduct in the solicitation of and advertising of life and health insurance in a manner which:(1)Prevents unfair, deceptive, and misleading advertising;(2)Is conducive to accurate presentation and description to the insurance-buying public through the advertising media and material used by insurance producers and companies;(3)Provides for the full disclosure of the benefits, limitations, and exclusions of policies sold;(4)Sets forth minimum standards and guidelines to assure a full and truthful disclosure to the public of all material and relevant information in the advertising of life insurance policies and annuity contracts;(5)Requires insurers to deliver to purchasers of life insurance information which will improve the buyer's ability to select the most appropriate plan of life insurance for the buyer's needs;(6)Improves the buyer's understanding of the basic features of the policy which has been purchased or which is under consideration;(7)Improves the ability of the buyer to evaluate the relative costs of similar plans of life insurance;(8)Provides reasonable standardization and simplification of terms and coverages of health insurance policies and subscriber contracts of nonprofit hospital, medical, and dental service associations to facilitate public understanding and comparison;(9)Eliminates provisions contained in health insurance policies and subscriber contracts of nonprofit hospital, medical, and dental service associations which may be misleading or unreasonably confusing in connection either with the purchase of such coverages or with the settlement of claims; and(10)Provides for full disclosure in the sale of life or health coverages. Source: SL 1999, ch 240, 2; SL 2000, ch 251, 3; SL 2001, ch 286, 211.
58-33A-20.1. Contract for performance of supervision system functions--Responsibility for corrective action--Supervision of performance.Nothing in 58-33A-20 or this section restricts an insurer from contracting for performance of a function required under 58-33A-20, including maintenance of procedures. An insurer is responsible for taking appropriate corrective action and may be subject to sanctions and penalties pursuant to 58-33A-26 regardless of whether the insurer contracts for performance of a function and regardless of the insurer's compliance with this section.An insurer's supervision system under 58-33A-20 and this section shall include supervision of contractual performance under this section. This includes the following:(1)Monitoring and, as appropriate, conducting audits to assure that the contracted function is properly performed; and(2)Annually obtaining a certification from a senior manager who has responsibility for the contracted function that the manager has a reasonable basis to represent, and does represent, that the function is properly performed.An insurer is not required to include in its system of supervision a producer's recommendations to consumers of products other than the annuities offered by the insurer, consideration of or comparison to options available to the producer, or compensation relating to those options other than annuities or other products offered by the insurer. Source: SL 2012, ch 250, 8; SL 2022, ch 186, 21, eff. Jan. 1, 2023.
58-33A-20.2. Prohibited conduct by insurance producer.No producer or insurer may dissuade, or attempt to dissuade, a consumer from:(1)Truthfully responding to an insurer's request for confirmation of consumer profile information;(2)Filing a complaint; or(3)Cooperating with the investigation of a complaint. Source: SL 2012, ch 250, 9; SL 2022, ch 186, 22, eff. Jan. 1, 2023.
58-33A-20. Insurer's system for supervising recommendations.An insurer shall establish and maintain a supervision system that is reasonably designed to achieve compliance with 58-33A-13 to 58-33A-27, inclusive, including:(1)The insurer shall establish and maintain reasonable procedures to inform its producers of the requirements of 58-33A-16 to 58-33A-26, inclusive and shall incorporate the requirements of this regulation into relevant producer training manuals;(2)The insurer shall establish and maintain standards for producer product training and shall establish and maintain reasonable procedures to require its producers to comply with the requirements of 58-33A-25.1 to 58-33A-25.3, inclusive;(3)The insurer shall provide product-specific training and training materials that explain all material features of its annuity products to its producers;(4)The insurer shall establish and maintain procedures for review of each recommendation prior to issuance of an annuity that are designed to ensure that there is a reasonable basis to determine that the recommended annuity would effectively address the particular consumer's financial situation, insurance needs, and financial objectives. Such review procedures may apply a screening system for the purpose of identifying selected transactions for additional review and may be accomplished electronically or through other means including, physical review. Such an electronic or other system may be designed to require additional review only of those transactions identified for additional review by the selection criteria;(5)The insurer shall establish and maintain reasonable procedures to detect recommendations that are not in compliance with 58-33A-13 to 58-33A-27, inclusive. This may include confirmation of consumer profile information, systematic customer surveys, producer and consumer interviews, confirmation letters, producer statements or attestations, and programs of internal monitoring. Nothing in this subdivision prevents an insurer from complying with this subdivision by applying sampling procedures or by confirming consumer profile information or other required information after issuance or delivery of the annuity;(6)The insurer shall annually provide a written report to senior management, including to the senior manager responsible for audit functions, that details a review, with appropriate testing, reasonably designed to determine the effectiveness of the supervision system, the exceptions found, and corrective action taken or recommended, if any;(7)The insurer shall establish and maintain reasonable procedures to assess, prior to or upon issuance or delivery of an annuity, whether a producer has provided to the consumer the information required to be provided under this section;(8)The insurer shall establish and maintain reasonable procedures to identify and address suspicious consumer refusals to provide consumer profile information; and(9)The insurer shall establish and maintain reasonable procedures to identify and eliminate any sales contests, sales quotas, bonuses, and non-cash compensation that are based on the sales of specific annuities within a limited period of time. The requirements of this subdivision are not intended to prohibit the receipt of health insurance, office rent, office support, retirement benefits, or other employee benefits by employees as long as those benefits are not based upon the volume of sales of a specific annuity within a limited period of time. Source: SL 2008, ch 273, 8; SL 2012, ch 250, 7; SL 2022, ch 186, 20, eff. Jan. 1, 2023.
58-33A-25.1. Insurance producer to have adequate knowledge of annuity product--Required training.No producer may solicit the sale of an annuity product unless the producer has adequate knowledge of the product to recommend the annuity and the producer is in compliance with the insurer's standards for product training. A producer may rely on insurer-provided product-specific training standards and materials to comply with this section. A producer who engages in the sale of annuity products shall complete a one-time four credit training course approved by the director and provided by a director-approved education provider.A producer who obtains a life insurance line of authority may not engage in the sale of annuities unless the annuity training course required under this section has been completed. The minimum length of the training required under this section shall be sufficient to qualify for at least four continuing education credits, but may be longer. The training required under this section must include information on the following subjects:(1)The types of annuities and various classifications of annuities;(2)Identification of the parties to an annuity;(3)How product-specific annuity contract features affect consumers;(4)The application of income taxation of qualified and nonqualified annuities;(5)The primary uses of annuities; and(6)Appropriate standard of conduct, sales practices, replacement, and disclosure requirements.An insurance producer who has completed an annuity training course approved by the division prior to January 1, 2023 shall, within six months, complete either a new four credit training course approved by the division or an additional one-time one credit training course approved by the division and provided by the division-approved education provider on appropriate sales practices, replacement, and disclosure requirements under 58-33A-13 to 58-33A-27, inclusive. Source: SL 2012, ch 250, 11; SL 2022, ch 186, 25, eff. Jan. 1, 2023.
58-33A-25.2. Annuity training course providers--Training requirements of other states.Each course provider intending to comply with 58-33A-25.1 shall cover all subjects listed in 58-33A-25.1. No provider of such course may present any marketing information or provide training on sales techniques or provide specific information about a particular insurer's products. Additional subjects may be offered in conjunction with and in addition to the required subjects. Each provider of an annuity training course intending to comply with 58-33A-25.1 shall register as a continuing education provider in this state and shall comply with the rules applicable to producer continuing education courses as set forth in chapter 58-30.An annuity training course may be conducted and completed by classroom or self-study methods. Each provider of annuity training shall comply with the reporting requirements and shall issue certificates of completion in accordance with chapter 58-30. The satisfaction of the training requirements of another state that are substantially similar to the provisions of this section satisfy the training requirements of this section and 58-33A-25.1. The satisfaction of the components of the training requirements of any course or courses with components substantially similar to 58-33A-25.1 are be deemed to satisfy the training requirements. Source: SL 2012, ch 250, 12; SL 2022, ch 186, 26, eff. Jan. 1, 2023.
58-33A-25.3. Insurer to verify producer has completed annuity training course.An insurer shall verify that a producer has completed the annuity training course required pursuant to 58-33A-25.1 before allowing the producer to sell an annuity product for that insurer. An insurer may satisfy its responsibility under this section by obtaining certificates of completion of the training course or obtaining reports provided by a director-sponsored database system or vendor or from a reasonably reliable commercial database vendor that has a reporting arrangement with an approved insurance education provider. Source: SL 2012, ch 250, 13; SL 2022, ch 186, 27, eff. Jan. 1, 2023.
58-33A-25.4. Authorized insurance business--Other licenses.Nothing in 58-33A-13 to 58-33A-27, inclusive, should be construed to require a producer to obtain any license other than a producer license with the appropriate line of authority to sell, solicit, or negotiate insurance in this state, including a securities license, in order to fulfill the duties and obligations contained in 58-33A-13 to 58-33A-27, inclusive provided the producer does not give advice or provide services that are otherwise subject to securities laws or engage in any other activity requiring other professional licenses. Source: SL 2022, ch 186, 16, eff. Jan. 1, 2023.
58-33A-25.5. Definition of terms--Compliance with Conduct Rules.The terms used in 58-33A-25 mean:(1)"Comparable standards,":(a)With respect to broker-dealers and registered representatives of broker-dealers, applicable SEC and FINRA rules pertaining to best interest obligations and supervision of annuity recommendations and sales, including 17 C.F.R. 240.15|-1 (2023);(b)With respect to investment advisers registered under federal or state securities laws or investment adviser representatives, the fiduciary duties and all other requirements imposed on such investment advisers or investment adviser representatives by contract or under the Investment Advisers Act of 1940 or applicable state securities law, including the Form ADV and interpretations; and(c)With respect to plan fiduciaries or fiduciaries, the duties, obligations, prohibitions, and all other requirements attendant to such status under Employee Retirement Income Security Act of 1974 (ERISA) or the Internal Revenue Code as of January 1, 2023; and(2)"Financial professional," a producer that is regulated and acting as:(a)A broker-dealer registered under federal or state securities laws or a registered representative of a broker-dealer;(b)An investment adviser registered under federal or state securities laws or an investment adviser representative associated with the federal or state registered investment adviser; or(c)A plan fiduciary under 29 U.S. Code  1002(21) (2019) or fiduciary under 26 U.S. Code 4975(e)(3) (2019). Source: SL 2022, ch 186, 23, eff. Jan. 1, 2023.
58-33A-25. Compliance with comparable standards by financial professional.Recommendations and sales of annuities made in compliance with comparable standards shall satisfy the requirements of 58-33A-13 to 58-33-27, inclusive. This section applies to all recommendations and sales of annuities made by financial professionals in compliance with business rules, controls, and procedures that satisfy a comparable standard even if such standard would not otherwise apply to the product or recommendation at issue. For this section to apply, an insurer shall:(1)Monitor the relevant conduct of the financial professional seeking to rely on this section or the entity responsible for supervising the financial professional, such as the financial professionals broker-dealer or an investment adviser registered under federal or state securities laws using information collected in the normal course of an insurer's business; and(2)Provide to the entity responsible for supervising the financial professional seeking to rely on this section, such as the financial professionals broker-dealer or investment adviser registered under federal or state securities laws, information and reports that are reasonably appropriate to assist the entity to maintain its supervision system.Nothing in this section shall limit the directors ability to investigate and enforce the provisions of 58-33A-13 to 58-33A-27, inclusive, or limit the insurers obligation to comply with 58-33A-20(4), although the insurer may base its analysis on information received from either the financial professional or the entity supervising the financial professional. Source: SL 2008, ch 273, 13; SL 2012, ch 250, 10; SL 2022, ch 186, 24, eff. Jan. 1, 2023.
58-33A-26. Corrective action for violations.An insurer is responsible for compliance with 58-33A-13 to 58-33A-27, inclusive. If a violation occurs because of the action or inaction of the insurer or its producer, the director may order:(1)An insurer to take reasonably appropriate corrective action for any consumer harmed by a failure to comply by the insurer, an entity contracted to perform the insurers supervisory duties, or by its producer in violation of 58-33A-13 to 58-33A-27, inclusive;(2)A producer to take reasonably appropriate corrective action for any consumer harmed by the producer's violation of 58-33A-13 to 58-33A-27, inclusive; and(3)A general agency or independent agency that employs or contracts with a producer to sell, or solicit the sale, of annuities to consumers, to take reasonably appropriate corrective action for any consumer harmed by the producer's violation of 58-33A-13 to 58-33A-27, inclusive.Any violation of 58-33A-13 to 58-33A-27, inclusive subjects the insurer, producer, or general agency or independent agency to suspension, revocation, refusal to renew a license, or to a monetary penalty as provided for under this title. However, the penalty may be reduced or eliminated, if corrective action for the consumer is taken promptly after a violation is discovered or the violation was not part of a pattern or practice. Source: SL 2008, ch 273, 14; SL 2012, ch 250, 14; SL 2022, ch 186, 28, eff. Jan. 1, 2023.
58-33A-27. Records regarding recommendations.Each insurer, general agent, independent agency and producer shall maintain or be able to make available to the director records of the information collected from the consumer, disclosures made to the consumer, including summaries of oral disclosures, and other information used in making the recommendations that were the basis for insurance transactions for five years after the insurance transaction is completed by the insurer. An insurer is permitted, but is not required, to maintain documentation on behalf of a producer.Any record required to be maintained by 58-33A-13 to 58-33A-27, inclusive, may be maintained in paper, photographic, microprocess, magnetic, mechanical or electronic media or by any process that accurately reproduces the actual document. Source: SL 2008, ch 273, 15; SL 2022, ch 186, 29, eff. Jan. 1, 2023.
58-33A-28. Multi-state plan sale or solicitation of health insurance outside of exchange prohibited.No multi-state plan as described in Section 1334 of the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010) may sell, solicit, negotiate, or otherwise transact health insurance in this state outside of any public exchange which may be operating in this state. Source: SL 2013, ch 249, 3.
58-33A-3. Advertisement determined.For the purposes of this chapter, the term, advertisement, includes:(1)Any printed and published material, audio visual material, and descriptive literature of an insurer used in direct mail, newspapers, magazines, radio scripts, TV scripts, billboards, and similar displays;(2)Any descriptive literature and sales aids of all kinds issued by an insurer, representative of the insurer, insurance producer, or solicitor for presentation to members of the insurance-buying public, including circulars, leaflets, booklets, depictions, illustrations, internet communications, form letters, and lead-generating devices of all kinds;(3)Any prepared sales talks, presentations, and material for use by representatives of the insurer, insurance producers, and solicitors whether prepared by the insurer or the representative of the insurer, insurance producer, or solicitor; and(4)Any advertising material included with a policy if the policy is delivered and material is used in the solicitation of renewals and reinstatements. Source: SL 1999, ch 240, 3; SL 2000, ch 251, 4; SL 2001, ch 286, 212.
58-33A-4. Certain material and communication not deemed to be advertisement.For the purposes of this chapter, the term, advertisement, does not include:(1)Any material to be used solely for the training and education of an insurer's employees, representatives, or insurance producers;(2)Any material used in-house by insurers;(3)Any communications within an insurer's own organization not intended for dissemination to the public;(4)Any individual communications of a personal nature with current policyholders other than material urging such policyholders to increase or expand coverages;(5)Any correspondence between a prospective group or blanket policyholder and an insurer in the course of negotiating a group or blanket contract;(6)Any court-approved material ordered by a court to be disseminated to policyholders; or(7)Any general announcement from a group or blanket policyholder to eligible individuals on an employment or membership list that a contract or program has been written or arranged if the announcement clearly indicates that it is preliminary to the issuance of a booklet and the announcement does not describe the benefits under the contract or program or describe advantages as to the purchase of the contract or program. Source: SL 1999, ch 240, 4; SL 2000, ch 251, 5; SL 2001, ch 286, 213.
58-33A-5. Outline of coverage to accompany all health insurance policies or subscriber contracts--Acknowledgment of receipt or certificate of delivery.In order to provide for full and fair disclosure in the sale of health insurance policies or subscriber contracts of a nonprofit hospital, medical, or dental service association, no such policy or contract may be delivered or issued for delivery in this state unless the outline of coverage described in 58-33A-6 either accompanies the policy or is delivered to the applicant at the time application is made and an acknowledgment of receipt or certificate of delivery of such outline is provided the insurer. If the policy has been sold through an insurance producer, the outline of coverage shall be delivered at the time of application. If the policy is issued on a basis other than that applied for, the outline of coverage properly describing the policy or contract shall accompany the policy or contract. Source: SL 1999, ch 240, 5; SL 2001, ch 286, 214.
58-33A-6. Format and content of outline of coverage--"Format" defined--Outline of coverage requirements.The director shall prescribe the general format and content of the outline of coverage required by 58-33A-5. The term, format, means style, arrangement, and overall appearance, including such items as the size, color, prominence of type, and the arrangement of text and captions. The term, outline of coverage, includes:(1)A statement identifying the applicable category or categories of coverage provided by the policy or contract as prescribed by the director;(2)A description of the principal benefits and coverage provided in the policy or contract;(3)A statement of the exceptions, reductions, and limitations contained in the policy or contract;(4)A statement of the renewal provisions including any reservation by the insurer of nonprofit hospital, medical, or dental service association of a right to change premiums; and(5)A statement that the outline is a summary of the policy or contract issued or applied for and that the policy or contract should be consulted to determine governing contractual provisions.Nothing in this section prohibits an insurer from incorporating an outline of coverage into other solicitation and policy information documents if the required information is contained in the documents. Source: SL 1999, ch 240, 6.
58-33A-7. Director authorized to promulgate rules--Scope of rules.The director may promulgate rules pursuant to chapter 1-26 to establish specific standards consistent with 58-33A-2. The rules may include standards of full and fair disclosure, that set forth the manner, content, and required disclosure. Except for conversion policies issued pursuant to a contractual conversion privilege under a group, the rules may apply to the sale of individual and group health insurance subject to this chapter and shall be in addition to and in accordance with applicable laws of this state. The rules may include:(1)Terms of renewability;(2)Initial and subsequent conditions of eligibility;(3)Nonduplication of coverage provisions;(4)Coverage of dependents;(5)Preexisting conditions;(6)Termination of insurance;(7)Probationary periods;(8)Limitations, exceptions, and reductions;(9)Elimination periods;(10)Requirements for replacement;(11)Recurrent conditions;(12)Prohibitions on the use of terms, information, phrases, or implied affiliations in advertising;(13)Prominence, form, and style of any advertisement;(14)Information to be disclosed on advertising or solicitation materials;(15)Use of testimonials;(16)Special offers or enrollment periods;(17)Coverage comparisons;(18)Identification of insurers, representatives of the insurers and insurance producers;(19)Prearrangements or preneed funeral contracts; and(20)The definition of terms including the following: hospital, accident, sickness, injury, physician, accidental means, total disability, partial disability, nervous disorder, guaranteed renewable and noncancellable. Source: SL 1999, ch 240, 7; SL 2000, ch 251, 6; SL 2001, ch 286, 215.
58-33A-8.1. Disclosure of usual, customary, and reasonable limitation provision required.Any insurer that is subject to 58-33A-1 offering to provide health benefits in this state through a policy, contract, or certificate that contains a provision limiting coverage to usual, customary, or reasonable charges shall provide prominent disclosure that the policy, certificate, or contract contains a usual, customary, and reasonable limitation and that this limitation may cause the insured to incur additional out-of-pocket expenses. An insurer may comply with this section by including the required disclosure in an outline of coverage. Source: SL 2000, ch 251, 1.
58-33A-8. Required disclosures to be clear and conspicuous.Any information required to be disclosed by rules promulgated pursuant to this chapter shall be set out conspicuously and in close conjunction with the statements to which the information relates or under appropriate captions of such prominence that it does not minimize, render obscure, present in an ambiguous fashion, or intermingle with the context of the advertisement so as to be confusing or misleading. Source: SL 1999, ch 240, 8; SL 2000, ch 251, 7.
58-33A-9. Buyer's guide and policy summary to be provided to all prospective life insurance purchasers--Illustration in lieu of policy summary--Director authorized to promulgate rules.Prior to accepting the applicant's initial premium or premium deposit, the insurer shall provide, to all prospective life insurance purchasers, a buyer's guide, and a policy summary. However, in lieu of a policy summary, an insurer may provide an illustration which complies with applicable rules concerning life insurance illustrations. Insurers may deliver the buyer's guide and policy summary or illustration at other times as specified by the director by rule. The director may also promulgate rules pursuant to chapter 1-26 specifying the type of policy summary required, the form and content of policy summaries, the specific buyer's guide to be used, and if the buyer's guide must be provided. Source: SL 1999, ch 240, 9.
58-34-1. Reciprocal insurance defined."Reciprocal" insurance is that resulting from an interexchange among persons, known as "subscribers," of reciprocal agreements of indemnity, the interexchange being effectuated through an "attorney in fact" common to all such persons. Source: SL 1966, ch 111, ch 19, 1.
58-34-10. Advance notice of cancellation of bond.The bond required by 58-34-8 shall provide that it is not subject to cancellation unless thirty days' advance notice in writing of cancellation is given to the attorney and the director. Source: SL 1966, ch 111, ch 19, 12 (3).
58-34-11. Deposit in lieu of bond.In lieu of the bond required under 58-34-8, the attorney may maintain on deposit through the office of the director, a like amount of cash or of securities eligible for deposit under 58-7-8 to 58-7-10, inclusive, and subject to the same conditions as the bond. Source: SL 1966, ch 111, ch 19, 13.
58-34-12. Action on bond or to recover against deposit.Action on the attorney's bond or to recover against any such deposit made in lieu thereof may be brought at any time by one or more subscribers suffering loss through a violation of its conditions or by a receiver or liquidator of the insurer. Amounts recovered on the bond shall be deposited in and become part of the insurer's funds. The total aggregate liability of the surety shall be limited to the amount of the penalty of such bond. Source: SL 1966, ch 111, ch 19, 14.
58-34-13. Business name of insurer--Use in suits by and against.A reciprocal insurer shall:(1)Have and use a business name. The name shall include the word "reciprocal," or "interinsurer," or "interinsurance," or "exchange," or "underwriters," or "underwriting."(2)Sue and be sued in its own name. Source: SL 1966, ch 111, ch 19, 5.
58-34-14. Surplus funds of domestic reciprocal insurer--Amounts required.A domestic reciprocal insurer formed after June 30, 1966, may be authorized to transact insurance if it has otherwise complied with the applicable provisions of this title and has and thereafter maintains surplus funds as follows:(1)To transact property insurance, surplus of not less than two hundred thousand dollars;(2)To transact casualty insurance, without workers' compensation included, surplus of not less than two hundred thousand dollars; to transact casualty insurance, including workers' compensation, surplus of not less than three hundred thousand dollars. Source: SL 1966, ch 111, ch 19, 8 (2).
58-34-15. Additional expendable surplus required of new insurer.In addition to surplus required to be maintained under 58-34-14, a domestic reciprocal insurer formed after June 30, 1966, shall have, when first authorized to transact insurance, expendable surplus equal to not less than one-half of the minimum amount of surplus required to be maintained. Source: SL 1966, ch 111, ch 19, 8 (3).
58-34-16. Additional kinds of insurance transacted--Minimum amount of surplus funds.A domestic reciprocal insurer may be authorized to transact additional kinds of insurance if it has otherwise complied with the provisions of this title therefor and possesses and maintains surplus funds not less in amount than the minimum capital stock required of a domestic stock insurer for authority to transact a like combination of kinds of insurance, but subject to 58-6-27 and 58-6-28. Source: SL 1966, ch 111, ch 19, 8 (4).
58-34-17. Surplus funds of existing insurers--Laws governing.A domestic reciprocal insurer, which held a valid certificate of authority to transact business in this state immediately prior to July 1, 1966, is governed, as to surplus required to be maintained, by 58-6-27 and 58-6-28. Source: SL 1966, ch 111, ch 19, 8 (1).
58-34-18. Issuance of certificate of authority.The certificate of authority of a reciprocal insurer shall be issued to its attorney in the name of the insurer. Source: SL 1966, ch 111, ch 19, 9 (1).
58-34-19. Refusal, suspension, or revocation of certificate of authority--Grounds.The director may refuse, suspend, or revoke the certificate of authority, in addition to other grounds therefor, for failure of the attorney to comply with any provision of this title. Source: SL 1966, ch 111, ch 19, 9 (2).
58-34-2. Reciprocal insurer defined.A "reciprocal insurer" means an unincorporated aggregation of subscribers operating individually and collectively through an attorney in fact to provide reciprocal insurance among themselves. Source: SL 1966, ch 111, ch 19, 2.
58-34-20. Rights and powers of attorney provided by subscribers' agreement.The rights and powers of the attorney of a reciprocal insurer shall be as provided in the power of attorney given it by the subscribers. Source: SL 1966, ch 111, ch 19, 10 (1).
58-34-21. Power of attorney--Form and contents.The power of attorney described in 58-34-20 must set forth:(1)The powers of the attorney;(2)That the attorney is empowered to accept service of process on behalf of the insurer and to authorize the director to receive service of process in actions against the insurer upon contracts exchanged;(3)The general services to be performed by the attorney;(4)The maximum amount to be deducted from advanced premiums or deposits to be paid to the attorney and the general items of expense in addition to losses, to be paid by the insurer; and(5)Except as to nonassessable policies, a provision for a contingent several liability of each subscriber in a specified amount which amount shall be not less than one nor more than ten times the premium or premium deposit stated in the policy. Source: SL 1966, ch 111, ch 19, 10 (2).
58-34-22. Power of attorney--Terms--Approval by director.The terms of any power of attorney or agreement collateral thereto shall be fair and equitable, and no such power or agreement shall be effective as to a domestic reciprocal insurer until approved by the director. Source: SL 1966, ch 111, ch 19, 10 (3).
58-34-23. Service of legal process upon domestic insurer.Legal process shall be served upon a domestic reciprocal insurer by serving the insurer's attorney at his principal offices or by serving the director as the insurer's process agent under 58-6-39. Source: SL 1966, ch 111, ch 19, 15 (1).
58-34-24. Liability of subscribers for judgment against insurer--Service of legal process.Any judgment based upon legal process so served shall be binding upon each of the insurer's subscribers as their respective interests may appear, but in an amount not exceeding their respective contingent liabilities, if any, the same as though personal service of process was had upon each such subscriber. Source: SL 1966, ch 111, ch 19, 15 (2).
58-34-25. Eligibility to become subscriber.Individuals, partnerships, associations, and corporations, public or private, of this state, hereby designated as subscribers, are authorized to exchange reciprocal or interinsurance contracts with each other, or with individuals, partnerships, associations, and corporations, public or private, of other states and countries, providing indemnity among themselves for any loss which may be insured against by the reciprocal insurer to which they are subscribers; except, that public corporations of this state may so insure only in an insurer which has a surplus of three hundred thousand dollars or more and under an insurance contract as to which such an insured has no contingent liability. Source: SL 1966, ch 111, ch 19, 19 (1).
58-34-26. Authority of corporation to exchange insurance contracts.Any corporation now or hereafter organized under the laws of this state shall, in addition to the rights, powers, and franchises specified in its articles of incorporation have full power and authority to exchange insurance contracts of the kind and character mentioned in 58-34-25. The right to exchange such contracts is declared to be incidental to the purposes for which such corporations are organized and as much granted as the rights and powers expressly conferred. Source: SL 1966, ch 111, ch 19, 19 (2).
58-34-27. Representatives of subscribers not liable on contract.Any officer, representative, trustee, receiver, or legal representative of any such subscriber shall be recognized as acting for or on its behalf for the purpose of such contract but shall not be personally liable upon the contract by reason of acting in such representative capacity. Source: SL 1966, ch 111, ch 19, 19 (3).
58-34-28. Advisory committee representing subscribers--Selection.The advisory committee of a domestic reciprocal insurer exercising the subscribers' rights shall be selected under such rules as the subscribers adopt. Source: SL 1966, ch 111, ch 19, 20 (1).
58-34-29. Advisory committee--Qualifications of members.Not less than two-thirds of the advisory committee of a domestic reciprocal insurer shall be subscribers other than the attorney, or any person employed by, representing, or having a financial interest in the attorney. Source: SL 1966, ch 111, ch 19, 20 (2).
58-34-3. Attorney defined."Attorney," as used in this chapter, refers to the attorney in fact of a reciprocal insurer. The attorney may be an individual, firm, or corporation. Source: SL 1966, ch 111, ch 19, 6.
58-34-30. Powers of advisory committee.The advisory committee of a domestic reciprocal insurer shall:(1)Supervise the finances of the insurer;(2)Supervise the insurer's operations to such extent as to assure conformity with the subscribers' agreement and power of attorney;(3)Procure the audit of the accounts and records of the insurer and of the attorney at the expense of the insurer; and(4)Have such additional powers and functions as may be conferred by the subscribers' agreement. Source: SL 1966, ch 111, ch 19, 20 (3).
58-34-31. Modification of subscribers' agreement or power of attorney.Modifications of the terms of the subscribers' agreement or of the power of attorney of a domestic reciprocal insurer shall be made jointly by the attorney and the subscribers' advisory committee. No such modification shall be effective until approved by the director. Source: SL 1966, ch 111, ch 19, 11.
58-34-32. Kinds of business transacted--Life or title insurance excepted.A reciprocal insurer may, upon qualifying therefor as provided for by this title, transact any kinds of business defined by this title, other than life or title insurance. Source: SL 1966, ch 111, ch 19, 4 (1).
58-34-33. Reinsurance authorized.A reciprocal insurer may purchase reinsurance, and may grant reinsurance as to any kind of insurance it is authorized to transact. Source: SL 1966, ch 111, ch 19, 4 (2).
58-34-34. Advance of funds to insurer.The attorney or other parties may advance to a domestic reciprocal insurer upon reasonable terms such funds as it may require from time to time in its operations. Sums so advanced shall not be treated as a liability of the insurer, and, except upon liquidation of the insurer, shall not be withdrawn or repaid except out of the insurer's realized earned surplus in excess of its minimum required surplus. No such withdrawal or repayment shall be made without the advance approval of the director. This section does not apply to bank loans, or to other loans made upon security. Source: SL 1966, ch 111, ch 19, 16.
58-34-35. Liability of subscribers several and proportionate.The liability of each subscriber, other than as to a nonassessable policy, for the obligations of the reciprocal insurer shall be an individual, several and proportionate liability, and not joint. Source: SL 1966, ch 111, ch 19, 21 (1).
58-34-36. Contingent assessment liability of subscriber.Except as to a nonassessable policy, each subscriber shall have a contingent assessment liability, in the amount provided for in the power of attorney or in the subscribers' agreement, for payment of actual losses and expenses incurred while his policy was in force. Such contingent liability may be at the rate of not less than one nor more than ten times the premium or premium deposit stated in the policy, and the maximum aggregate thereof shall be computed in the manner set forth in 58-34-43. Source: SL 1966, ch 111, ch 19, 21 (2).
58-34-37. Contingent liability stated in assessable policy.Each assessable policy issued by the insurer shall contain a statement of the contingent liability, set in type of the same prominence as the insuring clause. Source: SL 1966, ch 111, ch 19, 21 (3).
58-34-38. Assessments against subscribers--Authority for levy.Assessments may be levied upon subscribers of a domestic reciprocal insurer liable therefor under the terms of their policies by the attorney upon approval by the subscribers' advisory committee and the director; or by the director in liquidation of the insurer. Source: SL 1966, ch 111, ch 19, 23 (1).
58-34-39. Computation of amounts of assessments--Ratio of deficiency to premiums earned.Each subscriber's share of a deficiency for which an assessment is made, but not exceeding in any event his aggregate contingent liability as provided by this chapter, shall be computed by applying to the premium earned on the subscriber's policy or policies during the period to be covered by the assessment, the ratio of the total deficiency to the total premiums earned during such period upon all policies subject to the assessment. Source: SL 1966, ch 111, ch 19, 23 (2).
58-34-4. Application of chapter to foreign reciprocal insurers.All authorized reciprocal insurers shall be governed by those sections of this chapter not expressly made applicable to domestic reciprocals. Source: SL 1966, ch 111, ch 19, 3 (1).
58-34-40. Earned premiums, computation for purpose of assessments.In computing the earned premiums for the purposes of 58-34-39, the gross premium received by the insurer for the policy shall be used as a base, deducting therefrom solely charges not recurring upon the renewal or extension of the policy. Source: SL 1966, ch 111, ch 19, 23 (3).
58-34-41. Offset of claim for unearned premium against assessment prohibited.No subscriber shall have an offset against any assessment for which he is liable, on account of any claim for unearned premium or losses payable. Source: SL 1966, ch 111, ch 19, 23 (4).
58-34-42. Time limit for levy of assessment.Every subscriber of a domestic reciprocal insurer having contingent liability shall be liable for, and shall pay his share of any assessment, as computed and limited in accordance with this chapter, if:(1)While his policy is in force or within one year after its termination, he is notified by either the attorney or the director of his intentions to levy such assessment; or(2)An order to show cause why a receiver, conservator, rehabilitator, or liquidator of the insurer should not be appointed is issued while his policy is in force or within one year after its termination. Source: SL 1966, ch 111, ch 19, 24.
58-34-43. Aggregate liability of subscriber--Maximum in one year.No one policy, or subscriber of such policy, shall be assessed or charged with an aggregate of contingent liability as to obligations incurred by a domestic reciprocal insurer in any one calendar year, in excess of the amount provided for in the power of attorney or in the subscribers' agreement, computed solely upon premium earned on such policy during that year. Source: SL 1966, ch 111, ch 19, 25.
58-34-44. Subscriber not liable until final judgment against insurer.No action shall lie against any subscriber upon any obligation claimed against the insurer until a final judgment has been obtained against the insurer and remains unsatisfied for thirty days. Source: SL 1966, ch 111, ch 19, 22 (1).
58-34-45. Limited liability of subscriber on judgment.Any such judgment shall be binding upon each subscriber only in such proportion as his interest may appear and in an amount not exceeding his contingent liability, if any. Source: SL 1966, ch 111, ch 19, 22 (2).
58-34-46. Nonassessable policies--Authorization for issuance--Extinguishment of contingent liability.If a reciprocal insurer has a surplus of assets over all liabilities at least equal to the minimum capital stock required of a domestic stock insurer authorized to transact like kinds of insurance, upon application of the attorney and as approved by the subscribers' advisory committee, the director shall issue his certificate authorizing the insurer to extinguish the contingent liability of subscribers under its policies then in force in this state, and to omit provisions imposing contingent liability in all policies delivered or issued for delivery in this state for so long as all such surplus remains unimpaired. Source: SL 1966, ch 111, ch 19, 26 (1).
58-34-47. Extinguishment of contingent liability of all subscribers required for authorization of nonassessable policies.The director shall not authorize a domestic reciprocal insurer so to extinguish the contingent liability of any of its subscribers or in any of its policies to be issued, unless it qualifies to and does extinguish such liability of all its subscribers and in all such policies for all kinds of insurance transacted by it. Except, that if required by the laws of another state in which the insurer is transacting insurance as an authorized insurer, the insurer may issue policies providing for the contingent liability of such of its subscribers as may acquire such policies in such state, and need not extinguish the contingent liability applicable to policies theretofore in force in such state. Source: SL 1966, ch 111, ch 19, 26 (3).
58-34-48. Impairment of surplus required for nonassessable policies--Revocation of extinguishment authority.Upon impairment of the surplus required by 58-34-46, the director shall forthwith revoke the certificate of authority to extinguish the contingent liability of subscribers. Such revocation shall not render subject to contingent liability any policy then in force and for the remainder of the period for which the premium has theretofore been paid; but after such revocation no policy shall be issued or renewed without providing for contingent assessment liability of the subscriber. Source: SL 1966, ch 111, ch 19, 26 (2).
58-34-49. Savings--Distribution to subscribers.A reciprocal insurer may from time to time return to its subscribers any unused premiums, savings, or credits accruing to their accounts. Any such distribution shall not unfairly discriminate between classes of risks, or policies, or between subscribers, but this shall not prevent retrospective rating, nor distribution on a retrospective plan nor distribution varying as to classes of subscribers based on the experience of such subscribers. Source: SL 1966, ch 111, ch 19, 27.
58-34-5. Compliance required of existing insurers.Authorized reciprocal insurers existing on July 1, 1966, shall after said date comply with the provisions of this chapter, and shall make such amendments to their subscribers' agreements, power of attorney, policies, and other documents and accounts and perform such other acts as may be required for such compliance. Source: SL 1966, ch 111, ch 19, 3 (2).
58-34-50. Liquidation--Distribution of remaining assets to subscribers.Upon the liquidation of a domestic reciprocal insurer, its assets remaining after discharge of its indebtedness and policy obligations, the return of any contributions of the attorney or other persons to its surplus made as provided in 58-34-34, and the return of any unused premium, savings, or credits then standing on subscribers' accounts, shall be distributed to its subscribers who were such within the twelve months prior to the last termination of its certificate of authority, according to such formula as the director may approve. Source: SL 1966, ch 111, ch 19, 28.
58-34-51. Annual statement of insurer--Filing.The annual statement of a reciprocal insurer shall be made and filed by its attorney. Source: SL 1966, ch 111, ch 19, 17 (1).
58-34-52. Annual statement--Supplemental information required by director.The annual statement of a reciprocal insurer shall be supplemented by such information as may be required by the director relative to the affairs and transactions of the attorney in so far as they relate to the reciprocal insurer. Source: SL 1966, ch 111, ch 19, 17 (2).
58-34-53. Determination of financial condition--Rules applied by director.In determining the financial condition of a reciprocal insurer the director shall apply the rules set forth in 58-34-54 to 58-34-60, inclusive. Source: SL 1966, ch 111, ch 19, 18.
58-34-54. Premium deposits as assets.All premium deposits delinquent less than ninety days shall be allowed as assets. Source: SL 1966, ch 111, ch 19, 18 (4).
58-34-55. Surplus deposits--Allowance as assets.The surplus deposits of subscribers shall be allowed as assets, except that any premium deposits delinquent for ninety days shall first be charged against such surplus deposit. Source: SL 1966, ch 111, ch 19, 18 (2).
58-34-56. Uncollected assessments not allowed as assets.An assessment levied upon subscribers, and not collected, shall not be allowed as an asset. Source: SL 1966, ch 111, ch 19, 18 (5).
58-34-57. Contingent liability of subscribers not allowed as asset.The contingent liability of subscribers shall not be allowed as an asset. Source: SL 1966, ch 111, ch 19, 18 (6).
58-34-58. Reserves charged as liabilities.The director shall charge as liabilities the same reserves as are required of incorporated insurers issuing nonassessable policies on a reserve basis. Source: SL 1966, ch 111, ch 19, 18 (1).
58-34-59. Computation of reserves.The computation of reserves shall be based upon premium deposits other than membership fees and without any deduction for expenses and the compensation of the attorney. Source: SL 1966, ch 111, ch 19, 18 (7).
58-34-6. Organization of insurer--Number of persons required.Twenty-five or more persons domiciled in this state may organize a domestic reciprocal insurer and make application to the director for a certificate of authority. Source: SL 1966, ch 111, ch 19, 7 (1).
58-34-60. Surplus deposits of subscribers not a liability.The surplus deposits of subscribers shall not be charged as a liability. Source: SL 1966, ch 111, ch 19, 18 (3).
58-34-61. Merger or conversion prohibited.A domestic reciprocal insurer shall not merge with another reciprocal insurer or be converted to a stock or mutual insurer. Source: SL 1966, ch 111, ch 19, 29.
58-34-62. Impairment of surplus--Deficiency to be made up.If the assets of a reciprocal insurer are at any time insufficient to discharge its liabilities, other than any liability on account of funds contributed by the attorney or others, and to maintain the required surplus, its attorney shall forthwith make up the deficiency or levy an assessment upon the subscribers for the amount needed to make up the deficiency; but subject to the limitation set forth in the power of attorney or policy. Source: SL 1966, ch 111, ch 19, 30 (1).
58-34-63. Failure to make up deficiency--Insurer deemed insolvent.If the attorney fails to make up the deficiency described in 58-34-62 or to make the assessment within thirty days after the director orders him to do so, or if the deficiency is not fully made up within sixty days after the date the assessment was made, the insurer shall be deemed insolvent and shall be proceeded against as authorized by this title. Source: SL 1966, ch 111, ch 19, 30 (2).
58-34-64. Liquidation of insurer ordered--Levy of assessment against subscribers.If liquidation of a reciprocal insurer is ordered, an assessment shall be levied upon the subscribers for such an amount, subject to limits as provided by this chapter, as the director determines to be necessary to discharge all liabilities of the insurer, exclusive of any funds contributed by the attorney or other persons, but including the reasonable cost of the liquidation. Source: SL 1966, ch 111, ch 19, 30 (3).
58-34-7. Application for certificate of authority--Execution and filing--Contents.The proposed attorney shall execute and file with the director an application for a certificate of authority setting forth:(1)The name of the insurer;(2)The location of the insurer's principal office, which shall be the same as that of the attorney and shall be maintained within this state;(3)The kinds of insurance business proposed to be transacted;(4)The names and addresses of the original subscribers;(5)The designation and appointment of the proposed attorney and a copy of the power of attorney;(6)The names and addresses of the officers and directors of the attorney, if a corporation, or its members, if a firm;(7)The powers of the subscribers' advisory committee; and the names and terms of office of the members thereof;(8)That all moneys paid to the reciprocal shall, after deducting therefrom any sum payable to the attorney, be held in the name of the insurer and for the purposes specified in the subscribers' agreement;(9)A copy of the subscribers' agreement;(10)A statement that each of the original subscribers has in good faith applied for insurance of a kind proposed to be transacted, and that the insurer has received from each such subscriber the full premium or premium deposit required for the policy applied for, for a term of not less than six months at an adequate rate theretofore filed with and approved by the director;(11)A statement of the financial condition of the insurer, a schedule of its assets, and a statement that the surplus as required by 58-34-14 to 58-34-16, inclusive, is on hand; and(12)A copy of each policy, endorsement and application form it then proposes to issue or use.Such declaration shall be acknowledged by the attorney. Source: SL 1966, ch 111, ch 19, 7 (2).
58-34-8. Bond of attorney in fact--Filing with and approval by director.Concurrently with the filing of the application provided for in 58-34-7, the attorney of a domestic reciprocal insurer shall file with the director a bond in favor of the State of South Dakota for the benefit of all persons damaged as a result of a breach of the conditions of his bond as set forth in 58-34-9. The bond shall be executed by the attorney and by an authorized corporate surety, and shall be subject to the director's approval. Source: SL 1966, ch 111, ch 19, 12 (1).
58-34-9. Amount and conditions of bond.The bond required by 58-34-8 shall be in the penal sum of twenty-five thousand dollars, conditioned that the attorney will faithfully account for all moneys and other property of the insurer coming into his hands, and that he will not withdraw or appropriate to his own use from the funds of the insurer, any moneys or property to which he is not entitled. Source: SL 1966, ch 111, ch 19, 12 (2).
58-35-1. Application of chapter.This chapter applies to:(1)All domestic mutual hail, fire, and other casualty insurers of farm property and stock and rural buildings formed before July 1, 1966, and immediately prior to said date lawfully transacting business under sections 31.2701 through 31.2812, 31.2918, 31.3001 through 31.3010, and amendments thereto, of the South Dakota Code of 1939; and(2)All insurers formed after June 30, 1966, under this chapter. Source: SL 1966, ch 111, ch 17, 1 (1).
58-35-10. Articles of incorporation--Approval and endorsement by attorney general.After the director approves the articles of incorporation, he shall submit the proposed articles of incorporation to the attorney general for examination. If the attorney general finds that the articles comply with the provisions of this chapter, and the Constitution and laws of the United States and of this state, he shall endorse his approval thereon and return the proposed articles to the director. The director shall submit the original and two copies to the secretary of state for approval. If the secretary of state finds that the articles of incorporation comply with the corporate laws, he shall endorse his approval thereon, retain the original and return a copy to the incorporators and a copy to the division. Source: SL 1966, ch 111, ch 17, 9 (1); SL 1993, ch 369, 3.
58-35-11. Misleading name of proposed corporation--Rejection by director.If the director deems the name of the proposed corporation to be so similar to one already appropriated by another company as to be likely to mislead the public, he shall reject the name applied for and shall notify the incorporators thereof. Source: SL 1966, ch 111, ch 17, 9 (2).
58-35-13. Transaction of business without certificate of authority as misdemeanor.The corporation shall not transact business as an insurer until it has received a certificate of authority as provided in this chapter. Violation of this section is a Class 2 misdemeanor. Source: SL 1966, ch 111, ch 17, 9 (4); SL 1978, ch 359, 2.
58-35-14. Amendment of articles of incorporation.A farm mutual insurer may, by a two-thirds vote of those present in person or, if authorized by the bylaws, by proxy, at any annual meeting, or at any special meeting of members called for that purpose, amend its articles of incorporation to extend its corporate existence or in any particular within the scope of this chapter, by causing amended articles to be filed in the same form and manner as required for original articles of incorporation. The amended articles of incorporation shall be signed only by the president and secretary of the corporation. Notice of the proposed amendment, or a summary of the changes to be effected thereby, shall be contained in the notice given of such annual or special meeting, and any number of amendments may be submitted to the members, and voted upon by them, at one meeting. Source: SL 1966, ch 111, ch 17, 10; SL 1967, ch 129, 4.
58-35-15. Qualifications of state mutual insurer for certificate of authority.When applying for an original certificate of authority, a state mutual insurer must be otherwise qualified therefor under this title, and it must have received acceptable applications from one hundred persons, each for substantial insurance, aggregating at least five hundred thousand dollars; and such applicants must have given to the insurer the obligations referred to in 58-35-41, or paid the premium required, subject to the insurer qualifying to transact insurance. Source: SL 1966, ch 111, ch 17, 11 (2).
58-35-16. Qualifications of county mutual insurer for certificate of authority.When applying for an original certificate of authority, a county mutual insurer must be otherwise qualified therefor under this title, and it must have received acceptable applications from twenty-five persons for substantial insurance, aggregating at least one hundred thousand dollars; and such applicants must have given to the insurer the obligations referred to in 58-35-41, or paid the premium required, subject to the insurer qualifying to transact insurance. Source: SL 1966, ch 111, ch 17, 11 (1).
58-35-17. Certificate of authority to insure against hail--Required qualifications to obtain.When applying for an original certificate of authority to insure growing crops against loss by hail, the insurer must be otherwise qualified therefor under this title, and it must have received applications for such insurance from not less than one hundred persons owning in the aggregate not less than five thousand acres of grain; and each such applicant must have given to the insurer the obligations referred to in 58-35-41, or paid the premium required subject to the insurer qualifying to transact insurance. Source: SL 1966, ch 111, ch 17, 11 (3).
58-35-18. Issuance of certificate of authority--Continuation--Termination.Upon application, the director shall issue such a certificate of authority to every insurer qualified therefor under this chapter. The certificate of authority shall continue, unless revoked or otherwise terminated. Source: SL 1966, ch 111, ch 17, 12 (1); SL 2004, ch 297, 2.
58-35-19. Fees for certificate of authority.The insurer shall pay to the director the fees specified in 58-2-29 for each issuance and renewal of its certificate of authority. Source: SL 1966, ch 111, ch 17, 12 (2).
58-35-2. Farm mutual insurers subject to chapter.All insurers described in 58-35-1 may be referred to as "farm mutual insurers." Source: SL 1966, ch 111, ch 17, 1 (2).
58-35-20. Suspension or revocation of certificate of authority--Grounds.A certificate of authority shall be subject to suspension or revocation by the director for violation of or noncompliance with any law of this state. Source: SL 1966, ch 111, ch 17, 12 (3).
58-35-21. Bylaws--Making and approval--Modification.The initial board of directors of a farm mutual insurer shall adopt such bylaws as may be deemed necessary for the management of its affairs. The bylaws shall be subject to the approval of the insurer's members at their next succeeding meeting by a two-thirds vote of those present in person or, if authorized by the bylaws, by proxy. The members shall otherwise have the power to make, modify, and revoke bylaws. Source: SL 1966, ch 111, ch 17, 13.
58-35-22. Contents of bylaws.The bylaws of a farm mutual insurer shall provide:(1)The extent of liability of each member for payment of the expenses and losses of the insurer;(2)The time when obligations of members for losses and expenses become due;(3)The terms of office of the directors; at least part of the directors shall be elected at each annual meeting of members, and the term of any director shall not be longer than three years;(4)The date of the annual meeting of the members. Each member shall be permitted to cast at least one vote, either in person or, if authorized by the bylaws, by proxy, for each director to be elected and upon any other matter;(5)The method of selecting directors in event of resignation, disability, or death; and(6)The method of giving notice of annual and special meetings of members. Source: SL 1966, ch 111, ch 17, 14 (1).
58-35-23. Filing of bylaws--Disapproval by director.The insurer shall promptly file with the director two certified copies of its bylaws and all amendments thereto. The director at the time of filing or at any time thereafter may disapprove any bylaw provision deemed by him to be unlawful, unreasonable, inadequate, unfair, or detrimental to the proper interests or protection of the insurer's members or any class thereof. Source: SL 1966, ch 111, ch 17, 14 (2); SL 1993, ch 369, 5.
58-35-24. Minimum number of members.The total membership of the insurer shall at all times be not less than the number of persons required by 58-35-5 or 58-35-6 to incorporate such an insurer. Source: SL 1966, ch 111, ch 17, 15.
58-35-25. Directors--Election--Term of office.Directors of a farm mutual insurer shall be elected by its members by ballot for terms not to exceed three years, and shall hold office until their respective successors are elected and qualified. Source: SL 1966, ch 111, ch 17, 18 (1).
58-35-26. Qualification of directors.No individual shall serve as a director of a farm mutual insurer unless a member of the insurer. Source: SL 1966, ch 111, ch 17, 18 (2).
58-35-27. Officers--Election--Term of office.The board of directors of an insurer shall elect from their number a president and vice-president. The board shall also elect a secretary and treasurer or a secretary-treasurer of the insurer. Officers shall hold their offices for one year, and until their successors are elected and qualified. Source: SL 1966, ch 111, ch 17, 19.
58-35-28. Bonds of treasurer and secretary.The treasurer and secretary of an insurer shall each give bond to the insurer for the faithful performance of his duties, in such amount as is designated by the board of directors. Any such bond shall be issued by an authorized corporate surety. Source: SL 1966, ch 111, ch 17, 20.
58-35-29.1. Living expenses and fire department service charges incidental to casualty insurance.A farm mutual insurer may, in connection with policies covering property insured under 58-35-29, afford coverage for additional expenses or loss of use resulting from fire or other casualty rendering the insured property unusable, and coverage for an insured's liability, assumed by contract or agreement, for fire department service charges. Source: SL 1972, ch 267; SL 1993, ch 370, 2.
58-35-29. Property insurable by farm mutual.A farm mutual insurer shall only insure the following described property against loss or damage by fire or other casualty:(1)Farm dwellings and buildings, including the usual contents therein, livestock, farm machinery, growing crops, and other forms of farm property;(2)Dwellings designed for occupancy by not over two families, including the usual contents thereof, and private structures;(3)Churches, schools, and community buildings including the usual contents thereof;(4)The usual and customary possessions of the occupants of multi-family dwellings; and(5)Personal property used in a solely-owned business activity conducted on the insured premises, including property held for resale if the insured property is covered by reinsurance.For purposes of this chapter any policy written by a farm mutual insurer is considered a personal lines policy. Source: SL 1966, ch 111, ch 17, 3 (1); SL 1979, ch 341, 24; SL 1992, ch 60, 2; SL 1993, ch 370, 1; SL 2004, ch 297, 3.
58-35-3. State mutual insurer defined.An insurer authorized to insure property throughout the state, but including personal property temporarily removed therefrom, is a "state mutual insurer." Source: SL 1966, ch 111, ch 17, 2 (1).
58-35-30. Insurance of property not owned by member or spouse prohibited--Exceptions.No insurer may insure any property not owned by a member or by his spouse except for the following:(1)Property described in subdivision 58-35-29(3); and(2)Personal property in the care, custody, and control of a member or his spouse. Source: SL 1966, ch 111, ch 17, 3 (2); SL 1992, ch 356.
58-35-32.1. Liability insurance issued by state insurers--Medical and disability benefits--Snowmobiles.A state mutual insurer may issue policies of insurance insuring against legal liability for the death, injury, or disability of any human being, or for damage to property, excluding liability, loss, or expense resulting from or incidental to the ownership, maintenance, or use of aircraft or motor vehicles normally operated, intended to be operated, or designed primarily for use upon highways, roads, or streets; and provision may be included in such policies for medical, hospital, surgical, and disability benefits to injured persons and funeral and death benefits to dependents, beneficiaries, or personal representatives of persons killed, irrespective of legal liability of the insured, when issued as incidental coverage with or supplemental to such liability insurance. A state mutual insurer may insure snowmobiles whether used on or off premises, but the insurance covering off premises usage shall comply with chapter 32-35 and must be offered at a limit specified in a separately written and approved endorsement or policy. Source: SL 1970, ch 272; SL 1991, ch 406.
58-35-32. Insurance on churches, schools, and community buildings.No contract of insurance covering any church, school, or community building referred to in 58-35-29 shall be invalid because any director or officer of the insurer was or is a trustee, director, agent, custodian, or manager or in any way in control, supervision, or management of any or all of the property so insured. Source: SL 1966, ch 111, ch 17, 29.
58-35-33. Withdrawal from membership--Surrender of policy for cancellation--Payment of obligations.Any member of an insurer may withdraw therefrom by surrendering his policy to the insurer for cancellation and paying all obligations then owing by him to the insurer. Source: SL 1966, ch 111, ch 17, 17 (1).
58-35-35. Maximum amount of insurance on single risk.The maximum amount of insurance which an insurer shall retain on a single risk, after deduction of applicable reinsurance, shall not exceed ten percent of the admitted assets of the insurer or ten thousand dollars, whichever is the larger amount. Source: SL 1966, ch 111, ch 17, 4 (1).
58-35-36. Single risk defined.For the purposes of 58-35-35, a "single risk" as to insurance against fire and hazards other than windstorm, earthquake, or other catastrophic perils, includes all properties insured by the same insurer which are reasonably susceptible to loss or damage from the same fire or the same occurrence of such other hazard insured against. Source: SL 1966, ch 111, ch 17, 4 (2).
58-35-37. Cash premium or assessment plan for transacting business.An insurer may transact business on either a cash premium plan or on an assessment plan as provided for in its articles of incorporation or bylaws. Source: SL 1966, ch 111, ch 17, 6 (1).
58-35-38. Cash premium plan--Collection of premiums.If transacting business on the cash premium plan, the insurer shall collect from each member before or at the effective date of the member's insurance the premium in such amount as the insurer deems will be adequate to cover losses and expenses incurred during the term of such insurance, or for a period of one year from the inception date of the policy, if same be written for a longer period than one year. Source: SL 1966, ch 111, ch 17, 6 (2).
58-35-39. Cash premium plan--Special assessment in case of inadequacy.An insurer transacting business on the cash premium plan shall provide in its bylaws and policies for special assessment of its members if the cash premium charged is found to be inadequate to pay losses and expenses currently incurred. The bylaws shall provide that the amount which can be so assessed in any one policy year shall not be less than one nor more than six times the premium charged on each member's policy at the annual rate for a term of one year. Source: SL 1966, ch 111, ch 17, 6 (4).
58-35-4. County mutual insurer defined--Continuation of prior business in noncontiguous counties permitted--Exceptions.An insurer authorized to insure only property located in the county of its principal office and in those counties contiguous to the county of its principal office in this state, but including personal property temporarily removed therefrom, is a "county mutual insurer." However, those county farm mutuals insuring property located in noncontiguous counties as of August 25, 1978, may continue to insure property located in those noncontiguous counties served as of August 25, 1978, upon registration prior to January 1, 1980, with the director. The director of the Division of Insurance may permit a county farm mutual which otherwise does not meet the requirements of this section to insure property located in counties which would be considered noncontiguous to its home office subsequent to August 25, 1978, if, after a hearing, he finds that the violation of this section occurs because of a merger or consolidation consummated subsequent to August 25, 1978, as a result of bona fide negotiations begun prior to August 25, 1978, provided that the hearing is held prior to January 1, 1980. Source: SL 1966, ch 111, ch 17, 2 (2); SL 1979, ch 341, 22.
58-35-40. Assessment plan insurance--Levy of assessments before or after liability incurred--Collection of initial amount before effective date of insurance.If transacting business on the assessment plan, the insurer will depend for the payment of losses and expenses principally upon assessments levied upon members either before or after such losses or expenses have been incurred. This provision shall not be construed to prevent any such insurer from collecting from each member such initial amount as it may deem proper on or before the effective date of the member's insurance; nor to prohibit the accumulation of surplus or unallocated funds. Source: SL 1966, ch 111, ch 17, 6 (3).
58-35-41. Application for insurance to be in writing--Advance cash payments.An insurer shall require a written application from each person desiring insurance. If the insurer is transacting business on the assessment plan, the applicant shall at the time of application give his obligation to the insurer for the payment of losses and expenses as provided in the insurer's bylaws, and make such advance payment in cash as the insurer may require. Source: SL 1966, ch 111, ch 17, 26.
58-35-42. Application and policy forms filed with director--Disapproval.All forms of application for insurance and of policies proposed to be used by an insurer shall be filed with the director at least thirty days in advance of any such use. The director shall disapprove any such form found by him to be unlawful, illegible, or misleading. An insurer shall not use any such form after it has received the director's notice of disapproval setting forth the reasons therefor. Source: SL 1966, ch 111, ch 17, 27.
58-35-43. Rates--Filing with director not required--Discrimination prohibited.A farm mutual insurer is not required to file any of its insurance rates with the director. No such rate shall discriminate between subjects of insurance having substantially the same insuring, exposure, and underwriting characteristics. Source: SL 1966, ch 111, ch 17, 28.
58-35-44. Reinsurance.A farm mutual insurer may cede reinsurance to any other farm mutual insurer authorized to insure the risks ceded and to other authorized property insurers or reinsurers, and may accept reinsurance from other farm mutual insurers. A farm mutual insurer may also reinsure with a reinsurer authorized pursuant to chapter 58-14. Source: SL 1966, ch 111, ch 17, 5; SL 1993, ch 371.
58-35-45. Reinsurance corporation formed by insurers--Procedure.Any number, not less than five, of farm mutual insurers organized under this chapter may form a corporation for the purpose of reinsuring the risks of the members, on the mutual plan. The insurers proposing to form such reinsurance company shall file with the director a declaration of their intention to form such a corporation, together with proposed articles of incorporation, substantially in the manner and form provided by 58-35-7 to 58-35-9, inclusive, which proposed articles of incorporation, and amendments thereof, shall be treated substantially in the manner and form provided by 58-35-10 to 58-35-14, inclusive. The bylaws of such reinsurance company shall contain provisions for the government of such company and the conduct of its business substantially in the manner and form provided by 58-35-22 and 58-35-23. Source: SL 1966, ch 111, ch 17, 32; SL 1976, ch 318.
58-35-46. Risk limitation inapplicable to organization of county mutual insurers for reinsurance purposes.The risk limitations set forth in 58-35-35 and 58-35-36 shall not apply to reinsurance companies formed under 58-35-45. All reinsurance contracts of such reinsurer shall be submitted to the director for his approval, and he shall disapprove any reinsurance contracts which he finds would be contrary to the interests of the policyholders of the ceding insurers. Source: SL 1966, ch 111, ch 17, 32.
58-35-47. Investment of funds authorized.The directors of a farm mutual insurer may invest the insurer's funds or any part of the insurer's funds in any of the following:(1)Bonds or other securities issued by the United States government or by any agency or instrumentality of the United States government, or by any United States government-sponsored enterprise;(2)Bonds or other obligations the payment of the interest and principal of which is assumed or guaranteed by the United States government or any agency or instrumentality of the United States government, or by any United States government-sponsored enterprise;(3)General obligation bonds or warrants of this state or of any other state of the United States, or of any of the political subdivisions or other taxing districts of this state or any other state;(4)Certificates of deposit in any bank wherein the deposits are insured by the federal deposit insurance corporation up to the amount to which such insurance protection applies;(5)Shares or savings accounts of savings and loan and building and loan associations to the extent that such an account is insured by the federal savings and loan insurance corporation;(6)When authorized by a majority vote of its members present at a duly called and held meeting of members, and with the consent of the director, in a home office building and the land on which such building is situated;(7)With the approval of the director of the Division of Insurance, in the preferred stock of any solvent corporation existing under the laws of the United States of America, or any state of the United States and in the common stock of any other solvent insurer;(8)Bonds, notes, or other obligations issued by any federal land bank, federal intermediate credit bank, bank for cooperatives, or any or all of the federal farm credit banks;(9)With the approval of the director of the Division of Insurance, in common stocks, mutual funds and exchange traded funds consisting of common stocks, not to exceed twenty percent of the company's admitted assets. No individual common stock may exceed five percent of the company's admitted assets;(10)Money market funds which would qualify as an investment pursuant to 58-27-101;(11)With the approval of the director of the Division of Insurance, in an insurance agency;(12)Investments set forth in 58-27-103 if the aggregate value of the investments pursuant to that section do not exceed ten percent of the farm mutual's total admitted assets and do not exceed the limitation set forth in 58-27-53;(13)With the approval of the director of the Division of Insurance, in corporate bonds, convertible bonds, preferred stocks, or other fixed income mutual funds, or exchange traded funds consisting of income securities issued by corporations. No issuer may exceed five percent of admitted assets and no one mutual fund or exchange traded fund may exceed twenty percent of admitted assets. All individual holdings must be rated A3 or better by Moody's Investor Service or rated A- or better by Standard & Poor's Corporation. All mutual funds or exchange traded funds must have an average credit quality of A3 or better as rated by Moody's Investor Service or A- or better as rated by Standard & Poor's Corporation.If a farm mutual insurer has invested its funds or any part of its funds pursuant to subdivisions 58-35-47(9) or (13) and the farm mutual insurer is determined to be in a financially hazardous condition, the director may order the farm mutual insurer to reinvest those funds pursuant to chapters 58-4 or 58-29B. Source: SL 1966, ch 111, ch 17, 23; SL 1967, ch 135, 1, 2; SL 1974, ch 320; SL 1979, ch 37, 8; SL 1986, ch 423; SL 1987, ch 383; SL 1990, ch 409; SL 1993, ch 372; SL 1994, ch 388; SL 2004, ch 297, 4; SL 2014, ch 243, 1.
58-35-48. Funds expended for educational purposes--Maximum amount--Statement in annual report.An insurer may spend earnings of the preceding year for educational purposes. A complete and itemized report of such expenditures shall be filed by the insurer as part of its annual report required under 58-35-54. Source: SL 1966, ch 111, ch 17, 24; SL 1993, ch 373.
58-35-49. Claim for loss--Notice in writing--Arbitration.Every member who shall sustain loss or damage for which the company is liable, shall immediately notify in writing the secretary, or in his absence the president, of the company specifying the property destroyed or damaged and the time and cause thereof. The secretary, or in his absence the president, of the company shall forthwith inspect and adjust the loss or cause it to be inspected and adjusted in such manner as may be provided by the bylaws. In case of the inability of the parties to agree upon the amount of such loss or damage, the claimant and the company shall each choose a disinterested party who shall constitute a board of arbitration to settle such loss, and in case the arbitrators cannot agree they shall choose a third person to act with them and such board of arbitration shall have power to administer oaths, examine witnesses, and determine all matters in dispute and the decision of such board shall be final unless an interested party thereto appeals to a court within sixty days thereafter. Source: SL 1966, ch 111, ch 17, 30.
58-35-5. Incorporators--Number and property ownership required for state mutual insurer.One hundred or more individuals residing in this state, each of whom is at least twenty-one years of age, who collectively own farm property as referred to in 58-35-29 valued at not less than five hundred thousand dollars which they desire to insure, and each of whom owns farm or ranch land situated in this state valued at not less than five thousand dollars, may incorporate as a state mutual insurer. Source: SL 1966, ch 111, ch 17, 7 (1).
58-35-50. Directors' and officers' liability for failure to pay claims.The directors or officers of an insurer are liable in their individual capacity to the person sustaining an insured loss, if they willfully refuse or neglect to make an assessment and collect the obligations owing to the insurer in accordance with the provisions of this chapter. Source: SL 1966, ch 111, ch 17, 31.
58-35-54. Annual statement of affairs--Contents and filing.The president and secretary of every insurer, on or before the first day of March of each year, shall prepare, affirm under oath, affix the corporate seal thereto, and file with the director, on forms furnished by the director, an annual statement as of December thirty-first of the preceding calendar year including:(1)The names of the president and secretary;(2)The date of the annual meeting;(3)The amount of insurance in force;(4)The number of members;(5)The number of assessments made during the year;(6)The amount paid in losses during the year;(7)The amount of the losses claimed and not paid, with the reason for nonpayment;(8)The number of members cancelled or nonrenewed during the year;(9)The number of new members admitted during the year;(10)The expenses during the year;(11)The amount of money on hand;(12)The amount and character of the insurer's assets;(13)The amount of the insurer's liabilities; and(14)Such other information as the director may require. Source: SL 1966, ch 111, ch 17, 21 (1); SL 2004, ch 297, 5.
58-35-55. Failure to file annual statement--Suspension or revocation of certificate of authority.The director may suspend or revoke the certificate of authority of any insurer failing to file its annual statement. Source: SL 1966, ch 111, ch 17, 21 (2).
58-35-56. Annual statement--Presentation at meeting of members.The annual statement of the insurer, as required to be filed with the director under 58-35-54, shall be presented at the next annual meeting. Source: SL 1966, ch 111, ch 17, 16.
58-35-57. Application of other provisions.The following chapters and sections of this title apply to farm mutual insurers to the extent not inconsistent with the express provisions of this chapter and the reasonable implications of the express provisions:(1)Chapter 58-1. Definitions and General Provisions;(2)Chapter 58-2. Division of Insurance;(3)Chapter 58-3. Examination of Insurers and Insurance Producers;(4)Chapter 58-4. Enforcement Powers and Proceedings (except 58-4-7);(5)Chapter 58-4A. Insurance Fraud;(6)Sections 58-5-134 to 58-5-140, inclusive. Organization and General Powers of Insurers;(7)Chapter 58-10. Insurable Interest;(8)Chapter 58-11. Form and Contents of Insurance Policies;(9)Chapter 58-12. Insurance Claims and Benefits (except 58-12-3);(10)Chapter 58-17D. Standards for Utilization Review for Property and Casualty Insurers;(11)Chapter 58-33. Unfair Trade Practices;(12)Chapter 58-30. Insurance Producers;(13)Chapter 58-29B. Insurers Supervision, Rehabilitation and Liquidation;(14)Chapter 58-43. Independent Audit of Insurers (except 58-43-2). Source: SL 1966, ch 111, ch 17, 33; SL 1967, ch 129, 5; SL 1977, ch 417; SL 1979, ch 341, 14; SL 1991, ch 407, 1; SL 2001, ch 286, 216; SL 2001, ch 288, 1; SL 2003, ch 255, 1; SL 2008, ch 274, 1.
58-35-58. Provisions exclusive.Nothing in the insurance laws of this state shall be deemed to apply to or govern either directly or indirectly domestic farm mutual insurers except as contained or referred to in this chapter. Source: SL 1966, ch 111, ch 17, 1 (3).
58-35-59. Financial reporting standards.The financial reporting standards, procedures and accounting principles for farm mutuals are those set forth in the following National Association of Insurance Commissioners' manuals as amended as of December 31, 1993: Annual Statement Instructions, Property and Casualty; Examiner's Handbook; and Accounting Practices and Procedures Manual, Fire and Casualty Insurance Companies. The director may waive any standard, procedure, or accounting principle which the director determines is inapplicable to a farm mutual. The director shall establish a date by which the farm mutuals shall comply with financial reporting standards, procedures, and accounting principles or any amendment to them. The director may promulgate rules, pursuant to chapter 1-26, for the enforcement of this section. Source: SL 1991, ch 407, 2; SL 1993, ch 357, 6.
58-35-6. Incorporators--Number and property ownership required for county mutual insurer.Twenty-five or more individuals residing in this state, each of whom is an adult and owns farm or ranch land valued at not less than five thousand dollars located in the county of the principal office of the proposed insurer, or any county contiguous to the county of the principal office and who collectively own, in such counties, farm property referred to in 58-35-29 valued at not less than one hundred twenty-five thousand dollars which they desire to insure, may incorporate as a county mutual insurer. Source: SL 1966, ch 111, ch 17, 7 (2); SL 1979, ch 341, 23.
58-35-60. Merger of farm mutual insurers--Plan of merger.Any two or more farm mutual corporations authorized to transact business pursuant to this chapter may merge into one farm mutual corporation pursuant to a plan of merger as provided in this section and 58-35-61 to 58-35-74, inclusive. The board of directors of each corporation, shall, by resolution adopted by each such board, approve a plan of merger setting forth:(1)A statement that the merger is advisable;(2)The names of the corporations proposing to merge, and the name of the corporation into which they propose to merge, to be known as the surviving corporation;(3)The terms and conditions of the proposed merger;(4)The names of the surviving corporation's first board of directors;(5)The surviving corporation's principal office;(6)The manner and basis of converting the assets and liabilities of each corporation into the assets, liabilities, or obligations or other securities of the surviving corporation or of any other corporation, or, in whole or in part, into cash or other property;(7)A statement of any changes in the articles of incorporation of the surviving corporation to be affected by the merger;(8)That the board of directors approves the merger of the corporation into the surviving corporation; and(9)Any other provisions with respect to the proposed merger that are necessary or desirable. Source: SL 1995, ch 293, 1.
58-35-61. Policyholders to vote on merger plan--Notice of vote. Following the adoption of the resolution approving the plan of merger required by 58-35-60, a meeting of the policyholders of each of the corporations shall be held to vote upon the proposed merger plan. Written notice of the meeting of the policyholders shall be given to all policyholders, which may be either an annual or special meeting. Written notice shall be given to each policyholder of record whether or not entitled to vote at the meeting, not less than twenty days before the meeting, in the manner provided in 47-1A-701 to 47-1A-747, inclusive, and 47-1A-1601 to 47-1A-1620, inclusive, for the giving of notice of meetings of shareholders. Whether the meeting is an annual or special meeting, the notice shall state that the purpose or one of the purposes of the meeting is to consider the proposed plan of merger. A copy of the resolution passed by the board of directors shall be included in or enclosed with the notice. Source: SL 1995, ch 293, 2; SL 2005, ch 202, 26; SL 2021, ch 210,  21.
58-35-62. Approval of plan of merger by majority of voters.At the meeting of the policyholders, the policyholders shall vote on the proposed plan of merger. The plan of merger is approved if the majority of the policyholders present at the meeting vote for the proposed plan of merger. No policyholder may vote by proxy. Source: SL 1995, ch 293, 3.
58-35-63. Execution and acknowledgment of articles of merger--Contents of articles.If the plan of merger is approved, an original and one exact or conforming copy of the articles of merger shall be executed by each corporation by the chairman of the board of directors of the corporation or by its president or by another of its officers. The articles shall be acknowledged and shall set forth:(1)The plan of merger;(2)The number of votes voted for and against the merger;(3)The terms and conditions of the proposed merger;(4)The names of the surviving corporation's first board of directors;(5)The surviving corporation's principal office;(6)The manner and basis of converting the assets and the liabilities of each corporation into assets, liabilities, obligations, or other securities of the surviving corporation or of any other corporation or, in whole or in part, into cash or other property. Source: SL 1995, ch 293, 4.
58-35-64. Filing plan of merger and articles of merger--Approval by director--Reasons for denying hearing.If two or more companies propose to merge under the provisions of 58-35-63 and their membership has approved the plan of merger, the plan of merger shall be filed with the director of the Division of Insurance, accompanied by the articles of merger, and a request for the approval of the plan of merger. The plan shall be approved by the director after a hearing on the plan within a reasonable time unless the director finds that the plan:(1)Is contrary to law;(2)Is inequitable to the policyholders of any domestic insurer involved; or(3)Would substantially reduce the security of and service to be rendered to the policyholders of the domestic insurer.The director shall review the plan of merger and may waive any hearing if the director finds the proposed merger does not prejudice the interests of the policyholders of the companies. Source: SL 1995, ch 293, 5.
58-35-65. Notification of disapproval of plan.If the director of the Division of Insurance does not approve any such plan and agreement, the director shall notify the corporations in writing, specifying the reasons. Source: SL 1995, ch 293, 6.
58-35-66. Examination of articles of merger by attorney general--Submission to secretary of state.The director of the Division of Insurance, after approving the articles of merger, shall submit the proposed articles of merger to the attorney general for examination. If the attorney general finds that the articles of merger comply with the provisions of 58-35-60 to 58-35-74, inclusive, and the constitution and laws of the United States and of this state, the attorney general shall endorse and return the proposed articles to the director. The director shall submit the original and two copies to the secretary of state for approval. Source: SL 1995, ch 293, 7.
58-35-67. Approval of articles of merger by secretary of state--Endorsement--Filing--Certificate of merger.Following the delivery of the articles of merger from the director of the Division of Insurance to the secretary of state, the secretary shall, on finding that the articles conform to law, if all required fees have been paid:(1)Endorse the word "filed" on the original and the copy and the month, day, and year of filing;(2)File the original in the secretary's office; and(3)Issue a certificate of merger to which the secretary shall affix the copy.The certificate of merger, together with a copy, shall be returned to the surviving corporation or its representative. Source: SL 1995, ch 293, 8.
58-35-68. Merger effective upon issuance of certificate.Upon the issuance of the certificate of merger by the secretary of state, the merger is effective. Source: SL 1995, ch 293, 9.
58-35-69. Surviving corporation exists separate from parties to merger.If a merger has been effected pursuant to 58-35-60 to 58-35-74, inclusive:(1)The several corporations to the plan of merger are a single corporation which is that corporation designated in the plan of merger as the surviving corporation;(2)The separate existence of all corporations parties to the plan of merger, except the surviving or new corporation shall cease; and(3)The surviving or new corporation has all the rights, privileges, immunities, and powers and is subject to all the duties and liabilities of a corporation organized under 58-35-60 to 58-35-74, inclusive, and 47-1A-101 to 47-1A-863.3, inclusive, 47-1A-1001 to 47-1A-1021, inclusive, and 47-1A-1201 to 47-1A-1202.6, inclusive. Source: SL 1995, ch 293, 10; SL 2005, ch 202, 27.  
58-35-7. Declaration of intent to incorporate, filing--Proposed articles of incorporation, execution.The individuals proposing to form a farm mutual insurer as referred to in 58-35-5 or 58-35-6 shall file with the director:(1)A declaration of their intention to form such a corporation signed by at least one hundred incorporators if a proposed state mutual insurer, or by at least twenty-five incorporators if a proposed county mutual insurer; and(2)The original and two copies with original signatures of the proposed articles of incorporation signed by three or more of the incorporators and notarized. Source: SL 1966, ch 111, ch 17, 8 (1); SL 1993, ch 369, 1.
58-35-70. Rights, privileges, immunities, and franchises of surviving or new corporation.If a merger or consolidation has been effected pursuant to 58-35-60 to 58-35-74, inclusive:(1)The surviving or new corporation thereupon and thereafter possesses all the rights, privileges, immunities, and franchises, of a public as well as of a private nature, of each of the merging corporations;(2)All property, real, personal, and mixed and all debts due on whatever account and any other chose in action and all and every other interest, of or belonging to or due to each of the corporations so merged or consolidated, shall be taken and considered transferred to and vested in the single corporation without further act or deed; and(3)The title to any real estate, or any interest in the real estate, vested in any of the corporations may not revert or be in any way impaired by reason of such merger. Source: SL 1995, ch 293, 11.
58-35-71. Liabilities and obligations of surviving or new corporation.If a merger or consolidation has been effected pursuant to this chapter:(1)The surviving or new corporation is thenceforth responsible and liable for all the liabilities and obligations of each of the corporations so merged; and(2)Any claim existing or action or proceeding pending by or against any of the corporations may be prosecuted as if the merger had not taken place, or the surviving or new corporation may be substituted in its place.Neither the rights of creditors nor any liens upon the property of any such corporation may be impaired by the merger or consolidation. Source: SL 1995, ch 293, 12.
58-35-72. Articles of incorporation of surviving corporation amended by plan of merger.If a merger has been effected pursuant to 58-35-60 to 58-35-74, inclusive, the articles of incorporation of the surviving corporation shall be deemed to be amended to the extent, if any, the changes in its articles of incorporation are stated in the plan of merger. Source: SL 1995, ch 293, 13.
58-35-73. Dissolution of farm mutual insurer.A farm mutual insurer may dissolve under the applicable procedures prescribed by the statutes of this state applying to corporations for profit and be subject to any additional requirements found in chapter 58-35. Source: SL 1995, ch 293, 14.
58-35-74. Rights of dissenting members and proxy voters not applicable to mergers.The provisions of 47-1A-1101 to 47-1A-1108, inclusive, regarding the rights of dissenting members and proxy voting do not apply to mergers of farm mutual insurers pursuant to 58-35-60 to 58-35-74, inclusive. Source: SL 1995, ch 293, 15; SL 2005, ch 202, 28. 
58-35-75. Division of farm mutual insurers--Plan.Any farm mutual may divide itself into two or more farm mutuals. A written plan of division shall be prepared by the board of directors or by a committee selected by the board for that purpose. The plan of division shall set forth all the terms of the division and the proposed effect of the division on all members of the farm mutual. The plan shall also contain the articles of each new farm mutual being formed, if applicable, and any amendments to the articles of the remaining farm mutual. The applicable provisions of 58-35-60 apply to the plan of division and to the merger or integration of the divided farm mutual into another farm mutual or farm mutuals. Source: SL 2005, ch 277, 1. 
58-35-76. Members to vote on plan of division.The members of the farm mutual shall vote on the proposed plan of division in the manner provided in 58-35-61 and 58-35-62. Source: SL 2005, ch 277, 2. 
58-35-77. Articles of division of farm mutual--Articles of incorporation--Filing--Application of chapter provisions.The articles of division of a farm mutual, if approved, shall set forth the approved plan and such other information as required by 58-35-63 and shall be filed and approved as provided for by 58-35-64. Each part of the plan that contains the articles of a new farm mutual shall be separately filed and recorded as articles of incorporation for such new farm mutual. Any new farm mutual formed pursuant to 58-35-75 to 58-35-77, inclusive, is subject to the provisions of this chapter in the same manner as any other farm mutual. Source: SL 2005, ch 277, 3. 
58-35-78. Annual audit--Independent audit--Report--Extension.Any farm mutual insurer having direct premiums written in this state of more than two million dollars in any calendar year and more than two thousand policyholders or certificate holders of directly written policies nationwide at the end of a calendar year shall have an annual audit by an accountant of the financial statements reporting the financial position and the results of operations. This section also applies to insurers having assumed premiums pursuant to contracts or treaties of reinsurance of two million dollars or more. The director may require insurers with less than two million dollars in direct premiums and less than two thousand policyholders or certificate holders to have independent audits to determine the financial status of the insurer.The insurer shall file an audited financial report with the director on or before June first for the year that ended on the immediately preceding December thirty-first. The director may require an insurer to file an audited financial report earlier than June first with ninety days advance notice to the insurer.Extensions of the June first filing date may be granted by the director for thirty-day periods upon a showing by the insurer and its accountant to the director that there is good cause for an extension. The request for extension shall be submitted in writing to the director not less than ten days prior to the due date in sufficient detail to permit the director to make an informed decision. Source: SL 2008, ch 274, 2.
58-35-8. Articles of incorporation--Contents.The articles of incorporation required by 58-35-7 shall state:(1)The name of the corporation, which shall include the words "farm mutual" and if a county mutual insurer the name of the county of its principal place of business;(2)If a county mutual insurer, the name of the counties in which the corporation intends to do business and the address of its principal business office;(3)If a state mutual insurer, the location of its principal business office, which must be located in this state;(4)The purposes for which the corporation is formed;(5)If it will transact business on a cash premium plan or an assessment plan;(6)The duration of its existence, which may be perpetual;(7)The number of its directors, which shall be not less than five nor more than eleven; the names and addresses of the persons constituting the initial board of directors who shall serve until the first annual meeting of the members, and until their successors are elected and qualified; and(8)The names, residences and addresses of the incorporators and the value of their property desired to be insured. Source: SL 1966, ch 111, ch 17, 8 (2).
58-35-9. Fee for filing articles of incorporation.At the time of filing the proposed articles of incorporation, the incorporators shall submit a fee of twenty-five dollars payable to the division and the applicable filing fee payable to the secretary of state. Source: SL 1966, ch 111, ch 17, 8 (3); SL 1993, ch 369, 2.
58-36-1. Certificate not to be issued for assessment life or health insurance--Transaction of business as misdemeanor.No certificate of authority shall, after June 30, 1966, be issued to any insurer, organized upon the mutual assessment, cooperative, or natural premium plan for the purpose of writing assessment life, or health insurance. It is a Class 2 misdemeanor for any such insurer to transact business in South Dakota. Source: SL 1966, ch 111, ch 18, 1 (1); SL 1978, ch 359, 7.
58-36-45. Mutual property insurance association maintained by members of church--Risks covered--Conduct of business--License not required.The members of any one church or of any one religious denomination may maintain for the exclusive benefit of their members, an association for the mutual insurance of the property of its members against loss or damage by fire, lightning, storm, or hail, or all of them. Any such company, whether heretofore or hereafter organized, may also if specified in its articles of incorporation and bylaws, insure, in connection with fire and lightning policies, against loss or damage caused by smoke, explosion, riot, riot attending a strike, aircraft and vehicles, vandalism, theft, or other risk or risks. Such an association shall furnish no insurance except on property of an actual member of such church or denomination. It may conduct business upon the plan and method adopted by it, satisfactory to the director, and shall not be required to be licensed by or report to the director of insurance. Source: SDC 1939, 31.2919; SL 1951, ch 170, 11; SL 1955, ch 119; repealed SL 1966, ch 111, 5; re-enacted SL 1978, ch 366, 1.
58-36-46. Validation of past actions of religious society mutual.All actions of any religious society mutual which was organized pursuant to 31.2919 of the 1960 Supplement to the South Dakota Code of 1939, are valid despite the repeal of the section. Source: SL 1978, ch 366, 2.
58-37A-1. Fraternal benefit society defined.Any incorporated society, order, or supreme lodge, without capital stock, including one exempted under the provisions of subdivision 58-37A-38(2), whether incorporated or not, conducted solely for the benefit of its members and their beneficiaries and not for profit, operated on a lodge system with ritualistic form of work, having a representative form of government, and which provides benefits in accordance with this chapter, is a fraternal benefit society for the purposes of this chapter. Source: SL 1990, ch 410, 1.
58-37A-10. Procedure for formation of a society--Transaction by unincorporated society is a misdemeanor.A domestic society organized on or after January 1, 1991, shall be formed according to this section.Seven or more citizens of the United States, a majority of whom are citizens of this state, who desire to form a fraternal benefit society, may sign and acknowledge before some officer competent to take acknowledgment of deeds, articles of incorporation, in which shall be stated the proposed corporate name of the society, which may not so closely resemble the name of any society or insurance company as to be misleading or confusing; the purposes for which it is being formed and the mode in which its corporate powers are to be exercised; and the names and residences of the incorporators and the names, residences and official titles of all the officers, trustees, directors, or other persons who are to have and exercise the general control of the management of the affairs and funds of the society for the first year or until the ensuing election at which all the officers shall be elected by the supreme governing body, which election shall be held not later than one year from the date of issuance of the permanent certificate of authority.The articles of incorporation, duly certified copies of the society's bylaws and rules, copies of all proposed forms of certificates, applications therefor, and circulars to be issued by the society and a bond conditioned upon the return to applicants of the advanced payments if the organization is not completed within one year shall be filed with the director, who may require more information as the director considers necessary. The bond with sureties approved by the director shall be in an amount, not less than four hundred thousand dollars nor more than one million five hundred thousand dollars as required by the director. All documents filed are to be in the English language. If the purposes of the society conform to the requirements of this chapter and all provisions of the law have been complied with, the director shall certify, retain and file the articles of incorporation and furnish the incorporators a preliminary certificate of authority authorizing the society to solicit members.No preliminary certificate of authority granted under the provisions of this section is valid after one year from its date or after a further period, not exceeding one year, as may be authorized by the director upon cause shown, unless the five hundred applicants as required by this chapter are secured and the organization is completed. The articles of incorporation and all other proceedings are void in one year from the date of the preliminary certificate of authority, or at the expiration of the extended period, unless the society completes its organization and receives a certificate of authority to do business.Upon receipt of a preliminary certificate of authority from the director, the society may solicit members for the purpose of completing its organization, shall collect from each applicant the amount of not less than one regular monthly premium in accordance with its table of rates, and shall issue to each applicant a receipt for the amount collected. No society may incur any liability other than for the return of the advance premium, nor issue any certificate, nor pay, allow, or offer or promise to pay or allow, any benefit to any person until:(1)Actual bona fide applications for benefits have been secured on five hundred applicants, and any necessary evidence of insurability has been furnished to and approved by the society;(2)At least ten subordinate lodges have been established into which the five hundred applicants have been admitted;(3)There has been submitted to the director, under oath of the president or secretary, or corresponding officer of the society, a list of applicants, giving their names, addresses, date each was admitted, name and number of the subordinate lodge of which each applicant is a member, amount of benefits to be granted and premiums therefor; and (4)It is shown to the director, by sworn statement of the treasurer, or corresponding officer of the society, that five hundred applicants have each paid in cash at least one regular monthly premium, which premiums in the aggregate amount to at least one hundred fifty thousand dollars. The advance premiums shall be held in trust during the period of organization and if the society does not qualify for a certificate of authority within one year, the premiums shall be returned to the applicants.The director may make an examination and require further information. Upon presentation of satisfactory evidence that the society has complied with all the provisions of law, the director shall issue to the society a certificate of authority to that effect and that the society is authorized to transact business pursuant to the provisions of this chapter. The certificate of authority is prima facie evidence of the existence of the society at the date of the certificate. The director shall cause a record of the certificate of authority to be made. A certified copy of the record may be given in evidence with like effect as the original certificate of authority.No incorporated society authorized to transact business in this state on January 1, 1991, may be required to reincorporate.It is a Class 2 misdemeanor for an unincorporated or voluntary association to transact business in the state as a fraternal benefit society. Source: SL 1990, ch 410, 10.
58-37A-11. Amendments to society laws--Adoption--Filing--Printing as prima facie evidence.A domestic society may amend its laws in accordance with the provisions of this chapter by action of its supreme governing body at any regular or special meeting or, if its laws so provide, by referendum. A referendum may be held in accordance with the provisions of its laws by the vote of the voting members of the society, by the vote of delegates or representatives of voting members or by the vote of local lodges. A society may provide for voting by mail. No amendment submitted for adoption by referendum may be adopted unless, within six months from the date of submission, two-thirds of the members voting have signified their consent to the amendment by one of the methods specified.No amendment to the laws of any domestic society may take effect unless approved by the director who shall approve the amendment if the director finds that it has been duly adopted and is not inconsistent with any requirement of the laws of this state or with the character, objects and purposes of the society. Unless the director disapproves the amendment within sixty days after the filing of it, the amendment shall be considered approved. The approval or disapproval of the director shall be in writing and mailed to the secretary or corresponding officer of the society at its principal office. If the director disapproves the amendment, the reasons shall be stated in the written notice.Within ninety days from the approval by the director, each amendment, or a synopsis of the amendment, shall be furnished to all members of the society either by mail or by publication in full in the official publication of the society. The affidavit of any officer of the society or of anyone authorized by it to mail each amendment or synopsis, stating facts which show that same have been addressed and mailed, is prima facie evidence that the amendment or synopsis has been furnished to the addressee.Every foreign or alien society authorized to do business in this state shall file with the director a certified copy of all amendments of, or additions to, its laws within thirty days after their enactment.Printed copies of the laws as amended, certified by the secretary or corresponding officer of the society are prima facie evidence of their legal adoption. Source: SL 1990, ch 410, 11.
58-37A-12. Nonprofit organization created by society.A society may create, maintain, and operate, or may establish organizations to operate, not for profit institutions to further the purposes permitted by 58-37A-5. The institutions may furnish services free or at a reasonable charge. Any real or personal property owned, held or leased by the society for this purpose shall be reported in the annual statement required by 58-37A-26.It is a Class 2 misdemeanor for a society to own or operate a funeral home or an undertaking establishment. Source: SL 1990, ch 410, 12.
58-37A-13. Reinsurance agreement--Ceding risks.A domestic society may, by a reinsurance agreement, cede any individual risk to an insurer, other than another fraternal benefit society, having the power to make such reinsurance and authorized to do business in this state, or if not authorized, one which is approved by the director, but no society may reinsure substantially all of its insurance in force without the written permission of the director. It may take credit for the reserves on the ceded risks to the extent reinsured, but no credit may be allowed as an admitted asset or as a deduction from liability, to a ceding society for reinsurance made, ceded, renewed, or otherwise becoming effective after January 1, 1991, unless the reinsurance is payable by the assuming insurer on the basis of the liability of the ceding society under the contract or contracts reinsured without diminution because of the insolvency of the ceding society.Notwithstanding this limitation, a society may reinsure the risks of another society in a consolidation or merger approved by the director under 58-37A-14. Source: SL 1990, ch 410, 13.
58-37A-14. Consolidation or merger.A domestic society may consolidate or merge with any other society by complying with the provisions of this section and the applicable provisions of 47-1A-1101 to 47-1A-1108, inclusive, and chapter 58-5. It shall file with the director:(1)A certified copy of the written contract containing in full the terms and conditions of the consolidation or merger;(2)A sworn statement by the president and secretary or corresponding officers of each society showing the financial condition thereof on a date fixed by the director but not earlier than December thirty-first, next preceding the date of the contract;(3)A certificate of the officers, verified by their respective oaths, that the consolidation or merger has been approved by a two-thirds vote of the supreme governing body of each society, the vote being conducted at a regular or special meeting of each body, or, if the society's laws permit, by mail; and(4)Evidence that at least sixty days before the action of the supreme governing body of each society, the text of the contract had been furnished to all members of each society either by mail or by publication in full in the official publication of each society.If the director finds that the contract conforms to the provisions of this section, that the financial statements are correct and that the consolidation or merger is just and equitable to the members of each society, the director shall approve the contract and issue a certificate to that effect. Upon approval, the contract shall be in effect unless any society which is a party to the contract is incorporated under the laws of any other state or territory. The consolidation or merger is not effective until it has been approved as provided by the laws of the other state or territory and a certificate of approval filed with the director of insurance of this state or, if the laws of the other state or territory contain no such provision, the consolidation or merger is not effective until it has been approved by the director of the other state or territory and a certificate of approval filed with the director of insurance of this state.Upon the consolidation or merger becoming effective, all the rights, franchises, and interests of the consolidated or merged societies in and to every species of property, real, personal, or mixed, and things in action belonging to the consolidated or merged societies, shall be vested in the society resulting from or remaining after the consolidation or merger without any other instrument. However, conveyances of real property may be evidenced by proper deeds, and the title to any real estate or interest in real estate, vested under the laws of this state in any of the societies consolidated or merged, do not revert and are not impaired by reason of the consolidation or merger, but shall vest in the society resulting from the consolidation or merger.The affidavit of any officer of the society or of anyone authorized by it to mail any notice or document, stating that the notice or document has been addressed and mailed, is prima facie evidence that the notice or document has been furnished to the addressees. Source: SL 1990, ch 410, 14; SL 2005, ch 202, 29.  
58-37A-15. Conversion into life insurance company--Plan--Approval.Any fraternal benefit society incorporated under the laws of the state may reorganize and convert itself into a mutual life insurance company or into a stock life insurance company by compliance with all the requirements of the insurance laws of this state for mutual life insurance companies. A plan of conversion shall be prepared in writing by the board of directors setting forth the terms and conditions of conversion. The affirmative vote of two-thirds of all members of the supreme governing body at a regular or special meeting is necessary for the approval of the plan. No conversion may take effect unless approved by the director who may approve the plan if the director finds that the proposed change conforms to the requirements of law and is not prejudicial to the certificate holders of the society. Source: SL 1990, ch 410, 15.
58-37A-16. Contractual benefits allowed.A society may provide the following contractual benefits in any form:(1)Death benefits;(2)Endowment benefits;(3)Annuity benefits;(4)Temporary or permanent disability benefits;(5)Hospital, medical, or nursing benefits;(6)Monument or tombstone benefits to the memory of deceased members; and(7)Any other benefits as authorized for life and health insurers and which are not inconsistent with this chapter.A society shall specify in its rules those persons who may be issued, or covered by, the contractual benefits consistent with providing benefits to members and their dependents. A society may provide benefits on the lives of children under the minimum age for adult membership upon application of an adult. Source: SL 1990, ch 410, 16.
58-37A-17. Beneficiary designations--Funeral benefits.The owner of a benefit contract may change the beneficiaries in accordance with the laws or rules of the society unless the owner waives this right by specifically requesting in writing that the beneficiary designation be irrevocable. A society may, through its laws or rules, limit the scope of beneficiary designations and shall provide that no revocable beneficiary may obtain any vested interest in the proceeds of any certificate until the certificate has become due and payable in conformity with the provisions of the benefit contract. A society shall honor the request of the owner of a benefit contract to assign the contract to, or designate an irrevocable beneficiary of, a trust which provides for the payment of funeral or burial related expenses and is established by the insured, the insurer, or owner of the benefit contract, unless the request does not conform to the laws or rules of the society. In no event may the certificate proceeds paid to such a trust exceed the actual funeral or burial related expenses incurred.A society may provide for the payment of funeral benefits to the extent of the portion of any payment under a certificate as might reasonably appear to be due to any person equitably entitled to it by reason of having incurred expense occasioned by the burial of the member. A society shall honor the request of the owner of a benefit contract to collaterally assign the contract to, or make an irrevocable beneficiary designation of, a funeral home solely for the payment of funeral or burial related expenses, unless the request does not conform to the laws or rules of the society.If, at the death of any person insured under a benefit contract, there is no lawful beneficiary to whom the proceeds are payable, the amount of the benefit, except to the extent that funeral benefits may be paid as provided in this chapter, is payable to the estate of the deceased insured the same as other property not exempt. However, if the owner of the certificate is other than the insured, the proceeds are payable to the owner. Source: SL 1990, ch 410, 17; SL 2005, ch 278, 1; SL 2010, ch 245, 1.
58-37A-18. Money or other benefits not attachable for individual debts.No money or other benefit, charity, relief, or aid to be paid, provided, or rendered by any society, is liable to attachment, garnishment, or other process, or to be seized, taken, appropriated, or applied by any legal or equitable process or operation of law to pay any debt or liability of a member or beneficiary, or any other person who may have a right thereunder, either before or after payment by the society. Source: SL 1990, ch 410, 18.
58-37A-19. Benefit certificates.Every society authorized to do business in this state shall issue to each owner of a benefit contract a certificate specifying the amount of benefits to be provided by the benefit contract. The certificate, together with any riders or endorsements attached to it, the laws of the society, the application for membership, the application for insurance and declaration of insurability, if any, signed by the applicant, and all amendments to each, shall constitute the benefit contract, as of the date of issuance, between the society and the owner, and the certificate shall so state. A copy of the application for insurance and declaration of insurability, if any, shall be endorsed upon or attached to the certificate. All statements on the application are representations and not warranties. Any waiver of this provision is void.Any changes, additions or amendments to the laws of the society made or enacted after the issuance of the certificate, bind the owner and the beneficiaries, and govern and control the benefit contract in all respects the same as though the changes, additions, or amendments had been made before and were in force at the time of the application for insurance. However, no change, addition, or amendment may destroy or diminish benefits which the society contracted to give the owner as of the date of issuance.Any person upon whose life a benefit contract is issued before attaining the age of majority shall be bound by the terms of the application and certificate and by all the laws and rules of the society to the same extent as though the age of majority had been attained at the time of application.A society shall provide in its laws that if its reserves as to any class of certificates become impaired its board of directors or corresponding body may require that there shall be paid by the owner to the society the amount of the owner's equitable proportion of the deficiency as ascertained by its board. If the payment is not made either it stands as an indebtedness against the certificate and shall draw interest not to exceed the rate specified for certificate loans under the certificates or in lieu of or in combination with the indebtedness, the owner may accept a proportionate reduction in benefits under the certificate. The society may specify the manner of the election and which alternative is to be presumed if no election is made.Copies of any of the documents provided for in this section, certified by the secretary or corresponding officer of the society, shall be received in evidence of the terms and conditions thereof.No certificate may be delivered or issued for delivery in this state unless a copy of the form has been filed with the director in the manner provided for like policies issued by life and health insurers in this state. Every life, accident, health, or disability insurance certificate and every annuity certificate issued on or after one year from January 1, 1991, shall meet the standard contract provision requirements consistent with this chapter for like policies issued by life and health insurers in this state. However, a society may provide for a grace period for payment of premiums of one full month in its certificates. The certificate shall also contain a provision stating the amount of premiums which are payable under the certificate and a provision reciting or setting forth the substance of any sections of the society's laws or rules in force at the time of issuance of the certificate which, if violated, shall result in the termination or reduction of benefits payable under the certificate. If the laws of the society provide for expulsion or suspension of a member, the certificate shall also contain a provision that any member expelled or suspended, except for nonpayment of a premium or within the contestable period for material misrepresentation in the application for membership or insurance, may maintain the certificate in force by continuing payment of the premium.Benefit contracts issued on the lives of persons below the society's minimum age for adult membership may provide for transfer of control of ownership to the insured at an age specified in the certificate. A society may require approval of an application for membership in order to effect this transfer and may provide in all other respects for the regulation, government, and control of the certificates and all rights, obligations, and liabilities incident to and connected with the certificates. Ownership rights before this transfer shall be specified in the certificate. A society may specify the terms and conditions on which benefit contracts may be assigned. Source: SL 1990, ch 410, 19.
58-37A-2. Lodge system--Regular meetings--Lodges for children.A society is operating on the lodge system if it has a supreme governing body and subordinate lodges into which members are elected, initiated, or admitted in accordance with its laws, rules and ritual. Subordinate lodges shall be required by the laws of the society to hold regular meetings at least once in each month in furtherance of the purposes of the society. A society may organize and operate lodges for children under the minimum age for adult membership. No membership and initiation in local lodges may be required of those children, nor may they have a voice or vote in the management of the society. Source: SL 1990, ch 410, 2.
58-37A-20. Basis for computing value of nonforfeiture benefits.For certificates issued before one year after January 1, 1991, the value of every paid-up nonforfeiture benefit and the amount of any cash surrender value, loan, or other option granted shall comply with the provisions of law applicable immediately before January 1, 1991.For certificates issued on or after one year from January 1, 1991, every paid-up nonforfeiture benefit and the amount of any cash surrender value, loan, or other option granted may not be less than the corresponding amount based on the interest rate and mortality tables authorized by the laws of this state for the calculation of these benefits by life and health insurers issuing policies containing like benefits based upon such interest rate and mortality tables. Source: SL 1990, ch 410, 20.
58-37A-21. Authorized investments.A society shall invest its funds only in the investments that are authorized by the laws of this state for the investment of assets of life insurers and subject to the same limitations. Any foreign or alien society permitted or seeking to do business in this state which invests its funds in accordance with the laws of the state, district, territory, country, or province in which it is incorporated, shall be held to meet the requirements of this section for the investment of funds. Source: SL 1990, ch 410, 21.
58-37A-22. Permissible use of assets and special funds--Establishing separate accounts and issuing contracts.All assets shall be held, invested, and disbursed for the use and benefit of the society and no member or beneficiary has individual rights in the assets or is entitled to any apportionment on the surrender of any part of the assets, except as provided in the benefit contract.A society may create, maintain, invest, disburse, and apply any special fund or funds necessary to carry out any purpose permitted by the laws of the society.A society may, pursuant to resolution of its supreme governing body, establish and operate separate accounts and issue contracts on a variable basis, subject to the provisions of law regulating life and health insurers establishing the accounts and issuing the contracts. To the extent the society considers it necessary in order to comply with any applicable federal or state laws, or any rules issued under those federal or state laws, the society may adopt special procedures for the conduct of the business and affairs of a separate account, may, for persons having beneficial interests in a separate account, provide special voting and other rights, including special rights and procedures relating to investment policy, investment advisory services, selection of certified public accountants, and selection of a committee to manage the business and affairs of the account, and may issue contracts on a variable basis to which the provisions of the second and third paragraphs in 58-37A-19 do not apply. Source: SL 1990, ch 410, 22.
58-37A-23. Exemption from other insurance laws.Except as provided in this chapter, societies are exempt from all other provisions of the insurance laws of this state unless they are expressly designated in the law, or unless it is specifically made applicable by this chapter. Source: SL 1990, ch 410, 23.
58-37A-24. Exemption from certain taxes.Every society organized or licensed under this chapter is a charitable and benevolent institution for the purposes of this chapter, and all of its funds are exempt from all and every state, county, district, municipal, and school tax, other than sales taxes, use taxes, and taxes on real estate and office equipment. Source: SL 1990, ch 410, 24.
58-37A-25. Standards of valuation for certificates--Maintenance of excess reserves.Any standards of valuation for certificates issued before one year after January 1, 1991, shall be those provided by the laws applicable immediately before January 1, 1991.The minimum standards of valuation for certificates issued on or after one year from January 1, 1991, shall be based on the following:(1)For certificates of life insurance--the commissioner's standard ordinary mortality tables applicable to life and health insurers in this state; and(2)For annuity and pure endowment certificates, for total and permanent disability benefits, for accidental death benefits and for noncancelable accident and health benefits--the tables that are authorized for use by life and health insurers in this state.All of the above shall be under valuation methods and standards including interest assumptions in accordance with the laws of this state applicable to life and health insurers issuing policies containing like benefits.The director may accept other standards for valuation if the director finds that the reserves produced by the other standards will not be less in the aggregate than reserves computed in accordance with the minimum valuation standard prescribed in this section. The director may vary the standards of mortality applicable to all benefit contracts on substandard lives or other extra hazardous lives by any society authorized to do business in this state.Any society, with the consent of the insurance supervisory official of the state of domicile of the society and under such conditions, if any, which the director may impose, may establish and maintain reserves on its certificates in excess of the reserves required under this section, but no contractual rights of any benefit member may be affected by maintaining excess reserves. Source: SL 1990, ch 410, 25.
58-37A-26. Annual statement of affairs--Valuation of certificates--Filing requirements.Every society transacting business in this state shall annually, on or before the first day of March, unless for cause shown the time has been extended by the director, file with the director a true statement of its financial condition, transactions and affairs for the preceding calendar year. A fraternal benefit society receiving premiums, as defined in subdivision 10-44-1(5), in an amount of two hundred thousand dollars or more shall pay a five hundred dollar annual statement filing fee to the state. A fraternal benefit society receiving premiums, as defined in subdivision 10-44-1(5), in an amount less than two hundred thousand dollars, shall pay a one hundred dollar annual statement filing fee to the state. The statement shall be in general form and content as approved by the national association of insurance commissioners for fraternal benefit societies and as supplemented by additional information required by the director.As a part of the annual statement, each society shall, on or before the first day of March, file with the director a valuation of its certificates in force on December thirty-first last preceding. However, the director may for cause shown, extend the time for filing the valuation for not more than two calendar months. The valuation shall be done in accordance with the standards specified in 58-37A-25. The valuation and underlying data shall be certified by a qualified actuary or, at the expense of the society, verified by the actuary of the insurance regulatory agency of the state of domicile of the society.A society neglecting to file the annual statement in the form and within the time provided by this section shall forfeit one hundred dollars for each day during which the neglect continues, and, upon notice by the director to that effect, its authority to do business in this state shall cease while the default continues. Source: SL 1990, ch 410, 26.
58-37A-27. License to transact business--Annual expiration and renewal--License fee--Copy of license as evidence.Societies which are now authorized to transact business in this state, and all societies hereafter licensed, may continue their business until May 1, 1991. The authority of these societies and all societies hereafter licensed, may thereafter be renewed annually, but in all cases to terminate on the first day of the succeeding May. However, a license issued shall continue in effect until the new license is issued or specifically refused. A fraternal benefit society making application for a certificate of authority or original license to transact business in this state shall pay a five hundred dollar license fee to the state. A fraternal benefit society receiving premiums, as defined in subdivision 10-44-1(5), in an amount less than two hundred thousand dollars shall pay a one hundred dollar annual renewal license fee to the state. A fraternal benefit society receiving premiums, as defined in subdivision 10-44-1(5), in an amount of two hundred thousand dollars or more shall pay a five hundred dollar annual renewal license fee to the state. A certified copy or duplicate of the license is prima facie evidence that the licensee is a fraternal benefit society within the meaning of this chapter. Source: SL 1990, ch 410, 27.
58-37A-28. Examination of domestic, foreign, and alien societies--Requirements--Responsibility for expenses--Report of examination.The director, or any person appointed by the director, may examine any domestic, foreign, or alien society transacting or applying for admission to transact business in this state in the same manner as authorized for examination of domestic, foreign, or alien insurers. Requirements of notice and an opportunity to respond before findings are made public as provided in the laws regulating insurers are also applicable to the examination of societies.The expense of each examination and of each valuation, including compensation and actual expense of examiners, shall be paid by the society examined or whose certificates are valued, upon statements furnished by the director.A summary of the report of the director and the recommendations or statements of the director that accompany the report, shall be read at the first meeting of the board of directors or corresponding body of the society following their receipt, and if directed by the director, shall also be read at the first meeting of the supreme legislative or governing body of the society following their receipt. A copy of the report, recommendations, and statements of the director shall be furnished by the society to each member of the board of directors or other governing body. Source: SL 1990, ch 410, 28.
58-37A-29. Foreign or alien society--Qualifications and procedure for admission to transact business in state.It is a Class 2 misdemeanor for any foreign or alien society to transact business in this state without a license issued by the director. Any foreign or alien society desiring admission to this state shall have the qualifications required of domestic societies organized under this chapter. Any foreign or alien society may be licensed to transact business in this state upon filing with the director:(1)A duly certified copy of its articles of incorporation;(2)A copy of its bylaws, certified by its secretary or corresponding officer;(3)A power of attorney to the director as prescribed in 58-37A-35;(4)A statement of its business under oath of its president and secretary or corresponding officers in a form prescribed by the director, verified by an examination made by the supervising insurance official of its home state or other state, territory, province, or country, satisfactory to the director;(5)Certification from the proper official of its home state, territory, province, or country that the society is legally incorporated and licensed to transact business;(6)Copies of its certificate forms; and(7)Any other information as the director considers necessary;and upon a showing that its assets are invested in accordance with the provisions of this chapter. Source: SL 1990, ch 410, 29.
58-37A-3. Representative form of government determined.A society has a representative form of government if:(1)It has a supreme governing body constituted in one of the following ways:(a)The supreme governing body is an assembly composed of delegates elected directly by the members or at intermediate assemblies or conventions of members or their representatives, together with other delegates as may be prescribed in the society's laws. A society may provide for election of delegates by mail. The elected delegates shall constitute a majority in number and may not have less than two-thirds of the votes and not less than the number of votes required to amend the society's laws. The assembly shall be elected and shall meet at least once every four years and shall elect a board of directors to conduct the business of the society between meetings of the assembly. Vacancies on the board of directors between elections may be filled in the manner prescribed by the society's laws;(b)The supreme governing body is a board composed of persons elected by the members, either directly or by their representatives in intermediate assemblies, and any other persons prescribed in the society's laws. A society may provide for election of the board by mail. Each term of a board member may not exceed four years. Vacancies on the board between elections may be filled in the manner prescribed by the society's laws. Those persons elected to the board shall constitute a majority in number and not less than the number of votes required to amend the society's laws. A person filling the unexpired term of an elected board member shall be considered to be an elected member. The board shall meet at least quarterly to conduct the business of the society;(2)The officers of the society are elected either by the supreme governing body or by the board of directors;(3)Only benefit members are eligible for election to the supreme governing body and the board of directors; and(4)Each voting member shall have one vote; no vote may be cast by proxy. Source: SL 1990, ch 410, 3.
58-37A-33. Insurance producers--When license is required.Any insurance producer of a society shall be licensed in accordance with the provisions of chapter 58-30 regulating the licensing, revocation, suspension, or termination of license of resident and nonresident insurance producers. Source: SL 1990, ch 410, 33; SL 2001, ch 286, 218.
58-37A-34. Applicability of unfair trade prohibitions--Determination of membership requirements and to whom benefits offered.Any society and insurance producer authorized to do business in this state is subject to the provisions of chapter 58-33 relating to unfair trade practices. However, nothing in these provisions may be construed as applying to or affecting the right of any society to determine its eligibility requirements for membership or be construed as applying to or affecting the offering of benefits exclusively to members or persons eligible for membership in the society by a subsidiary corporation or affiliated organization of the society. Source: SL 1990, ch 410, 34; SL 2001, ch 286, 219.
58-37A-35. Appointment of director as attorney for service of process--Copy forwarded to secretary of society--Time for filing answer--Fee paid by plaintiff.Any society authorized to do business in this state shall appoint in writing the director to be its attorney upon whom all lawful process in any action or proceeding against it may be served and shall agree in writing that any lawful process against it which is served on the attorney shall be of the same legal force and validity as if served upon the society and that the authority shall continue in force so long as any liability remains outstanding in this state. Copies of this appointment, certified by the director, are sufficient evidence of it and shall be admitted in evidence with the same force and effect as the original was admitted.Service shall only be made upon the director, or if absent, upon the person in charge of the director's office. It shall be made in duplicate and shall constitute sufficient service upon the society. If legal process against a society is served upon the director, the director shall immediately forward one of the duplicate copies by registered mail, prepaid, directed to the secretary or corresponding officer. No service may require a society to file its answer, pleading, or defense in less than thirty days from the date of mailing the copy of the service to a society. No legal process may be served upon a society except in the manner provided in this section. At the time of serving any process upon the director, the plaintiff, or complainant in the action shall pay to the director a fee as set forth in subsection 58-2-29(12)(c). Source: SL 1990, ch 410, 35.
58-37A-36. Fraudulent statements, and soliciting membership in unlicensed societies as crimes.No person may knowingly make any false or fraudulent statement or representation in or with reference to any application for membership or for the purpose of obtaining money from or a benefit in any society. A violation of this provision is a Class 2 misdemeanor.Any person who willfully makes a false or fraudulent statement in any verified report or declaration under oath required or authorized by this chapter or of any material fact or thing contained in a sworn statement concerning the death or disability of an insured for the purpose of procuring payment of a benefit named in the certificate is guilty of perjury.No person may solicit membership for, or in any manner assist in procuring membership in, any society not licensed to do business in this state. A violation of this provision is a Class 2 misdemeanor. Source: SL 1990, ch 410, 36.
58-37A-37. Judicial review of actions of director.All decisions and findings of the director made under the provisions of this chapter are subject to review by proper proceedings in any court of competent jurisdiction in this state. Source: SL 1990, ch 410, 37.
58-37A-38.1. Inapplicability of subdivision 58-37A-38(2) to certain societies, orders, and associations.The provisions of subdivision 58-37A-38(2) do not apply to any society, order, or association which had a certificate of authority in this state as of July 1, 2006, nor to any society, order, or association which is formed on or after July 1, 2007. Any society, order or association not exempt pursuant to the provisions of this section shall hold a certificate of authority in this state. Source: SL 2007, ch 55, 2.
58-37A-38. Exempt societies--Allowance of compensation for procuring new members prohibited--Director to determine exemption--Exempt societies not subject to insurance laws.Nothing contained in this chapter may be construed as to apply to:(1)Grand or subordinate lodges of societies, orders, or associations now doing business in this state which provide benefits exclusively through local or subordinate lodges;(2)Orders, societies, or associations which admit to membership only persons engaged in crafts or hazardous occupations, in the same or similar lines of business, insuring only their own members and their families, and the ladies' societies or ladies' auxiliaries to these orders, societies, or associations;(3)Domestic societies which limit their membership to employees of a particular municipality, designated firm, business house, or corporation which provide for a death benefit of not more than four hundred dollars or disability benefits of not more than three hundred fifty dollars to any person in any one year, or both; or(4)Domestic societies or associations of a purely religious, charitable, or benevolent description, which provide for a death benefit of not more than four hundred dollars or for disability benefits of not more than three hundred fifty dollars to any one person in any one year, or both.Any such society or association described in subdivision (3) or (4) of this section which provides for death or disability benefits for which benefit certificates are issued, and any such society or association included in subdivision (4) of this section which has more than one thousand members, is not exempt from the provisions of this chapter.No society which, by the provisions of this section, is exempt from the requirements of this chapter, except any society described in subdivision (2) of this section may give or allow, or promise to give or allow, to any person any compensation for procuring new members.Every society which provides for benefits in case of death or disability resulting solely from accident and which does not obligate itself to pay natural death or sick benefits has all of the privileges and is subject to the provisions of this chapter. However, the provisions of this chapter relating to medical examination, valuations of benefit certificates and incontestability, do not apply to that society.The director may require from any society or association, by examination or otherwise, the information that will enable the director to determine whether the society or association is exempt from the provisions of this chapter.Any society, exempt under the provisions of this section, is also exempt from all other provisions of the insurance laws of this state. Source: SL 1990, ch 410, 38; SL 1992, ch 60, 2.
58-37A-39. Application of other provisions.In addition to the provisions contained in this chapter, the following chapters and provisions of the South Dakota Code also apply to fraternal benefit societies, to the extent applicable and not in conflict with the express provisions of this chapter and the reasonable implications of this chapter:(1)Chapter 47-6;(2)Chapter 58-1;(3)Chapter 58-2, with the exception of 58-2-29;(4)Chapter 58-3;(5)Chapter 58-4;(6)Chapter 58-5;(7)Sections 58-6-8, 58-6-46, and 58-6-47;(8)Chapters 58-15, 58-17, 58-17A, 58-17B, and 58-18;(9)Chapter 58-29B;(10)Chapter 58-30;(11)Chapter 58-33;(12)Chapters 58-17F, 58-17G, 58-17H, 58-17I, and 58-33A. (SL 2012, ch 239, 1 provides: "The provisions of chapter 219 of the 2011 Session Laws shall be deemed repealed if the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010) is found to be unconstitutional in its entirety by a final decision of a federal court of competent jurisdiction and all appeals exhausted or time for appeals elapsed.") Source: SL 1990, ch 410, 39; SL 2001, ch 289, 1; SL 2003, ch 256, 1; SL 2011, ch 219, 100.
58-37A-4. Definition of terms.Terms used in this chapter mean:(1)"Benefit contract," the agreement for provision of benefits authorized by 58-37A-16, as that agreement is described in 58-37A-19;(2)"Benefit member," any adult member who is designated by the laws or rules of the society to be a benefit member under a benefit contract;(3)"Certificate," the document issued as written evidence of the benefit contract;(4)"Laws," the society's articles of incorporation, constitution, and bylaws, however designated;(5)"Lodge," subordinate member units of the society, known as camps, courts, councils, branches, or by any other designation;(6)"Premiums," premiums, rates, dues, or other required contributions by whatever name known, which are payable under the certificate;(7)"Rules," all rules, regulations, or resolutions adopted by the supreme governing body or board of directors which are intended to have general application to the members of the society;(8)"Society," fraternal benefit society, unless otherwise indicated. Source: SL 1990, ch 410, 4.
58-37A-5. Benefits and purposes of society--Power to adopt laws and rules for governing the society.A society shall operate for the benefit of members and their beneficiaries by providing benefits as specified in 58-37A-16, and operating for one or more social, intellectual, educational, charitable, benevolent, moral, fraternal, patriotic, or religious purposes for the benefit of its members, which may also be extended to others. These purposes may be carried out directly by the society, or indirectly through subsidiary corporations or affiliated organizations. These subsidiaries or affiliated organizations shall comply with all other applicable provisions of the laws and are also subject to the requirements of chapter 58-5A.Every society may adopt laws and rules for the government of the society, the admission of its members, and the management of its affairs. It may change, alter, add to, or amend the laws and rules and has any other powers that are necessary and incidental to carrying into effect the objects and purposes of the society. Source: SL 1990, ch 410, 5.
58-37A-6. Specification of laws or rules--Membership rights.A society shall specify in its laws or rules:(1)Eligibility standards for each class of membership. If benefits are provided on the lives of children, the minimum age for adult membership shall be set at not less than age fifteen and not greater than age twenty-one;(2)The process for admission to membership for each membership class; and(3)The rights and privileges of each membership class. However, only benefit members have the right to vote on the management of the insurance affairs of the society.A society may also admit social members who have no voice or vote in the management of the insurance affairs of the society. Membership rights in the society are personal to the member and are not assignable. Source: SL 1990, ch 410, 6.
58-37A-7. Location of office and meetings--Official publication--Annual synopsis--Grievance procedures provided.The principal office of any domestic society shall be located in this state. The meetings of its supreme governing body may be held in any state, district, province, or territory wherein the society has at least one subordinate lodge, or in any other location as determined by the supreme governing body, and all business transacted at these meetings shall be as valid in all respects as if these meetings were held in this state. The minutes of the proceedings of the supreme governing body and of the board of directors shall be in the English language.A society may provide in its laws for an official publication in which any notice, report, or statement required by law to be given to members, including notice of election, may be published. Each required report, notice, and statement shall be printed conspicuously in the publication. If the records of a society show that two or more members have the same mailing address, an official publication mailed to one member is deemed to be mailed to all members at the same address unless a member requests a separate copy.Not later than June first of each year, a synopsis of the society's annual statement providing an explanation of the facts concerning the condition of the society thereby disclosed shall be printed and mailed to each benefit member of the society or such synopsis may be published in the society's official publication.A society may provide in its laws or rules for grievance or complaint procedures for members. Source: SL 1990, ch 410, 7.
58-37A-8. Liability of officers and members of governing body--Indemnification and reimbursement--Insurance--Liability of noncompensated member.The officers and members of the supreme governing body or any subordinate body of a society are not personally liable for any benefits provided by a society.Any person may be indemnified and reimbursed by any society for expenses reasonably incurred by, and liabilities imposed upon, the person in connection with or arising out of any action, suit, or proceeding, whether civil, criminal, administrative, or investigative, or threat thereof, in which the person may be involved because the person was a director, officer, employee, or insurance producer of the society or of any firm, corporation, or organization which the person served in any capacity at the request of the society. No person may be indemnified or reimbursed in relation to any matter in any action, suit, or proceeding if the person is finally adjudged to be guilty of a breach of a duty as a director, officer, employee, or insurance producer of the society or in relation to any matter in any action, suit, or proceeding, or threat thereof, which is the subject of a compromise settlement; unless in either case the person acted in good faith for a purpose the person reasonably believed to be in or not opposed to the best interests of the society and, in a criminal action or proceeding, had no reasonable cause to believe that the person's conduct was unlawful. The determination whether the conduct of the person met the standard required in order to justify indemnification and reimbursement in relation to any matter described in the preceding sentence may only be made by the supreme governing body or board of directors by a majority vote of a quorum consisting of persons who were not parties to the action, suit, or proceeding or by a court of competent jurisdiction. The termination of any action, suit, or proceeding by judgment, order, settlement, conviction, or upon a plea of no contest, as to the person does not create a conclusive presumption that the person did not meet the standard of conduct required to justify indemnification and reimbursement. The right of indemnification and reimbursement is not exclusive of other rights to which a person may be entitled as a matter of law and shall inure to the benefit of the person's heirs and personal representatives.A society may purchase and maintain insurance on behalf of any person who is or was a director, officer, employee, or insurance producer of the society, or who is or was serving at the request of the society as a director, officer, employee, or insurance producer of any other firm, corporation, or organization against any liability asserted against the person and incurred by the person in any capacity or arising out of the person's status as such, whether or not the society would have the power to indemnify the person against the liability under this section.No director, officer, employee, member, or volunteer of a society serving without compensation is liable, and no cause of action may be brought, for damages resulting from the exercise of judgment or discretion in connection with the duties or responsibilities of the person for the society unless the act or omission involved willful or wanton misconduct. Source: SL 1990, ch 410, 8; SL 2001, ch 286, 217.
58-37A-9. Provisions of laws may not be waived.The laws of the society may provide that no subordinate body, nor any of its subordinate officers or members may waive any of the provisions of the laws of the society. This provision is binding on the society and every member and beneficiary of a member. Source: SL 1990, ch 410, 9.
58-38-1. Incorporators, number required--Purpose of incorporation.Five or more natural persons of full age and of either sex, all of whom are residents of this state and citizens of the United States, may form, under the provisions of the laws of this state relating to corporations, so far as those provisions are applicable and are not inconsistent with the provisions of this chapter, a nonprofit medical and surgical service plan corporation for the purpose of establishing, maintaining, and operating a nonprofit medical and surgical plan, whereby medical and surgical service may be provided at the expense of said corporation by duly licensed physicians and surgeons, to such of the public as become subscribers to said corporation under a contract which entitles each subscriber to medical and professional care. Such corporation shall be governed by this chapter and shall be subject to regulation and supervision by the director as hereinafter provided. Source: SL 1966, ch 111, ch 21, 2.
58-38-10. Rates charged for services--Approval by director.The rates charged by any medical and surgical plan corporation to the subscriber for medical and surgical service shall at all times be subject to the approval of the director. The contracts by any such corporation with the subscribers for medical and surgical service shall at all times be subject to the approval of the director. Source: SL 1966, ch 111, ch 21, 5.
58-38-11.1. Coverage for inpatient treatment of alcoholism to be offered in contracts.Any nonprofit service corporation which delivers or issues for delivery in this state service or indemnity type contracts to any individual subscriber or group shall offer, in writing, to include in such contracts issued or renewed on or after July 1, 1979, coverage for the inpatient treatment of alcoholism in licensed hospitals and residential primary treatment facilities approved by the State of South Dakota which are carrying out an approved program pursuant to diagnosis and recommendation of a doctor of medicine. When coverage for inpatient treatment of alcoholism is included in any policy or contract, such coverage shall include treatment at any South Dakota approved inpatient alcoholism treatment facility. Source: SL 1975, ch 314, 1; SL 1976, ch 314, 2; SL 1977, ch 411, 3; SL 1979, ch 344, 7.
58-38-11.10. Exclusion of benefits for injury while under the influence of alcohol or drugs prohibited--Exception for sickness or injury caused in commission of felony.A service or indemnity-type contract issued by a nonprofit medical or surgical service plan corporation that is delivered, issued for delivery, or renewed in this state may not exclude the payment of benefits for injuries sustained by an insured person because the insured was under the influence of alcohol or drugs, as defined by 32-23-1.Nothing in this section precludes a hospital or medical service plan from excluding coverage for an insured for any sickness or injury caused in the commission of a felony. Source: SL 1997, ch 290, 4, 7.
58-38-11.2. Benefits provided under alcoholism coverage--Maximum treatment periods permitted.The alcoholism coverage to be offered in writing shall provide benefits on the same basis as benefits provided for the treatment of other sicknesses covered under the contract; provided, however, that the coverage by the service corporation need not exceed thirty days' care in any six-month period, and further provided that the total days' care per recipient need not exceed ninety days during the life of the contract. Source: SL 1975, ch 314, 2; SL 1977, ch 411, 4; SL 1979, ch 344, 8.
58-38-11.3. Plans not within alcoholism coverage requirement.Sections 58-38-11.1 and 58-38-11.2 shall not apply to group major-medical service plans or accident only, or limited or specified disease plans. Source: SL 1975, ch 314, 3.
58-38-11.4. Individual accident or health policy required for covered spouse of insured--Eligibility--Coverage--Waiting periods.No accident or health insurance policy providing coverage of hospital or medical expense which in addition to covering the insured also provides coverage to the spouse of the insured shall be issued without a provision that provides that upon eligibility for medicare or social security disability benefits by one spouse the other spouse shall be entitled to have issued to him or her, without evidence of insurability, upon application to the company within sixty days following the eligibility, and upon payment of the appropriate premium, an individual policy of accident or health insurance. Such policy shall provide the coverage then being issued by the insurer which is most nearly similar to the existing coverages. This obligation can be met by continuation of coverage for spouse under existing policy at the appropriate premium. Any and all probationary or waiting periods set forth in such policy shall be considered as being met to the extent coverage was in force under the prior policy. Source: SL 1979, ch 343.
58-38-11.5. Conversion privileges of insured's spouse upon divorce.No accident or health insurance policy providing coverage of hospital or medical expense which in addition to covering the insured also provides coverage to the spouse of the insured shall be issued without a provision that provides that upon divorce of the insured and the insured's spouse, the spouse is entitled to have issued to him or her, without evidence of insurability, upon application to the company within thirty days following the eligibility, and upon payment of the appropriate premium, an individual policy of accident or health insurance. Such policy shall provide the coverage then being issued by the insurer which is most nearly similar to the existing coverages. This obligation can be met by continuation of coverage for spouse under existing policy at the appropriate premium. Any and all probationary or waiting periods set forth in such policy shall be considered as being met to the extent coverage was in force under the prior policy. Source: SL 1980, ch 354.
58-38-11.6. Coordination, integration, or lessening of benefits restricted.No group health insurance policy or group subscriber contract issued by a nonprofit corporation delivered or issued for delivery in this state may contain a provision requiring coordination of benefits, integration of benefits, or lessening of policy benefits because of the existence or availability of coverage under an individual health insurance policy or individual subscriber contract issued by a nonprofit corporation.An individual health insurance policy or individual subscriber contract issued by a nonprofit corporation may be rescinded within its contestable period for material misrepresentation if the full premium is refunded.This section applies to policies issued or renewed after July 1, 1981. Source: SL 1981, ch 362, 1, 2.
58-38-11. Contracts with subscribers--Required provisions.The contracts by any medical and surgical plan corporation with the subscribers for medical and surgical service shall be entered into only with physicians and surgeons regularly licensed to practice their profession by the State of South Dakota. All contracts issued by such corporation to the subscribers shall constitute direct obligations of the corporation and of the physician or surgeon with whom such corporation has contracted for medical and surgical service and shall provide for medical and surgical service to subscribers by the physician and surgeon chosen by the patient without regard to whether said physician and surgeon has a contract with said corporation, and at the same rate as provided in the contract of the corporation for service by other than contracting physicians and surgeons in case of emergency or expediency. Source: SL 1966, ch 111, ch 21, 5.
58-38-12. Care provided by noncontracting physicians--Contracting physician unavailable.If at any time that the subscriber or certificate holder is entitled to medical and surgical service no contracting physician and surgeon is available, the medical and surgical plan corporation shall provide such care by physicians and surgeons who have not contracted with such corporation, to such extent as the subscriber or certificate holder is entitled to under his certificate, and at the same rate and for the same fees as is provided for care by noncontracting physicians and surgeons, but not to exceed the limitation provided for in the certificate. Source: SL 1966, ch 111, ch 21, 5.
58-38-13. Practice of medicine not authorized by chapter.Nothing in this chapter shall authorize any person, association, or corporation to engage, in any manner, in the practice of medicine or surgery. Source: SL 1966, ch 111, ch 21, 5.
58-38-14. Expenses of acquisition and administration--Control by director.All acquisition and administrative expenses in connection with such medical and surgical service corporation shall at all times be subject to control by the director. Source: SL 1966, ch 111, ch 21, 9.
58-38-15. Permitted investments.The funds of any corporation subject to the provisions of this chapter shall be invested only in securities permitted by the laws of this state for the investment of assets of life insurance companies. Source: SL 1966, ch 111, ch 21, 10.
58-38-16. Foreign corporation--Transaction of business in state.A nonprofit medical and surgical service plan corporation organized under the laws of another state or any territory may, with the approval of the director, and under the rules as may be promulgated, consistent with the provisions of this chapter, transact and carry on its business in this state, provided it shall first file with the director:(1)A duly certified copy of its charter or articles of incorporation;(2)A verified statement of the condition of its affairs for the next preceding calendar year;(3)A duly certified and authenticated appointment of the director as its true and lawful agent in and for this state, upon whom all lawful process in any action or proceeding against the insurer may be served with the same effect as if a domestic insurer served in this state, such appointment to stipulate that any lawful process against such insurer served on such agent shall be of the same legal force and validity as if served on the insurer, and that the authority shall continue in force as long as any liability remains outstanding against such insurer in this state. Such service may be made on the director in the manner provided by statute for service of process, or may be made by filing a copy of such process in the office of the director. Whenever any such process is served upon the director, he shall forthwith forward a copy thereof by mail, postpaid, directed to the secretary of the insurer; or in case of insurers in foreign countries, to the resident manager thereof, in this country, and to its general agent in this state; and(4)Evidence satisfactory to the director that such corporation has existing contracts for the rendering of medical and surgical service to the subscribers with at least twenty physicians and surgeons licensed to practice their profession in the State of South Dakota, approved for participation by the director.Any such foreign corporation shall be subject to the laws of this state pertaining to reciprocal relations imposed upon foreign insurers transacting or doing business in this state. Source: SL 1966, ch 111, ch 21, 11; SL 1986, ch 22, 40.
58-38-17. Annual statement of financial condition--Filing--Verification--Form and contents.Every medical and surgical plan corporation shall annually on or before the first day of March file in the office of the director a statement verified by at least two of the principal officers of said corporation showing its condition on the preceding thirty-first day of December; the statement shall be in such form and shall contain such matters as the director shall prescribe. Source: SL 1966, ch 111, ch 21, 7.
58-38-18. Investigation and examination by director--Cost borne by corporation.The director may investigate and examine the books and records of any medical and surgical plan corporation, and may summon and examine under oath its officers, representatives, insurance producers, employees, or other persons in relation to the affairs, transactions, and conditions of the corporation.The director shall conduct an examination of each corporation at least every five years pursuant to chapter 58-3, and the cost of the regular or other special examinations shall be borne by the corporation. Source: SL 1966, ch 111, ch 21, 8; SL 1994, ch 389, 1; SL 2001, ch 286, 220.
58-38-19. Exemption from other insurance laws--Exceptions.Any medical and surgical plan corporation is exempt from all provisions of the insurance laws of this state other than in this chapter. However, the corporation is subject to the provisions of this title on matters of hearings, appeals, mergers, dissolutions, licensure of insurance producers, and procedures on such matters. The corporation is also subject to 58-4-39 to 58-4-42, inclusive; 58-6-75; 58-17-17, and 58-17-19 for nongroup policies only; 58-17-54; 58-17-56; 58-30-124 to 58-30-139, inclusive; and to the fees and taxation as insurers covered by this title; and to chapters 58-3, 58-5A, 58-14, 58-18B, 58-26, 58-27, 58-29B, 58-29D, 58-33, 58-43, and 58-44. Source: SL 1966, ch 111, ch 21, 2; SL 1980, ch 361; SL 1982, ch 367, 1; SL 1991, ch 408, 1; SL 1991, ch 409; SL 1994, ch 386, 2; SL 2001, ch 286, 221.
58-38-2. Physicians and surgeons defined.The words "physicians and surgeons" as used in this chapter shall include all those persons who are licensed pursuant to chapters 36-4, 36-4A, and 36-9A. Source: SL 1966, ch 111, ch 21, 12; SL 1980, ch 355, 1.
58-38-20. Citation of chapter.This chapter may be cited as the Medical and Surgical Plan Law. Source: SL 1966, ch 111, ch 21, 1.
58-38-21. Notice required by medical and surgical plan corporation for rate increase.Forty-five days before a contract rate increase is effective, the medical and surgical plan corporation shall notify the group employer or association in writing that the contract rate for the medical and surgical plan operated by the corporation will be increased. Source: SL 1989, ch 434, 2.
58-38-22.1. Service and indemnity-type contracts required to cover occult breast cancer screening.Each service or indemnity-type contract issued by a nonprofit medical and surgical service plan corporation that covers a female and that is delivered, issued for delivery, or renewed in this state, except for a contract that provides coverage for specified disease or other limited benefit coverage, shall provide coverage for screening for the presence of occult breast cancer.The provisions of this section apply only to plans that are not grandfathered pursuant to 75 Fed. Reg. 116 (2010) to be codified at 26 C.F.R. 54 and 602, 29 C.F.R. 2590, and 45 C.F.R. 147. (SL 2011, ch 216, 19 provides: "The provisions of this Act are repealed if the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010) is found to be unconstitutional in its entirety by a final decision of a federal court of competent jurisdiction and all appeals exhausted or time for appeals elapsed.") Source: SL 2011, ch 216, 14.
58-38-22. Grandfathered service and indemnity-type contracts required to cover low-dose mammography--Extent of coverage.Each service or indemnity-type contract issued by a nonprofit medical and surgical service plan corporation that covers a female and that is delivered, issued for delivery, or renewed in this state, except for a contract that provides coverage for specified disease or other limited benefit coverage, shall provide coverage for screening by low-dose mammography for the presence of occult breast cancer that is subject to the same dollar limits, deductibles and coinsurance factors as for other radiological examinations. Coverage for the screening shall be provided as follows: ages thirty-five to thirty-nine, one baseline mammography; ages forty to forty-nine, a mammography every other year; and age fifty and older, a mammography every year.As used in this section, "low-dose mammography" means the X ray examination of the breast using equipment dedicated specifically for mammography, including the X ray tube, filter, compression device, screens, films, and cassettes, with an average radiation exposure delivery of less than one rad midbreast, with two views for each breast and with interpretation by a qualified radiologist.The provisions of this section apply only to grandfathered plans pursuant to 75 Fed. Reg. 116 (2010) to be codified at 26 C.F.R. 54 and 602, 29 C.F.R. 2590, and 45 C.F.R. 147. (SL 2011, ch 216, 19 provides: "The provisions of this Act are repealed if the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010) is found to be unconstitutional in its entirety by a final decision of a federal court of competent jurisdiction and all appeals exhausted or time for appeals elapsed.") Source: SL 1990, ch 397, 1, 5; SL 1991, ch 400, 5; SL 2011, ch 216, 7.
58-38-23. Coverage for phenylketonuria.Every service or indemnity-type contract issued by a nonprofit medical and surgical service plan corporation that is delivered, issued for delivery or renewed in this state, except for policies that provide coverage for specified disease or other limited benefit coverage, shall offer coverage for testing, diagnosis, and treatment of phenylketonuria including dietary management, formulas, case management, intake and screening, assessment, comprehensive care planning, and service referral. Source: SL 1992, ch 348, 4.
58-38-24. Hospital service plan authorized.A medical and surgical plan corporation licensed under this chapter may establish and operate a nonprofit hospital service plan under the provisions of chapter 58-40. Such plan shall be governed by chapter 58-40, but is exempt from the provisions of 58-40-4. Source: SL 1993, ch 374.
58-38-25. Formation of voluntary health insurance purchasing organizations. Notwithstanding the provisions of chapter 47-34A and  47-15-2 and 47-22-4, any organization may form for the purposes of purchasing group health insurance on a voluntary basis. For purposes of 58-38-25 to 58-38-35, inclusive, an organization means any nonprofit organization or nonprofit corporation formed under South Dakota law. Source: SL 1994, ch 382, 1; SL 2021, ch 210,  22.
58-38-26. Membership of voluntary health insurance purchasing organizations.Any organization may have a group health insurance policy issued to that organization on behalf of its members who would be insured under such policy. Members may join the organization, for the purpose of obtaining group health insurance, as individuals, employers, labor unions, associations, or substantially similar groups. Source: SL 1994, ch 382, 2.
58-38-27. Purchasing organization's responsibility for negotiating terms and conditions.The organization shall be responsible for negotiating the terms and conditions of insurance contracts, collection of premiums, and providing notice to members. Source: SL 1994, ch 382, 3.
58-38-28. Purchasing organization's notice of premium charge.The organization may provide not less than forty-five days advance notice of any benefit or premium change to its members. Source: SL 1994, ch 382, 4.
58-38-29. Additional chapters applicable to purchasing organization.Any organization is subject to all applicable provisions of chapter 58-3 and chapter 58-33. Source: SL 1994, ch 382, 5.
58-38-3. Articles of incorporation and amendments--Approval by director--Filing with secretary of state.The articles of incorporation of every such corporation, and amendments thereto, shall be submitted to the director, whose approval thereof shall be endorsed thereon before the same are filed with the secretary of state; provided, however, that if the articles of incorporation of any such corporation shall have been filed with the secretary of state prior to July 1, 1966, the approval thereof by the director shall be evidenced by a separate instrument in writing filed with the secretary of state. Source: SL 1966, ch 111, ch 21, 3.
58-38-30. Approval of purchasing organization by Division of Insurance.Any organization shall, prior to its engaging in the business of insurance, obtain approval from the Division of Insurance. The division may deny approval or withdraw approval of an organization to engage in the business of insurance for any of the following reasons:(1)Any of the grounds specified in 58-6-8;(2)Insufficient membership control of the organization;(3)Unreasonable compensation to officers, directors, or employees of the organization;(4)Misuse of premiums; or(5)Refusal to be examined or to cooperate in an examination. Source: SL 1994, ch 382, 6.
58-38-31. Premiums held in trust by purchasing organization.The organization shall hold all premiums received in trust and promptly remit premiums to the person entitled thereto. Source: SL 1994, ch 382, 7.
58-38-32. Rates for group health insurance issued to purchasing organizations.Any insurer issuing group health insurance pursuant to 58-38-25 to 58-38-35, inclusive, is subject to all of the provisions of chapter 58-18B relating to rates. Source: SL 1994, ch 382, 8.
58-38-33. Reasonable participation requirements for group members of purchasing organizations.An insurer may as a condition of offering coverage or continuing coverage require reasonable participation requirements of groups who become members of an organization. Source: SL 1994, ch 382, 9.
58-38-34. Purchasing organizations exempt from antitrust provisions.Any organization formed pursuant to 58-38-25 to 58-38-35, inclusive, is exempt from the antitrust provisions under chapter 37-1. Source: SL 1994, ch 382, 10.
58-38-35. Promulgation of rules for purchasing organizations.The director may promulgate rules pursuant to chapter 1-26 to further the provisions of 58-38-25 to 58-38-35, inclusive, and for purposes of carrying out the provisions of 58-18-1 to 58-18-6, inclusive, and to ensure that group health insurance coverage is issued to eligible groups and that organizations are formed and operated to further the purpose of providing economical group health insurance for its members. The rules may include:(1)Definition of terms;(2)Criteria for determining groups, associations, organizations, and trusts and their eligibility for coverage;(3)Criteria for determining substantially similar groups or for determining related industries;(4)Application requirements and procedures;(5)Reasonable compensation; and(6)Organizational structure. Source: SL 1994, ch 382, 11.
58-38-36. Minimum loss ratio for small employer health benefit plans.Premium rates for small employer health benefit plans shall produce a minimum lifetime loss ratio of not less than seventy-five percent. The director may promulgate rules pursuant to chapter 1-26 which modify the minimum loss ratio required based upon the specific plan design or other objective and pertinent criteria. Source: SL 1994, ch 381, 1.
58-38-37. Minimum inpatient care coverage following delivery.If a service or indemnity-type contract issued or renewed on or after July 1, 1996, by a nonprofit medical and surgical service plan corporation provides maternity coverage, the contract shall provide coverage for a minimum of forty-eight hours of inpatient care following a vaginal delivery and a minimum of ninety-six hours of inpatient care following delivery by cesarean section for a mother and her newborn child in a health care facility licensed pursuant to chapter 34-12, except as otherwise provided in 58-38-38. Any individual policy and any policy issued to employers with less than fifteen employees that provides coverage for complications of pregnancy, and does not provide other maternity benefits, is not required to comply with this section. Source: SL 1996, ch 292, 10; SL 1998, ch 290, 4.
58-38-38. Shorter hospital stay permitted--Follow-up visit within forty-eight hours required.If the treating physician determines that the mother and the newborn meet medical criteria contained in Guidelines for Perinatal Care, Third Edition, of the American Academy of Pediatrics and the American College of Obstetricians and Gynecologists as in effect on January 1, 1996, a service or indemnity-type contract issued by a nonprofit medical and surgical service plan corporation may provide coverage for a shorter length of hospital inpatient stay for services related to maternity and newborn care than is required in 58-38-37 if the coverage includes one follow-up visit in the first forty-eight hours after discharge to verify the condition of the mother and newborn. Source: SL 1996, ch 292, 11.
58-38-39. Notice to subscribers--Disclosures.The nonprofit medical and surgical service plan corporation shall provide notice to subscribers regarding the coverage required by 58-38-37 in accordance with rules adopted by the director of the Division of Insurance pursuant to chapter 1-26. The notice shall be in writing and prominently positioned in any literature or correspondence. The notice shall be transmitted to subscribers in the next mailing to subscribers, in the yearly informational packet sent to subscribers, or by January 1, 1997, whichever is earliest. Source: SL 1996, ch 292, 12.
58-38-4. Members and directors.A medical and surgical plan corporation shall consist of a board of directors and of such members, grouped in such classes, as the bylaws of the corporation shall provide. Source: SL 1966, ch 111, ch 21, 4.
58-38-40. Health insurance policies to provide coverage for biologically-based mental illnesses.Every service or indemnity-type contract issued by a nonprofit medical and surgical service plan corporation that is delivered, issued for delivery, or renewed in this state, except for policies that provide coverage for specified disease or other limited benefit coverage, shall provide, in writing, coverage for the treatment and diagnosis of biologically-based mental illnesses with the same dollar limits, deductibles, coinsurance factors, and restrictions as for other covered illnesses.The term, biologically-based mental illness, means schizophrenia and other psychotic disorders, bipolar disorder, major depression, and obsessive-compulsive disorder. Source: SL 1998, ch 291, 4; SL 1999, ch 251, 4.
58-38-41. Application--Exemptions.The provisions of 58-38-40 do not apply to any plan, policy, or contract that provides coverage only for:(1)Specified disease;(2)Hospital indemnity;(3)Fixed indemnity;(4)Accident-only;(5)Credit;(6)Dental;(7)Vision;(8)Prescription drug;(9)Medicare supplement;(10)Long-term care;(11)Disability income insurance;(12)Coverage issued as a supplement to liability insurance;(13)Workers' compensation or similar insurance;(14)Automobile medical payment insurance; or(15)Individual health benefit plans of six-months duration or less that are not renewable. Source: SL 1998, ch 291, 7.
58-38-42. Policies to provide coverage for diabetes supplies, equipment and education--Exceptions--Conditions and limitations.Every service or indemnity-type contract issued by a nonprofit medical and surgical service plan corporation delivered, issued for delivery, or renewed in this state, except for policies that provide coverage for specified disease or other limited benefit coverage, shall provide, in writing, coverage for equipment, supplies, and self-management training and education, including medical nutrition therapy, for treatment of persons diagnosed with diabetes if prescribed by a physician or other licensed health care provider legally authorized to prescribe such treatment. Medical nutrition therapy does not include any food items or nonprescription drugs.Coverage for medically necessary equipment and supplies shall include blood glucose monitors, blood glucose monitors for the legally blind, test strips for glucose monitors, urine testing strips, insulin, injection aids, lancets, lancet devices, syringes, insulin pumps and all supplies for the pump, insulin infusion devices, prescribed oral agents for controlling blood sugars, glucose agents, glucagon kits, insulin measurement and administration aids for the visually impaired, and other medical devices for treatment of diabetes.Diabetes self-management training and education shall be covered if: (a) the service is provided by a physician, nurse, dietitian, pharmacist, or other licensed health care provider who satisfies the current academic eligibility requirements of the National Certification Board for Diabetic Educators and has completed a course in diabetes education and training or has been certified as a diabetes educator; and (b) the training and education is based upon a diabetes program recognized by the American Diabetes Association or a diabetes program with a curriculum approved by the American Diabetes Association or the South Dakota Department of Health.Coverage of diabetes self-management training is limited to (a) persons who are newly diagnosed with diabetes or have received no prior diabetes education; (b) persons who require a change in current therapy; (c) persons who have a co-morbid condition such as heart disease or renal failure; or (d) persons whose diabetes condition is unstable. Under these circumstances, no more than two comprehensive education programs per lifetime and up to eight follow-up visits per year need be covered. Coverage is limited to the closest available qualified education program that provides the necessary management training to accomplish the prescribed treatment.The benefits provided in this section are subject to the same dollar limits, deductibles, coinsurance, and other restrictions established for all other benefits covered in the contract. Source: SL 1999, ch 252, 7.
58-38-43. Diabetes coverage not required of certain plans and policies.The provisions of 58-38-42 do not apply to any plan, policy, or contract that provides coverage only for:(1)Specified disease;(2)Hospital indemnity;(3)Fixed indemnity;(4)Accident-only;(5)Credit;(6)Dental;(7)Vision;(8)Prescription drug;(9)Medicare supplement;(10)Long-term care;(11)Disability income insurance;(12)Coverage issued as a supplement to liability insurance;(13)Workers' compensation or similar insurance;(14)Automobile medical payment insurance;(15)Individual health benefit plans of six-months duration or less that are not renewable; or(16)Individual nonmajor medical insurance. Source: SL 1999, ch 252, 8.
58-38-44. Contracts to provide coverage for prostate cancer screening.Every service or indemnity-type contract issued by a nonprofit medical or surgical service plan corporation that covers a male and that is delivered, issued for delivery, or renewed in this state, except for policies that provide coverage for specified disease or other limited benefit coverage, shall provide the following coverage for diagnostic screening for prostate cancer:(1)An annual medically recognized diagnostic examination, including a digital rectal examination and a prostate-specific antigen test, as follows:(a)For asymptomatic men aged fifty and over; and(b)For men aged forty-five and over at high risk for prostate cancer; and(2)For males of any age who have a prior history of prostate cancer, medically indicated diagnostic testing at intervals recommended by a physician, including the digital rectal examination, prostate-specific antigen test, and bone scan. Source: SL 2001, ch 277, 4.
58-38-5. Board of directors--Minimum number--Qualifications--Selection--Term of office.The business of a medical and surgical plan corporation shall be managed by a board of directors of at least five persons possessing the same general qualifications as the incorporators and they shall be selected, and their number fixed, in the manner set out in the bylaws for three-year terms. At least a majority of the directors of said corporation must be at all times physicians or surgeons who have contracted, or may contract with such corporation to render to its subscribers medical or surgical service. Source: SL 1966, ch 111, ch 21, 4.
58-38-6. License to issue contracts required--Violation as misdemeanor.A corporation subject to the provisions of this chapter may issue contracts only when the director has by formal license authorized it to do so. Violation of this section is a Class 2 misdemeanor. Source: SL 1966, ch 111, ch 21, 6; SL 1978, ch 359, 2.
58-38-7. Application for license--Form and contents--Documents accompanying.Application for the license required by 58-38-6 shall be made on forms to be approved by the director, containing such information as he shall deem necessary. Each application for such license shall be accompanied by copies of the following documents:(1)Certified copy of its charter or certificate of incorporation;(2)Bylaws;(3)Proposed contracts between the corporation and participating physicians and surgeons showing the terms under which medical and surgical service is to be furnished to subscribers;(4)Contracts to be issued to subscribers showing the benefits to which they are entitled;(5)A table of the rates to be charged to the subscribers; and(6)Financial statement of the corporation, including the amounts of contribution paid or agreed to be paid to the corporation for working capital and the name of each contributor and the terms of each contribution. Source: SL 1966, ch 111, ch 21, 6.
58-38-8. Issuance of license--Matters considered by director.The director shall issue a license upon being satisfied on the following points:(1)That the applicant is established as a bona fide nonprofit medical and surgical service corporation;(2)That the contracts between the applicant and the participating physicians and surgeons obligate each physician and surgeon to render service to which each subscriber may be entitled under the contract issued to the subscribers;(3)That the rates to be charged and benefits to be provided are fair and reasonable;(4)That amounts provided as working capital of the corporation are repayable only out of earned income over and above operating expenses, physicians and surgeons expenses, and such reserve as the director may deem adequate; and(5)That the amount of money actually available for working capital be sufficient to carry all acquisition costs and operating expenses for a reasonable period of time from the date of the issuance of the certificate. Source: SL 1966, ch 111, ch 21, 6.
58-38-9. Contracts with subscribers.Any medical and surgical plan corporation, organized under the provisions of this chapter, may enter into contracts with subscribers to furnish medical and surgical service through physicians and surgeons. The medical and surgical plan operated by such corporation shall also provide for such service to subscribers by the physician and surgeon chosen by the subscriber without regard to whether such physician and surgeon has a contract for service with such corporation. Source: SL 1966, ch 111, ch 21, 5.
58-39-1. Incorporators, number required--Purpose of incorporation.Five or more natural persons of full age and of either sex, all of whom are residents of this state and citizens of the United States, may form, under the provisions of the law of this state relating to benevolent corporations, so far as those provisions are applicable and are not inconsistent with the provisions of this chapter a nonprofit dental service corporation for the purpose of establishing and operating a nonprofit dental service plan whereby dental service may be provided at the expense of said corporation by duly licensed dentists to such of the public as become subscribers to said corporation under a contract which entitles each subscriber to dental care. Such corporation shall be governed by this chapter and shall be subject to regulation and supervision by the director as hereinafter provided. Source: SL 1966, ch 111, ch 30, 2.
58-39-10. Practice of dentistry not authorized by chapter.Nothing in this chapter shall authorize any person, association, or corporation to engage, in any manner, in the practice of dentistry. Source: SL 1966, ch 111, ch 30, 5.
58-39-11. Expenses of acquisition and administration--Control by director.All acquisition and administrative expenses in connection with such dental service corporation shall at all times be subject to control by the director. Source: SL 1966, ch 111, ch 30, 9.
58-39-12. Permitted investments.The funds of any corporation subject to the provisions of this chapter shall be invested only in securities permitted by the laws of this state for the investment of assets of life insurance companies. Source: SL 1966, ch 111, ch 30, 10.
58-39-13. Foreign corporation--Transaction of business in state.A nonprofit dental service corporation organized under the laws of another state or any territory may, with the approval of the director, and under the rules as may be promulgated, consistent with the provisions of this chapter, transact and carry on its business in this state, provided it shall first file with the director:(1)A duly certified copy of its charter or articles of incorporation;(2)A verified statement of the condition of its affairs for the next preceding calendar year;(3)A duly certified and authenticated appointment in writing of the director as its true and lawful agent in and for this state, upon whom all lawful process in any action or proceeding against the company may be served with the same effect as if a domestic company served in this state, such appointment to stipulate that any lawful process against such company served on such agent shall be of the same legal force and validity as if served on the company, and that the authority shall continue in force as long as any liability remains outstanding against such company in this state. Such service may be made on the director in the manner provided by statute for service of process, or may be made by filing a copy of such process in the office of the director. Whenever any such process is served upon the director, he shall forthwith forward a copy thereof by mail, postpaid, directed to the secretary of the company; or in case of companies in foreign countries to the resident manager thereof, in this country, and to its general agent in this state; and(4)Evidence satisfactory to the director that such corporation has existing contracts for the rendering of dental service to the subscribers with at least twenty dentists licensed to practice their profession in the State of South Dakota, approved for participation by the director.Any such foreign corporation shall be subject to the laws of this state pertaining to reciprocal relations imposed upon foreign insurance companies transacting or doing business in this state. Source: SL 1966, ch 111, ch 30, 11; SL 1986, ch 22, 41.
58-39-14. Annual statement of financial condition--Filing--Verification--Form and contents.Every dental service corporation shall regularly on or before the first day of March file in the office of the director a statement verified by at least two of the principal officers of said corporation showing its condition on the preceding thirty-first day of December, which shall be in such form and shall contain such matters as the director shall prescribe. Source: SL 1966, ch 111, ch 30, 7.
58-39-15. Investigation and examination by director--Cost borne by corporation.The director may investigate and examine the books and records of any dental service corporation, and may summon and examine under oath its officers, representatives, insurance producers, employees, or other persons in relation to the affairs, transactions, and conditions of the corporation.The director shall conduct an examination of each corporation at least every five years pursuant to chapter 58-3, and the cost of the regular or other special examinations shall be borne by the corporation. Source: SL 1966, ch 111, ch 30, 8; SL 1994, ch 389, 2; SL 2001, ch 286, 222.
58-39-16.1. Assignment of benefits provisions applicable.Notwithstanding the provisions of 58-39-16, the provisions of 58-17-163 to 58-17-166, inclusive, apply to any dental service corporation organized under this chapter. Source: SL 2017, ch 213, 5.
58-39-16. Exemption from other insurance laws, exceptions--Fees and taxation as insurers.Any dental service corporation is exempt from all provisions of the insurance laws of this state other than this chapter. However, the corporation is subject to the provisions of this title on matters of hearings, appeals, mergers, dissolutions, licensure of insurance producers, and procedures on such matters. The corporation is also subject to fees and taxation as insurers covered by this title, and to chapter 58-33. Source: SL 1966, ch 111, ch 30, 2; SL 1991, ch 408, 2; SL 2001, ch 286, 223.
58-39-17. Citation of chapter.This chapter may be cited as the Dental Service Corporation Law. Source: SL 1966, ch 111, ch 30, 1.
58-39-2. Articles of incorporation and amendments--Approval by director--Filing with secretary of state.The articles of incorporation of every dental service corporation, and amendments thereto, shall be submitted to the director, whose approval thereof shall be endorsed thereon before the same are filed with the secretary of state. Source: SL 1966, ch 111, ch 30, 3.
58-39-3. Members and directors.A dental service corporation shall consist of a board of directors and of such members, grouped in such classes, as the bylaws of the corporation shall provide. Source: SL 1966, ch 111, ch 30, 4.
58-39-4. Board of directors--Minimum number--Qualifications--Selection--Term of office.The business of a dental service corporation shall be managed by a board of directors of at least five persons possessing the same general qualifications as the incorporators and selected, and the number fixed, in the manner set out by the bylaws for three-year terms. At least a majority of the directors of said corporation must be at all times dentists who have contracted, or may contract with such corporation to render to its subscribers dental service. Source: SL 1966, ch 111, ch 30, 4.
58-39-5. License to issue contracts required--Violation as misdemeanor.A corporation subject to the provisions of this chapter may issue contracts only when the director has by formal license authorized it to do so. Violation of this section is a Class 2 misdemeanor. Source: SL 1966, ch 111, ch 30, 6; SL 1978, ch 359, 2.
58-39-6. Application for license--Form and contents--Documents accompanying.Application for the license required by 58-39-5 shall be made on forms to be approved by the director, containing such information as he shall deem necessary. Each application for such license shall be accompanied by copies of the following documents:(1)Certified copy of its charter or certificate of incorporation;(2)Bylaws;(3)Proposed contracts between the corporation and participating dentists showing the terms under which dental service is to be furnished to subscribers;(4)Contracts to be issued to subscribers showing the benefits to which they are entitled;(5)A table of the rates to be charged to the subscribers;(6)Financial statement of the corporation, including the amounts of contribution paid or agreed to be paid to the corporation for working capital and the name of each contributor and the terms of each contribution. Source: SL 1966, ch 111, ch 30, 6.
58-39-7. Issuance of license--Matters considered by director.The director shall issue license upon being satisfied on the following points:(1)That the applicant is established as a bona fide nonprofit dental service corporation;(2)That the contracts between the applicant and the participating dentists obligate each dentist to render service to which each subscriber may be entitled under the terms and conditions of the contract issued to the subscriber;(3)That the rates to be charged and the benefits to be provided are fair and reasonable;(4)That the amounts provided as working capital of the corporation are repayable only out of earned income paid and payable for operating expenses, dentist expenses, and such reserve as the director may deem adequate; and(5)That the amount of money actually available for working capital be sufficient to carry all operating expenses for a reasonable period of time from the date of the issuance of the certificate. Source: SL 1966, ch 111, ch 30, 6.
58-39-8. Contracts with subscribers--Rates charged for services--Approval by director.Any dental service corporation organized under the provisions of this chapter may enter into contracts with subscribers to furnish dental service through dentists. The rates charged by any such corporation to the subscriber for dental service and the contracts by said corporation with the subscribers for dental service shall at all times be subject to the approval of the director. The contracts by any such corporation with the subscribers for dental service shall be entered into only with dentists regularly licensed to practice their profession by the State of South Dakota. All contracts issued by such corporation to the subscribers shall constitute direct obligations of the corporation and of the dentists with whom such corporation has contracted for dental service. Source: SL 1966, ch 111, ch 30, 5.
58-39-9. Care provided by noncontracting dentist--Contracting dentist unavailable.If at any time that the subscriber or certificate holder is entitled to dental service no dentist is available or in case of emergency or expediency, the dental service corporation shall provide such care by dentists who have not contracted with such corporation to such extent as the subscriber or certificate holder is entitled to under his certificate, and at the same rate and for the same fees as is provided for care by noncontracting dentists, but not to exceed the limitation provided for in the certificate. If there is no contracting dentist acceptable to the subscriber, said corporation shall pay the subscriber for care provided by a dentist of the subscriber's own choosing who has not contracted with the corporation to the extent and in such amounts as are provided by the contract for dental care. Source: SL 1966, ch 111, ch 30, 5.
58-40-1. Incorporators, number required--Purpose of incorporation.Five or more natural persons of full age and of either sex, all of whom are residents of this state and citizens of the United States, may form, under the provisions of the laws of this state relating to benevolent corporations, so far as those provisions are applicable and are not inconsistent with the provisions of this chapter, a nonprofit hospital service plan corporation for the purpose of establishing and operating a nonprofit hospital service plan, whereby hospital service may be provided by one or more hospitals with which such corporation has a contract for such purpose, to such of the public as become subscribers to said corporation under a contract which entitles each subscriber to certain hospital care.Such corporation shall be governed by this chapter and shall be subject to regulation and supervision by the director as hereinafter provided. Source: SL 1966, ch 111, ch 21, 14.
58-40-10.1. Coverage for inpatient treatment of alcoholism to be offered in individual or group plans.Any nonprofit hospital service plan that delivers or issues for delivery in this state service or indemnity type contracts to any individual subscriber or group shall offer, in writing, to include in such contracts issued or renewed on or after July 1, 1979, coverage for the inpatient treatment of alcoholism in licensed hospitals and residential primary treatment facilities approved by the State of South Dakota which are carrying out an approved program pursuant to diagnosis and recommendation of a doctor of medicine. When coverage for inpatient treatment of alcoholism is included in any policy or contract, such coverage shall include treatment at any South Dakota approved inpatient alcoholism treatment facility. Source: SL 1979, ch 344, 9.
58-40-10.10. Exclusion of benefits for injury while under the influence of alcohol or drugs prohibited--Exception for sickness or injury caused in commission of felony.A service or indemnity-type contract issued by a nonprofit hospital service plan or organization that is delivered, issued for delivery, or renewed in this state may not exclude the payment of benefits for injuries sustained by an insured person because the insured was under the influence of alcohol or drugs, as defined by 32-23-1.Nothing in this section precludes a hospital or medical service plan from excluding coverage for an insured for any sickness or injury caused in the commission of a felony. Source: SL 1997, ch 290, 5, 7.
58-40-10.2. Benefits provided under alcoholism coverage--Maximum treatment periods permitted.The alcoholism coverage to be offered in writing shall provide benefits on the same basis as benefits provided for the treatment of other sicknesses covered under the contract; provided, however, that the coverage by the service corporation need not exceed thirty days' care in any six-month period, and further provided that the total days' care per recipient need not exceed ninety days during the life of the contract. Source: SL 1979, ch 344, 10.
58-40-10.3. Plans not within alcoholism coverage requirement.Sections 58-40-10.1 and 58-40-10.2 shall not apply to group major-medical service plans or accident only, or limited or specified disease plans. Source: SL 1979, ch 344, 11.
58-40-10.4. Individual policy required for covered spouse of insured--Eligibility--Coverage--Waiting periods.No accident or health insurance policy providing coverage of hospital or medical expense which in addition to covering the insured also provides coverage to the spouse of the insured shall be issued without a provision that provides that upon eligibility for medicare or social security disability benefits by one spouse the other spouse shall be entitled to have issued to him or her, without evidence of insurability, upon application to the company within sixty days following the eligibility, and upon payment of the appropriate premium, an individual policy of accident or health insurance. Such policy shall provide the coverage then being issued by the insurer which is most nearly similar to the existing coverages. This obligation can be met by continuation of coverage for spouse under existing policy at the appropriate premium. Any and all probationary or waiting periods set forth in such policy shall be considered as being met to the extent coverage was in force under the prior policy. Source: SL 1979, ch 343.
58-40-10.5. Conversion privileges of insured's spouse upon divorce.No accident or health insurance policy providing coverage of hospital or medical expense which in addition to covering the insured also provides coverage to the spouse of the insured shall be issued without a provision that provides that upon divorce of the insured and the insured's spouse, the spouse is entitled to have issued to him or her, without evidence of insurability, upon application to the company within thirty days following the eligibility, and upon payment of the appropriate premium, an individual policy of accident or health insurance. Such policy shall provide the coverage then being issued by the insurer which is most nearly similar to the existing coverages. This obligation can be met by continuation of coverage for spouse under existing policy at the appropriate premium. Any and all probationary or waiting periods set forth in such policy shall be considered as being met to the extent coverage was in force under the prior policy. Source: SL 1980, ch 354.
58-40-10.6. Coordination, integration, or lessening of benefits restricted.No group health insurance policy or group subscriber contract issued by a nonprofit corporation delivered or issued for delivery in this state may contain a provision requiring coordination of benefits, integration of benefits, or lessening of policy benefits because of the existence or availability of coverage under an individual health insurance policy or individual subscriber contract issued by a nonprofit corporation.An individual health insurance policy or individual subscriber contract issued by a nonprofit corporation may be rescinded within its contestable period for material misrepresentation if the full premium is refunded.This section applies to policies issued or renewed after July 1, 1981. Source: SL 1981, ch 362, 1, 2.
58-40-10. Contracts with subscribers--Required provisions.A hospital service plan corporation may enter into contracts for the rendering of hospital service to the subscribers only with hospitals duly conforming with the laws of the State of South Dakota, and approved for participation by the director; provided that the hospital service plan operated by such corporation shall also provide for hospital service to subscribers in the hospital chosen by the patient without regard to whether such hospital is a contracting hospital, and subject to the approval of the director, and at the same rate as provided in the contract of the corporation for care in other than contracting hospitals in case of emergency or expediency, and subject to the approval of the director. Source: SL 1966, ch 111, ch 21, 17.
58-40-11. Care provided by noncontracting hospitals--Contracting hospital unavailable.All contracts issued by a hospital service plan corporation to the subscribers shall constitute direct obligations of the corporation and of the hospitals with which such corporation has contracted for hospital service. If at any time that the certificate holder is entitled to hospitalization no hospital care is available, said corporation shall provide care outside of hospitals to such extent as the certificate holder is entitled to under the certificate and at the same rate per day as is provided for care in nonmember hospitals, but not to exceed the limits of the certificate. Source: SL 1966, ch 111, ch 21, 17.
58-40-12.1. Notice required for rate increase by hospital service plan corporation.Forty-five days before a contract rate increase is effective, the hospital service plan corporation shall notify the group employer or association in writing that the contract rate for the hospital service plan operated by the corporation will be increased. Source: SL 1989, ch 434, 3.
58-40-12. Rates charged for services--Approval by director.The rates charged to the subscribers for hospital service and the rates of payment by a hospital service plan corporation to the contracting hospitals at all times shall be subject to the approval of the director. Source: SL 1966, ch 111, ch 21, 17.
58-40-13. Expenses of acquisition and administration--Control by director.All acquisition and administrative expenses in connection with such hospital service corporation shall at all times be subject to control by the director. Source: SL 1966, ch 111, ch 21, 21.
58-40-14. Permitted investments.The funds of any corporation subject to the provisions of this chapter shall be invested only in securities permitted by the laws of this state for the investment of assets of life insurers. Source: SL 1966, ch 111, ch 21, 22.
58-40-15. Foreign corporation--Transaction of business in state.A nonprofit hospital service plan corporation organized under the laws of another state or any territory may with the approval of the director and under the rules as may be promulgated, consistent with the provisions of this chapter, transact and carry on its business in this state; provided it shall first file with the director:(1)A duly certified copy of its charter or articles of incorporation;(2)A verified statement of the condition of its affairs for the next preceding calendar year;(3)A duly certified and authenticated appointment in writing of the director as its true and lawful agent in and for this state, upon whom all lawful process in any action or proceeding against the insurer may be served with the same effect as if a domestic insurer served in this state, such appointment to stipulate that any lawful process against such insurer served on such agent shall be of the same legal force and validity as if served on the insurer, and that the authority shall continue in force as long as any liability remains outstanding against such insurer in this state. Such service may be made on the director in the manner provided by statute for service of process, or may be made by filing a copy of such process in the office of the director. Whenever any such process is served upon the director, he shall forthwith forward a copy thereof by mail, postpaid, directed to the secretary of the insurer; or in case of insurers in foreign countries to the resident manager thereof, in this country, and to its general agent in this state; and(4)Evidence satisfactory to the director that such corporation has existing contracts for the rendering of hospital service to the subscribers with at least twenty hospitals located within the State of South Dakota, approved for participation by the director.Any such foreign corporation shall be subject to the laws of this state pertaining to reciprocal relations imposed on foreign insurers transacting or doing business in this state. Source: SL 1966, ch 111, ch 21, 23; SL 1986, ch 22, 42.
58-40-16. Annual statement of financial condition--Filing--Verification--Form and contents.Every hospital service plan corporation shall annually on or before the first day of March file with the director a statement verified by at least two of the principal officers of said corporation showing its condition on the thirty-first day of the preceding December; the statement shall be in such form and shall contain such matters as the director shall prescribe. Source: SL 1966, ch 111, ch 21, 19.
58-40-17. Investigation and examination by director--Cost borne by corporation.The director may investigate and examine the books and records of any hospital service plan corporation, and may summon and examine under oath its officers, representatives, insurance producers, employees, or other persons in relation to the affairs, transactions, and conditions of the corporation.The director shall conduct an examination of each corporation at least every five years pursuant to chapter 58-3, and the cost of the regular or other special examinations shall be borne by the corporation. Source: SL 1966, ch 111, ch 21, 20; SL 1994, ch 389, 3; SL 2001, ch 286, 224.
58-40-18. Exemption from other insurance laws--Exceptions.A hospital service plan corporation is exempt from all provisions of the insurance laws of this state other than in this chapter. However, the corporation is subject to the provisions of this title on matters of hearings, appeals, mergers, dissolutions, licensure of insurance producers, and procedures on such matters. The corporation is also subject to 58-4-39 to 58-4-42, inclusive; 58-6-75; 58-17-17 and 58-17-19, for nongroup policies only; 58-30-124 to 58-30-139, inclusive; to the fees and taxation as insurers covered by this title; and to chapters 58-3, 58-5A, 58-14, 58-18B, 58-26, 58-27, 58-29B, 58-29D, 58-33, 58-43, and 58-44. Source: SL 1966, ch 111, ch 21, 14; SL 1981, ch 367, 2; SL 1982, ch 367, 2; SL 1991, ch 408, 3; SL 1994, ch 386, 3; SL 2001, ch 286, 225.
58-40-19. Citation of chapter.This chapter may be cited as the Hospital Service Plan Law. Source: SL 1966, ch 111, ch 21, 13.
58-40-2. Articles of incorporation and amendments--Approval by director--Filing with secretary of state.The articles of incorporation of every hospital service plan corporation, and amendments thereto, shall be submitted to the director, whose approval thereof shall be endorsed thereon before the same are filed with the secretary of state; provided, however, that if the articles of incorporation of any such corporation shall have been filed with the secretary of state prior to July 1, 1966, the approval thereof by the director shall be evidenced by a separate instrument in writing filed with the secretary of state. Source: SL 1966, ch 111, ch 21, 15.
58-40-20.1. Service and indemnity-type contracts required to cover occult breast cancer screening.Each service or indemnity-type contract issued by a nonprofit hospital service plan corporation that covers a female and that is delivered, issued for delivery, or renewed in this state, except for a contract that provides coverage for specified disease or other limited benefit coverage, shall provide coverage for screening for the presence of occult breast cancer.The provisions of this section apply only to plans that are not grandfathered pursuant to 75 Fed. Reg. 116 (2010) to be codified at 26 C.F.R. 54 and 602, 29 C.F.R. 2590, and 45 C.F.R. 147. (SL 2011, ch 216, 19 provides: "The provisions of this Act are repealed if the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010) is found to be unconstitutional in its entirety by a final decision of a federal court of competent jurisdiction and all appeals exhausted or time for appeals elapsed.") Source: SL 2011, ch 216, 16.
58-40-20. Grandfathered service and indemnity-type contracts required to cover low-dose mammography--Extent of coverage.Each service or indemnity-type contract issued by a nonprofit hospital service plan corporation that covers a female and that is delivered, issued for delivery, or renewed in this state, except for a contract that provides coverage for specified disease or other limited benefit coverage, shall provide coverage for screening by low-dose mammography for the presence of occult breast cancer that is subject to the same dollar limits, deductibles, and coinsurance factors as for other radiological examinations. Coverage for the screening shall be provided as follows: ages thirty-five to thirty-nine, one baseline mammography; ages forty to forty-nine, a mammography every other year; and age fifty and older, a mammography every year.As used in this section, "low-dose mammography" means the X ray examination of the breast using equipment dedicated specifically for mammography, including the X ray tube, filter, compression device, screens, films, and cassettes, with an average radiation exposure delivery of less than one rad midbreast, with two views for each breast and with interpretation by a qualified radiologist.The provisions of this section apply only to grandfathered plans pursuant to 75 Fed. Reg. 116 (2010) to be codified at 26 C.F.R. 54 and 602, 29 C.F.R. 2590, and 45 C.F.R. 147. (SL 2011, ch 216, 19 provides: "The provisions of this Act are repealed if the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010) is found to be unconstitutional in its entirety by a final decision of a federal court of competent jurisdiction and all appeals exhausted or time for appeals elapsed.") Source: SL 1990, ch 397, 1, 6; SL 1991, ch 400, 6; SL 2011, ch 216, 11.
58-40-21. Coverage for phenylketonuria.Every service or indemnity-type contract issued by a nonprofit hospital service plan corporation that is delivered, issued for delivery, or renewed in this state, except for policies that provide coverage for specified disease or other limited benefit coverage, shall offer coverage for testing, diagnosis, and treatment of phenylketonuria including dietary management, formulas, case management, intake and screening, assessment, comprehensive care planning, and service referral. Source: SL 1992, ch 348, 5.
58-40-22. Formation of voluntary health insurance purchasing organizations. Notwithstanding the provisions of chapter 47-34A and  47-15-2 and 47-22-4, any organization may form for the purposes of purchasing group health insurance on a voluntary basis. For purposes of 58-40-22 to 58-40-32, inclusive, an organization means any nonprofit organization or nonprofit corporation formed under South Dakota law. Source: SL 1994, ch 382, 1; SL 2021, ch 210,  23.
58-40-23. Membership of voluntary health insurance purchasing organizations.Any organization may have a group health insurance policy issued to that organization on behalf of its members who would be insured under such policy. Members may join the organization, for the purpose of obtaining group health insurance, as individuals, employers, labor unions, associations, or substantially similar groups. Source: SL 1994, ch 382, 2.
58-40-24. Purchasing organization's responsibility for negotiating terms and conditions.The organization shall be responsible for negotiating the terms and conditions of insurance contracts, collection of premiums, and providing notice to members. Source: SL 1994, ch 382, 3.
58-40-25. Purchasing organization's notice of premium charge.The organization may provide not less than forty-five days advance notice of any benefit or premium change to its members. Source: SL 1994, ch 382, 4.
58-40-26. Additional chapters applicable to purchasing organization.Any organization is subject to all applicable provisions of chapter 58-3 and chapter 58-33. Source: SL 1994, ch 382, 5.
58-40-27. Approval of purchasing organization by Division of Insurance.Any organization shall, prior to its engaging in the business of insurance, obtain approval from the Division of Insurance. The division may deny approval or withdraw approval of an organization to engage in the business of insurance for any of the following reasons:(1)Any of the grounds specified in 58-6-8;(2)Insufficient membership control of the organization;(3)Unreasonable compensation to officers, directors, or employees of the organization;(4)Misuse of premiums; or(5)Refusal to be examined or to cooperate in an examination. Source: SL 1994, ch 382, 6.
58-40-28. Premiums held in trust by purchasing organization.The organization shall hold all premiums received in trust and promptly remit premiums to the person entitled thereto. Source: SL 1994, ch 382, 7.
58-40-29. Rates for group health insurance issued to purchasing organizations.Any insurer issuing group health insurance pursuant to 58-40-22 to 58-40-32, inclusive, is subject to all of the provisions of chapter 58-18B relating to rates. Source: SL 1994, ch 382, 8.
58-40-3. Members and directors.A hospital plan corporation shall consist of a board of directors and of such members, grouped in such classes, as the bylaws of the corporation shall provide. Source: SL 1966, ch 111, ch 21, 16.
58-40-30. Reasonable participation requirements for group members of purchasing organizations.An insurer may as a condition of offering coverage or continuing coverage require reasonable participation requirements of groups who become members of an organization. Source: SL 1994, ch 382, 9.
58-40-31. Purchasing organizations exempt from antitrust provisions.Any organization formed pursuant to 58-40-22 to 58-40-32, inclusive, is exempt from the antitrust provisions under chapter 37-1. Source: SL 1994, ch 382, 10.
58-40-32. Promulgation of rules for purchasing organizations.The director may promulgate rules pursuant to chapter 1-26 to further the provisions of 58-40-22 to 58-40-32, inclusive, and for purposes of carrying out the provisions of 58-18-1 to 58-18-6, inclusive, and to ensure that group health insurance coverage is issued to eligible groups and that organizations are formed and operated to further the purpose of providing economical group health insurance for its members. The rules may include:(1)Definition of terms;(2)Criteria for determining groups, associations, organizations, and trusts and their eligibility for coverage;(3)Criteria for determining substantially similar groups or for determining related industries;(4)Application requirements and procedures;(5)Reasonable compensation; and(6)Organizational structure. Source: SL 1994, ch 382, 11.
58-40-33. Minimum loss ratio for small employer health benefit plans.Premium rates for individual health benefit plans shall produce a minimum lifetime loss ratio of not less than seventy-five percent. The director may promulgate rules pursuant to chapter 1-26 which modify the minimum loss ratio required based on the specific design of the product or other objective and pertinent criteria. Source: SL 1994, ch 381, 1.
58-40-34. Minimum inpatient care coverage following delivery.If a service or indemnity-type contract issued or renewed on or after July 1, 1996, by a nonprofit hospital service plan corporation provides maternity coverage, the contract shall provide coverage for a minimum of forty-eight hours of inpatient care following a vaginal delivery and a minimum of ninety-six hours of inpatient care following delivery by cesarean section for a mother and her newborn child in a health care facility licensed pursuant to chapter 34-12, except as otherwise provided in 58-40-35. Any individual policy and any policy issued to employers with less than fifteen employees that provides coverage for complications of pregnancy, and does not provide other maternity benefits, is not required to comply with this section. Source: SL 1996, ch 292, 13; SL 1998, ch 290, 5.
58-40-35. Shorter hospital stay permitted--Follow-up visit within forty-eight hours required.If the treating physician determines that the mother and the newborn meet medical criteria contained in Guidelines for Perinatal Care, Third Edition, of the American Academy of Pediatrics and the American College of Obstetricians and Gynecologists as in effect on January 1, 1996, a service or indemnity-type contract issued by a nonprofit hospital service plan corporation may provide coverage for a shorter length of hospital inpatient stay for services related to maternity and newborn care than is required in 58-40-34 if the coverage includes one follow-up visit in the first forty-eight hours after discharge to verify the condition of the mother and newborn. Source: SL 1996, ch 292, 14.
58-40-36. Notice to subscribers--Disclosure.The nonprofit hospital service plan corporation shall provide notice to subscribers regarding the coverage required by 58-40-34 in accordance with rules adopted by the director of the Division of Insurance pursuant to chapter 1-26. The notice shall be in writing and prominently positioned in any literature or correspondence. The notice shall be transmitted to subscribers in the next mailing to subscribers, in the yearly informational packet sent to subscribers, or by January 1, 1997, whichever is earliest. Source: SL 1996, ch 292, 15.
58-40-37. Health insurance policies to provide coverage for biologically-based mental illnesses.Every service or indemnity-type contract issued by a nonprofit hospital service plan corporation that is delivered, issued for delivery, or renewed in this state, except for policies that provide coverage for specified disease or other limited benefit coverage, shall provide, in writing, coverage for the treatment and diagnosis of biologically-based mental illnesses with the same dollar limits, deductibles, coinsurance factors, and restrictions as for other covered illnesses.The term, biologically-based mental illness, means schizophrenia and other psychotic disorders, bipolar disorder, major depression, and obsessive-compulsive disorder. Source: SL 1998, ch 291, 5; SL 1999, ch 251, 5.
58-40-38. Application--Exemptions.The provisions of 58-40-37 do not apply to any plan, policy, or contract that provides coverage only for:(1)Specified disease;(2)Hospital indemnity;(3)Fixed indemnity;(4)Accident-only;(5)Credit;(6)Dental;(7)Vision;(8)Prescription drug;(9)Medicare supplement;(10)Long-term care;(11)Disability income insurance;(12)Coverage issued as a supplement to liability insurance;(13)Workers' compensation or similar insurance;(14)Automobile medical payment insurance; or(15)Individual health benefit plans of six-months duration or less that are not renewable. Source: SL 1998, ch 291, 7.
58-40-39. Policies to provide coverage for diabetes supplies, equipment, and education--Exceptions--Conditions and limitations.Every service or indemnity-type contract issued by a nonprofit hospital service plan corporation delivered, issued for delivery, or renewed in this state, except for policies that provide coverage for specified disease or other limited benefit coverage, shall provide, in writing, coverage for equipment, supplies, and self-management training and education, including medical nutrition therapy, for treatment of persons diagnosed with diabetes if prescribed by a physician or other licensed health care provider legally authorized to prescribe such treatment. Medical nutrition therapy does not include any food items or nonprescription drugs.Coverage for medically necessary equipment and supplies shall include blood glucose monitors, blood glucose monitors for the legally blind, test strips for glucose monitors, urine testing strips, insulin, injection aids, lancets, lancet devices, syringes, insulin pumps and all supplies for the pump, insulin infusion devices, prescribed oral agents for controlling blood sugars, glucose agents, glucagon kits, insulin measurement and administration aids for the visually impaired, and other medical devices for treatment of diabetes.Diabetes self-management training and education shall be covered if: (a) the service is provided by a physician, nurse, dietitian, pharmacist, or other licensed health care provider who satisfies the current academic eligibility requirements of the National Certification Board for Diabetic Educators and has completed a course in diabetes education and training or has been certified as a diabetes educator; and (b) the training and education is based upon a diabetes program recognized by the American Diabetes Association or a diabetes program with a curriculum approved by the American Diabetes Association or the South Dakota Department of Health.Coverage of diabetes self-management training is limited to (a) persons who are newly diagnosed with diabetes or have received no prior diabetes education; (b) persons who require a change in current therapy; (c) persons who have a co-morbid condition such as heart disease or renal failure; or (d) persons whose diabetes condition is unstable. Under these circumstances, no more than two comprehensive education programs per lifetime and up to eight follow-up visits per year need be covered. Coverage is limited to the closest available qualified education program that provides the necessary management training to accomplish the prescribed treatment.The benefits provided in this section are subject to the same dollar limits, deductibles, coinsurance, and other restrictions established for all other benefits covered in the contract. Source: SL 1999, ch 252, 9.
58-40-4. Board of directors--Minimum number--Qualifications--Selection--Term of office.The business of a hospital service plan corporation shall be managed by a board of directors of at least five persons possessing the same general qualifications as the incorporators and they shall be selected, and their number fixed, in the manner set out in the bylaws for three-year terms. The directors of such corporation must at all times include representatives of the following groups: administrators, directors, trustees, or members of the clinical staff of hospitals which have contracted or may contract with such corporation to render to its subscribers hospital service; physicians and surgeons regularly licensed to practice in this state; and the general public exclusive of hospital representatives and physicians. Source: SL 1966, ch 111, ch 21, 16.
58-40-40. Diabetes coverage not required of certain plans and policies.The provisions of 58-40-39 do not apply to any plan, policy, or contract that provides coverage only for:(1)Specified disease;(2)Hospital indemnity;(3)Fixed indemnity;(4)Accident-only;(5)Credit;(6)Dental;(7)Vision;(8)Prescription drug;(9)Medicare supplement;(10)Long-term care;(11)Disability income insurance;(12)Coverage issued as a supplement to liability insurance;(13)Workers' compensation or similar insurance;(14)Automobile medical payment insurance;(15)Individual health benefit plans of six-months duration or less that are not renewable; or(16)Individual nonmajor medical insurance. Source: SL 1999, ch 252, 10.
58-40-41. Contracts to provide coverage for prostate cancer screening.Every service or indemnity-type contract issued by a nonprofit hospital service plan or organization that covers a male and that is delivered, issued for delivery, or renewed in this state, except for policies that provide coverage for specified disease or other limited benefit coverage, shall provide the following coverage for diagnostic screening for prostate cancer:(1)An annual medically recognized diagnostic examination, including a digital rectal examination and a prostate-specific antigen test, as follows:(a)For asymptomatic men aged fifty and over; and(b)For men aged forty-five and over at high risk for prostate cancer; and(2)For males of any age who have a prior history of prostate cancer, medically indicated diagnostic testing at intervals recommended by a physician, including the digital rectal examination, prostate-specific antigen test, and bone scan. Source: SL 2001, ch 277, 5.
58-40-5. License to issue contracts required--Violation as misdemeanor.A corporation subject to the provisions of this chapter may issue contracts only when the director has by formal certificate or license authorized it to do so. Violation of this section is a Class 2 misdemeanor. Source: SL 1966, ch 111, ch 21, 18; SL 1978, ch 359, 2.
58-40-6. Application for license--Form and contents--Documents accompanying.Application for the certificate of authority or license required by 58-40-5 shall be made on forms to be approved by the director, containing such information as he shall deem necessary. Each application for such certificate or license shall be accompanied by copies of the following documents:(1)Certified copy of its charter or certificate of incorporation;(2)Bylaws;(3)Proposed contracts between the corporation and participating hospitals showing terms under which hospital service is to be furnished to subscribers;(4)Contracts to be issued to subscribers showing the benefits to which they are entitled;(5)A table of the rates to be charged to the subscribers;(6)Financial statement of the corporation including the amounts of contribution paid or agreed to be paid to the corporation for working capital and the names of each contributor and the terms of each contribution. Source: SL 1966, ch 111, ch 21, 18.
58-40-7. Issuance of license--Matters considered by director.The director shall issue a certificate of authority or license upon being satisfied on the following points:(1)That the applicant is established as a bona fide nonprofit hospital service corporation;(2)That the contracts between the applicant and the participating hospitals obligate each hospital to render service to which each subscriber may be entitled under the contract issued to the subscribers;(3)That the rates to be charged and benefits to be provided are fair and reasonable;(4)That amounts provided as working capital of the corporation are repayable only out of earned income over and above operating expenses, hospital expenses, and such reserve as the director may deem adequate;(5)That the amount of money actually available for working capital be sufficient to carry all acquisition costs and operating expenses for a reasonable period of time from the date of the issuance of the certificate. Source: SL 1966, ch 111, ch 21, 18.
58-40-8. Contracts with subscribers.Any hospital service plan corporation organized under the provisions of this chapter may enter into contracts for the rendering of hospital service to any of its subscribers with licensed hospitals maintained and operated by any corporation, association, individual or any political subdivision of this state. Source: SL 1966, ch 111, ch 21, 17.
58-40-9. Hospital service determined--Unauthorized practice of healing or practice of medicine.Hospital service is meant to include the usual and customary service furnished by hospitals but nothing in this chapter shall authorize any person, association or corporation to engage, in any manner, in the practice of healing, or the practice of medicine, as defined by law. Source: SL 1966, ch 111, ch 21, 17.
58-41-1. Definition of terms.Terms used in this chapter mean:(1)"Comprehensive health maintenance services," a set of comprehensive health services which the enrollees might reasonably require to be maintained in good health, including as a minimum, but not limited to, emergency care, inpatient hospital and physician care, outpatient medical services, and preventive medical services;(2)"Director," the director of the Division of Insurance or his designee;(3)"Enrollee," any person who has entered into, or is covered by a health maintenance contract;(4)"Evidence of coverage," any certificate, agreement, or contract issued to an enrollee which sets out the coverage to which he is entitled under the health maintenance contract which covers him;(5)"Health maintenance contract," any contract whereby a health maintenance organization agrees to provide comprehensive health maintenance services to enrollees, provided that the contract may contain reasonable enrollee copayment provisions. Any contract may provide for health care services in addition to those set forth in subdivision (1);(6)"Limited health service," dental care services, vision care services, mental health services, substance abuse services, pharmaceutical services, podiatric care services, and such other services as may be determined by the director to be limited health services. Limited health service does not include hospital, medical, surgical, or emergency services except as these services are provided incident to the limited health services;(7)"Provider," any person who furnishes health services and is licensed or otherwise authorized to render such services in the state;(8)"Risk bearing entity," an intermediary organization that is a financial risk for services provided through contractual assumption of the obligation for the delivery of specified health care services to covered persons of the health maintenance organization. Source: SL 1974, ch 321, 2; SL 2013, ch 256, 1.
58-41-10. Appointment to receive process required of foreign applicant.Each application for a certificate of authority by an applicant not domiciled in this state shall include a power of attorney duly executed by such applicant, appointing the director and his successors in office, and duly authorized deputies, as the true and lawful attorney of such applicant in and for this state upon whom all lawful process in any legal action or proceeding against the health maintenance organization on a cause of action arising in this state may be served. Source: SL 1974, ch 321, 6 (9).
58-41-100. Membership of voluntary health insurance purchasing organizations.Any organization may have a group health insurance policy issued to that organization on behalf of its members who would be insured under such policy. Members may join the organization, for the purpose of obtaining group health insurance, as individuals, employers, labor unions, associations, or substantially similar groups. Source: SL 1994, ch 382, 2.
58-41-101. Purchasing organization's responsibility for negotiating terms and conditions.The organization shall be responsible for negotiating the terms and conditions of insurance contracts, collection of premiums, and providing notice to members. Source: SL 1994, ch 382, 3.
58-41-102. Purchasing organization's notice of premium charge.The organization may provide not less than forty-five days advance notice of any benefit or premium change to its members. Source: SL 1994, ch 382, 4.
58-41-103. Additional chapters applicable to purchasing organization.Any organization is subject to all applicable provisions of chapter 58-3 and chapter 58-33. Source: SL 1994, ch 382, 5.
58-41-104. Approval of purchasing organization by Division of Insurance.Any organization shall, prior to its engaging in the business of insurance, obtain approval from the Division of Insurance. The division may deny approval or withdraw approval of an organization to engage in the business of insurance for any of the following reasons:(1)Any of the grounds specified in 58-6-8;(2)Insufficient membership control of the organization;(3)Unreasonable compensation to officers, directors, or employees of the organization;(4)Misuse of premiums; or(5)Refusal to be examined or to cooperate in an examination. Source: SL 1994, ch 382, 6.
58-41-105. Premiums held in trust by purchasing organization.The organization shall hold all premiums received in trust and promptly remit premiums to the person entitled thereto. Source: SL 1994, ch 382, 7.
58-41-106. Rates for group health insurance issued to purchasing organizations.Any insurer issuing group health insurance pursuant to 58-41-99 to 58-41-109, inclusive, is subject to all of the provisions of chapter 58-18B relating to rates. Source: SL 1994, ch 382, 8.
58-41-107. Reasonable participation requirements for group members of purchasing organizations.An insurer may as a condition of offering coverage or continuing coverage require reasonable participation requirements of groups who become members of an organization. Source: SL 1994, ch 382, 9.
58-41-108. Purchasing organizations exempt from antitrust provisions.Any organization formed pursuant to 58-41-99 to 58-41-109, inclusive, is exempt from the antitrust provisions under chapter 37-1. Source: SL 1994, ch 382, 10.
58-41-109. Promulgation of rules for purchasing organizations.The director may promulgate rules pursuant to chapter 1-26 to further the provisions of 58-41-99 to 58-41-109, inclusive, and for purposes of carrying out the provisions of 58-18-1 to 58-18-6, inclusive, and to ensure that group health insurance coverage is issued to eligible groups and that organizations are formed and operated to further the purpose of providing economical group health insurance for its members. The rules may include:(1)Definition of terms;(2)Criteria for determining groups, associations, organizations, and trusts and their eligibility for coverage;(3)Criteria for determining substantially similar groups or for determining related industries;(4)Application requirements and procedures;(5)Reasonable compensation; and(6)Organizational structure. Source: SL 1994, ch 382, 11.
58-41-11. Surety bond or deposit required--Waiver.Each health maintenance organization shall furnish a surety bond in an amount satisfactory to the director or deposit with the director cash or securities acceptable to him in at least the same amount as a guarantee that the obligations to the enrollees will be performed. The director may waive this requirement whenever he is satisfied that the assets of the organization or its contracts with insurers, hospital or medical service corporations, governments, or other organizations are sufficient to reasonably assure the performance of its obligations. Source: SL 1974, ch 321, 31.
58-41-110. Application of chapter to provider contracting with state.Nothing in this chapter applies to a medical provider who enters into a contract with the State of South Dakota for services pursuant to chapter 3-12A. Source: SL 1995, ch 294, 1.
58-41-111. Application of chapter to provider contracting with licensed health maintenance organization.Any medical provider who enters into a contract for medical services with a licensed health maintenance organization or a health insurer licensed pursuant to this title is not required to be licensed pursuant to this chapter. Source: SL 1995, ch 294, 2.
58-41-112. Minimum inpatient care coverage following delivery.If a health maintenance contract issued or renewed on or after July 1, 1996, by a health maintenance organization provides maternity coverage, the contract shall provide coverage for a minimum of forty-eight hours of inpatient care following a vaginal delivery and a minimum of ninety-six hours of inpatient care following delivery by cesarean section for a mother and her newborn child in a health care facility licensed pursuant to chapter 34-12, except as otherwise provided in 58-41-113. Any individual policy and any policy issued to employers with less than fifteen employees that provides coverage for complications of pregnancy, and does not provide other maternity benefits, is not required to comply with this section. Source: SL 1996, ch 292, 16; SL 1998, ch 290, 6.
58-41-113. Shorter hospital stay permitted--Follow-up visit within forty-eight hours required.If the treating physician determines that the mother and the newborn meet medical criteria contained in Guidelines for Perinatal Care, Third Edition, of the American Academy of Pediatrics and the American College of Obstetricians and Gynecologists as in effect on January 1, 1996, a health maintenance contract may provide coverage for a shorter length of hospital inpatient stay for services related to maternity and newborn care than is required in 58-41-112 if the coverage includes one follow-up visit in the first forty-eight hours after discharge to verify the condition of the mother and newborn. Source: SL 1996, ch 292, 17.
58-41-114. Notice to enrollees--Disclosures.The health maintenance organization shall provide notice to enrollees regarding the coverage required by 58-41-112 in accordance with rules adopted by the director of the Division of Insurance pursuant to chapter 1-26. The notice shall be in writing and prominently positioned in any literature or correspondence. The notice shall be transmitted to enrollees in the next mailing to enrollees, in the yearly informational packet sent to enrollees, or by January 1, 1997, whichever is earliest. Source: SL 1996, ch 292, 18.
58-41-115. Health insurance policies to provide coverage for biologically-based mental illnesses.Every health maintenance contract that is delivered, issued for delivery, or renewed in this state, except for policies that provide coverage for specified disease or other limited benefit coverage, shall provide, in writing, coverage for the treatment and diagnosis of biologically-based mental illnesses with the same dollar limits, deductibles, coinsurance factors, and restrictions as for other covered illnesses.The term, biologically-based mental illness, means schizophrenia and other psychotic disorders, bipolar disorder, major depression, and obsessive-compulsive disorder. Source: SL 1998, ch 291, 6; SL 1999, ch 251, 6.
58-41-116. Application--Exemptions.The provisions of 58-41-115 do not apply to any plan, policy, or contract that provides coverage only for:(1)Specified disease;(2)Hospital indemnity;(3)Fixed indemnity;(4)Accident-only;(5)Credit;(6)Dental;(7)Vision;(8)Prescription drug;(9)Medicare supplement;(10)Long-term care;(11)Disability income insurance;(12)Coverage issued as a supplement to liability insurance;(13)Workers' compensation or similar insurance;(14)Automobile medical payment insurance; or(15)Individual health benefit plans of six-months duration or less that are not renewable. Source: SL 1998, ch 291, 7.
58-41-117. Policies to provide coverage for diabetes supplies, equipment, and education--Exceptions--Conditions and limitations.Every health maintenance contract delivered, issued for delivery, or renewed in this state, except for policies that provide coverage for specified disease or other limited benefit coverage, shall provide, in writing, coverage for equipment, supplies, and self-management training and education, including medical nutrition therapy, for treatment of persons diagnosed with diabetes if prescribed by a physician or other licensed health care provider legally authorized to prescribe such treatment. Medical nutrition therapy does not include any food items or nonprescription drugs.Coverage for medically necessary equipment and supplies shall include blood glucose monitors, blood glucose monitors for the legally blind, test strips for glucose monitors, urine testing strips, insulin, injection aids, lancets, lancet devices, syringes, insulin pumps and all supplies for the pump, insulin infusion devices, prescribed oral agents for controlling blood sugars, glucose agents, glucagon kits, insulin measurement and administration aids for the visually impaired, and other medical devices for treatment of diabetes.Diabetes self-management training and education shall be covered if: (a) the service is provided by a physician, nurse, dietitian, pharmacist, or other licensed health care provider who satisfies the current academic eligibility requirements of the National Certification Board for Diabetic Educators and has completed a course in diabetes education and training or has been certified as a diabetes educator; and (b) the training and education is based upon a diabetes program recognized by the American Diabetes Association or a diabetes program with a curriculum approved by the American Diabetes Association or the South Dakota Department of Health.Coverage of diabetes self-management training is limited to (a) persons who are newly diagnosed with diabetes or have received no prior diabetes education; (b) persons who require a change in current therapy; (c) persons who have a co-morbid condition such as heart disease or renal failure; or (d) persons whose diabetes condition is unstable. Under these circumstances, no more than two comprehensive education programs per lifetime and up to eight follow-up visits per year need be covered. Coverage is limited to the closest available qualified education program that provides the necessary management training to accomplish the prescribed treatment.The benefits provided in this section are subject to the same dollar limits, deductibles, coinsurance, and other restrictions established for all other benefits covered in the contract. Source: SL 1999, ch 252, 11.
58-41-118. Diabetes coverage not required of certain plans and policies.The provisions of 58-41-117 do not apply to any plan, policy, or contract that provides coverage only for:(1)Specified disease;(2)Hospital indemnity;(3)Fixed indemnity;(4)Accident-only;(5)Credit;(6)Dental;(7)Vision;(8)Prescription drug;(9)Medicare supplement;(10)Long-term care;(11)Disability income insurance;(12)Coverage issued as a supplement to liability insurance;(13)Workers' compensation or similar insurance;(14)Automobile medical payment insurance;(15)Individual health benefit plans of six-months' duration or less that are not renewable; or(16)Individual nonmajor medical insurance. Source: SL 1999, ch 252, 12.
58-41-119. Contracts to provide coverage for prostate cancer screening.Every health maintenance contract that covers a male and that is delivered, issued for delivery, or renewed in this state, except for policies that provide coverage for specified disease or other limited benefit coverage, shall provide the following coverage for diagnostic screening for prostate cancer:(1)An annual medically recognized diagnostic examination, including a digital rectal examination and a prostate-specific antigen test, as follows:(a)For asymptomatic men aged fifty and over; and(b)For men aged forty-five and over at high risk for prostate cancer; and(2)For males of any age who have a prior history of prostate cancer, medically indicated diagnostic testing at intervals recommended by a physician, including the digital rectal examination, prostate-specific antigen test, and bone scan. Source: SL 2001, ch 277, 6.
58-41-12. Determination of health care qualifications.The director shall determine whether the applicant for a certificate of authority has:(1)Demonstrated the willingness and potential ability to assure that health care services will be provided in a manner to assure both the availability and accessibility of adequate personnel and facilities consistent with the requirements of chapter 58-17F;(2)Arrangements, established in accordance with regulations promulgated by the director for an ongoing quality of health care assurance program consistent with the requirements of chapter 58-17F, concerning health care processes and outcomes;(3)A procedure, established in accordance with rules promulgated pursuant to chapter 1-26 by the director, to develop, compile, evaluate, and report statistics relating to the cost of its operations, the pattern of utilization of its services, the availability and accessibility of its services, and such other matters as may be reasonably required by the director; and(4)Reasonable provisions for emergency and out-of-area health care services. Source: SL 1974, ch 321, 8; SL 1999, ch 245, 20; SL 2011, ch 219, 101; SL 2013, ch 256, 4.
58-41-120. Annual report on risk bearing entities.A health maintenance organization shall file annually, as part of its access plan, a list of all risk bearing entities with which it has an agreement or contract and the number of covered persons assigned or selected by each risk bearing entity. Source: SL 2013, ch 256, 35.
58-41-121. Documents provided to risk bearing entity by health maintenance organization.In entering into, amending, or renewing a contract with a risk bearing entity, a health maintenance organization shall, unless already specified in the contract, provide the following, upon request, to a risk bearing entity:(1)At the time the contract is entered into, a written statement describing the amount or method of remuneration to be paid to the risk bearing entity. If any part of the remuneration is a calculated amount based on variable factors, the payment methodology upon which the calculated amount will be determined. The statement shall specify the services and expenses for which the risk bearing entity is financially liable in whole or part;(2)At the time payment is made, the basis of the calculation of that payment;(3)For health benefit plans in which the covered persons are assigned to the risk bearing entity under a capitated payment arrangement, a list of enrollees and payments due to the risk bearing entity, to be provided monthly if not already available to the risk bearing entity;(4)At the time the contract is entered into, a copy of the health maintenance organization's most recent annual statement filed with the NAIC; and(5)Once the contract is in effect, the quarterly or annual statement. Source: SL 2013, ch 256, 36.
58-41-122.Documents provided to health maintenance organization by risk bearing entity.A health maintenance organization shall include in any contract with a risk bearing entity a requirement that the risk bearing entity provide to the health maintenance organization at the time a contract is entered into and annually thereafter the following:(1)Annual audited GAAP report in accordance with generally accepted accounting principles in the United States (U.S. GAAP);(2)Documentation that satisfies the health maintenance organization that the risk bearing entity has sufficient ability to accept risk; and(3)Documentation that satisfies the health maintenance organization that the risk bearing entity has appropriate management expertise and infrastructure.The contract shall also require that the risk bearing entity on a quarterly basis provide status reports that include the following:(1)Financial statements prepared in accordance with U. S. GAAP;(2)An aging report of the percentage of claims that have been paid, pended, or denied, across all contracts with risk bearing entities; and(3)On a monthly basis, a report of the estimated reported claims and incurred but not reported claims liability of the risk bearing entity. Source: SL 2013, ch 256, 37.
58-41-123. Notice by risk bearing entity of change in conditions--Assignment of contract.A health maintenance organization shall require in any contract with a risk bearing entity that the risk bearing entity provide notice to the health maintenance organization within thirty days of:(1)Any changes involving the ownership structure of the risk bearing entity; or(2)Financial or operational concerns regarding the financial viability of the risk bearing entity.A health maintenance organization shall also require in any contract with a risk bearing entity a provision that allows the director, in the event that a risk bearing entity fails to comply with any provision of 58-41-120 to 58-41-126, inclusive, to assign for six months, the risk bearing entity's contract with providers to furnish covered services. Source: SL 2013, ch 256, 38.
58-41-124. Notice to director that risk bearing entity has materially failed to perform contract.A health maintenance organization shall have procedures in place to notify the director within a reasonable time that a risk bearing entity has materially failed to perform under its contract with the health maintenance organization. A health maintenance organization is not in violation of this section if it acts in good faith in its attempt to comply with this section. A health maintenance organization shall maintain systems and controls for reviewing the information provided to the health maintenance organization by the risk bearing entity pursuant to 58-41-120 to 58-41-126, inclusive. Source: SL 2013, ch 256, 39.
58-41-125. Confidentiality of information.Any information provided to the director by a health maintenance organization relative to risk bearing entities with which it is contracted is confidential and may not be disclosed to any person except to the extent that it is necessary to carry out the purposes of 58-41-120 to 58-41-126, inclusive, and as allowed by state law, regardless of whether the information is in the form of paper, is preserved on microfilm, or is stored in computer readable form. If the information is disclosed pursuant to this section, the health maintenance organization providing the notice is not liable for the disclosure or any subsequent use or misuse of the information. The health maintenance organization is entitled to claim any statutory privileges against disclosure that the entity that provided the information to the health maintenance organization is entitled to claim. This section is not intended to create a private right of action. Source: SL 2013, ch 256, 40.
58-41-126. Nontransferable responsibilities of health maintenance organization.Notwithstanding any agreement to the contrary, the health maintenance organization shall:(1)Retain full responsibility on a prospective basis for the provision of health care services pursuant to any applicable health benefit plan; and(2)At all times, be able to demonstrate to the satisfaction of the director that the health maintenance organization can fulfill its nontransferable obligation to provide health care services to covered persons in any event, including the failure, for any reason, of a risk bearing entity. Source: SL 2013, ch 256, 41.
58-41-127. Coverage for treatment of hearing impairment for persons under age nineteen.Any qualified health plan issued on or after January 1, 2015, that offers coverage for professional audiology services shall include coverage for medically necessary physician services appropriate for the treatment of hearing impairment to a person under the age of nineteen. This shall include professional services rendered by an audiologist licensed pursuant to chapter 36-24.The benefits provided shall be subject to the same dollar limits, deductibles, coinsurance and other limitations provided for other covered benefits in the policy.Nothing in this section requires the payment by the health plan of hearing aids, devices, or equipment to correct hearing impairment or loss. Source: SL 2014, ch 237, 4.
58-41-13.Coordination with federal professional standards review.To the extent that it furthers the purposes of this chapter, the director shall attempt to coordinate the operations of this chapter relating to the quality of health care services with the operations of 42 U.S. C. sections 1320c to 1320c-19. Source: SL 1974, ch 321, 54; SL 2013, ch 256, 5.
58-41-15.1. Certain healing arts practitioners to participate in alternate health care delivery systems.Any optometrist licensed pursuant to chapter 36-7, podiatrist licensed pursuant to chapter 36-8, chiropractor licensed pursuant to chapter 36-5, psychologist licensed pursuant to chapter 36-27A, dentist licensed pursuant to chapter 36-6A, or social worker licensed under 36-26-17, may organize or contract for services with a corporation organized under the laws of this state by licensed practitioners of the healing arts, for the purpose of negotiating group health care contracts and providing services within the scope of their respective licenses with alternate health care delivery systems, including health maintenance organizations, preferred provider organizations, individual practices organizations, or other similar entities. Source: SL 1987, ch 269, 2; SL 2013, ch 256, 6.
58-41-15. Health maintenance not considered practice of healing arts.Any health maintenance organization authorized under this chapter shall not be deemed to be practicing a healing art. Source: SL 1974, ch 321, 53.
58-41-17. Issuance or denial of certificate--Fee--Conditions for issuance.The director of the Division of Insurance shall issue or deny a certificate of authority to any person filing an application pursuant to this chapter. Issuance of a certificate of authority shall be granted upon payment of the application fee prescribed in 58-41-26 if the director is satisfied that the following conditions are met:(1)The persons responsible for the conduct of the affairs of the applicant are competent, trustworthy, and possess good reputations;(2)The health maintenance organization's proposed plan of operation meets the requirements of 58-41-12;(3)The health maintenance contract constitutes an appropriate mechanism whereby the health maintenance organization will effectively provide or arrange for the provision of comprehensive health maintenance services on a prepaid basis, through insurance or otherwise, except to the extent of reasonable requirements for copayments;(4)The health maintenance organization is financially responsible and may reasonably be expected to meet its obligations to enrollees and prospective enrollees;(5)The health maintenance organization will assume full financial risk on a prospective basis for the provision of comprehensive health maintenance services, including hospital care;(6)The enrollees will be afforded an opportunity to participate in matters of policy and operation pursuant to 58-41-23 and 58-41-24; and(7)Nothing in the proposed method of operation, as shown by the information submitted pursuant to 58-41-4 to 58-41-10, inclusive, or by independent investigation, is contrary to the public interest.A certificate of authority may be denied only after compliance with the requirements of 58-41-87 to 58-41-90, inclusive. Source: SL 1974, ch 321, 10; SL 1985, ch 393, 15; SL 2013, ch 256, 8.
58-41-18. Factors considered in determining financial responsibility.In making a determination under subdivision 58-41-17(4), the director may consider:(1)The financial soundness of the applicant's arrangements for health care services and the proposed schedule of charges used in connection therewith;(2)The adequacy of its working capital;(3)Arrangements which will guarantee for a reasonable period of time the continued availability or payment of the cost of health care services in the event of discontinuance of the health maintenance organization;(4)Agreements with providers for the provision of health care services; and(5)Any surety bond or deposit of cash or securities submitted in accordance with 58-41-11 as a guarantee that the obligations will be duly performed. Source: SL 1974, ch 321, 10 (4).
58-41-19. Insurance arrangements permitted.The requirement of subdivision 58-41-17(5) shall not prohibit a health maintenance organization from obtaining insurance or making other arrangements:(1)For the cost of providing to any enrollee comprehensive health maintenance services, the aggregate value of which exceeds five thousand dollars in any year;(2)For the cost of providing comprehensive health care services to its members on a nonelective emergency basis, or while they are outside the area served by the organization; or(3)For not more than ninety-five percent of the amount by which the health maintenance organization's costs for any of its fiscal years exceeds one hundred five percent of its income for such fiscal years. Source: SL 1974, ch 321, 10 (5).
58-41-2. Organizations subject to chapter.As used in this chapter a health maintenance organization is a corporation organized under Title 47, controlled and operated as provided in this chapter, which provides, either directly or through arrangements with providers or other persons, comprehensive health maintenance services, or arranges for the provision of such services, to enrollees on the basis of a fixed prepaid sum without regard to the frequency or extent of services furnished to any particular enrollee. A health maintenance organization may be organized pursuant to this chapter on a limited health service basis. Nothing in this chapter prohibits a health maintenance organization holding a certificate of authority in this state from issuing contracts to enrollees on a preferred provider, exclusive provider, or closed panel basis. Nothing in this chapter requires a licensed pharmacy benefit manager to obtain a certificate of authority as a health maintenance organization provided that the pharmacy benefit manager does not assume insurance risk directly from an insured. Source: SL 1974, ch 321, 2 (3); SL 1985, ch 393, 1; SL 2013, ch 256, 2.
58-41-20. Corporation operating after certification.Any corporation may, upon obtaining a certificate of authority as required in this chapter, operate as a health maintenance organization. Source: SL 1974, ch 321, 11; SL 1985, ch 393, 3.
58-41-21. Foreign corporations qualifying--Exemption from other requirements.A foreign corporation may qualify under this chapter, and if such corporation fully complies with the provisions of Title 58, then such corporation shall be exempt from complying with other provisions of the South Dakota Code concerning foreign corporations. Source: SL 1974, ch 321, 3; SL 1985, ch 393, 4.
58-41-22. Filing of notice of modification of operation--Approval if not disapproved--Exemptions.A health maintenance organization shall, unless otherwise provided for in this chapter, file a notice describing any modification of the operation set out in the information required by 58-41-6 to 58-41-10, inclusive. Such a notice shall be filed with the director prior to the modification. If the director does not disapprove within thirty days of filing, such modification shall be deemed approved. The director may promulgate rules and regulations exempting from the filing requirements of this section those items he deems unnecessary. Source: SL 1974, ch 321, 7.
58-41-23. Composition of governing body--Consumer representation.The governing body of any health maintenance organization may include enrollees, providers, or other individuals. However, after a health maintenance organization has been authorized under this chapter for one year, at least twenty percent of the governing body of a health maintenance organization shall be composed of consumers. A consumer, is any person other than a person whose occupation involves the administration of health activities or the providing of health services. Source: SL 1974, ch 321, 2 (9), 16; SL 1985, ch 393, 5; SL 2014, ch 244, 1.
58-41-24. Mechanisms for enrollee participation in policy and operation of governing body.The governing body shall establish a mechanism to afford the enrollees an opportunity to express their opinions in matters of policy and operation through the establishment of advisory panels, by the use of advisory referenda on major policy decisions, or through the use of other mechanisms as may be prescribed or permitted by the director. Source: SL 1974, ch 321, 16; SL 2013, ch 256, 9.
58-41-25.1. Investments.The funds of any corporation subject to the provisions of this chapter shall be invested only in securities permitted by the laws of this state for the investment of assets of life insurance companies. Source: SL 1985, ch 393, 14.
58-41-25. Fiduciary responsibilities to enrollees.Any director, officer, or partner of a health maintenance organization who receives, collects, disburses, or invests funds in connection with the activities of such organization shall be responsible for such funds in a fiduciary relationship to the enrollees. Source: SL 1974, ch 321, 17.
58-41-26. Exemption from insurance laws--Exceptions--Taxation.Any health maintenance organization is exempt from all provisions of the insurance laws of this state other than this chapter. However, the corporation is subject to the provisions of this title on matters and procedures of mergers and licensure of insurance producers. The corporation is also subject to fees and taxation as insurers under 58-2-29 and chapter 10-44. The corporation is also subject to 58-17-53 and 58-17-54 if entering into a contract after July 1, 1990, with the State of South Dakota, counties, school districts, municipalities, and any other unit of state government using public funds. The state, however, may not collect premium taxes for insurance written on individuals residing outside this state or property located outside this state if no comparable tax is paid by the direct writing health maintenance organization to any appropriate taxing authority. Health maintenance organizations are also subject to the following chapters: 58-1, 58-2, 58-3, 58-4, 58-5, 58-5A, 58-6, 58-7, 58-11, 58-12, 58-14, 58-17, 58-17A, 58-17F, 58-17G, 58-17H, 58-17I, 58-18, 58-18A, 58-18B, 58-18C, 58-26, 58-27, 58-29B on the same basis as insurers, 58-30, 58-33A; and 58-43. Nothing in chapters 58-5 or 58-6 may be construed to prohibit a nonprofit health maintenance organization from transacting business under this title based upon its nonprofit status.To the extent that a health maintenance organization is compliant with the provisions of chapters 58-17F to 58-17I, inclusive, for purposes of network adequacy, quality assessment and improvements, utilization review and benefit determinations, and grievance procedure, the health maintenance organization is compliant with the provisions of this chapter. Source: SL 1974, ch 321, 51; SL 1985, ch 393, 8; SL 1990, ch 411; SL 2001, ch 286, 226; SL 2007, ch 293, 1; SL 2013, ch 256, 10; SL 2020, ch 210,  13.
58-41-28. Solicitation of enrollment not deemed professional advertising.Solicitation of enrollees by a health maintenance organization granted a certificate of authority, or its representatives, shall not be construed to violate any provision of law relating to solicitation or advertising by health professionals. Source: SL 1974, ch 321, 52.
58-41-29.1. Notice required for rate increase in health maintenance contract by a health maintenance organization.Forty-five days before a health maintenance contract rate increase is effective, the health maintenance organization shall notify the enrolling unit in writing that the contract rate for the health maintenance contract offered by the organization will be increased. Source: SL 1989, ch 434, 4.
58-41-29. Contracts and necessary activities.A health maintenance organization may enter into health maintenance contracts in this state and engage in any other activities consistent with this chapter which are necessary to the performance of its obligations under such contracts or authorize its representatives to do so. Source: SL 1974, ch 321, 12.
58-41-3. Certificate of authority required for health maintenance organization or contracts--Violation as misdemeanor.No person shall establish or operate a health maintenance organization in this state, nor sell or offer to sell, or solicit offers to purchase or receive advance or periodic consideration in conjunction with a health maintenance organization or health maintenance contract unless such organization has a certificate of authority under this chapter. Violation of this section is a Class 2 misdemeanor. Source: SL 1974, ch 321, 3, 50; SDCL Supp, 58-41-77; SL 1978, ch 359, 2.
58-41-30. Sources of payment for enrollee services--Application by medical assistance recipient.Each health maintenance organization authorized to operate under this chapter or its representative, may accept from governmental agencies, private agencies, corporations, associations, groups, individuals, or other persons, payments covering all or part of the cost of health care service provided to enrollees. Any recipient of medical assistance, pursuant to Title 28, may make application to join a health maintenance organization which has been approved for medical assistance by the secretary of the Department of Social Services. Source: SL 1974, ch 321, 15.
58-41-31. Direct payments to enrollees prohibited.No health maintenance organization or representative thereof may by a health maintenance contract or evidence of coverage provide for the reimbursement of an enrollee other than through a policy of insurance, except to refund payments made by or on behalf of an enrollee. Source: SL 1974, ch 321, 32 (4).
58-41-32. Use of words descriptive of insurance, casualty, or surety business as misdemeanor--Exception.No health maintenance organization or representative thereof may use in its name, contracts, or literature any of the words "insurance," "casualty," "surety," "mutual," or any other words which are descriptive of the insurance, casualty, or surety business or deceptively similar to the name or description of any insurance or surety corporation doing business in this state; provided, however, that when a health maintenance organization has contracted with an insurance company for any coverage permitted by this chapter, it may so state. Violation of this section is a Class 2 misdemeanor. Source: SL 1974, ch 321, 32 (3), 50; SDCL Supp, 58-41-77; SL 1978, ch 359, 2.
58-41-33. Trade practice laws applicable.Each health maintenance organization, health maintenance contract, and evidence of coverage shall be subject to chapter 58-33, relating to the regulation of trade practices, except to the extent that the director determines that the nature of health maintenance organizations, health maintenance contracts, and evidences of coverage render such chapter clearly inappropriate. Source: SL 1974, ch 321, 33.
58-41-34. Evidence of coverage issued to enrollees.Every enrollee residing in this state is entitled to evidence of coverage under a health maintenance contract. The health maintenance organization or its designated representative shall issue the evidence of coverage. Source: SL 1974, ch 321, 18.
58-41-35.1. Alcoholism coverage to be offered at time contract is negotiated.At the time of negotiation of any health maintenance contract, the health maintenance organization shall offer, in writing, to provide the coverage prescribed by 58-17-30.5 and 58-18-7.1. Source: SL 1979, ch 344, 12.
58-41-35.5. Grandfathered contracts required to cover low-dose mammography--Extent of coverage.Each health maintenance contract that covers a female and that is delivered, issued for delivery, or renewed in this state, except for a contract that provides coverage for specified disease or other limited benefit coverage, shall provide coverage for screening by low-dose mammography for the presence of occult breast cancer that is subject to the same dollar limits, deductibles, and coinsurance factors as for other radiological examinations. Coverage for the screening shall be provided as follows: ages thirty-five to thirty-nine, one baseline mammography; ages forty to forty-nine, a mammography every other year; and age fifty and older, a mammography every year.As used in this section, "low-dose mammography" means the X ray examination of the breast using equipment dedicated specifically for mammography, including the X ray tube, filter, compression device, screens, films, and cassettes, with an average radiation exposure delivery of less than one rad midbreast, with two views for each breast and with interpretation by a qualified radiologist.The provisions of this section apply only to grandfathered plans pursuant to 75 Fed. Reg. 116 (2010) to be codified at 26 C.F.R. 54 and 602, 29 C.F.R. 2590, and 45 C.F.R. 147. (SL 2011, ch 216, 19 provides: "The provisions of this Act are repealed if the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010) is found to be unconstitutional in its entirety by a final decision of a federal court of competent jurisdiction and all appeals exhausted or time for appeals elapsed.") Source: SL 1990, ch 397, 1, 7; SL 1991, ch 400, 7; SL 2011, ch 216, 12.
58-41-35.6. Exclusion of benefits for injury while under the influence of alcohol or drugs prohibited--Exception for sickness or injury caused in commission of felony.A health maintenance contract that is delivered, issued for delivery, or renewed in this state may not exclude the payment of benefits for injuries sustained by an insured person because the insured was under the influence of alcohol or drugs, as defined by 32-23-1.Nothing in this section precludes a health maintenance contract from excluding coverage for an insured for any sickness or injury caused in the commission of a felony. Source: SL 1997, ch 290, 6, 7.
58-41-35.7.Contracts required to cover occult breast cancer screening.Each health maintenance contract that covers a female and that is delivered, issued for delivery, or renewed in this state, except for a contract that provides coverage for specified disease or other limited benefit coverage, shall provide coverage for screening for the presence of occult breast cancer.The provisions of this section apply only to plans that are not grandfathered pursuant to 75 Fed. Reg. 116 (2010) to be codified at 26 C.F.R. 54 and 602, 29 C.F.R. 2590, and 45 C.F. R. 147. (SL 2011, ch 216, 19 provides: "The provisions of this Act are repealed if the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010) is found to be unconstitutional in its entirety by a final decision of a federal court of competent jurisdiction and all appeals exhausted or time for appeals elapsed.") Source: SL 2011, ch 216, 17.
58-41-35. Contents required in evidence of coverage.An evidence of coverage shall contain a clear, concise, and complete statement of:(1)The health care services and the insurance or other benefits, if any, to which the enrollee is entitled under the health care plan;(2)Any exclusions or limitations on the services, kind of services, benefits, or kind of benefits, to be provided, including any deductible or copayment feature;(3)Where and in what manner information is available as to how service, including emergency and out-of-area services, may be obtained;(4)The total amount of payment and copayment if any, for health care services and the indemnity or service benefits, if any, which the enrollee is obligated to pay with respect to individual contracts, or an indication whether the plan is contributory or noncontributory with respect to group certificates; and(5)A description of the health maintenance organization's method for resolving enrollee complaints. Source: SL 1974, ch 321, 19 (2).
58-41-36. Unfair and misleading information in evidence of coverage as misdemeanor.No evidence of coverage shall contain provisions or statements which are unjust, unfair, inequitable, misleading, or deceptive, as defined in 58-41-37 to 58-41-40, inclusive. Violation of this section is a Class 2 misdemeanor. Source: SL 1974, ch 321, 19 (1), 50; SDCL Supp, 58-41-77; SL 1978, ch 359, 2.
58-41-37. Deceptive advertising or evidence of coverage as misdemeanor.No health maintenance organization or representative thereof may cause or knowingly permit the use of advertising or solicitation which is untrue or misleading, or any form of evidence of coverage which is deceptive. Violation of this section is a Class 2 misdemeanor. Source: SL 1974, ch 321, 32 (1), 50; SDCL, 58-41-77; SL 1978, ch 359, 2.
58-41-38. Statements deemed untrue.For the purposes of this chapter, a statement or item of information shall be deemed to be untrue if it does not conform to fact in any respect which is or may be significant to an enrollee of, or person considering enrollment in, a health maintenance organization. Source: SL 1974, ch 321, 32 (1) (a).
58-41-39. Statements deemed misleading.For the purposes of this chapter, a statement or item of information shall be deemed to be misleading, whether or not it may be literally untrue, if, in the total context in which such statement is made or such item of information is communicated, such statement or item of information may be reasonably understood by a reasonable person, not possessing special knowledge regarding health care coverage, as indicating any benefit or advantage or the absence of any exclusion, limitation, or disadvantage of possible significance to an enrollee of, or person considering enrollment in, a health care plan, if such benefit or advantage or absence of limitation, exclusion, or disadvantage does not in fact exist. Source: SL 1974, ch 321, 32 (1) (b).
58-41-4. Application for certificate of authority required.Notwithstanding any law of this state to the contrary, any corporation organized to do so shall apply to the director of the Division of Insurance for a certificate of authority to establish and operate a health maintenance organization in compliance with the provisions of this chapter. Source: SL 1974, ch 321, 3; SL 1985, ch 393, 2.
58-41-40. Evidence of coverage deemed deceptive.For the purposes of this chapter, an evidence of coverage shall be deemed to be deceptive if the evidence of coverage taken as a whole, and with consideration given to typography and format, as well as language, shall be such as to cause a reasonable person, not possessing special knowledge regarding health care plans and evidences of coverage therefor, to expect benefits, services, charges, or other advantages which the evidence of coverage does not regularly make available for enrollees covered under such evidence of coverage. Source: SL 1974, ch 321, 32 (1) (c).
58-41-41. Issuance to enrollees of change in evidence of coverage.Any approved change in evidence of coverage shall be issued to each enrollee. Source: SL 1974, ch 321, 21.
58-41-42. Evidence of coverage to be approved before use--Violation as misdemeanor.No evidence of coverage or amendment thereto shall be issued or delivered to any person in this state until a copy of the form of the evidence of coverage or amendment thereto has been filed with and approved by the director. Violation of this section is a Class 2 misdemeanor. Source: SL 1974, ch 321, 20, 50; SDCL Supp, 58-41-77; SL 1978, ch 359, 2.
58-41-43. Filing and approval requirements applicable.A copy of the form of evidence of coverage to be used in this state, and any amendment thereto, shall be subject to the filing and approval requirements of 58-41-42 unless it is subject to the jurisdiction of the director under the laws governing health insurance or hospital or medical service corporations in which event the filing and approval provisions of such laws shall apply. To the extent, however, that such provisions do not fulfill the requirements of 58-41-35 and 58-41-36, the requirements of said sections shall be applicable. Source: SL 1974, ch 321, 22.
58-41-44. Charges to enrollees--Fairness--Actuary's certificate.Charges for comprehensive health maintenance services may be established in accordance with actuarial principles for various categories of enrollees, provided that such charges applicable to an enrollee shall not be individually determined based on the status of his health. However, the charges shall not be excessive, inadequate, or unfairly discriminatory. A certification, by a qualified actuary, to the appropriateness of the charges, based on reasonable assumptions, shall accompany the filing along with adequate supporting information. Source: SL 1974, ch 321, 23 (1).
58-41-45. Discrimination as misdemeanor.No health maintenance organization or representative thereof may discriminate in the rates charged enrollees except in accordance with accepted actuarial principles.Violation of this section is a Class 2 misdemeanor. Source: SL 1974, ch 321, 32 (6), (7), 50; SDCL Supp, 58-41-77; SL 1978, ch 359, 2; SL 2013, ch 256, 11.
58-41-50. Authorized expenses.Authorized expenses of health maintenance organizations include:(1)Cash rebates to enrollees, or to persons who have made payments on behalf of enrollees;(2)Free or reduced cost health service to enrollees; or(3)Payments to providers or other persons based upon the efficient provision of services or as incentives to provide quality care. Source: SL 1974, ch 321, 32 (8), 50; SDCL Supp, 58-41-77; SL 1978, ch 359, 2; SL 1985, ch 393, 6.
58-41-51.1. Individual policy required for covered spouse of insured--Eligibility--Coverage--Waiting periods.No accident or health insurance policy providing coverage of hospital or medical expense which in addition to covering the insured also provides coverage to the spouse of the insured shall be issued without a provision that provides that upon eligibility for medicare or social security disability benefits by one spouse the other spouse shall be entitled to have issued to him or her, without evidence of insurability, upon application to the company within sixty days following the eligibility, and upon payment of the appropriate premium, an individual policy of accident or health insurance. Such policy shall provide the coverage then being issued by the insurer which is most nearly similar to the existing coverages. This obligation can be met by continuation of coverage for spouse under existing policy at the appropriate premium. Any and all probationary or waiting periods set forth in such policy shall be considered as being met to the extent coverage was in force under the prior policy. Source: SL 1979, ch 343.
58-41-51.2. Conversion privileges of insured's spouse upon divorce.No accident or health insurance policy providing coverage of hospital or medical expense which in addition to covering the insured also provides coverage to the spouse of the insured shall be issued without a provision that provides that upon divorce of the insured and the insured's spouse, the spouse is entitled to have issued to him or her, without evidence of insurability, upon application to the company within thirty days following the eligibility, and upon payment of the appropriate premium, an individual policy of accident or health insurance. Such policy shall provide the coverage then being issued by the insurer which is most nearly similar to the existing coverages. This obligation can be met by continuation of coverage for spouse under existing policy at the appropriate premium. Any and all probationary or waiting periods set forth in such policy shall be considered as being met to the extent coverage was in force under the prior policy. Source: SL 1980, ch 354.
58-41-51.3. Continuation and conversion coverage to be offered.At the time of negotiation of any health maintenance contract, the health maintenance organization shall offer, in writing, to provide the coverage prescribed by 58-18-7.5 to 58-18-7.15, inclusive. Source: SL 1985, ch 393, 13.
  58-41-52.1  .  Collection for covered services prohibited.   Except for coinsurance, deductibles, or copayments as specifically provided in the evidence of coverage, in no event, including nonpayment by the health maintenance organization, insolvency of the health maintenance organization, or breach of contract among the health maintenance organization, risk bearing entity, or participating provider, may a risk bearing entity or participating provider bill, charge, collect a deposit from, seek compensation, remuneration or reimbursement from, or have any recourse against an enrollee or a person other than the health maintenance organization acting on behalf of   the enrollee for covered services provided. No risk bearing entity or participating provider, nor any agent, trustee or assignee of the risk bearing entity or participating provider may maintain an action at law against an enrollee to collect sums owed by the health maintenance organization.     Source:  SL 2020, ch 210,  10. 
  58-41-52.2  .  Contracts--Hold harmless provision.   All contracts among health maintenance organizations, risk bearing entities, and participating providers shall include a hold harmless provision specifying protection for enrollees consistent with   58-41-52.1   to 58-41-52.3, inclusive. Any attempted waiver or amendment in a manner materially adverse to the interests of enrollees of a hold harmless provision are null and void and unenforceable. Any violation of the provisions of this section constitutes an unfair trade practice under chapter   58-33  .     Source:  SL 2020, ch 210,  11. 
  58-41-52.3  .  Hold harmless provision--Language of provision.   The requirements of   58-41-52.2   shall be met by including a provision substantially similar to the following:   Provider agrees that in no event, including but not limited to nonpayment by the health maintenance organization or intermediary organization, insolvency of the health maintenance organization or intermediary organization, or breach of this agreement, may the provider bill, charge, collect a deposit from, seek compensation, remuneration or reimbursement from, or have any recourse against an enrollee or a person (other than the health maintenance organization or intermediary organization) acting on behalf of the enrollee for covered services provided pursuant to this agreement. This agreement does not prohibit the provider from collecting coinsurance, deductibles, copayments or services in excess of limits, as specifically provided in the evidence of coverage, or fees for uncovered services delivered on a fee-for-service basis to enrollees.     Source:  SL 2020, ch 210,  12. 
58-41-52. Contracts with providers of health care services.A health maintenance organization may contract with providers of health care services to render the services the health maintenance organization has promised to provide under the terms of its health maintenance contracts. Source: SL 1974, ch 321, 13.
58-41-54. Contracts with insurance companies and nonprofit health service plan corporations authorized--Limitations.A health maintenance organization may, subject to the limitations of subdivision 58-41-17(5) and of 58-41-19, contract with insurance companies and nonprofit health service plan corporations for insurance, indemnity, or reimbursement of its cost of providing health care services for enrollees or against the risks incurred by the health maintenance organization and may contract with insurance companies and nonprofit health service plan corporations to insure or cover the enrollees' costs and expenses in the health maintenance organization, including the customary prepayment amount and any copayment obligations. If contracts are made with insurance companies or nonprofit health service plan corporations, such companies or corporations must be authorized to transact business in this state. Source: SL 1974, ch 321, 13, 14.
58-41-55. Insurance contracts authorized--Group coverage--Benefit payments.Notwithstanding any law to the contrary, an insurer or a hospital or medical service corporation may contract with a health maintenance organization to provide insurance or similar protection against the cost of care provided through health maintenance organizations and to provide coverage in the event of the failure of the health maintenance organization to meet its obligations. The enrollees of a health maintenance organization constitute a permissible group for group coverage under the insurance laws and the health service plan corporation laws of this state. Under such contracts, the insurer or health service plan corporation may make benefit payments to health maintenance organizations for health care services rendered, or to be rendered, by providers pursuant to the health care plan. Any insurer, or health service plan corporation, licensed to do business in this state, is authorized to provide the types of coverages described in 58-41-54. Source: SL 1974, ch 321, 35.
58-41-56. Contracts for management and administrative services authorized.A health maintenance organization may contract with other persons for the provision of services, including, but not limited to, managerial and administration, marketing and enrolling, data processing, actuarial analysis, and billing services. Source: SL 1974, ch 321, 14.
58-41-57. Payment of unreasonably high expenses as misdemeanor.No health maintenance organization shall incur or pay for any expense of any nature which is unreasonably high in relation to the value of the service or goods provided. Violation of this section is a Class 2 misdemeanor. Source: SL 1974, ch 321, 41, 50; SDCL Supp, 58-41-77; SL 1978, ch 359, 2.
58-41-6. Verification and form of application--Contents.Each application for a certificate of authority shall be verified by an officer or authorized representative of the applicant, shall include an application fee, and shall be in a form prescribed by the director. Each application shall include the following:(1)A copy of the basic organizational document, if any, of the applicant, such as the articles of incorporation, or other applicable documents, and all amendments thereto;(2)A copy of the bylaws, rules, and regulations, or similar document, if any, and all amendments thereto which regulate the conduct of the affairs of the applicant;(3)A list of the names, addresses, and official positions of all members of the board of directors, and the principal officers of the organization, which shall contain a full disclosure in the application of the extent and nature of any contract or financial arrangements between them and the health maintenance organization, including a full disclosure of any financial arrangements between them and any provider or other person concerning any financial relationship with the health maintenance organization;(4)A statement generally describing the health maintenance organization, its health care plan or plans, facilities, and personnel, including a statement describing the manner in which the applicant proposes to provide enrollees with comprehensive health maintenance services or limited health services;(5)A statement reasonably describing the geographic area or areas to be served and the type or types of enrollees to be served;(6)A description of the complaint procedures to be utilized;(7)A description of the procedures and programs to be implemented to meet the requirements of subdivisions 58-41-12(2) and (3) and chapters 58-17G and 58-17H and to monitor the quality of health care provided to enrollees;(8)A description of the mechanism by which enrollees will be afforded an opportunity to participate in matters of policy and operation under 58-41-23 and 58-41-24;(9)Such other information as the director may reasonably require to be provided;(10)A copy of the form of any contract made, or to be made, between the applicant and any providers regarding the provision of limited health services to enrollees;(11)A copy of the form of any contract made, or to be made, between the applicant and any person listed in subdivision (3) of this section;(12)A copy of the form of any contract made, or to be made, between the applicant and any person, corporation, partnership, or other entity for the performance on the applicant's behalf of any functions including marketing, administration, enrollment, investment management, and subcontracting for the provision of limited health services to enrollees;(13)A copy of the form of any group contract that is to be issued to employers, unions, trustees, or other organizations and a copy of any form of evidence of coverage to be issued to subscribers;(14)A copy of the applicant's financial plan, including a three-year projection of anticipated operating results, a statement of the sources of working capital, and any other sources of funding and provisions for contingencies;(15)A schedule of rates and charges;(16)A description of the proposed method of marketing;(17)A copy of the applicant's financial statements showing the applicant's assets, liabilities, and sources of financial support, including a copy of the applicant's most recent audited financial statement and an unaudited current financial statement, or if the information is not applicable to the applicant, a list of the assets representing the initial net worth of the applicant;(18)A financial plan that provides a three-year projection of operating results, including:(a)A projection of balance sheets; (b)Income and expense statements anticipated from the start of operations until the organization has had net income for at least one year;(c)Cash flow statements showing any capital expenditures, purchase and sale of investments and deposits with the state;(d)Detailed enrollment projections;(e)The methodology for determining premium rates to be charged that has been certified by a qualified actuary; and(f)A statement as to the sources of working capital as well as any other sources of funding;(19)The names and addresses of the applicants's qualified actuary and external auditors;(20)If the applicant has a parent company and the director determines that additional solvency guarantees are necessary, the parent company's guaranty, on a form acceptable to the director, that the applicant will maintain the minimum net worth required under this chapter. If no parent company exists, a statement regarding the availability of future funds, if needed;(21)A description of the nature and extent of any reinsurance program to be implemented, including a detailed risk retention schedule indicating direct, assumed, ceded, and net maximum risk exposures on any one risk;(22)A demonstration that errors and omission insurance or other arrangements satisfactory to the director will be in place upon the applicant's receipt of a certificate of authority;(23)If the applicant is a foreign corporation, a statement from the appropriate regulatory agency of the applicant's state of domicile stating that:(a)The applicant is authorized to operate as a health maintenance organization in the state of domicile;(b)The regulatory agency has no objection to the applicant applying for a certificate of authority in this state;(24)The name and address of the applicant's statutory agent for service of process, notice, or demand, or if not domiciled in this state, a power of attorney duly executed by the applicant, appointing the director and duly authorized deputies, as the true and lawful attorney of the applicant in and for this state upon whom all lawful process in any legal action or proceeding against the health maintenance organization on a cause of action arising in this state may be served;(25)A description of the proposed policies, standards, and procedures for the management of health information, including proposed policies, standards, and procedures that guard against the unauthorized collection, use, or disclosure of protected health information, that complies with 58-2-40 and 58-2-41;(26)A description of the proposed quality assessment and improvement activities regarding the maintenance and improvement of the quality of health care services provided to covered persons;(27)A description of the proposed health care provider credentialing program;(28)If the health maintenance organization will provide or perform utilization review services, a description of the proposed utilization review procedures;(29)A description of the proposed internal grievance procedures; and(30)A description of the proposed external review procedures. Source: SL 1974, ch 321, 6 (1) to (4), (10) to (14); SL 2013, ch 256, 3.
58-41-63. General annual report required--Form and contents.Every health maintenance organization shall annually, on or before March first, file a report verified by at least two principal officers with the director, covering the preceding calendar year. Such report shall be on forms prescribed by the director and shall include:(1)A financial statement of the organization, including its balance sheet and receipts and disbursements for the preceding year certified by an independent certified public accountant licensed by an appropriate jurisdiction, reflecting at least:(a)Prepayment and other payments received for health care services rendered;(b)Expenditures to all providers, by classes or groups of providers, and insurance companies or nonprofit health service plan corporations engaged to fulfill obligations arising out of the health maintenance contract; and(c)Expenditures for capital improvements, or additions thereto, including but not limited to construction, renovation or purchase of facilities and capital equipment;(2)Any material changes in the information submitted pursuant to 58-41-6 to 58-41-9, inclusive;(3)The number of new enrollees enrolled during the year, the number of enrollees as of the end of the year and the number of enrollees terminated during the year;(4)A summary of information compiled pursuant to subdivision 58-41-12(3) on such form as may be required by the director;(5)A report of the names and residence addresses of all persons set forth in subdivision 58-41-6(3), who were associated with the health maintenance organization during the preceding year, and the amount of wages, expense reimbursements, or other payments to such individuals for services to the health maintenance organization, including a full disclosure of all financial arrangements during the preceding year required to be disclosed pursuant to subdivision 58-41-6(3); and(6)Such other information relating to the performance of the health maintenance organization as is reasonably necessary to enable the director to carry out his duties under this chapter. Source: SL 1974, ch 321, 24; SL 2013, ch 256, 17.
58-41-65. Applications, filings and reports as public documents.All applications, filings, and reports required under this chapter are public documents except as provided for by 1-27-30. Source: SL 1974, ch 321, 57; SL 2013, ch 256, 18.
58-41-66. Annual summary for enrollees required--Contents.Every health maintenance organization or its representative shall annually, before April first, provide to its enrollees a summary of:(1)Its most recent annual financial statement, including a balance sheet and statement of receipts and disbursements;(2)A description of the health maintenance organization, its health care plan or plans, its facilities and personnel, and any material changes therein since the last report;(3)The current evidence of coverage; and(4)The health maintenance organization's method for resolving enrollee complaints. Source: SL 1974, ch 321, 25.
58-41-67. Promulgation of rules.The director may, pursuant to chapter 1-26, promulgate such reasonable rules as are necessary to carry out the provisions of this chapter. Included among such rules shall be those which provide minimum requirements for the provision of comprehensive health maintenance services, as defined in subdivision 58-41-1(1), and reasonable exclusions therefrom. Source: SL 1974, ch 321, 42; SL 1986, ch 22, 43; SL 2013, ch 256, 19.
58-41-7. Financial statements required with application.Each application for a certificate of authority shall include financial statements showing the applicant's assets, liabilities, and sources of financial support. If the applicant's financial affairs are audited by independent certified public accountants, a copy of the applicant's most recent regular certified financial statement shall be deemed to satisfy this requirement unless the director directs that additional or more recent financial information is required for the proper administration of this chapter. Source: SL 1974, ch 321, 6 (7).
58-41-73. Physician-patient privileges.A health maintenance organization shall be entitled to claim any statutory privileges against such disclosure which the provider who furnished such information to the health maintenance organization is entitled to claim. Source: SL 1974, ch 321, 36 (5).
58-41-74. Confidential data--Exceptions.Any data or information pertaining to the diagnosis, treatment, or health of any enrollee, or any application obtained from any person, shall be confidential and shall not be disclosed to any person except:(1)To the extent that it may be necessary to carry out the purposes of this chapter;(2)Upon the express consent of the enrollee or applicant;(3)Pursuant to statute or court order for the production of evidence or the discovery thereof; or(4)In the event of a claim or litigation between such person and the provider or health maintenance organization wherein such data or information is pertinent. Source: SL 1974, ch 321, 36 (5).
58-41-78. Cease and desist orders.The director may issue an order directing a health maintenance organization or a representative of a health maintenance organization to cease and desist from engaging in any act or practice in violation of the provision of this chapter. Source: SL 1974, ch 321, 47.
58-41-79. Hearing on cease and desist order--Procedure--Judicial review.Within twenty days after service of the order to cease and desist, the respondent may request a hearing on the question of whether acts or practices in violation of this chapter have occurred. Such hearings shall be conducted pursuant to, and judicial review shall be available as provided by, chapter 1-26. Source: SL 1974, ch 321, 48.
58-41-8. Copies of forms required with application.Each application for a certificate of authority shall include:(1)A copy of the form of each evidence of coverage to be issued to the enrollees;(2)A copy of the form of each individual or group health maintenance contract which is to be issued to enrollees or their representatives. Source: SL 1974, ch 321, 6 (5), (6).
58-41-80. Injunctive relief against violations--Venue.In the event of any violation of the provisions of this chapter, if the director elects not to issue a cease and desist order, or in the event of noncompliance with a cease and desist order pursuant to 58-41-79, the director may institute a proceeding to obtain injunctive relief or other appropriate relief in the circuit court serving Hughes County. Source: SL 1974, ch 321, 49.
58-41-81. Suspension or revocation of certificate of authority on findings by director.The director may suspend or revoke any certificate of authority issued to a health maintenance organization under this chapter if the director finds that any of the following conditions exists:(1)The health maintenance organization is operating significantly in contravention of its basic organizational document, its health maintenance contract, or in a manner contrary to that described in and reasonably inferred from any other information submitted under this chapter, unless amendments to such submissions have been filed with and approved by the director;(2)The health maintenance organization issues evidence of coverage or uses a schedule or charges for health care services which do not comply with the requirements of 58-41-34 to 58-41-45, inclusive;(3)The health care plan does not provide or arrange for comprehensive health maintenance services;(4)The health maintenance organization is no longer financially responsible and may reasonably be expected to be unable to meet its obligations to enrollees or prospective enrollees;(5)The health maintenance organization has failed to implement a mechanism affording the enrollees an opportunity to participate in matters of policy and operation under the provisions of 58-41-23 and 58-41-24;(6)The health maintenance organization has failed to implement the complaint system in a manner designed to reasonably resolve valid complaints;(7)The health maintenance organization, or any person acting with its sanction, has advertised or merchandised its services in an untrue, misrepresentative, misleading, deceptive, or unfair manner;(8)The continued operation of the health maintenance organization would be hazardous to its enrollees; or(9)The health maintenance organization has otherwise failed to substantially comply with this chapter, has violated a provision of chapter 58-33 or any other provision of law applicable to health maintenance organizations, or has submitted false information in any report required hereunder. Source: SL 1974, ch 321, 37; SL 2000, ch 235, 3; SL 2013, ch 256, 27.
58-41-82. Additional grounds for suspension or revocation.The director may suspend or revoke any certificate of authority issued to a health maintenance organization under this chapter if:(1)The health maintenance organization does not meet the requirements of 58-41-12; or(2)The health maintenance organization is unable to fulfill its obligations to furnish comprehensive health maintenance services as required under its health maintenance contract. Source: SL 1974, ch 321, 37 (4); SL 2013, ch 256, 28.
58-41-83. Voluntary conference before commencing actions for violation.If the director, for any reason, has cause to believe that any violation of this chapter has occurred or is threatened, the director may, before commencing action under 58-41-81, 58-41-82, 58-41-85, or 58-41-87, give notice to the health maintenance organization and to the representatives, or other persons who appear to be involved in such suspected violations, to arrange a voluntary conference with the alleged violators or their authorized representatives for the purpose of attempting to ascertain the fact that any violation has occurred or is threatened, to arrive at an adequate and effective means of correcting or preventing such violation. Source: SL 1974, ch 321, 45; SL 2013, ch 256, 29.
58-41-84. Informality in voluntary conferences.Proceedings under 58-41-83 are not governed by any formal procedural requirements, and may be conducted in such manner as the director finds appropriate under the circumstances. Source: SL 1974, ch 321, 46; SL 2013, ch 256, 30.
58-41-85. Money penalty in lieu of suspension or revocation.The director may, in lieu of suspension or revocation of a certificate of authority under 58-41-81 or 58-41-82, levy a money penalty pursuant to 58-4-28.1. Source: SL 1974, ch 321, 44; SL 2000, ch 235, 4.
58-41-86.1. Suspension without notice or hearing.The director of the Division of Insurance may, without advance notice or a hearing thereon, immediately suspend the certificate of authority of a health maintenance organization as to which proceedings for receivership, conservatorship, rehabilitation, or other delinquency proceedings have been commenced in any state by the public supervisory official of such state. Proceedings in such actions shall be conducted in accordance with 58-6-49 to 58-6-61, inclusive. Source: SL 1985, ch 393, 12.
58-41-86. Requirements for suspension or revocation.A certificate of authority shall be suspended or revoked only after compliance with the requirements of 58-41-87 to 58-41-91, inclusive. Source: SL 1974, ch 321, 37.
58-41-87. Notice of grounds for denial, suspension, or revocation of certificate--Time of hearing--Summary proceedings excepted.If the director has cause to believe that grounds for the denial of an application for a certificate of authority exist, or that grounds for the suspension or revocation of a certificate of authority exist, the director shall notify the health maintenance organization in writing specifically stating the grounds for denial, suspension, or revocation and fixing a time of at least twenty days thereafter for a hearing on the matter, except in summary proceedings as provided in 58-41-94. Source: SL 1974, ch 321, 39; SL 2013, ch 256, 31.
58-41-88. Administrative procedure and rules.The provisions of chapter 1-26, including the right of judicial review, apply to proceedings under 58-41-85 to 58-41-91, inclusive, to the extent those provisions are not in conflict with other provisions of such sections. Source: SL 1974, ch 321, 39 (4); SL 2000, ch 235, 5.
58-41-9. Marketing, charges, and financial plans required with application.Each application for a certificate of authority shall include a description of the proposed method of marketing the plan, a schedule of proposed charges, and a financial plan which includes a three-year projection of the expenses and income and other sources of future capital. Source: SL 1974, ch 321, 6 (8).
58-41-90. Action of director after hearing--Written findings.After hearing pursuant to 58-41-87 and 58-41-88, or upon the failure of the health maintenance organization to appear at such hearing, the director shall take action as is deemed advisable on written findings which shall be mailed to the health maintenance organization. Source: SL 1974, ch 321, 39 (2); SL 2013, ch 256, 33.
58-41-91. Judicial review.The action of the director is subject to the court of primary jurisdiction for claims of the nature and magnitude described. The court may, in disposing of the issue before it, modify, affirm, or reverse the order of the director in whole or in part. Source: SL 1974, ch 321, 39 (3); SL 2013, ch 256, 34.
58-41-92. Activities prohibited during suspension of certificate.When the certificate of authority of a health maintenance organization is suspended, the health maintenance organization may not, during the period of such suspension, enroll any additional enrollees except newborn children or other newly acquired dependents of existing enrollees, and may not engage in any advertising or solicitation whatsoever. A health maintenance organization may not enroll such additional enrollees if it is suspended on those grounds in subdivisions 58-41-81(4) and (8) and 58-41-86.1. Source: SL 1974, ch 321, 38; SL 1985, ch 393, 11.
58-41-93. Winding up after revocation of certificate--Continued operation to protect enrollees.When the certificate of authority of a health maintenance organization is revoked, the organization shall proceed, immediately following the effective date of the order of revocation, to wind up its affairs, and shall conduct no further business except as may be essential to the orderly conclusion of the affairs of the organization. It shall engage in no further advertising or solicitation whatsoever. The director may, by written order, permit further operation of the organization as he may find to be in the best interest of enrollees, to the end that enrollees will be afforded the greatest practical opportunity to obtain continuing health care coverage. Source: SL 1974, ch 321, 38.
58-41-94. Summary proceeding to reorganize organization--Grounds.The director may apply for an order directing him to rehabilitate, liquidate, or conserve a health maintenance organization upon any one or more of the grounds set out in chapter 58-29B, or when in his opinion the continued operation of the health maintenance organization would be hazardous either to the enrollees or the people of this state. Source: SL 1974, ch 321, 40.
58-41-95. Rehabilitation, liquidation, or conservation under insurance company laws.Any rehabilitation, liquidation, or conservation of a health maintenance organization shall be deemed to be the rehabilitation, liquidation, or conservation of an insurance company and shall be conducted under the supervision of the director pursuant to chapter 58-29B, except to the extent that the nature of health maintenance organizations renders such law clearly inappropriate. Source: SL 1974, ch 321, 40.
58-41-96. Severability of provisions.If a part of this chapter is invalid, all valid parts that are severable from the invalid part remain in effect. If a part of this chapter is invalid in one or more of its applications, the part remains in effect in all valid applications that are severable from the invalid applications. Source: SL 1974, ch 321, 58.
58-41-97. Citation of chapter.This chapter may be cited as the "Health Maintenance Organization Act of 1974." Source: SL 1974, ch 321, 1.
58-41-98. Coverage for phenylketonuria.Every health maintenance contract that is delivered, issued for delivery, or renewed in this state, except for policies that provide coverage for specified disease or other limited benefit coverage, shall offer coverage for testing, diagnosis, and treatment of phenylketonuria including dietary management, formulas, case management, intake and screening, assessment, comprehensive care planning, and service referral. Source: SL 1992, ch 348, 6.
58-41-99. Formation of voluntary health insurance purchasing organizations. Notwithstanding the provisions of chapter 47-34A and  47-15-2 and 47-22-4, any organization may form for the purposes of purchasing group health insurance on a voluntary basis. For purposes of 58-41-99 to 58-41-109, inclusive, an organization means any nonprofit organization or nonprofit corporation formed under South Dakota law. Source: SL 1994, ch 382, 1; SL 2021, ch 210,  24.
58-43-1. Definition of terms.Terms used in this chapter mean:(1)"Accountant," an independent certified public accountant or accounting firm in good standing with the American Institute of Certified Public Accountants and in all states in which the accountant or firm is licensed to practice. For Canadian and British companies, an accountant is a Canadian-chartered or British-chartered accountant;(2)"Affiliate of a person" or "Affiliated with a specific person," a person that directly or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, the person specified;(3)"Audit committee," a committee established by the board of directors of an entity for the purpose of overseeing the accounting and financial reporting processes of an insurer or group of insurers, the internal audit function of an insurer or a group of insurers, if applicable, and external audits of financial statements of the insurer or group of insurers. The audit committee of any entity that controls a group of insurers may be deemed to be the audit committee for one or more of these controlled insurers solely for the purposes of this chapter at the election of the controlling person;(4)"Indemnification," an agreement of indemnity or a release from liability where the intent or effect is to shift or limit in any manner the potential liability of the person or firm for failure to adhere to applicable auditing or professional standards, whether or not resulting in part from knowing of other misrepresentations made by the insurer or the insurer's representatives;(5)"Insurer," an authorized insurer as defined in subdivision 58-1-2(2);(6)"Group of insurers," those insurers included in the reporting requirements of chapter 58-5A, or a set of insurers as identified by management, for the purpose of assessing the effectiveness of internal control over financial reporting;(7)"Internal audit function," any person who provides independent, objective, and reasonable assurance designed to add value and improve an organization's operations and accomplish the organization's objectives by using a systematic, disciplined approach to evaluate and improve the effectiveness of each risk management, control, and governance process;(8)"Internal control over financial reporting," a process effected by an entity's board of directors, management, and other personnel designed to provide reasonable assurance regarding the reliability of the financial statements and includes those policies and procedures that:(a)Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of assets;(b)Provide reasonable assurance that transactions are recorded as necessary to permit preparation of the financial statements and that receipts and expenditures are being made only in accordance with authorizations of management and directors; and(c)Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of assets that could have a material effect on the financial statements;(9)"SEC," the United States Securities and Exchange Commission;(10)"Section 404," Section 404 of the Sarbanes-Oxley Act of 2002 in effect as of January 1, 2018;(11)"Section 404 report," management's report on internal control over financial reporting as defined by the SEC and the related attestation report of the independent certified public accountant;(12)"SOX compliant entity," an entity that either is required to be compliant with, or voluntarily is compliant with, all of the following provisions of the Sarbanes-Oxley Act of 2002 in effect as of January 1, 2018: (a)The preapproval requirements of Section 201 (Section 10A(i) of the Securities Exchange Act of 1934);(b)The audit committee independence requirements of Section 301 (Section 10A(m)(3) of the Securities Exchange Act of 1934); and(c)The internal control over financial reporting requirements of Section 404 (Item 308 of SEC Regulation S-K). Source: SL 1992, ch 357, 1; SL 2009, ch 271, 1; SL 2018, ch 283, 1.
58-43-10. Rotation of accountant--Application for relief from rotation requirement.The lead or coordinating audit partner, having primary responsibility for the audit pursuant to this chapter, may not act in that capacity for more than five consecutive years. The person shall be disqualified from acting in that or a similar capacity for the same company or its insurance subsidiaries or affiliates for a period of five consecutive years. An insurer may make application to the director for relief from the above rotation requirements for good cause. This application shall be made at least thirty days before the end of the calendar year. The director may consider the following factors in determining if the relief should be granted:(1)Number of partners, expertise of the partners or the number of insurance clients in the currently registered firm;(2)Premium volume of the insurer; or(3)Number of jurisdictions in which the insurer transacts business.The insurer shall file, with the insurer's annual statement filing, the approval for relief with the states that the insurer is licensed in, with the states that the insurer is doing business in, and with the National Association of Insurance Commissioners. If the nondomestic state accepts electronic filing with the National Association of Insurance Commissioners, the insurer shall file the approval in an electronic format acceptable to the National Association of Insurance Commissioners. Source: SL 1992, ch 357, 10; SL 2009, ch 271, 7.
58-43-11. Rejection of accountant or audited financial report--Grounds.The director may not recognize as an accountant, nor accept any annual audited financial report, prepared in whole or in part by, any natural person who:(1)Has been convicted of fraud, bribery, a violation of the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. 1961-1968, or any dishonest conduct or practices under federal or state law;(2)Has been found to have violated the insurance laws of this state with respect to any previous reports submitted under this chapter; or(3)Has demonstrated a pattern or practice of failing to detect or disclose material information in previous reports filed under the provisions of this chapter. Source: SL 1992, ch 357, 11.
58-43-12. Disqualification hearing.An accountant which has been disqualified or any firm which has had an accountant disqualified by the director may request a hearing on the disqualification. The director may, as a result of the hearing, require the insurer to replace the accountant with another qualified accountant. Source: SL 1992, ch 357, 12.
58-43-13. Application to file consolidated or combined financial statements--Worksheet--Contents.An insurer may make written application to the director for approval to file audited consolidated or combined financial statements in lieu of separate annual audited financial statements if the insurer is part of a group of insurance companies which utilizes a pooling or one hundred percent reinsurance agreement that affects the solvency and integrity of the insurer's reserves and the insurer cedes all of its direct and assumed business to the pool. In such cases, a columnar consolidating or combining worksheet shall be filed with the report as follows:(1)Amounts shown on the consolidated or combined audited financial report shall be shown on the worksheet;(2)Amounts for each insurer subject to this section shall be stated separately;(3)Noninsurance operations may be shown on the worksheet on a combined or individual basis;(4)Explanations of consolidating and eliminating entries shall be included; and(5)A reconciliation shall be included of any differences between the amounts shown in the individual insurer columns of the worksheet and comparable amounts shown on the annual statements of the insurers. Source: SL 1992, ch 357, 13.
58-43-14. Report of material misstatement of financial condition or that capital and surplus requirements not met--Time limit--Liability of accountant.An insurer shall require the accountant to report, in writing, within five business days to the board of directors or its audit committee any determination by the accountant that the insurer has materially misstated its financial condition as reported to the director as of the balance sheet date currently under examination or that the insurer does not meet the minimum capital and surplus requirement of 58-5-21 and 58-6-23 as of that date. An insurer who has received a report pursuant to this section shall forward a copy of the report to the director within five business days of receipt of the report and shall provide the accountant making the report with evidence of the report being furnished to the director. If the accountant fails to receive the evidence within the required five business-day period, the accountant shall send or deliver to the director a copy of its report within the next five business days.No accountant is liable in any manner to any person for any statement made in connection with this section if the statement is made in good faith. Source: SL 1992, ch 357, 14.
58-43-15. Accountant's action upon awareness of new facts subsequent to filing audited report.If the accountant, subsequent to the date of the audited financial report filed pursuant to this chapter becomes aware of facts which might affect his report, the accountant shall take the action prescribed in volume 1, section AU 561 of the professional standards of the American Institute of Certified Public Accountants. Source: SL 1992, ch 357, 15.
58-43-16.1. Applicability of 58-43-16.2 to 58-43-16.9.The provisions of 58-43-16.2 to 58-43-16.9, inclusive, do not apply to any foreign or alien insurer licensed in this state or any insurer that is a SOX compliant entity or a direct or indirect wholly-owned subsidiary of a SOX compliant entity. Source: SL 2009, ch 271, 16.
58-43-16.10. Hardship waiver of requirements of 58-43-16.2 to 58-43-16.9, inclusive.An insurer with direct written and assumed premiums, excluding premiums reinsured with the Federal Crop Insurance Corporation and Federal Flood Program, of less than five hundred million dollars may make application to the director for a waiver from the requirements of 58-43-16.2 to 58-43-16.9, inclusive, based upon hardship. The insurer shall file, with the insurer's annual statement filing, the approval for relief from 58-43-16.2 to 58-43-16.9, inclusive, with the states that the insurer is licensed in or doing business in and with the National Association of Insurance Commissioners. If the nondomestic state accepts electronic filing with the National Association of Insurance Commissioners, the insurer shall file the approval in an electronic format acceptable to the National Association of Insurance Commissioners. Source: SL 2009, ch 271, 25, eff. Jan. 1, 2010.
58-43-16.11. Materially false or misleading statements or omissions to accountant prohibited.No director or officer of an insurer shall, directly or indirectly:(1)Make or cause to be made a materially false or misleading statement to an accountant in connection with any audit, review, or communication required under this chapter; or(2)Omit to state, or cause another person to omit to state, any material fact necessary in order to make statements made, in light of the circumstances under which the statements were made, not misleading to an accountant in connection with any audit, review, or communication required under this chapter. Source: SL 2009, ch 271, 26.
58-43-16.12. Coercion, manipulation, or fraudulent influence of accountant prohibited.No officer or director of an insurer, or any other person acting under the direction thereof, shall directly or indirectly take any action to coerce, manipulate, mislead, or fraudulently influence any accountant engaged in the performance of an audit pursuant to this chapter if that person knew or should have known that the action, if successful, could result in rendering the insurer's financial statements materially misleading.These actions include:(1)To issue or reissue a report on an insurer's financial statements that is not warranted in the circumstances (due to material violations of statutory accounting principles prescribed by the director, generally accepted auditing standards, or other professional or regulatory standards);(2)To fail to perform audit, review, or other procedures required by generally accepted auditing standards or other professional standards;(3)To fail to withdraw an issued report; or(4)To fail to communicate matters to an insurer's audit committee. Source: SL 2009, ch 271, 27.
58-43-16.13. Management's Report of Internal Control over Financial Reporting required of certain insurers.Each insurer required to file an audited financial report pursuant to this chapter that has annual direct written and assumed premiums, excluding premiums reinsured with the Federal Crop Insurance Corporation and Federal Flood Program, of five hundred million dollars or more shall prepare a report of the insurer's or group of insurers' internal control over financial reporting. The report shall be filed with the director along with the communication of internal control related matters noted in an audit described in 58-43-16. The Management's Report of Internal Control over Financial Reporting shall be as of December thirty-first for the immediately preceding year. Source: SL 2009, ch 271, 28.
  58-43-16.14.   Circumstances under which director may require Management's Report of Internal Control over Financial Reporting. Notwithstanding the premium threshold in  58-43-16.13, the director may require an insurer to file a Management's Report of Internal Control over Financial Reporting if the insurer is in any risk based capital (RBC) level event, or meets any one or more of the standards of an insurer deemed to be in hazardous financial condition as defined in  58-4-39 to 58-4-43, inclusive.   Source: SL 2009, ch 271,  29.  
58-43-16.15. Certain insurers required to file Section 404 report and addendum.An insurer or a group of insurers that is:(1)Directly subject to Section 404;(2)Part of a holding company system whose parent is directly subject to Section 404;(3)Not directly subject to Section 404 but is a SOX compliant entity; or(4)A member of a holding company system whose parent is not directly subject to Section 404 but is a SOX compliant entity;shall file its or its parent's Section 404 report and an addendum in satisfaction of 58-43-16.13 only if those internal controls of the insurer or group of insurers having a material impact on the preparation of the insurer's or group of insurers' audited statutory financial statements were included in the scope of the Section 404 report. The addendum shall be a positive statement by management that there are no material processes with respect to the preparation of the insurer's or group of insurers' audited statutory financial statements excluded from the Section 404 report.If there are internal controls of the insurer or group of insurers that have a material impact on the preparation of the insurer's or group of insurers' audited statutory financial statements and those internal controls were not included in the scope of the Section 404 report, the insurer or group of insurers may either file a report in accordance with 58-43-16.13, or the Section 404 report and a 58-43-16.13 report for those internal controls that have a material impact on the preparation of the insurer's or group of insurers' audited statutory financial statements not covered by the Section 404 report. Source: SL 2009, ch 271, 30.
58-43-16.16. Contents of Management's Report of Internal Control over Financial Reporting.A Management's Report of Internal Control over Financial Reporting shall include:(1)A statement that management is responsible for establishing and maintaining adequate internal control over financial reporting;(2)A statement that management has established internal control over financial reporting and an assertion, to the best of management's knowledge and belief, after diligent inquiry, as to whether its internal control over financial reporting is effective to provide reasonable assurance regarding the reliability of financial statements in accordance with statutory accounting principles;(3)A statement that briefly describes the approach or processes by which management evaluated the effectiveness of its internal control over financial reporting;(4)A statement that briefly describes the scope of work that is included and whether any internal controls were excluded;(5)Disclosure of any unremediated material weaknesses in the internal control over financial reporting identified by management as of December thirty-first for the immediately preceding year. Management is not permitted to conclude that the internal control over financial reporting is effective to provide reasonable assurance regarding the reliability of financial statements in accordance with statutory accounting principles if there is one or more unremediated material weaknesses in its internal control over financial reporting;(6)A statement regarding the inherent limitations of internal control systems; and(7)Signatures of the chief executive officer and the chief financial officer (or equivalent position or title). Source: SL 2009, ch 271, 31.
58-43-16.17. Documentation of assertions made in Management's Report of Internal Control over Financial Reporting.Management shall document and make available at the time of a financial condition examination the basis upon which its assertions, required in 58-43-16.16, are made. Management may base its assertions, in part, upon its review, monitoring, and testing of internal controls undertaken in the normal course of its activities. Source: SL 2009, ch 271, 32.
58-43-16.18. Discretion of management as to internal control framework and documentation.Management has discretion as to the nature of the internal control framework used, and the nature and extent of documentation, in order to make its assertion in a cost effective manner and, as such, may include assembly of or reference to existing documentation. Source: SL 2009, ch 271, 33.
58-43-16.19. Confidentiality of Management's Report of Internal Control over Financial Reporting and documentation.The Management's Report of Internal Control over Financial Reporting, required by 58-43-16.13, and any documentation provided in support thereof during the course of a financial condition examination, shall be kept confidential by the Division of Insurance. Source: SL 2009, ch 271, 34.
58-43-16.2. Responsibilities of audit committee.The audit committee shall be directly responsible for the appointment, compensation, and oversight of the work of any accountant, including resolution of disagreements between management and the accountant regarding financial reporting, for the purpose of preparing or issuing the audited financial report or related work pursuant to this chapter. Each accountant shall report directly to the audit committee.The audit committee of an insurer or a group of insurers shall be responsible for overseeing the insurer's internal audit function and granting each person performing the function suitable authority and resources to complete the audit committee's responsibilities required by 58-43-16.25 to 58-43-16.28, inclusive. Source: SL 2009, ch 271, 17, eff. Jan. 1, 2010; SL 2018, ch 283, 2.
58-43-16.20. Compliance of insurers retaining independent accountant on July 1, 2009.Any domestic insurer retaining a certified public accountant on July 1, 2009 who qualifies as independent shall comply with this chapter for the year ending December 31, 2010, and each year thereafter unless the director permits otherwise. Source: SL 2009, ch 271, 35.
58-43-16.21. Compliance schedule for insurers not retaining independent accountant on July 1, 2009.Any domestic insurer not retaining a certified public accountant on July 1, 2009, who qualifies as independent shall meet the following schedule for compliance unless the director permits otherwise:(1)As of December 31, 2010, file with the director an audited financial report; and(2)For the year ending December 31, 2010, the insurer shall file with the director all reports and communication required by this chapter. Source: SL 2009, ch 271, 36.
58-43-16.22. Compliance of foreign insurers.Each foreign insurer shall comply with this chapter for the year ending December 31, 2010, and each year thereafter, unless the director permits otherwise. Source: SL 2009, ch 271, 37.
58-43-16.23. Applicability of 58-43-10 and 58-43-16.2 to 58-43-16.10.The provisions of 58-43-10 as amended by SL 2009, ch 271, 7 apply to audits of the year beginning January 1, 2010. The provisions of 58-43-16.2 to 58-43-16.10, inclusive, are effective January 1, 2010. An insurer or group of insurers that is not required to have independent audit committee members or only a majority of independent audit committee members because the total written and assumed premium is below the threshold and subsequently becomes subject to one of the independence requirements due to changes in premium shall have one year following the year the threshold is exceeded (but not earlier than January 1, 2010) to comply with the independence requirements. An insurer that becomes subject to one of the independence requirements as a result of a business combination shall have one calendar year following the date of acquisition or combination to comply with the independence requirements. Source: SL 2009, ch 271, 38.
58-43-16.24. Applicability of 58-43-16.13 to 58-43-16.19.The requirements of 58-43-16.13 to 58-43-16.19, inclusive, are effective beginning with the reporting period ending December 31, 2010, and each year thereafter. An insurer or group of insurers that is not required to file a report because the total written premium is below the threshold and subsequently becomes subject to the reporting requirements shall have two years following the year the threshold is exceeded (but not earlier than December 31, 2010) to file a report. An insurer acquired in a business combination shall have two calendar years following the date of acquisition or combination to comply with the reporting requirements. Source: SL 2009, ch 271, 39.
58-43-16.25. Internal audit function requirements.The insurer or group of insurers shall establish an internal audit function providing independent, objective, and reasonable assurance to the audit committee and insurer management regarding the insurer's governance, risk management, and internal controls. This assurance shall be provided by performing general and specific audits, reviews, and tests and by employing other techniques deemed necessary to protect assets, evaluate control effectiveness and efficiency, and evaluate compliance with policies and regulations. Source: SL 2018, ch 283, 3.
58-43-16.26. Internal audit function to be organizationally independent.In order to ensure that an internal auditor remains objective, the internal audit function shall be organizationally independent. The internal audit function may not defer ultimate judgment on audit matters to others and shall appoint an individual to head the internal audit function who has direct and unrestricted access to the board of directors. Organizational independence does not preclude dual-reporting relationships. Source: SL 2018, ch 283, 4.
58-43-16.27. Report of head of internal audit function to audit committee.The head of the internal audit function shall report to the audit committee regularly, but no less than annually, on the periodic audit plan, factors that may adversely impact the internal audit function's independence or effectiveness, material findings from completed audits, and the appropriateness of corrective actions implemented by management as a result of audit findings. Source: SL 2018, ch 283, 5.
58-43-16.28. Member of insurance holding company system or group of insurers.If an insurer is a member of an insurance holding company system or included in a group of insurers, the insurer may satisfy the internal audit function requirements provided in 58-43-16.25 to 58-43-16.27, inclusive, at the ultimate controlling parent level, an intermediate holding company level, or the individual legal entity level. Source: SL 2018, ch 283, 6.
58-43-16.29. Exemption from internal audit function requirements.An insurer is exempt from the requirements of 58-43-16.25 to 58-43-16.28, inclusive, if the insurer:(1)Has annual direct written and unaffiliated assumed premium, including international direct and assumed premium but excluding any premium that is reinsured with the Federal Crop Insurance Corporation and Federal Flood Program, and that is less than five hundred million dollars; and(2)Is a member of a group of insurers, the group has annual direct written and unaffiliated assumed premium including international direct and assumed premium, but excluding any premium that is reinsured with the Federal Crop Insurance Corporation and Federal Flood Program, and that is less than one billion dollars.If an insurer or group of insurers no longer qualifies for this exemption, it has one year after the year the threshold is exceeded to comply with 58-43-16.25 to 58-43-16.29, inclusive. Source: SL 2018, ch 283, 7.
58-43-16.3. Membership of audit committee.Each member of the audit committee shall be a member of the board of directors of the insurer or a member of the board of directors of an entity elected pursuant to 58-43-16.6. Source: SL 2009, ch 271, 18, eff. Jan. 1, 2010.
58-43-16.4. Independence of audit committee members.A member of the audit committee may not be considered independent, other than in the member's capacity as a member of the audit committee, the board of directors, or any other board committee, if the member accepts any consulting, advisory, or other compensatory fee from the entity or be an affiliated person of the entity or any subsidiary thereof. However, if a law requires board participation by otherwise nonindependent members, that law shall prevail, and the members may participate in the audit committee and be designated as independent for audit committee purposes unless the member is an officer or employee of the insurer or one of its affiliates. Source: SL 2009, ch 271, 19, eff. Jan. 1, 2010.
58-43-16.5. Nonindependence of audit committee member for reasons outside the member's control.If a member of the audit committee ceases to be independent for reasons outside the member's reasonable control, that person, with notice by the responsible entity to the director, may remain an audit committee member of the responsible entity until the earlier of the next annual meeting of the responsible entity or one year from the occurrence of the event that caused the member to be no longer independent. Source: SL 2009, ch 271, 20, eff. Jan. 1, 2010.
58-43-16.6. Election of controlling person to designate audit committee.To exercise the election of the controlling person to designate the audit committee for purposes of this chapter, the ultimate controlling person shall provide written notice to the directors of the affected insurer. Notification shall be made timely prior to the issuance of the statutory audit report and include a description of the basis for the election. The election can be changed through notice to the director by the insurer, which shall include a description of the basis for the change. The election shall remain in effect until rescinded.If an audit committee is not designated by the insurer, the insurer's entire board of directors shall constitute the audit committee. Source: SL 2009, ch 271, 21, eff. Jan. 1, 2010.
58-43-16.7. Report of accountant to audit committee.The audit committee shall require the accountant that performs for an insurer any audit required by this chapter to report in a timely manner to the audit committee in accordance with the requirements of AU-C 260, The Auditor's Communication with Those Charged with Governance, as of January 1, 2015, including:(1)All significant accounting policies and material permitted practices;(2)All material alternative treatments of financial information within statutory accounting principles that have been discussed with management officials of the insurer, ramifications of the use of the alternative disclosures and treatments, and the treatment preferred by the accountant; and(3)Other material written communications between the accountant and the management of the insurer, such as any management letter or schedule of unadjusted differences. Source: SL 2009, ch 271, 22, eff. Jan. 1, 2010; SL 2015, ch 260, 12.
58-43-16.8. Report of accountant where insurer is member of holding company system.If an insurer is a member of an insurance holding company system, any report required by 58-43-16.7 may be provided to the audit committee on an aggregate basis for insurers in the holding company system only if any substantial differences among insurers in the system are identified to the audit committee. Source: SL 2009, ch 271, 23, eff. Jan. 1, 2010.
58-43-16.9. Criteria for proportion of audit committee members.The proportion of independent audit committee members shall meet or exceed the following criteria:Prior Calendar Year Direct Written and Assumed Premiums  $0--$300,000,000Over $300,000,000--Over $500,000,000  $500,000,000  No minimum requirements. See also Note A and B.Majority (50% or more) of members shall be Supermajority of members (75% or more) shall be   independent. See also Noteindependent. See also Note  A and B.A.Note A: The director has authority afforded by state law to require the entity's board to enact improvements to the independence of the audit committee membership if the insurer is in a risk based capital (RBC) action level event, meets one or more of the standards of an insurer deemed to be in hazardous financial condition, or otherwise exhibits qualities of a troubled insurer.Note B: Any insurer with less than five hundred million in prior year direct written and assumed premiums is encouraged to structure an audit committee with at least a supermajority of independent audit committee members.Note C: Prior calendar year direct written and assumed premiums shall be the combined total of direct premiums and assumed premiums from nonaffiliates for the reporting entities. Source: SL 2009, ch 271, 24, eff. Jan. 1, 2010.
58-43-16. Written communication as to unremediated material weaknesses in internal controls over financial reporting.In addition to the annual audited financial report, each insurer shall furnish the director with a written communication as to any unremediated material weaknesses in the insurer's internal controls over financial reporting noted during the audit. The communication shall be prepared by the accountant within sixty days after the filing of the annual audited financial report. The communication shall contain a description of any unremediated material weakness as of December thirty-first for the immediately preceding year in the insurer's internal control over financial reporting noted by the accountant during the course of the accountant's audit of the financial statements. If no unremediated material weaknesses were noted, the communication shall so state.The insurer shall provide a description of remedial actions taken or proposed to correct unremediated material weaknesses, if the actions are not described in the accountant's communication.The insurer shall maintain information about significant deficiencies communicated by the independent certified public accountant. The information shall be made available to the examiner conducting a financial condition examination for review and kept confidential pursuant to 58-3-22. Source: SL 1992, ch 357, 16; SL 2009, ch 271, 15.
58-43-17. Letter from accountant stating accountant's independent status, background, compliance with chapter and licensing.The accountant shall furnish the insurer for inclusion in the filing of the annual audited financial report a letter stating:(1)That the accountant is independent with respect to the insurer and conforms to the standards of his profession as contained in the Code of Professional Ethics and Pronouncements of the American Institute of Certified Public Accountants and to chapter 36-20A and rules promulgated under the chapter;(2)The background and experience in general, and the experience in audits of insurers of the staff assigned to the engagement and whether each is an independent certified public accountant. Nothing in this section prohibits the accountant from utilizing the staff as he deems appropriate if such use is consistent with the standards prescribed by generally accepted auditing standards;(3)That the accountant understands the annual audited financial report and his opinion thereon will be filed in compliance with this chapter and that the director will be relying on this information in the monitoring and regulation of the financial position of insurers;(4)That the accountant consents to the requirements of 58-43-18 and 58-43-19 and that the accountant consents and agrees to make available for review by the director, his designee or his appointed agent, the workpapers, as defined in 58-43-18 and 58-43-19;(5)A representation that the accountant is properly licensed by an appropriate state licensing authority and is a member in good standing in the American Institute of Certified Public Accountants;(6)A representation that the accountant is in compliance with the requirements of 58-43-9 to 58-43-12, inclusive, of this chapter. Source: SL 1992, ch 357, 17.
58-43-18. Workpapers.Workpapers are the records kept by the accountant of the procedures followed, the tests performed, the information obtained and the conclusions reached pertinent to his examination of the financial statements of an insurer. Workpapers, accordingly, may include audit planning documentation, work programs, analyses, memoranda, letters of confirmation and representation, abstracts of company documents, and schedules or commentaries prepared or obtained by the accountant in the course of his examination of the financial statements of an insurer and which support his opinion. Source: SL 1992, ch 357, 18.
58-43-19. Availability of workpapers and communications related to audit between insurer and accountant--Confidentiality of documents.The insurer and the accountant shall make available for review by the division or its examiners, all workpapers prepared in the conduct of his audit and any communications related to the audit between the accountant and the insurer, at the offices of the insurer, at the division or at any other reasonable place designated by the director. The accountant shall retain the audit workpapers and communications until the division has filed a report on examination covering the period of the audit but no longer than seven years from the date of the audit report.In the conduct of the division's review, the division may copy any audit workpapers and may retain them. The reviews by the division examiners shall be considered investigations and all working papers and communications obtained during the course of the investigations shall be afforded the same confidentiality as other examination workpapers generated by the division under chapter 58-3. Source: SL 1992, ch 357, 19.
58-43-2. Annual audit required--Filing audited financial report--Extension of filing date--Audit committee.Each insurer having direct premiums written in this state of more than one million dollars in any calendar year and more than one thousand policyholders or certificate holders of directly written policies nationwide at the end of a calendar year is required to have an annual audit by an accountant of the financial statements reporting the financial position and the results of operations. This chapter also applies to insurers having assumed premiums pursuant to contracts or treaties of reinsurance of one million dollars or more. The director may require insurers with less than one million dollars in direct premiums and less than one thousand policyholders or certificate holders to have independent audits to determine the financial status of the insurer.The insurer shall file an audited financial report with the director on or before June first for the immediately preceding year. The director may require an insurer to file an audited financial report earlier than June first with ninety days advance notice to the insurer.Extensions of the June first filing date may be granted by the director for thirty-day periods upon showing by the insurer and its accountant to the director that there is good cause for an extension. The request for extension shall be submitted in writing to the director not less than ten days prior to the due date in sufficient detail to permit the director to make an informed decision.If an extension is granted, a similar extension of thirty days is granted for the filing of the Management's Report of Internal Control over Financial Reporting.Each insurer required to file an annual audited financial report pursuant to this chapter shall designate a group of individuals as constituting the insurer's audit committee. The audit committee of an entity that controls an insurer may be deemed to be the insurer's audit committee for purposes of this chapter at the election of the controlling person. Source: SL 1992, ch 357, 2; SL 2009, ch 271, 3.
58-43-20. Hardship exemption--Hearing.Upon written application of an insurer, the director may grant an exemption from compliance with this chapter if the director finds, upon review of the application, that compliance with this chapter would constitute a financial or organizational hardship upon the insurer. An exemption may be granted at any time and from time to time for any specified period. Within ten days from a denial of an insurer's written request for an exemption from this rule, the insurer may request in writing a hearing on its application for an exemption. Source: SL 1992, ch 357, 20.
58-43-21. Compliance with chapter for year ending December 31, 1993--Foreign insurer for 1994.Domestic insurers shall comply with this chapter for the year ending December 31, 1993, and each year thereafter unless the director permits otherwise.Foreign insurers shall comply with this chapter for the year ending December 31, 1994, and each year thereafter unless the director permits otherwise. Source: SL 1992, ch 357, 21.
58-43-22. Application to Canadian and British insurers.In the case of Canadian and British insurers, the annual audited financial report shall be defined as the annual statement of total business on the form filed by the companies with their supervision authority duly audited by an independent chartered accountant.For these insurers, the letter required in 58-43-6 and 58-43-7 shall state that the accountant is aware of the requirements relating to the annual audited financial report filed with the director pursuant to 58-43-4 and shall affirm that the opinion expressed is in conformity with the requirements. Source: SL 1992, ch 357, 22; SL 2009, ch 271, 40.
58-43-23. Fine, suspension, or revocation of license for violation.Failure of an insurer subject to this chapter to comply with this chapter may result in a fine of not more than twenty-five thousand dollars for each violation or suspension of not more than one year or revocation of the certificate of authority. Source: SL 1992, ch 357, 23.
58-43-24. Promulgation of rules by director.The director may promulgate rules, pursuant to chapter 1-26, regarding the filing and form of the audited annual financial report, qualifications and waiver of any requirements of the accountant, good cause, consolidated and combined audits, internal control reports, workpapers and exemptions from the requirements of this chapter. Source: SL 1992, ch 357, 24.
58-43-25. Application of chapter.This chapter applies to all persons doing insurance business notwithstanding any provision exempting them from the insurance laws of this title. Source: SL 1992, ch 357, 25.
58-43-26. Dispute resolution by mediation or arbitration.A qualified independent certified public accountant may enter into an agreement with an insurer to have disputes relating to an audit resolved by mediation or arbitration. However, if a delinquency proceeding commenced against the insurer under chapter 58-29B, the mediation or arbitration provisions shall operate at the option of the statutory successor. Source: SL 2007, ch 294, 4.
58-43-3. Foreign or alien insurers--Exemption.Foreign or alien insurers, filing audited financial reports in another state which report has been found by the director to be substantially similar to the requirements of 58-43-4, are exempt if:(1)A copy of the audited financial report, communication of internal control related matters noted in an audit, and the accountant's letter of qualifications which are filed with the other state are filed with the director in accordance with the filing dates specified in 58-43-2, 58-43-14, and 58-43-15. Canadian insurers may submit accountants' reports as filed with the Office of the Superintendent of Financial Institutions, Canada;(2)A copy of any notification of adverse financial condition report filed with that other state is filed with the director within the time specified in 58-43-14.This section does not prohibit, preclude or in any way limit the director of insurance from ordering or conducting or performing examinations of insurers under this title. Source: SL 1992, ch 357, 3; SL 2009, ch 271, 4.
58-43-4. Annual audited financial report--Contents.The annual audited financial report shall report the financial position of the insurer as of the end of the most recent calendar year and the results of its operations, cash flows, and changes in capital and surplus for the year then ended. The audit shall reflect the statutory accounting practices prescribed, or otherwise permitted, by the division. The report shall include the following:(1)Report of the accountant;(2)Balance sheet reporting admitted assets, liabilities, capital, and surplus;(3)Statement of operations;(4)Statement of cash flows;(5)Statement of changes in capital and surplus; and(6)Notes to financial statements.Any notes to financial statements shall be prepared in accordance with the Annual Statement Instructions Manual and the Accounting Practices and Procedures Manual prescribed by the National Association of Insurance Commissioners as promulgated by rules by the director pursuant to chapter 1-26 and shall also include a reconciliation of differences, if any, between the audited statutory financial statements and the annual statement filed pursuant to 58-6-75 with a written description of the nature of these differences. Source: SL 1992, ch 357, 4; SL 2003, ch 257, 1; SL 2009, ch 271, 5.
58-43-5.1. Examination of financial statements by accountant.Financial statements furnished pursuant to 58-43-4 shall be examined by the independent certified public accountant. The audit of the insurer's financial statements shall be conducted in accordance with generally accepted auditing standards. In accordance with AU Section 319 of the Professional Standards of the AICPA, Consideration of Internal Control in a Financial Statement Audit as of January 1, 2009, the independent certified public accountant should obtain an understanding of internal control sufficient to plan the audit. To the extent required by AU Section 319, for those insurers required to file a Management's Report of Internal Control over Financial Reporting pursuant to 58-43-16.13, the independent certified public accountant should consider, as that term is defined in Statement on Auditing Standards (SAS) No. 102, Defining Professional Requirements in Statements on Auditing Standards as of January 1, 2009, the most recently available report in planning and performing the audit of the statutory financial statements. Consideration shall be given to the procedures illustrated in the Financial Condition Examiners Handbook promulgated by the National Association of Insurance Commissioners as adopted by the director by rules promulgated pursuant to chapter 1-26, as the independent certified public accountant deems necessary. Source: SL 2009, ch 271, 14.
58-43-5. Financial statements.The financial statements included in the audited financial report shall be prepared in a form and using language and groupings substantially the same as the relevant sections of the annual statement filed pursuant to 58-6-75 and the financial statement shall be comparative, presenting the amounts as of December thirty-first of the current year and the amounts as of the immediately preceding December thirty-first. In the first year in which an insurer is required to file an audited financial report, the comparative data may be omitted. Source: SL 1992, ch 357, 5.
58-43-6. Registration of retained accountant--Letter of acknowledgment from accountant.Each insurer required to file an annual audited financial report shall, within sixty days after becoming subject to the requirement, register with the director in writing the name and address of the independent certified public accountant or accounting firm retained to conduct the annual audit set forth in this chapter. Any insurer not retaining an independent certified public accountant on July 1, 2009, shall register the name and address of the insurer's retained independent certified public accountant not less than six months before the date when the first audited financial report is to be filed.The insurer shall obtain a letter from the accountant, and file a copy with the director, stating that the accountant is aware of the laws of the state of domicile that relate to accounting and financial matters and affirming that the accountant will express his or her opinion on the financial statements in terms of their conformity to the statutory accounting practices prescribed or permitted and specify any exceptions. Source: SL 1992, ch 357, 6; SL 2009, ch 271, 6.
58-43-7. Notification of dismissal or resignation of insurer's accountant--Reporting disagreements.If an accountant who was the accountant for the immediately preceding filed audited financial report is dismissed or resigns, the insurer shall mail notification to the director within five business days of the dismissal or resignation. The insurer shall mail the director a separate letter within ten business days of the above notification stating whether in the twenty-four months preceding this dismissal or resignation there were any disagreements with the former accountant on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of the former accountant, would have caused him to make reference to the subject matter of the disagreement in connection with his opinion. Source: SL 1992, ch 357, 7.
58-43-8. Explanation of disagreements between insurer and accountant--Letters from both insurer and accountant to director.The disagreements required in 58-43-7 to be reported include both those resolved to the former accountant's satisfaction and those not resolved to the former accountant's satisfaction. Disagreements contemplated by this section are those that occur at the decision-making level, such as, between personnel of the insurer responsible for presentation of its financial statements and personnel of the accounting firm responsible for rendering its report. The insurer shall request in writing the former accountant to furnish a letter addressed to the insurer stating whether the accountant agrees with the statements contained in the insurer's letter and, if not, stating the reasons for which he does not agree. The insurer shall furnish the responsive letter from the former accountant to the director together with its own. The accountant shall also furnish a copy of the responsive letter to the director. Source: SL 1992, ch 357, 8.
58-43-9.1. Disqualification of accountant.No person or firm may be recognized as a qualified independent certified public accountant if the person or firm:(1)Is not in conformity with the Code of Professional Ethics of the American Institute of CPA's and in all states in which the accountant is licensed to practice, or, for a Canadian or British company, that is not a chartered accountant; or(2)Has either directly or indirectly entered into an agreement of indemnity or release from liability with respect to the audit of the insurer. Source: SL 2007, ch 294, 3.
58-43-9.2. Disqualification of accountant for services provided contemporaneously with audit.The director may not recognize as a qualified independent certified public accountant, nor accept an annual audited financial report, prepared in whole or in part by an accountant who provides to an insurer, contemporaneously with the audit, the following nonaudit services:(1)Bookkeeping or other services related to the accounting records or financial statements of the insurer;(2)Financial information systems design and implementation;(3)Appraisal or valuation services, fairness opinions, or contribution-in-kind reports;(4)Actuarially-oriented advisory services involving the determination of amounts recorded in the financial statements. The accountant may assist an insurer in understanding the methods, assumptions, and inputs used in the determination of amounts recorded in the financial statement only if it is reasonable to conclude that the services provided will not be subject to audit procedures during an audit of the insurer's financial statements. An accountant's actuary may also issue an actuarial opinion or certification on an insurer's reserves if the following conditions have been met:(a)Neither the accountant nor the accountant's actuary has performed any management functions or made any management decisions;(b)The insurer has competent personnel or engages a third party actuary to estimate the reserves for which management takes responsibility; and(c)The accountant's actuary tests the reasonableness of the reserves after the insurer's management has determined the amount of the reserves;(5)Internal audit outsourcing services;(6)Management functions or human resources;(7)Broker or dealer, investment adviser, or investment banking services;(8)Legal services or expert services unrelated to the audit; or(9)Any other services that the director determines, by rules promulgated pursuant to chapter 1-26, are impermissible. Source: SL 2009, ch 271, 8.
58-43-9.3. Exemption from disqualification provisions of 58-43-9.2.Any insurer having direct written and assumed premiums of less than one hundred million dollars in any calendar year may request an exemption from the provisions of 58-43-9.2. The insurer shall file with the director a written statement discussing the reasons why the insurer should be exempt from these provisions. If the director finds, upon review of this statement, that compliance with these provisions would constitute a financial or organizational hardship upon the insurer, an exemption may be granted. Source: SL 2009, ch 271, 9.
58-43-9.4. Services which do not disqualify accountant--Audit committee preapproval.A qualified independent certified public accountant who performs the audit may engage in other nonaudit services, including tax services, that are not described in or that do not conflict with the provisions of 58-43-9.2, only if the activity is approved in advance by the audit committee, in accordance with the provisions of 58-43-9.5. Source: SL 2009, ch 271, 10.
58-43-9.5. Preapproval of auditing and nonaudit services by audit committee--SOX compliant entities.Any auditing services or nonaudit services provided to an insurer by the qualified independent certified public accountant of the insurer shall be preapproved by the audit committee. This preapproval requirement is waived with respect to nonaudit services if the insurer is a SOX compliant entity or a direct or indirect wholly-owned subsidiary of a SOX compliant entity or:(1)The aggregate amount of all such nonaudit services provided to the insurer constitutes not more than five percent of the total amount of fees paid by the insurer to its qualified independent certified public accountant during the fiscal year in which the nonaudit services are provided;(2)The services were not recognized by the insurer at the time of the engagement to be nonaudit services; and(3)The services are promptly brought to the attention of the audit committee and approved prior to the completion of the audit by the audit committee or by one or more members of the audit committee who are the members of the board of directors to whom authority to grant such approvals has been delegated by the audit committee. Source: SL 2009, ch 271, 11.
58-43-9.6. Delegation of preapproval duties.The audit committee may delegate to one or more designated members of the audit committee the authority to grant the preapprovals required by the provisions of 58-43-9.5. The decisions of any member to whom this authority is delegated shall be presented to the full audit committee at each of its scheduled meetings. Source: SL 2009, ch 271, 12.
58-43-9.7. Disqualification of accountant due to previous employment of partner or senior manager of insurer--Relief from requirement.The director may not recognize an independent certified public accountant as qualified for a particular insurer if a member of the board, president, chief executive officer, controller, chief financial officer, chief accounting officer, or any person serving in an equivalent position for that insurer, was employed by the independent certified public accountant and participated in the audit of that insurer during the one-year period preceding the date that the most current statutory opinion is due. This section shall only apply to partners and senior managers involved in the audit.An insurer may make application to the director for relief from this requirement on the basis of unusual circumstances. The insurer shall file, with the insurer's annual statement filing, the approval for relief with the states that it is licensed in, with the states that it is doing business in, and with the National Association of Insurance Commissioners. If the nondomestic state accepts electronic filing with the National Association of Insurance Commissioners, the insurer shall file the approval in an electronic format acceptable to the National Association of Insurance Commissioners. Source: SL 2009, ch 271, 13.
58-43-9. Qualifications of accountant.An accountant shall be recognized as qualified as long as the accountant conforms to the standards of the profession, as contained in the Code of Professional Ethics of the American Institute of Certified Public Accountants and the requirements of chapter 36-20B and rules promulgated pursuant to that chapter. Source: SL 1992, ch 357, 9; SL 2007, ch 294, 2.
58-44-1. Definition of terms.Terms used in this chapter mean:(1)"Accredited state," any state in which the insurance department or regulatory agency has qualified as meeting the minimum financial regulatory standards promulgated and established by the National Association of Insurance Commissioners (NAIC);(2)"Control" or "controlled," as defined in chapter 58-5A;(3)"Controlled insurer," any licensed insurer which is controlled, directly or indirectly, by a broker;(4)"Controlling broker," any person who, directly or indirectly, controls an insurer and for any compensation, commission, or other thing of value, acts or aids in any manner in soliciting, negotiating, or procuring the making of any insurance contract on behalf of an insured other than the controlling broker;(5)"Licensed insurer" or "insurer," any person duly licensed to transact a property and casualty insurance business in this state. The term does not include any residual market pool or any joint underwriting authority or association. Source: SL 1992, ch 358, 1; SL 2016, ch 232, 16.
58-44-10. Civil action in behalf of insurer for violation while under order for liquidation or rehabilitation.If an order for liquidation or rehabilitation of the controlled insurer has been entered pursuant to chapter 58-29B, and the receiver appointed under that order believes that the controlling broker or any other person has not complied with this chapter, or any regulation or order, and the insurer suffered any loss or damage therefrom, the receiver may maintain a civil action for recovery of damages or other appropriate sanctions for the benefit of the insurer. Source: SL 1992, ch 358, 10.
58-44-11. Rights of director to impose penalties.Nothing contained in this section affects the right of the director to impose any other penalties provided for in this title. Source: SL 1992, ch 358, 11.
58-44-12. Rights of third parties.Nothing contained in this section alters or affects the rights of policyholders, claimants, creditors, or other third parties. Source: SL 1992, ch 358, 12.
58-44-13. Time limit for compliance.Controlled insurers and controlling brokers who are not in compliance with 58-44-3 to 58-44-7, inclusive, on July 1, 1992, shall have sixty days to come into compliance and shall comply with 58-44-8 beginning with all policies written or renewed on or after September 30, 1992. Source: SL 1992, ch 358, 13.
58-44-14. Disapproval of contract between controlling broker and controlled insurer.The director may disapprove the contract in 58-44-5 pursuant to 58-5-85 and 58-5-86 if it would adversely affect the insurer or would violate any law. Source: SL 1992, ch 358, 14.
58-44-15. Promulgation of rules.The director may promulgate rules, pursuant to chapter 1-26, for accreditation; requirements for insurers, agents, or brokers, whether controlled or not; contracts between the parties; bank accounts; standards of disapproval of the contracts between the parties; reporting requirements; limitation of business between the parties; and reinsurance agreements and negotiations. Source: SL 1992, ch 358, 15.
58-44-16. Exception to application of chapter.This chapter applies to all persons doing insurance business notwithstanding any provision in this title which exempts them from other insurance laws except any insurer licensed pursuant to chapter 58-35 which does not have more than one million dollars in direct written premiums and more than one thousand policyholders in any calendar year. Source: SL 1992, ch 358, 16.
58-44-2. Application of chapter to licensed insurers--Application of chapter 58-5A.This chapter applies to licensed insurers, either domiciled in this state or domiciled in a state that is not an accredited state. All provisions of chapter 58-5A, to the extent they are not superseded by this chapter, apply to all parties within holding company systems. Source: SL 1992, ch 358, 2.
58-44-3. Application of chapter based on gross written premium on business placed with controlled insurer.The provisions of this chapter apply if, in any calendar year, the aggregate amount of gross written premium on business placed with a controlled insurer by a controlling broker is equal to or greater than five percent of the admitted assets of the controlled insurer, as reported in the controlled insurers' quarterly statement filed as of September thirtieth of the prior year. Source: SL 1992, ch 358, 3.
58-44-4. Chapter not applicable under certain circumstances.The provisions of this chapter do not apply if:(1)The controlling broker:(a)Places insurance only with the controlled insurer, or only with the controlled insurer and a member or members of the controlled insurer's holding company system, or the controlled insurer's parent, affiliate or subsidiary and receives no compensation based upon the amount of premiums written in connection with the insurance; and(b)Accepts insurance placements only from nonaffiliated brokers, and not directly from insureds; and(2)The controlled insurer, except for insurance business written through a residual market facility, accepts insurance business only from a controlling broker, a broker controlled by the controlled insurer, a broker that is a subsidiary of the controlled insurer. Residual market facility includes government insurance programs, risk pools, and assigned risk plans. Source: SL 1992, ch 358, 4.
58-44-5. Written contract required--Provisions.A controlled insurer may not accept business from a controlling broker and a controlling broker may not place business with a controlled insurer unless there is a written contract between the parties specifying the responsibilities of each party, and the contract has been approved by the board of directors of the insurer and the director of insurance and contains the following minimum provisions:(1)The controlled insurer may terminate the contract for cause, upon written notice to the controlling broker. The controlled insurer shall suspend the authority of the controlling broker to write business during the pendency of any dispute regarding the cause for the termination;(2)The controlling broker shall provide accounts to the controlled insurer detailing all material transactions, including information necessary to support all commissions, charges and other fees received by, or owing to, the controlling broker;(3)The controlling broker shall remit all funds due under the terms of the contract to the controlled insurer on at least a monthly basis. The due date shall be fixed so that premiums or installments collected shall be remitted no later than ninety days after the effective date of any policy placed with the controlled insurer under this contract;(4)All funds collected for the controlled insurer's account shall be held by the controlling broker in a fiduciary capacity, in one or more appropriately identified bank accounts in banks that are members of the federal reserve system, in accordance with the provisions of the insurance law as applicable. However, funds of a controlling broker not required to be licensed in this state shall be maintained in compliance with the requirements of the controlling broker's domiciliary jurisdiction;(5)The controlling broker shall maintain separately identifiable records of business written for the controlled insurer;(6)The contract may not be assigned in whole or in part by the controlling broker;(7)The controlled insurer shall provide the controlling broker with its underwriting standards, rules and procedures, manuals setting forth the rates to be charged, and the conditions for the acceptance or rejection of risks. The controlling broker shall adhere to the standards, rules, procedures, rates, and conditions. The standards, rules, procedures, rates, and conditions shall be the same as those applicable to comparable business placed with the controlled insurer by a broker other than the controlling broker;(8)The rates and terms of the controlling broker's commissions, charges, or other fees and the purposes for those charges or fees. The rates of the commissions, charges, and other fees may be no greater than those applicable to comparable business placed with the controlled insurer by brokers other than controlling brokers. For purposes of this subdivision and subdivision (7) of this section, examples of "comparable business" include the same lines of insurance, same kinds of insurance, same kinds of risks, similar policy limits, and similar quality of business;(9)If the contract provides that the controlling broker, on insurance business placed with the insurer, is to be compensated contingent upon the insurer's profits on that business, then the compensation may not be determined and paid until at least five years after the premiums on liability insurance are earned and at least one year after the premiums are earned on any other insurance. In no event may the commissions be paid until the adequacy of the controlled insurer's reserves on remaining claims has been independently verified pursuant to 58-44-6; (10)A limit on the controlling broker's writings in relation to the controlled insurer's surplus and total writings. The insurer may establish a different limit for each line or subline of business. The controlled insurer shall notify the controlling broker when the applicable limit is approached and may not accept business from the controlling broker if the limit is reached. The controlling broker may not place business with the controlled insurer if it has been notified by the controlled insurer that the limit has been reached; and(11)The controlling broker may negotiate but may not bind reinsurance on behalf of the controlled insurer on business the controlling broker places with the controlled insurer. However, the controlling broker may bind facultative reinsurance contracts pursuant to obligatory facultative agreements if the contract with the controlled insurer contains underwriting guidelines including, for both reinsurance assumed and ceded, a list of reinsurers with which automatic agreements are in effect, the coverages and amounts or percentages that may be reinsured and commission schedules. Source: SL 1992, ch 358, 5.
58-44-6. Audit committee of controlled insurer--Annual meeting.Every controlled insurer shall establish an audit committee of the board of directors composed of independent directors. The audit committee shall annually meet with management, the insurer's independent certified public accountants, and an independent casualty actuary or other independent loss reserve specialist acceptable to the director to review the adequacy of the insurer's loss reserves. Source: SL 1992, ch 358, 6.
58-44-7. Annual report of loss ratios and loss reserves.In addition to any other required loss reserve certification, the controlled insurer shall annually, on April first of each year, file with the director an opinion of an independent casualty actuary or other independent loss reserve specialist acceptable to the director reporting loss ratios for each line of business written and attesting to the adequacy of loss reserves established for losses incurred and outstanding as of year-end, including incurred but not reported, on business placed by the broker.The controlled insurer shall annually report to the director the amount of commissions paid to the controlling broker, the percentage the amount represents of the net premiums written and comparable amounts and percentage paid to noncontrolling brokers for placements of the same kinds of insurance. Source: SL 1992, ch 358, 7.
58-44-8. Notice from controlling broker to prospective insured--Subbroker.The controlling broker, prior to the effective date of the policy, shall deliver written notice to the prospective insured disclosing the relationship between the controlling broker and the controlled insurer. If the business is placed through a broker who is not a controlling broker, the controlling broker shall retain in his records a signed commitment from the subbroker that the subbroker is aware of the relationship between the insurer and the broker and that the subbroker has or will notify the insured. Source: SL 1992, ch 358, 8.
58-44-9. Consequences of noncompliance with chapter--Civil action by director.If the director believes that the controlling broker or any other person has not complied with this chapter, or any regulation or order, the director may order the controlling broker to cease placing business with the controlled insurer or any other conduct in violation of this chapter, or both pursuant to 58-4-7. In addition, if it is found that because of noncompliance that the controlled insurer or any policyholder has suffered any loss or damage, the director may maintain a civil action or intervene in an action brought by or on behalf of the insurer or policyholder for recovery of compensatory damages for the benefit of the insurer or policyholder or other appropriate relief. Source: SL 1992, ch 358, 9.
58-46-1. Definition of terms.Terms used in this chapter mean:(1)"Affiliated entity," any entity, in the same corporate system as the captive insurance company, owned or controlled, directly or indirectly, by a parent or subsidiary, or a member organization by virtue of control, operation, or management. In the case of a trust captive insurance company or, if approved by the director, a special purpose captive insurance company, an affiliated entity of a trust which holds ownership interest in the captive insurance company also includes any other trust created by the settlor, the settlor's grandparents or their descendants, the settlor's spouse, or any trust created by any one of the aforementioned persons;(1A)"Agency captive insurance company," an insurance company that is:(a)Owned or controlled by an insurance agency, brokerage, or reinsurance intermediary, or an affiliate thereof, or under common ownership or control with the agency, brokerage, or reinsurance intermediary, and that only insures the risks of insurance or annuity contracts placed by or through the agency, brokerage, or reinsurance intermediary; or(b)Owned or controlled by a producer of service contracts or warranties, and that only insures or reinsures the contractual liability arising out of service contracts or warranties sold through such producer.For purposes of this subdivision, common ownership or control means ownership of thirty percent or more of the voting securities of an entity or such other form of ownership or control as the director approves. For purposes of this subdivision, producer means an individual, agent, broker, or agency that is licensed by a state's insurance division or department to sell insurance;(2)"Association," any legal association of entities, the members of the organization of which:(a)Own, control, or hold with power to vote all of the outstanding voting securities of a group captive insurance company incorporated as a stock insurer or nonprofit corporation; or(b)Have complete voting control over group captive insurance company formed as a limited liability company;(3)"Captive insurance company," any insurance company licensed under chapter 58-46;(4)"Controlled unaffiliated business," any person or entity that is not in the corporate system of a parent and its affiliated entities and has an existing contractual relationship for its control, operation, or management with the parent or one of its affiliated entities;(5)"Director," the director of the Division of Insurance;(5A)"Entity," a corporation, business trust, cooperative corporation, estate, trust, partnership, limited liability company, association, joint venture, government, governmental subdivision, agency, or instrumentality, or any other legal or commercial entity;(5B)"Governing board," in the case of a corporation, its board of directors; in the case of a member managed limited liability company, its board of members; in the case of a manager managed limited liability company, its board of managers; in the case of a partnership, its general partner; in the case of a business trust or trust, its trustee; and in the case of any other entity not defined, the person in charge of managing its business affairs;(6)"Group," any association of entities with substantially similar or related risks, the members of which collectively own, control, or hold with power to vote all of the outstanding voting securities or other ownership interest of a group captive insurance company;(7)"Group captive insurance company," any entity licensed under this chapter that insures the risks of the member organizations of the group, the risks of the affiliated entities of the member organizations, or the risks of the association; (8)"Member organization," any entity that belongs to an association;(9)"Parent," an entity that directly or indirectly owns, controls, or holds with power to vote fifty percent or more of the outstanding voting securities of a pure captive insurance company;(10)"Pure captive insurance company," any entity licensed under this chapter that insures risks of its parent and affiliated entities or a controlled unaffiliated business;(11)"Participant contract," with respect to a sponsored captive insurance company, a contract by which a sponsored captive insurance company insures the risks of one or more participants, and limits the losses of each participant to its pro rata share of the assets of one or more protected cells identified in the participant contract;(12)"Special purpose captive insurance company," a captive insurance company that is licensed under this chapter that does not meet the definition of any other type of captive insurance company defined in this section and it may insure the risks of its parent, unless otherwise approved by the director;(13A)"Participant," any person or entity that is insured by a sponsored captive insurance company, where the losses of the participant are limited through a participant contract to the participant's pro rata share of the assets of one or more protected cells identified in the participant contract;(13B)"Protected cell," a separate and distinct account established and maintained by or on behalf of a sponsored captive insurance company in which assets, including assets invested pursuant to 58-46-30, are accounted for and recorded for one or more participants in accordance with the terms of one or more participant contracts to fund the liability of the sponsored captive insurance company assumed on behalf of the participants as set forth in the participant contracts;(14)"Sponsor," a person or entity qualifying as a sponsor under 58-46-28;(15)"Sponsored captive insurance company," a captive insurance company that is licensed under this chapter:(a)Of which the minimum capital and surplus required by this chapter is provided by one or more sponsors;(b)That insures the risks of its participants only, through separate participant contracts; and(c)That funds its liability to each participant through one or more protected cells and segregates the assets of each protected cell from the assets of other protected cells and from the assets of the sponsored captive insurance company's general account;(16)"Trust captive insurance company," a captive insurance company whose ownership interest is held in a trust or trusts;(17)"Trust," any trust with a South Dakota jurisdiction provision as set forth in 55-3-40 to 55-3-42, inclusive, and which complies with 55-3-39. Source: SL 1996, ch 287, 1; SL 2009, ch 272, 1; SL 2013, ch 257, 1; SL 2015, ch 257, 1.
58-46-10. Forms of incorporation.A pure or agency captive insurance company may be incorporated as a stock corporation, a nonstock corporation, a nonprofit corporation, or may be formed as a limited liability company, business trust under chapter 47-14A, or other form of legal entity as approved by the director.A group captive insurance company may be incorporated as a stock corporation or as a nonstock corporation, may be formed as a limited liability company, a business trust, or may be organized as a reciprocal insurer, or other form of legal entity as approved by the director.A special purpose captive insurance company may be incorporated as a stock corporation or as a nonstock corporation, may be formed as a limited liability company, business trust or trust, or may be such other form of legal entity as approved by the director.A trust captive insurance company may be incorporated as a stock corporation or as a nonstock corporation, or may be formed as a limited liability company, or business trust, or other form of legal entity as approved by the director.A sponsored captive insurance company may be incorporated as a stock corporation or as a nonstock corporation, or may be formed as a limited liability company, or business trust, or other form of legal entity as approved by the director. Source: SL 1996, ch 287, 10; SL 2009, ch 272, 6; SL 2013, ch 257, 9; SL 2015, ch 257, 2.
58-46-11. Organizers.A captive insurance company shall have at least three organizers of whom at least one shall be a resident of this state. Source: SL 1996, ch 287, 11; SL 2013, ch 257, 10.
58-46-12. Governing board.At least one of the members of the governing board of a captive insurance company incorporated in this state shall be a resident of this state. Source: SL 1996, ch 287, 12; SL 2013, ch 257, 11.
58-46-13. Privileges--Applicable law.Any captive insurance company formed under the provisions of this chapter has the privileges and is subject to the provisions of title 47 or title 55, as applicable to the entity under which it is formed and is otherwise relevant, as well as the applicable provisions contained in this chapter. In the event of conflict between the provisions of this chapter and those of title 47 or title 55, the provisions of this chapter control. Source: SL 1996, ch 287, 13; SL 2013, ch 257, 12; SL 2014, ch 245, 2.
58-46-14. Acquisitions, mergers and consolidation procedures.The provisions of chapters 58-5 and 58-5A pertaining to acquisitions, mergers, and consolidations apply in determining the procedures to be followed by captive insurance companies in carrying out any of the transactions described by those chapters. However, the director may waive or modify the requirements for public notice and hearing in accordance with rules which the director may adopt pursuant to chapter 1-26, addressing categories of transactions. If a notice of public hearing is required and no one requests a hearing, the director may cancel the hearing. Source: SL 1996, ch 287, 14.
58-46-15. Financial condition reporting--Independent audit.Each group or sponsored captive insurance company shall submit annually to the director a report of its financial condition pursuant to 58-6-75, no later than six months after the close of its financial year. The report shall be audited by an independent certified public accountant pursuant to chapter 58-43. Each group or sponsored captive insurance company shall file with its annual report of financial condition an actuarial opinion pursuant to 58-26-13.1. If requested by the director, the group or sponsored captive insurance company shall submit quarterly reports of its financial condition pursuant to 58-6-75.A pure, agency, or trust captive insurance company shall submit annually no later than six months after the close of its financial year to the director a report of its financial condition using statutory accounting principles certified under oath by two of its officers. A pure, agency, or trust captive insurance company shall provide a report of its financial condition audited by an independent certified public accountant every five years pursuant to chapter 58-43 if it has annual direct premiums written of less than two million five hundred thousand dollars. If a pure, agency, or trust captive insurance company has two million five hundred thousand dollars or more of annual direct premiums written, it shall provide a report of its financial condition audited by an independent certified public accountant every three years pursuant to chapter 58-43. Following its first year of operation, and in connection with its audited statement of financial condition (or more often if requested by the director), each pure, agency, or trust captive insurance company shall file an actuarial opinion pursuant to 58-26-13.1.No later than six months after the close of its financial year, a special purpose captive insurance company shall submit to the director a report of its financial condition pursuant to 58-6-75. The report shall be audited by an independent certified public accountant pursuant to chapter 58-43. Following its first year of operation, and every three years thereafter, a special purpose captive insurance company shall file with its annual report of financial condition an actuarial opinion pursuant to 58-26-13.1. If requested by the director, the special purpose captive insurance company shall submit quarterly reports of its financial condition pursuant to 58-6-75.Upon request to and approval by the director, a captive insurance company may use generally accepted accounting principles in lieu of statutory accounting principles in its certification of its financial condition and may use consolidated, nonconsolidated, or a similar type of reporting, as approved by the director. Source: SL 1996, ch 287, 15; SL 2009, ch 272, 7; SL 2013, ch 257, 13; SL 2015, ch 257, 3.
58-46-16. Alternative reporting date.A pure, agency, or trust captive insurance company may make written application for filing the report required by 58-46-15 on a fiscal year-end that is consistent with the parent company's fiscal year. If an alternative reporting date is granted, the annual report is due six months after its fiscal year-end. Source: SL 1996, ch 287, 16; SL 2009, ch 272, 8; SL 2013, ch 257, 14; SL 2015, ch 257, 4.
58-46-17. Review of company financial condition--Compliance.At least once in five years and whenever the director determines it to be prudent, the director shall examine each captive insurance company to ascertain its financial condition and whether it has complied with the provisions of this chapter. Chapter 58-3 applies to any examination conducted under this section. Source: SL 1996, ch 287, 17.
58-46-18. Suspension or revocation of certificate of authority by director.The certificate of authority of a captive insurance company to do insurance business in this state may be suspended or revoked by the director for any of the following reasons:(1)Insolvency or impairment of capital or surplus;(2)Failure to meet the requirements of 58-46-8;(3)Refusal or failure to submit an annual report, as required by 58-46-15, or any other report or statement required by law or by lawful order of the director;(4)Failure to comply with the provisions of its own organizational documents or bylaws;(5)Failure to submit to examination or any legal obligation relative thereto, as required by 58-46-17;(6)Use of methods that, although not otherwise specifically prohibited by law, nevertheless render its operation detrimental or its condition unsound with respect to the public or to its policyholders;(7)Failure otherwise to comply with the laws of this state.If the director finds, upon examination, hearing, or other evidence, that any captive insurance company has violated any of these provisions, its certificate of authority may be suspended or revoked if it is deemed to be in the best interest of the public and the policyholders of such captive insurance company, notwithstanding any other provisions of this chapter. Source: SL 1996, ch 287, 18; SL 2013, ch 257, 15.
58-46-19. Allowable investments--Restrictions.No pure, agency, or trust captive insurance company is subject to any restrictions on allowable investments. However, the director may prohibit or limit any investment that threatens the solvency or liquidity of any such company.Unless the director has provided written approval of a different requirement or limitation, group, sponsored and special purpose captive insurance companies shall comply with the investment requirements and limitations applicable to other insurance companies pursuant to chapter 58-27. Source: SL 1996, ch 287, 19; SL 2009, ch 272, 9; SL 2013, ch 257, 16; SL 2015, ch 257, 5.
58-46-20. Loan to parent or affiliated entity.A pure, agency, or trust captive insurance company may make a loan to its parent or affiliated entities. No loan to its parent or affiliated entities may be made without prior written approval of the director. A group, sponsored, or special purpose captive insurance company may make a loan to an affiliated entity if prior written approval by the director has been provided. The approval shall be evidenced by a note in a form approved by the director. Source: SL 1996, ch 287, 20; SL 2009, ch 272, 10; SL 2013, ch 257, 17; SL 2015, ch 257, 6.
58-46-21. Ceding or taking credit for reserves.Any captive insurance company may take credit for reserves on risks or portions of risks ceded to reinsurers complying with provisions of chapter 58-14 or 58-46. Prior approval of the director shall be required for ceding or taking credit for reserves on risks or portions of risks ceded to reinsurers not complying with chapter 58-14 or 58-46. Source: SL 1996, ch 287, 21; SL 2013, ch 257, 18.
58-46-22. Rating organization.No captive insurance company may be required to join a rating organization. Source: SL 1996, ch 287, 22.
58-46-23.1. Risk management services.A pure or agency captive insurance company may enter into any arrangement to provide risk management services to a controlled unaffiliated business or an unaffiliated business but may not accept any insurance risk from an unaffiliated business. A trust captive insurance company may enter into any arrangement to provide risk management services to an affiliated entity and may accept insurance risk from an affiliated entity. Source: SL 2009, ch 272, 11; SL 2013, ch 257, 20; SL 2015, ch 257, 7.
58-46-23.2. Prohibited insurance risks.A captive insurance company may not insure:(1)Any life or health risk; or(2)Any personal lines property casualty risk. Source: SL 2013, ch 257, 21.
58-46-23. Contribution to plan, pool, association, or guaranty or insolvency fund prohibited.No captive insurance company may join or contribute financially to any plan, pool, association, or guaranty or insolvency fund in this state. No captive insurance company or its parent or affiliated entities may receive any benefit from any such plan, pool, association, or guaranty or insolvency fund for claims arising out of the operations of the captive insurance company. Source: SL 1996, ch 287, 23; SL 2013, ch 257, 19.
58-46-24. Annual supervision fee.Each captive insurance company shall pay to the Division of Insurance an annual supervision fee of the greater of five thousand dollars or eight one-hundredths of one percent on gross premiums, less return premiums, for insurance written on all risks or property resident, situated, or located within this state, and on risks and property situated elsewhere upon which no premium tax or fee is otherwise paid during the year ending on the preceding December thirty-first. A sponsored captive company shall pay for each protected cell an additional annual supervision fee of the greater of five hundred dollars or eight hundredths of one percent on gross premiums, less return premiums, for insurance written on all risks or property resident, situated, or located within this state, and on risks and property situated elsewhere upon which no premium tax or fee is otherwise paid during the year ending on the preceding December thirty-first. The annual supervision fee shall be due and payable on or before March first of each year. If the aggregate annual supervision fees to be paid by a captive insurance company calculated under this section amount to less than five thousand dollars in any year, such captive insurance company shall pay an annual supervision fee of five thousand dollars for the year. The aggregate annual supervision fees calculated under this section may not equal more than fifty thousand dollars. Source: SL 1996, ch 287, 24; SL 2013, ch 257, 22.
58-46-25. Application of chapter 58-29B.The terms and conditions set forth in chapter 58-29B pertaining to insurers' supervision, rehabilitation, and liquidation apply to captive insurance companies formed under this chapter. Source: SL 1996, ch 287, 25.
58-46-26. Application of Title 58.No provisions of Title 58, other than those contained in this chapter or contained in specific references contained in this chapter, apply to captive insurance companies. Source: SL 1996, ch 287, 26.
58-46-27. Sponsored captive insurance may establish protected cells--Conditions.A sponsored captive insurance company may establish and maintain one or more protected cells to insure risks of one or more participants, subject to the following conditions:(1)The owner of a sponsored captive insurance company is limited to its participants and sponsors;(2)The assets of each protected cell shall be held in a separate account or fund and accounted for separately on the books and records of the sponsored captive insurance company to reflect the financial condition and results of operations of such protected cell, net income or loss of such protected cell, dividends or other distributions to participants of such protected cell, and such other factors regarding such protected cell as may be provided in the applicable participant contract or required by the director;(3)The assets of a protected cell are not chargeable or accessible for the liabilities of any other protected cell, unless that cell is specifically reinsuring the risk or a portion of the risk in another cell or, unless otherwise agreed in the applicable participant contract, of the sponsored captive insurance company generally;(4)No sale, exchange, transfer of assets, dividend or other distribution, may be made with respect to a protected cell by such sponsored captive insurance company without the consent of the participants of each affected protected cell;(5)No sale, exchange, or transfer of assets, or other distribution (other than a payment or dividend to a participant or sponsor in accordance with the applicable participant contract, resulting in no less than one hundred five percent of capital to expected losses in any particular plan year), may be made with respect to a protected cell to a sponsor or a participant without the director's approval;(6)Each sponsored captive insurance company shall annually file with the director such financial reports as the director may require, which shall include accounting statements detailing the financial experience of each protected cell;(7)Each sponsored captive insurance company shall notify the director in writing promptly and in any event within ten business days of any protected cell that is insolvent or otherwise unable to meet its claim or expense obligations. The director may suspend or revoke the certificate of authority of the sponsored captive insurance company for failure to comply with this subdivision, and may suspend or revoke the sponsored captive insurance company's ability to maintain the protected cell if the cell is insolvent or otherwise unable to meet its claim or expense obligations;(8)No participant contract may take effect without the director's prior written approval, and the addition of each new protected cell and withdrawal of any participant or termination of any existing protected cell shall constitute a change in the plan of operation of the sponsored captive insurance company requiring the director's prior written approval; and(9)The business written by a sponsored captive insurance company, with respect to each protected cell, shall be:(a)Fronted by an insurance company licensed under the laws of this state or any other state;(b)Reinsured by a reinsurer authorized or approved by this state or any other state; (c)Secured by a trust fund in this state for the benefit of policyholders and claimants or funded by an irrevocable letter of credit or other arrangement that is acceptable to the director. The amount of security provided may be no less than the reserves associated with those liabilities which are neither fronted nor reinsured, including reserves for losses, allocated loss adjustment expenses, incurred but not reported losses and unearned premiums for business written through such protected cell. The director may require the sponsored captive insurance company to increase the funding of any security arrangement established under this subdivision. If the form of security is a letter of credit, the letter of credit shall be established, issued, or confirmed by a financial institution chartered by or licensed or otherwise authorized to do banking business in this state, or by any other financial institution approved by the director. A trust fund maintained pursuant to this subdivision shall be established in a form and upon such terms approved by the director; or(d)Any combination of these. Source: SL 2013, ch 257, 23.
58-46-28. Sponsor of sponsored captive insurance company.A sponsor of a sponsored captive insurance company shall be any entity approved by the director. A risk retention group may not be a sponsor of a sponsored captive insurance company, and a risk retention group may be a participant of a sponsored captive insurance company only to the extent that it is the sole participant of one or more protected cells. Source: SL 2013, ch 257, 24.
58-46-29. Participant in sponsored captive insurance company.Any entity may be a participant in any sponsored captive insurance company. A sponsor may be a participant in a sponsored captive insurance company. A participant need not be an owner of the sponsored captive insurance company or any affiliate thereof.Except as otherwise approved by the director, a participant may insure through a sponsored captive insurance company only its own risks and the risks of its affiliates who are participants. Source: SL 2013, ch 257, 25.
58-46-3.1. Group, sponsored, or special purpose captive insurance company limit of exposure to loss.A group, sponsored, or special purpose captive insurance company shall limit its exposure to loss on any one risk or hazard to an amount deemed acceptable by the director. The amount shall be determined based on whether the risk or hazard is reinsured through an insurance company that is licensed or accredited in this state, or other safeguards to the group, sponsored, or special purpose captive insurance company's financial solvency and stability are adequate. Source: SL 2013, ch 257, 3.
58-46-3. Requirements for doing business.No captive insurance company may do any insurance business in this state unless:(1)It first obtains from the director a certificate of authority authorizing it to do insurance business in this state;(2)Its governing board holds at least one meeting each year in this state in which a quorum is physically present;(3)It maintains its principal place of business in this state and keeps at this place complete records of its assets, transactions, and affairs, in accordance with the methods and systems which are customary or suitable as to the kinds of insurance transacted. In lieu thereof or if required by the director, in the director's discretion, the captive insurance company shall appoint a captive manager approved by the director. The captive manager shall maintain the complete records required in this section. The captive manager shall make available all information to the director upon request; and(4)It, and if applicable its captive manager, appoints a resident agent to accept service of process and to otherwise act on its behalf in this state. If the registered agent cannot, with reasonable diligence, be found at the registered office of the captive insurance company or captive manager, the director shall be an agent of the captive insurance company upon whom any process, notice, or demand may be served. Source: SL 1996, ch 287, 3; SL 2009, ch 272, 3; SL 2013, ch 257, 2.
58-46-30. Combination of assets of protected cells for purposes of investment.Notwithstanding the provisions of 58-46-27, a sponsored captive insurance company may combine the assets of two or more protected cells for purposes of investing those assets. Such a combination of assets may not be construed as defeating the segregation of assets for purposes of 58-46-27, or for accounting or other purposes. A sponsored captive insurance company shall comply with investment requirements as may be approved by the director upon application by a sponsored captive insurance company. Source: SL 2013, ch 257, 26.
58-46-31. Form of application--Confidentiality of information.The director shall prescribe the form for making an application and any application submitted shall contain such information as required. The applicant may, with approval of the director, designate confidential information.All information the director generates in making an investigation or examination of a captive insurance company is confidential. All confidential information is the property of the division but shall be furnished to the captive insurance company for its confidential use. Under no circumstances may a captive insurance company disclose a report or any supporting documentation to anyone, other than directors and officers of the captive insurance company or anyone acting in a fiduciary capacity for the captive insurance company, without written permission from the director.The director shall give ten days' prior written notice of intent to disclose confidential information to the affected captive insurance company. Any captive insurance company which receives a notice may object to the disclosure of the confidential information and shall be afforded the right to a hearing in accordance with the provisions of chapter 1-26. If a captive insurance company requests a hearing, the director may not reveal confidential information prior to the conclusion of the hearing and a ruling. Disclosure of confidential information shall be made only to formal regulatory bodies which clearly have a need for the confidential information. Prior to dissemination of any confidential information, the director shall require a written agreement not to reveal the confidential information by the party receiving the confidential information. In no event may the director disclose confidential information to the general public, any competitor, or any potential competitor of a captive insurance company, or its parents or affiliates.The submission of any information to the division in the course of any application, investigation, or examination shall not be construed as waiving, destroying, or otherwise affecting any privilege any person may claim with respect to the information under South Dakota law or federal law.For the purposes of this chapter, confidential information includes the names of stockholders, membership interest holders, or owners, ownership information, capital contributions, addresses, business affiliations, state and director findings through any examination or inquiry of any kind, and any information required to be reported or filed with the director.The provisions of this section do not apply to the disclosure of information by the director in connection with the institution and prosecution of an action against a captive insurance company under this chapter. Disclosure of confidential information may be made only to formal governmental regulatory bodies which have a need for the confidential information. Source: SL 2013, ch 257, 27.
58-46-32. Promulgation of rules.The director may promulgate rules pursuant to chapter 1-26 to further the provisions of this chapter. The rules may include:(1)Definition of terms;(2)Requirements for doing business;(3)Application requirements and procedures;(4)Conditions for receiving a certificate of authority;(5)Criteria for suspending or revoking a certificate of authority;(6)Organizational structure;(7)Financial condition;(8)Pooling and sharing risks; and(9)Notice requirements. Source: SL 2013, ch 257, 28.
58-46-4. Filing requirements.Before receiving a certificate of authority, a captive insurance company shall file with the director a certified copy of its governing documents, a statement under oath of an officer, manager, trustee, or other appropriately authorized representative, satisfactory to the director showing its financial condition, and any other statements or documents required by the director. Source: SL 1996, ch 287, 4; SL 2014, ch 245, 1.
58-46-5. Additional filing requirements.In addition to the information required by 58-46-4, each applicant captive insurance company shall file with the director evidence of the following:(1)The amount and liquidity of its assets relative to the risks to be assumed;(2)The adequacy of the expertise, experience, and character of the management;(3)The overall soundness of its plan of operation;(4)The adequacy of the loss prevention programs of its parent and affiliated entities; and(5)Such other factors deemed relevant by the director in ascertaining whether the proposed captive insurance company will be able to meet its policy obligations. Source: SL 1996, ch 287, 5; SL 2013, ch 257, 4.
58-46-6. Examination, investigation, and processing of application--Fees.Each captive insurance company shall pay to the director a nonrefundable fee of two thousand dollars for examining, investigating, and processing its application for certificate of authority. Two or more captive insurance companies under common ownership or control shall pay this fee for each application submitted to the director for a certificate of authority. A sponsored captive insurance company shall pay an additional one thousand dollars for each protected cell application. However, no additional fee is required for the first protected cell application submitted by a sponsored captive insurance company. The director may retain legal, financial, and examination services from outside the department. The reasonable cost of the services may be charged against the applicant with notice to the applicant. The provisions of chapter 58-3 apply to examinations, investigations, and processing conducted under the authority of this chapter. Source: SL 1996, ch 287, 6; SL 2013, ch 257, 5; SL 2016, ch 234, 1.
58-46-7. Issuance of certificate of authority.If the director is satisfied that the documents and statements that the captive insurance company has filed comply with the provisions of this chapter, the director shall issue a certificate of authority authorizing it to do insurance business in this state. Source: SL 1996, ch 287, 7; SL 2013, ch 257, 6.
58-46-8. Capital and surplus requirements.No captive insurance company, other than a trust captive insurance company, may be issued a certificate of authority unless it possesses and maintains unimpaired paid-in capital and surplus of two hundred fifty thousand dollars. A sponsored captive may include the capital and surplus of its protected cells in calculating its capital and surplus. No trust captive insurance company may be issued a certificate of authority unless it possesses and maintains unimpaired paid-in capital and surplus of one hundred thousand dollars or a greater amount of which shall be determined at the discretion of the director.The initial capital and surplus may be in the form of cash or an irrevocable letter of credit issued by a bank chartered by the State of South Dakota or a member bank of the Federal Reserve System and approved by the director. The director may prescribe additional capital and surplus for any captive insurance company based upon the type, volume, and nature of insurance business transacted. Source: SL 1996, ch 287, 8; SL 2009, ch 272, 4; SL 2013, ch 257, 7.
58-46-9. Dividends and distributions.No captive insurance company may pay a dividend out of, or other distribution with respect to, capital or surplus, in excess of the limitations set forth in 58-5A-35, without the prior approval of the director. Source: SL 1996, ch 287, 9; SL 2009, ch 272, 5; SL 2013, ch 257, 8.
58-47-1. Definitions.Terms used in this chapter mean:(1)"Customer," any person who purchases portable electronics;(2)"Enrolled customer," any customer who elects coverage under a portable electronics insurance policy issued to a vendor of portable electronics;(3)"Location," any physical location in the state or any website, call center site, or similar location directed to residents of this state;(4)"Portable electronics," electronic devices and their accessories that are easily carried by a person;(5)"Portable electronics transaction," the sale or lease of portable electronics by a vendor to a customer, or the sale of a service related to the use of portable electronics by a vendor to a customer;(6)"Supervising entity," any licensed insurer, licensed business entity, or licensed insurance producer that is appointed by an insurer to supervise the administration of a portable electronics insurance program;(7)"Vendor," any person in the business of engaging in portable electronics transactions directly or indirectly. Source: SL 2012, ch 251, 1; SL 2017, ch 215, 1.
58-47-10. Termination of insurance upon twenty days notice.An insurer may terminate an enrolled customer's enrollment under a portable electronics insurance policy upon twenty days notice for nonpayment of premium, discovery of fraud, or material misrepresentation in obtaining coverage or in the presentation of a claim under the policy. Source: SL 2012, ch 251, 10.
58-47-11. Immediate termination of insurance.An insurer may immediately terminate an enrolled customer's enrollment under a portable electronics insurance policy:(1)If the enrolled customer ceases to have an active service with the vendor of portable electronics; or(2)If an enrolled customer exhausts the aggregate limit of liability, if any, under the terms of the portable electronics insurance policy and the insurer sends notice of termination to the enrolled customer within thirty calendar days after exhaustion of the limit. However, if notice is not timely sent, enrollment shall continue notwithstanding the aggregate limit of liability until the insurer sends notice of termination to the enrolled customer. Source: SL 2012, ch 251, 11.
58-47-12. Notice of termination.If a portable electronics insurance policy is terminated by a vendor policyholder, the vendor policyholder shall mail or deliver a written notice to each enrolled customer advising the enrolled customer of the termination of the policy and the effective date of termination. The written notice shall be mailed or delivered to the enrolled customer at least thirty days before the termination. Source: SL 2012, ch 251, 12.
58-47-13. Notice and correspondence requirements.If any notice or correspondence with respect to a policy of portable electronics insurance is required, the notice or correspondence shall be in writing and mailed within any notice period specified within the statute or regulation requiring the notice or correspondence. Notwithstanding any other law, any notice or correspondence may be mailed by postal or electronic means. If the notice or correspondence is mailed through any postal service, the notice or correspondence shall be sent to the vendor of portable electronics at the vendor's mailing address specified for that purpose and to its affected enrolled customer's last known mailing address on file with the insurer. Either the insurer or vendor of portable electronics shall maintain proof of mailing in a form authorized or accepted by the United States Postal Service or any other commercial mail delivery service. If the notice or correspondence is mailed by electronic means, the notice or correspondence shall be sent to the vendor of portable electronics at the vendor's electronic mail address specified for that purpose and to its affected enrolled customer's last known electronic mail address as provided by each enrolled customer to the insurer or vendor of portable electronics. An enrolled customer's provision of an electronic mail address to the insurer or vendor of portable electronics is deemed to be consent to receive notice or correspondence by electronic means so long as a disclosure is provided to the customer within a reasonable time following purchase of the portable electronics. The insurer or vendor of portable electronics shall maintain proof that any notice or correspondence was electronically mailed to an enrolled customer. Notice or correspondence may be sent on behalf of any insurer or vendor, by the supervising entity appointed by the insurer. Source: SL 2012, ch 251, 13; SL 2017, ch 215, 2.
58-47-14. Term of portable electronics license--Renewal.A portable electronics license issued under this chapter is valid for one year unless suspended or revoked by the division. A license may be renewed upon expiration for another one-year period upon application of the vendor and payment of the fees as set forth in 58-2-29. Source: SL 2012, ch 251, 14.
58-47-15. Penalties for violation of chapter.If a vendor of portable electronics or its employee or authorized representative violates any provision of this chapter, the director may do any of the following:(1)After notice and hearing, impose penalties permitted under this section that the director deems necessary and reasonable to carry out the purpose of this chapter, including, but not limited to:(a)Suspending or revoking the privilege of transacting portable electronics insurance pursuant to this chapter at specific business locations where violations have occurred; and(b)Suspending or revoking the ability of individual employees or authorized representatives to act under the license;(2)Permit an applicant or licensee to elect in writing to pay a specified money penalty within a specified time in lieu of a license suspension or other permitted action. The money penalty may not exceed five hundred dollars per violation or five thousand dollars in aggregate. Source: SL 2012, ch 251, 16.
58-47-16. Application for license.An application for a license under this chapter shall be made to and filed with the director on forms prescribed and furnished by the director. The application shall provide:(1)The name, residence address, and other information required by the director for an employee or officer of the vendor that is designated by the applicant as the person responsible for the vendor's compliance with the requirements of this chapter; and(2)The location of the applicant's home office.Any vendor engaging in portable electronics insurance transactions on or before July 1, 2012 must apply for licensure within ninety days of the application being made available by the director. Any applicant commencing operations after July 1, 2012 must obtain a portable electronics license prior to offering portable electronics insurance. Source: SL 2012, ch 251, 17.
58-47-2. Portable electronics insurance defined.Portable electronics insurance is insurance providing coverage for the repair or replacement of portable electronics which may provide coverage for portable electronics against any one or more of the following causes of loss: loss, theft, inoperability due to mechanical failure, malfunction, damage, or other similar causes of loss. It is not a service contract or extended warranty providing coverage limited to the repair, replacement, or maintenance of property for the operational or structural failure of property due to a defect in materials, workmanship, accidental damage from handling power surges, or normal wear and tear, a policy of insurance covering a seller's or a manufacturer's obligations under a warranty, or a homeowner's, renter's, private passenger automobile, commercial multi-peril, or similar coverage. Source: SL 2012, ch 251, 2.
58-47-3. Portable electronics license required to sell or offer portable electronics insurance coverage.A vendor must have a portable electronics license issued pursuant to this chapter to sell or offer coverage under a policy of portable electronics insurance. A portable electronics license issued under this chapter authorizes any employee or authorized representative of the vendor to sell or offer coverage under a policy of portable electronics insurance to a customer at each location at which the vendor engages in portable electronics transactions. Each supervising entity shall maintain a registry of vendor locations which are authorized to sell or solicit portable electronics insurance coverage in this state. The registry shall be open to inspection by the director during regular business hours of the supervising entity. The supervising entity shall be subject to examination pursuant to the applicable provisions of chapter 58-3 and must otherwise comply with 58-33-66. Source: SL 2012, ch 251, 3.
58-47-4. Brochures to be available at locations where portable electronics insurance offered--Contents.At every location where portable electronics insurance is offered to customers, brochures or other written materials must be made available by a vendor to a prospective customer which:(1)Disclose that portable electronics insurance may provide a duplication of coverage already provided by a customer's homeowner's insurance policy, renter's insurance policy, or other source of coverage;(2)State that the enrollment by the customer in a portable electronics insurance program is not required in order to purchase or lease portable electronics or services;(3)Summarize the material terms of the insurance coverage, including:(a)The identity of the insurer;(b)The identity of the supervising entity;(c)The amount of any applicable deductible and how it is to be paid;(d)Benefits of the coverage; and(e)Key terms and conditions of coverage such as whether portable electronics may be repaired or replaced with similar make and model reconditioned or nonoriginal manufacturer parts or equipment;(4)Summarize the process for filing a claim, including a description of how to return portable electronics and the maximum fee applicable in the event the customer fails to comply with any equipment return requirements; and(5)State that an enrolled customer may cancel enrollment for coverage under a portable electronics insurance policy at any time and the person paying the premium shall receive a refund or credit of any applicable unearned premium. Source: SL 2012, ch 251, 4.
58-47-5. Periodic basis as group or master commercial inland marine policy.Portable electronics insurance may be offered on a month to month or other periodic basis as a group or master commercial inland marine policy issued to a vendor of portable electronics for its enrolled customers. Eligibility and underwriting standards for customers electing to enroll in coverage shall be established by the insurer for each portable electronics insurance program. Source: SL 2012, ch 251, 5.
58-47-6. Insurance producer license not required for vendor employees or representatives under certain conditions.An employee or an authorized representative of a vendor may sell or offer portable electronics insurance to a customer and is not subject to licensure as an insurance producer if:(1)The vendor obtains a portable electronics license to authorize its employees or authorized representatives to sell or offer portable electronics insurance pursuant to this chapter;(2)The insurer issuing the portable electronics insurance either directly supervises or appoints a supervising entity to supervise the administration of the sale of portable electronic insurance; and(3)No employee or authorized representative of a vendor of portable electronics may advertise, represent, or otherwise hold himself or herself out as a licensed insurance producer unless so licensed. Source: SL 2012, ch 251, 6.
58-47-7. Training program for vendor employees and representatives.The administration of the sale of portable electronics insurance includes the development of a training program for employees and authorized representatives of the vendors. The training shall be delivered to employees and authorized representatives of vendors who are directly engaged in the activity of selling or offering portable electronics insurance. The training may be provided in electronic form. However, if conducted in an electronic form, the supervising entity shall implement a supplemental education program regarding the portable electronics insurance product that is conducted and overseen by a licensed producer of the supervising entity. Each employee and authorized representative shall receive basic instruction about the portable electronics insurance offered to customers and the disclosures required under 58-47-4. Source: SL 2012, ch 251, 7.
58-47-8. Vendor permitted to collect charges for portable electronics insurance--Funds held in trust for insurer--Vendor compensation.Any charges for portable electronics insurance coverage may be billed and collected by the vendor of portable electronics. Each charge to the enrolled customer for coverage that is not included in the cost associated with the purchase or lease of portable electronics or related services shall be separately itemized on the enrolled customer's bill. If the portable electronics insurance coverage is included with the purchase or lease of portable electronics or related services, the vendor shall clearly and conspicuously disclose to the enrolled customer that the portable electronics insurance coverage is included with the portable electronics or related services. A vendor billing and collecting these charges is not required to maintain these funds in a segregated account if the vendor is authorized by the insurer to hold these funds in an alternative manner and remits such amounts to the supervising entity within sixty days of receipt. All funds received by a vendor from an enrolled customer for the sale of portable electronics insurance shall be considered funds held in trust by the vendor in a fiduciary capacity for the benefit of the insurer. A vendor may receive compensation for billing and collection services. Source: SL 2012, ch 251, 8.
58-47-9. Change in policy terms and conditions--Notice.An insurer may terminate or otherwise change the terms and conditions of a policy of portable electronics insurance only upon providing the vendor policyholder and enrolled customers with at least twenty days notice. If the insurer changes the terms and conditions, then the insurer shall provide the vendor policyholder with a revised policy or endorsement and each enrolled customer with a revised certificate, endorsement, updated brochure, or other evidence indicating a change in the terms and conditions has occurred and a summary of material changes. Source: SL 2012, ch 251, 9.
58-48-1. Definitions. Terms used in this chapter mean:(1)"Applicant," a person applying for an insurance innovation waiver;(2)"Consumer," a person that purchases or otherwise enters into a transaction or agreement to receive an innovative insurance product or service that is being tested by a participant;(3)"Innovation," the use or incorporation of a new or emerging technology or a new use of existing technology, including blockchain technology, to address a problem, provide a benefit, or otherwise offer a product, service, business model, or delivery mechanism that is not known by the division to have a comparable widespread offering in the state;(4)"Innovative insurance product or service," an insurance product or service that includes an innovation;(5)"Insurance product or service," an insurance product or insurance service that requires state licensure, registration, or other authorization under this title, including an insurance product or insurance service that includes a business model, delivery mechanism, or element that requires a license, registration, or other authorization to do insurance business, act as an insurance producer, or otherwise requires division approval;(6)"Insurance innovation waiver" or "waiver," a document issued pursuant to this chapter that allows a person to temporarily test an innovative insurance product or service on a limited basis without otherwise being licensed or authorized to act under the laws of the state or in full compliance with the provisions of this title;(7)"Participant," an applicant whose application for a waiver is granted in accordance with this chapter; and(8)"Test," to provide an innovative insurance product or service in accordance with a granted waiver. Source: SL 2021, ch 214,  1.
58-48-10. Consumer disclosures--Digital disclosure receipts. Disclosures must be provided to consumers by a participant before providing an innovative insurance product or service in clear and conspicuous form disclosing the following:(1)The name and contact information of the participant;(2)That the innovative insurance product or service is authorized pursuant to a waiver;(3)That the participant does not have a license or other authorization to provide an insurance product or service under state laws that regulate insurance products or services outside a waiver, if applicable;(4)That the innovative insurance product or service may not function as intended and may expose the consumer to financial risk;(5)That the participant is not immune from civil liability for any losses or damages caused by the innovative insurance product or service;(6)That the innovative insurance product or service is not covered by any guaranty association if the participant becomes unable to pay claims;(7)That the state does not endorse or recommend the innovative insurance product or service;(8)That the innovative insurance product or service is a temporary test that may be discontinued at the termination of the testing period;(9)The expected termination date of the testing period; and(10)That a consumer may contact the division to file a complaint regarding the innovative insurance product or service being tested and provide the division's telephone number and website address where a complaint may be filed.The director may require additional disclosures for the protection of consumers. A digital receipt from a consumer acknowledging the disclosures is required if the disclosures are delivered through an internet or application-based platform. Source: SL 2021, ch 214,  10.
58-48-11. Public notice of granted waiver. If an insurance innovation waiver is granted, the director shall provide public notice of the existence of the waiver by publishing a description of the following information on the division's website:(1)The name of the person who applied for and received the waiver;(2)The approval date and termination date of the waiver;(3)General terms, conditions, or limitations of the waiver; and(4)Any additional information considered appropriate by the director. Source: SL 2021, ch 214,  11.
58-48-12. Record keeping by participants. The director shall establish reporting requirements for each participant, including information about consumer complaints. A participant shall retain records, documents, and data produced in the course of business regarding an innovative insurance product or service subject to a waiver for a period of five years after the waiver has terminated.A participant shall make its records, documents, and data available for inspection by the director immediately upon request. Nothing in this chapter limits the director's authority to examine applicants or participants in accordance with chapter 58-3. Source: SL 2021, ch 214,  12.
58-48-13. Termination of waivers. If a participant tests an innovative insurance product or service requiring ongoing duties after the termination date of a waiver, the participant shall continue to fulfill those duties or arrange for another person to fulfill those duties after the date the waiver terminates. At the termination of the testing period provided by a waiver, the participant shall immediately stop offering all innovative insurance products or services being tested. The participant shall submit a final report showing test results in a form and manner prescribed by the director within sixty days of waiver termination. Source: SL 2021, ch 214,  13.
58-48-14. Termination for failure--Termination by director. If an innovative insurance product or service fails before the termination of a testing period as provided in an applicable waiver, the participant shall immediately notify the director and report on actions taken by the participant to ensure consumers have not been harmed as a result of the failure.The director may terminate an insurance innovation waiver for cause and with reasonable notice to the participant. Nothing in this chapter restricts the director's application of chapters 58-4 and 58-29B as regards participants. Source: SL 2021, ch 214,  14.
58-48-15. No guaranty association coverage for waivers. A participant under this chapter is not a member insurer of any guaranty association created under title 58 unless the participant is or becomes a licensed insurer in this state pursuant to title 58 and otherwise qualifies as a member insurer under the applicable guaranty association statutes. Source: SL 2021, ch 214,  15.
58-48-16. Confidentiality of waiver application and materials. Documents, materials, or other information in the possession of the division that are obtained by or disclosed to the director or any other person in the course of an insurance innovation waiver under this chapter are confidential by law and privileged; are not subject to open records, freedom of information, sunshine, or other related laws; are not subject to subpoena; and are not subject to discovery or admissible in evidence in any private civil action.The director may use the documents, materials, or other information in the furtherance of any regulatory or legal action brought as a part of the director's official duties. The director may not otherwise make the documents, materials, or other information public without the prior written consent of the person, applicant, or participant to which it pertains.This section does not apply to information about granted waivers published by the director pursuant to  58-48-11. Nothing in this section may be construed to modify the ability of a consumer to discover information in pursuit of a claim against a participant. Source: SL 2021, ch 214,  16.
58-48-2. Grounds for innovation waiver. Subject to  58-48-3 to 58-48-5, inclusive, the director may grant an insurance innovation waiver with respect to requirements imposed by any insurance law, regulation, or bulletin to enable a person to obtain limited access to the insurance market in this state to test an innovative insurance product or service without obtaining a license or other authorization that might otherwise be required or without coming into full compliance with any insurance law, regulation, or bulletin. To receive a waiver, an applicant shall demonstrate to the director's satisfaction that:(1)The application of the law, regulation, or bulletin would inhibit the introduction of an innovative or more efficient insurance product or service that the applicant intends to test during the period for which the proposed waiver is granted;(2)The public policy goals of the law, regulation, or bulletin will be or have been achieved by other means;(3)The waiver will not unreasonably increase risk to consumers or create unreasonable unfair competition in the insurance market; and(4)The waiver is in the public interest. Source: SL 2021, ch 214,  2.
58-48-3. Waiver not to restrict policyholder recovery or restrict director's authority. The authority granted to the director under this chapter may not be construed to allow the director to grant a waiver that would abridge the recovery rights of policyholders and may not be interpreted to limit or otherwise affect the authority of the director to exercise discretion to waive or enforce requirements as permitted under any other requirement of this title, any regulation, or any bulletin. The waiver may not be construed to waive any requirements except those which inhibit the introduction of the innovative insurance product or service as addressed in the innovation waiver document. Source: SL 2021, ch 214,  3.
58-48-4. Limited scope of waiver. The director may not grant a waiver with respect to:(1)Any law, regulation, bulletin, or other provision not subject to the director's jurisdiction;(2)Any requirement as to the minimum amount of paid-in capital or surplus required to be possessed or maintained by any participant as determined by the director;(3)Chapter 58-12 concerning unfair claims practices;(4)Chapters 58-15, 58-16, 58-28, and 58-33A concerning life insurance;(5)Chapters 58-17, 58-18, and 58-18B concerning health insurance;(6)Chapter 58-17B concerning long-term care insurance;(7)Chapter 58-20 concerning workers' compensation insurance;(8)Chapter 58-25 concerning title insurance;(9)Chapter 58-30 concerning sales through licensed insurance producers;(10)Sections 58-33-1 to 58-33-47, inclusive, and  58-33-66 to 58-33-69, inclusive, concerning certain unfair trade practices;(11)Any laws, regulations, or bulletins directly relating to subdivisions (3) to (10), inclusive, of this section; and(12)The application of any taxes or fees except as provided in subdivision 58-48-5(13). Source: SL 2021, ch 214,  4.
58-48-5. Application for waiver--Persons excluded from waiver application. An applicant shall submit an application in the form and manner prescribed by the director that:(1)Identifies the person applying for the waiver;(2)Contains relevant personal and contact information for the applicant, including legal names, addresses, telephone numbers, e-mail addresses, website addresses, and other information required by the director;(3)Demonstrates the applicant is subject to the jurisdiction of the state;(4)Demonstrates the applicant has established a physical or virtual location that is adequately accessible to the division, from which testing will be developed and performed and where all required records, documents, and data will be maintained;(5)Discloses criminal convictions of the applicant and all participating personnel;(6)Demonstrates that the applicant has the necessary personnel, financial and technical expertise, access to capital, and developed plan to test, monitor, and assess the innovative insurance product or service;(7)Describes the innovative insurance product or service to be offered if the waiver is granted, including how the product or service functions, how the innovative insurance product or service is different from other insurance products or services available in the state, and the manner and terms on which it will be offered, including copies of any contracts to be tested;(8)Identifies state laws, regulations, licensing, and other requirements in title 58 that prohibit the introduction, sale, or offering of the innovative insurance product or service that the applicant is seeking to have waived for testing;(9)Explains the potential benefits to consumers of the innovative insurance product or service;(10)Explains the potential risks to consumers posed by the product or service and how the applicant proposes to mitigate such risks, including all proposed consumer disclosures;(11)Explains how participating in the insurance innovation waiver would enable a successful test of the innovative insurance product or service with narratives for proposed beginning operations, ongoing operations, and the proposed process regarding waiver termination, including plans to obtain necessary licensure or authorizations after the waiver is terminated;(12)Explains how the applicant will terminate the waiver and protect consumers if the test fails, including providing evidence of sufficient liability coverage and financial reserves to protect consumers and to protect against insolvency of the applicant; and(13)Includes a nonrefundable application fee of two thousand dollars that may be reduced or eliminated by the director if the applicant holds a license issued by the division.The director may not grant a waiver to an applicant or any other person who has been convicted, entered a plea of nolo contendere, or entered a plea of guilty or nolo contendere held in abeyance, for a crime involving theft, fraud, or dishonesty that bears a substantial relationship to the applicant's or participant's ability to safely or competently administer an innovative insurance product or service. Source: SL 2021, ch 214,  5.
58-48-6. Application review--Additional information required. In addition to  58-48-5, an applicant shall provide any additional information that the director determines is necessary, including proof of sufficient assets, accounts, liability coverage, surety bond coverage or other preparation by the applicant to ensure that consumers are protected, evidence that the applicant will be able to cover ongoing duties when the testing period terminates or terminates early, prior industry ratings, and past performance of the applicant. An applicant's failure to provide any information requested by the director forfeits the application for a waiver. The director may require the applicant to retain independent consultants to determine the accuracy of any information submitted by the applicant at the applicant's expense. Source: SL 2021, ch 214,  6.
58-48-7. Grant or denial of waiver--Duration of waiver--Waiver deemed authority to act. The director shall grant or deny a waiver within ninety days after the director determines the applicant's waiver application to be complete. The director and the applicant may mutually agree to extend the ninety-day period. The director may deny a waiver application at the director's discretion based on the division's analysis of the application. The director's discretionary decision to grant or deny a waiver is not appealable and not subject to chapter 1-26. The director may grant a waiver for a period that may not exceed twenty-four months. A participant receiving a waiver has appropriate authority under the laws of this state to act for the purposes of any provision of federal law requiring state licensure or authorization and is not subject to chapter 58-8 for acts taken in compliance with a waiver. Source: SL 2021, ch 214,  7.
58-48-8. Conditions on innovation waiver. An insurance innovation waiver shall be issued by the director in writing that limits the number of consumers in this state that may purchase or utilize the underlying insurance product or service to no more than twenty thousand consumers and specifies any terms, conditions, and limitations that the director considers appropriate, including:(1)Limits on the amount of premium that may be written in relation to the innovative product or service;(2)Liability coverage requirements and minimum financial reserve requirements that the applicant must meet during the testing of the innovative insurance product or service; and(3)Regular or additional reporting on any aspect of the innovative insurance product or service during the test, including financial results and consumer information.Conditions issued under this section do not restrict a person who holds a license or authorization in another jurisdiction from acting in accordance with that license or authorization in that jurisdiction. Source: SL 2021, ch 214,  8.
58-48-9. Waiver participants--Deposit or bond. A participant may be required to make a deposit of cash or marketable securities in the manner provided under chapter 58-7 and in amounts, conditions, and for such purposes as the director determines necessary for the protection of consumers. The deposit required by this section may be refunded when the waiver has expired or if the director is satisfied that consumer claims have been satisfied, whichever is later. In lieu of a deposit, the director may accept a bond in an amount and with such conditions as the director determines is necessary for the protection of consumers. Source: SL 2021, ch 214,  9.