Source: https://sdlegislature.gov/statutes/Codified_laws/DisplayStatute.aspx?Statute=58-29c-46&Type=Statute
Timestamp: 2020-02-28 09:31:16
Document Index: 213632879

Matched Legal Cases: ['§ 1002', '§ 58', '§ 58', '§ 3', '§ 1', '§ 1', '§ 1']

SDLRC - Codified Law 58-29c-46
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:
(ii) The states in which the persons reside have associations similar to the association created by this chapter;
(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:
(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 direct, nongroup life, health, or annuity policies or contracts, 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) This chapter may not provide coverage for:
(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
(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));
(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 insurer to the contract owner or policy owner, including without limitation:
(ii) Claims based on side letters, riders, or other documents that were issued by the insurer without meeting applicable policy form filing or approval requirements;
(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, then 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 will 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 any regulations issued pursuant thereto.
(2)(a) With respect to one life, regardless of the number of policies or contracts:
(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 basic hospital, medical and surgical insurance, or major medical insurance as defined in the National Association of Insurance Commissioners Health Insurance Shoppers' Guide, as of January 1, 2003; 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 basic hospital, medical and surgical insurance, and major medical insurance under subsection 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 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.
D. In performing its obligations to provide coverage under § 58-29C-51, the association may not be required to guarantee, assume, reinsure, or perform, or cause to be guaranteed, assumed, reinsured, 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.
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