reglab/statecodes huggingface dataset:
2023 South Dakota Codified Laws › Title 58 - Insurance › Chapter 43 - Independent Audit Of Insurers › Section 58-43-16.5 - Nonindependence of audit committee member for reasons outside the member's control.

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.
2023 South Dakota Codified Laws › Title 58 - Insurance › Chapter 43 - Independent Audit Of Insurers › Section 58-43-16.6 - Election of controlling person to designate audit committee.

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 The election shall remain in effect until rescinded.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.
2023 South Dakota Codified Laws › Title 58 - Insurance › Chapter 43 - Independent Audit Of Insurers › Section 58-43-16.7 - Report of accountant to audit committee.

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.
2023 South Dakota Codified Laws › Title 58 - Insurance › Chapter 43 - Independent Audit Of Insurers › Section 58-43-16.8 - Report of accountant where insurer is member of holding company system.

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.
2023 South Dakota Codified Laws › Title 58 - Insurance › Chapter 43 - Independent Audit Of Insurers › Section 58-43-16.9 - Criteria for proportion of audit committee members.

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--$300,000,000
Over $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 Note
independent. 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.
2023 South Dakota Codified Laws › Title 58 - Insurance › Chapter 43 - Independent Audit Of Insurers › Section 58-43-16.10 - Hardship waiver of requirements of §§ 58-43-16.2 to 58-43-16.9, inclusive.

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.
2023 South Dakota Codified Laws › Title 58 - Insurance › Chapter 43 - Independent Audit Of Insurers › Section 58-43-16.11 - Materially false or misleading statements or omissions to accountant prohibited.

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.
2023 South Dakota Codified Laws › Title 58 - Insurance › Chapter 43 - Independent Audit Of Insurers › Section 58-43-16.12 - Coercion, manipulation, or fraudulent influence of accountant prohibited.

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.
2023 South Dakota Codified Laws › Title 58 - Insurance › Chapter 43 - Independent Audit Of Insurers › Section 58-43-16.13 - Management's Report of Internal Control over Financial Reporting required of certain insurers.

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.
2023 South Dakota Codified Laws › Title 58 - Insurance › Chapter 43 - Independent Audit Of Insurers › Section 58-43-16.14 - Circumstances under which director may require Management's Report of Internal Control over Financial Reporting.

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.
2023 South Dakota Codified Laws › Title 58 - Insurance › Chapter 43 - Independent Audit Of Insurers › Section 58-43-16.15 - Certain insurers required to file Section 404 report and addendum.

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.
2023 South Dakota Codified Laws › Title 58 - Insurance › Chapter 43 - Independent Audit Of Insurers › Section 58-43-16.16 - Contents of Management's Report of Internal Control over Financial Reporting.

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.
2023 South Dakota Codified Laws › Title 58 - Insurance › Chapter 43 - Independent Audit Of Insurers › Section 58-43-16.17 - Documentation of assertions made in Management's Report of Internal Control over Financial Reporting.

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.
2023 South Dakota Codified Laws › Title 58 - Insurance › Chapter 43 - Independent Audit Of Insurers › Section 58-43-16.18 - Discretion of management as to internal control framework and documentation.

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.
2023 South Dakota Codified Laws › Title 58 - Insurance › Chapter 43 - Independent Audit Of Insurers › Section 58-43-16.19 - Confidentiality of Management's Report of Internal Control over Financial Reporting and documentation.

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.
2023 South Dakota Codified Laws › Title 58 - Insurance › Chapter 43 - Independent Audit Of Insurers › Section 58-43-16.20 - Compliance of insurers retaining independent accountant on July 1, 2009.

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.
2023 South Dakota Codified Laws › Title 58 - Insurance › Chapter 43 - Independent Audit Of Insurers › Section 58-43-16.21 - Compliance schedule for insurers not retaining independent accountant on July 1, 2009.

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.
2023 South Dakota Codified Laws › Title 58 - Insurance › Chapter 43 - Independent Audit Of Insurers › Section 58-43-16.22 - Compliance of foreign insurers.

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.
2023 South Dakota Codified Laws › Title 58 - Insurance › Chapter 43 - Independent Audit Of Insurers › Section 58-43-16.23 - Applicability of §§ 58-43-10 and 58-43-16.2 to 58-43-16.10 .

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.
2023 South Dakota Codified Laws › Title 58 - Insurance › Chapter 43 - Independent Audit Of Insurers › Section 58-43-16.24 - Applicability of §§ 58-43-16.13 to 58-43-16.19.

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.
2023 South Dakota Codified Laws › Title 58 - Insurance › Chapter 43 - Independent Audit Of Insurers › Section 58-43-16.25 - Internal audit function requirements.

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.
2023 South Dakota Codified Laws › Title 58 - Insurance › Chapter 43 - Independent Audit Of Insurers › Section 58-43-16.26 - Internal audit function to be organizationally independent.

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.
2023 South Dakota Codified Laws › Title 58 - Insurance › Chapter 43 - Independent Audit Of Insurers › Section 58-43-16.27 - Report of head of internal audit function to audit committee.

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.
2023 South Dakota Codified Laws › Title 58 - Insurance › Chapter 43 - Independent Audit Of Insurers › Section 58-43-16.28 - Member of insurance holding company system or group of insurers.

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.
2023 South Dakota Codified Laws › Title 58 - Insurance › Chapter 43 - Independent Audit Of Insurers › Section 58-43-16.29 - Exemption from internal audit function requirements.

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.
2023 South Dakota Codified Laws › Title 58 - Insurance › Chapter 43 - Independent Audit Of Insurers › Section 58-43-17 - Letter from accountant stating accountant's independent status, background, compliance with chapter and licensing.

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.
2023 South Dakota Codified Laws › Title 58 - Insurance › Chapter 43 - Independent Audit Of Insurers › Section 58-43-18 - Workpapers.

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.
2023 South Dakota Codified Laws › Title 58 - Insurance › Chapter 43 - Independent Audit Of Insurers › Section 58-43-19 - Availability of workpapers and communications related to audit between insurer and accountant--Confidentiality of documents.

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.
2023 South Dakota Codified Laws › Title 58 - Insurance › Chapter 43 - Independent Audit Of Insurers › Section 58-43-20 - Hardship exemption--Hearing.

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.
2023 South Dakota Codified Laws › Title 58 - Insurance › Chapter 43 - Independent Audit Of Insurers › Section 58-43-21 - Compliance with chapter for year ending December 31, 1993--Foreign insurer for 1994.

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.
2023 South Dakota Codified Laws › Title 58 - Insurance › Chapter 43 - Independent Audit Of Insurers › Section 58-43-22 - Application to Canadian and British insurers.

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.
2023 South Dakota Codified Laws › Title 58 - Insurance › Chapter 43 - Independent Audit Of Insurers › Section 58-43-23 - Fine, suspension, or revocation of license for violation.

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.
2023 South Dakota Codified Laws › Title 58 - Insurance › Chapter 43 - Independent Audit Of Insurers › Section 58-43-24 - Promulgation of rules by director.

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.
2023 South Dakota Codified Laws › Title 58 - Insurance › Chapter 43 - Independent Audit Of Insurers › Section 58-43-26 - Dispute resolution by mediation or arbitration.

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.
2023 South Dakota Codified Laws › Title 58 - Insurance › Chapter 44 - Broker Controlled Property And Casualty Insurance › Section 58-44-1 - Definition of terms.

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.
2023 South Dakota Codified Laws › Title 58 - Insurance › Chapter 44 - Broker Controlled Property And Casualty Insurance › Section 58-44-2 - Application of chapter to licensed insurers--Application of chapter 58-5A.

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.
2023 South Dakota Codified Laws › Title 58 - Insurance › Chapter 44 - Broker Controlled Property And Casualty Insurance › Section 58-44-3 - Application of chapter based on gross written premium on business placed with controlled insurer.

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.
2023 South Dakota Codified Laws › Title 58 - Insurance › Chapter 44 - Broker Controlled Property And Casualty Insurance › Section 58-44-4 - Chapter not applicable under certain circumstances.

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.
2023 South Dakota Codified Laws › Title 58 - Insurance › Chapter 44 - Broker Controlled Property And Casualty Insurance › Section 58-44-6 - Audit committee of controlled insurer--Annual meeting.

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.
2023 South Dakota Codified Laws › Title 58 - Insurance › Chapter 44 - Broker Controlled Property And Casualty Insurance › Section 58-44-7 - Annual report of loss ratios and loss reserves.

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.
2023 South Dakota Codified Laws › Title 58 - Insurance › Chapter 44 - Broker Controlled Property And Casualty Insurance › Section 58-44-8 - Notice from controlling broker to prospective insured--Subbroker.

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.
2023 South Dakota Codified Laws › Title 58 - Insurance › Chapter 44 - Broker Controlled Property And Casualty Insurance › Section 58-44-9 - Consequences of noncompliance with chapter--Civil action by director.

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.
2023 South Dakota Codified Laws › Title 58 - Insurance › Chapter 44 - Broker Controlled Property And Casualty Insurance › Section 58-44-10 - Civil action in behalf of insurer for violation while under order for liquidation or rehabilitation.

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.
2023 South Dakota Codified Laws › Title 58 - Insurance › Chapter 44 - Broker Controlled Property And Casualty Insurance › Section 58-44-11 - Rights of director to impose penalties.

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.
2023 South Dakota Codified Laws › Title 58 - Insurance › Chapter 44 - Broker Controlled Property And Casualty Insurance › Section 58-44-12 - Rights of third parties.

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.
2023 South Dakota Codified Laws › Title 58 - Insurance › Chapter 44 - Broker Controlled Property And Casualty Insurance › Section 58-44-13 - Time limit for compliance.

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.
2023 South Dakota Codified Laws › Title 58 - Insurance › Chapter 44 - Broker Controlled Property And Casualty Insurance › Section 58-44-14 - Disapproval of contract between controlling broker and controlled insurer.

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.
2023 South Dakota Codified Laws › Title 58 - Insurance › Chapter 44 - Broker Controlled Property And Casualty Insurance › Section 58-44-15 - Promulgation of rules.

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.
2023 South Dakota Codified Laws › Title 58 - Insurance › Chapter 44 - Broker Controlled Property And Casualty Insurance › Section 58-44-16 - Exception to application of chapter.

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.
2023 South Dakota Codified Laws › Title 58 - Insurance › Chapter 46 - Captive Insurance Companies › Section 58-46-3 - Requirements for doing business.

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.
2023 South Dakota Codified Laws › Title 58 - Insurance › Chapter 46 - Captive Insurance Companies › Section 58-46-3.1 - Group, sponsored, or special purpose captive insurance company limit of exposure to loss.

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.
2023 South Dakota Codified Laws › Title 58 - Insurance › Chapter 46 - Captive Insurance Companies › Section 58-46-4 - Filing requirements.

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.
2023 South Dakota Codified Laws › Title 58 - Insurance › Chapter 46 - Captive Insurance Companies › Section 58-46-5 - Additional filing requirements.

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.
2023 South Dakota Codified Laws › Title 58 - Insurance › Chapter 46 - Captive Insurance Companies › Section 58-46-6 - Examination, investigation, and processing of application_Fees.

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.
2023 South Dakota Codified Laws › Title 58 - Insurance › Chapter 46 - Captive Insurance Companies › Section 58-46-7 - Issuance of certificate of authority.

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.