South Dakota Administrative Code

Rule 20:06:38:01 Definitions. 20:06:38:01. Definitions. Terms used in this chapter mean: (1) Actuarial Standards Board," the board established by the American Academy of Actuaries to develop and promulgate standards of actuarial practice; (2) "Assumed expenses," expenses as calcu…

Rule 20:06:38:02 Applicability and scope. 20:06:38:02. Applicability and scope. This chapter applies to all group and individual life policies and certificates sold on or after the effective date of this chapter except the following: (1) Variable life insurance; (2) Individual an…

Rule 20:06:38:03 Policies to be illustrated. 20:06:38:03. Policies to be illustrated. Each insurer marketing policies to which this chapter is applicable shall notify the director whether a policy form is to be marketed with or without an illustration. For all policy forms being …

Rule 20:06:38:04 Information required in illustration. 20:06:38:04. Information required in illustration. An illustration used in the sale of a life insurance policy must satisfy the applicable requirements of this chapter, be clearly labeled “life insurance illustration,” and co…

Rule 20:06:38:05 Prohibited practices. 20:06:38:05. Prohibited practices. When using an illustration in the sale of a life insurance policy, an insurer or its agents or other authorized representatives may not do any of the following: (1) Represent the policy as anything other th…

Rule 20:06:38:06 Interest rate illustrations. 20:06:38:06. Interest rate illustrations. If an interest rate used to determine the illustrated non-guaranteed elements is shown, it may not be greater than the earned interest rate underlying the disciplined current scale. Source: 23…

Rule 20:06:38:07 Standards for basic illustrations -- Format. 20:06:38:07. Standards for basic illustrations -- Format. A basic illustration must conform with the following requirements: (1) The illustration must be labeled with the date on which it was prepared; (2) Each page, i…

Rule 20:06:38:08 Standards for basic illustrations -- Narrative summary. 20:06:38:08. Standards for basic illustrations -- Narrative summary. A basic illustration must include the following in the narrative summary: (1) A brief description of the policy being illustrated, includi…

Rule 20:06:38:09 Standards for basic illustrations -- Numeric summary. 20:06:38:09. Standards for basic illustrations -- Numeric summary. Following the narrative summary, a basic illustration must include a numeric summary of the death benefits and values and the premium outlay a…

Rule 20:06:38:10 Standards for basic illustrations -- Statements. 20:06:38:10. Standards for basic illustrations -- Statements. Statements substantially similar to the following must be included on the same page as the numeric summary and signed by the applicant, or the policy ow…

Rule 20:06:38:11 Standards for basic illustrations -- Tabular detail. 20:06:38:11. Standards for basic illustrations -- Tabular detail. A basic illustration must include the following tabular detail for at least each policy year from one to ten and for every fifth policy year the…

Rule 20:06:38:12 Standards for supplemental illustrations. 20:06:38:12. Standards for supplemental illustrations. The supplemental illustration must include a notice referring to the basic illustration for guaranteed elements and other important information. A supplemental illust…

Rule 20:06:38:13 Basic illustration -- Use in sale of policy. 20:06:38:13. Basic illustration -- Use in sale of policy. If a basic illustration is used by an insurance agent or other authorized representative of the insurer in the sale of a life insurance policy and the policy is…

Rule 20:06:38:14 Basic illustration -- Not used in sale of policy. 20:06:38:14. Basic illustration -- Not used in sale of policy. If no illustration is used by an insurance agent or other authorized representative in the sale of a life insurance policy or if the policy is applied…

Rule 20:06:38:15 Basic illustration -- Delivery by mail. 20:06:38:15. Basic illustration -- Delivery by mail. If the basic illustration or revised illustration is sent to the applicant or policy owner by mail from the insurer, it must include instructions for the applicant or pol…

Rule 20:06:38:16 Basic illustration -- Retention by insurer. 20:06:38:16. Basic illustration -- Retention by insurer. A copy of the basic illustration and a revised basic illustration, if any, signed as applicable, along with any certification that either no illustration was used…

Rule 20:06:38:17 Annual report -- Requirement. 20:06:38:17. Annual report -- Requirement. If a policy is designated as one for which illustrations will be used, the insurer must provide each policy owner with an annual report on the status of the policy. Source: 23 SDR 228, effec…

Rule 20:06:38:18 Annual report -- Content for universal life policies. 20:06:38:18. Annual report -- Content for universal life policies. The annual report for universal life policies must include the following: (1) The beginning and end date of the current report period; (2) The…

Rule 20:06:38:19 Annual report -- Content for all other policies. 20:06:38:19. Annual report -- Content for all other policies. The annual report for policies other than universal life must include the following: (1) The current death benefit; (2) The annual contract premium; (3)…

Rule 20:06:38:20 Annual report -- Policies without nonforfeiture values. 20:06:38:20. Annual report -- Policies without nonforfeiture values. Insurers writing life insurance policies that do not build nonforfeiture values must provide an annual report on these policies only for t…

Rule 20:06:38:21 Annual report -- Notice if in-force illustration not included. 20:06:38:21. Annual report -- Notice if in-force illustration not included. If the annual report does not include an in-force illustration, it must contain the following notice displayed prominently: …

Rule 20:06:38:22 Annual report -- Notice of change in nonguaranteed elements. 20:06:38:22. Annual report -- Notice of change in nonguaranteed elements. If an adverse change in nonguaranteed elements that could affect the policy has been made by the insurer since the last annual r…

Rule 20:06:38:23 In-force illustration -- Furnished at policy owner’s request. 20:06:38:23. In-force illustration -- Furnished at policy owner’s request. Upon the request of the policy owner, the insurer must furnish an in-force illustration of current and future benefits and val…

Rule 20:06:38:24 Annual certification -- Disciplined current scale and illustrated scales. 20:06:38:24. Annual certification -- Disciplined current scale and illustrated scales. The board of directors of each insurer shall appoint one or more illustration actuaries to certify the…

Rule 20:06:38:25 Illustration actuary requirements. 20:06:38:25. Illustration actuary requirements. The illustration actuary must meet the following requirements: (1) Be a member in good standing of the American Academy of Actuaries; (2) Be familiar with the standard of practice …

Rule 20:06:38:26 Change of illustration actuary. 20:06:38:26. Change of illustration actuary. If an insurer changes the illustration actuary responsible for all or a portion of the company’s policy forms, the insurer must notify the director of that fact promptly and disclose the…

Rule 20:06:38:27 Annual certification -- Currently payable scale. 20:06:38:27. Annual certification -- Currently payable scale. The illustration actuary must disclose in the annual certification whether, since the last certification, a currently payable scale applicable for busin…

Rule 20:06:38:28 Annual certification -- Expenses. 20:06:38:28. Annual certification -- Expenses. The illustration actuary must disclose in the annual certification the method used to allocate overhead expenses for all illustrations and the method of determining assumed expenses …

Rule 20:06:38:29 Annual certification -- Additional certifications. 20:06:38:29. Annual certification -- Additional certifications. The illustration actuary must file a certification with the board and with the director annually for all policy forms for which illustrations are us…

Rule 20:06:38:30 Annual certification -- Inability to certify scale. 20:06:38:30. Annual certification -- Inability to certify scale. If an illustration actuary is unable to certify the scale for any policy form illustration the insurer intends to use, the actuary must notify the…

Rule 20:06:38:31 Annual certification -- Officer of the insurer. 20:06:38:31. Annual certification -- Officer of the insurer. A responsible officer of the insurer, other than the illustration actuary, must certify annually that the illustration formats meet the requirements of th…

Rule 20:06:38:32 Annual certification -- Date due. 20:06:38:32. Annual certification -- Date due. The annual certification must be provided to the director each year by a date determined by the insurer. Source: 23 SDR 228, effective July 1, 1997. General Authority: SDCL 58-33-5.1…

Rule 20:06:38:33 Disciplined current scale. 20:06:38:33. Disciplined current scale. The disciplined current scale is a scale of nonguaranteed elements constituting a limit on illustrations currently being illustrated by an insurer that is reasonably based on actual recent histori…

Rule 20:06:38:34 Expenses. 20:06:38:34. Expenses. Each year, the insurer shall choose the method used to allocate overhead expenses for all illustrations and the method of determining assumed expenses for all policy forms from the following: (1) Fully allocated expenses; (2) Marg…

Rule 20:06:38:35 Generally recognized expense table -- Approval. 20:06:38:35. Generally recognized expense table -- Approval. The director may approve any generally recognized expense table based on fully allocated expenses representing a significant portion of insurance companie…

Rule 20:06:39:01 Dual eligibility. 20:06:39:01. Dual eligibility. An individual who is otherwise eligible may not be denied coverage under SDCL 58-17-85 for the reason that the individual is also eligible for a conversion policy or other individual coverage. Individuals eligible …

Rule 20:06:39:02 Creditable coverage and preexisting waiting periods for newborn and adopted children. 20:06:39:02. Creditable coverage and preexisting waiting periods for newborn and adopted children. A child who was covered as a dependent within 31 days after the date of birth …

Rule 20:06:39:03 Permissible rating factors. 20:06:39:03. Permissible rating factors. A health benefit plan may use health status and weight in determining the rate charged for an individual when issuing a new policy or certificate. The application of rating factors based on heal…

Rule 20:06:39:04 Repealed. 20:06:39:04. Certificates required upon loss of coverage. Repealed. Source: 24 SDR 35, effective September 29, 1997; 39 SDR 203, adopted June 10, 2013, repealed January 1, 2014. Rule 20:06:39:04.01 Certificates required upon loss of coverage. 20:06:39:0…

Rule 20:06:39:04.01 Certificates required upon loss of coverage. 20:06:39:04.01. Certificates required upon loss of coverage. A health insurance issuer must provide a certificate of creditable coverage or simply certify that the individual has creditable coverage to any individua…

Rule 20:06:39:05 Standards for determinations on length of preexisting waiting periods. 20:06:39:05. Standards for determinations on length of preexisting waiting periods. A carrier must determine whether an individual is eligible for coverage pursuant to SDCL 58-17-85. In making…

Rule 20:06:39:06 Repealed. 20:06:39:06. College plans -- Bona fide association plans. Repealed. Source: 24 SDR 35, effective September 29, 1997; 39 SDR 203, adopted June 10, 2013, repealed January 1, 2014. Rule 20:06:39:06.01 Student health plans -- Bona fide association plans. 2…

Rule 20:06:39:06.01 Student health plans -- Bona fide association plans. 20:06:39:06.01. Student health plans -- Bona fide association plans (effective January 1, 2014). A student health plan is an association plan that provides coverage to students of a college or university. A …

Rule 20:06:39:07 Requirements for breaks in coverage when applying for a new policy. 20:06:39:07. Requirements for breaks in coverage when applying for a new policy. The maximum break in coverage of 63 days does not apply to the period of time after an individual applies for an i…

Rule 20:06:39:08 Repealed. 20:06:39:08. Active marketing required. Repealed. Source: 24 SDR 86, effective December 31, 1997; 37 SDR 63, effective September 23, 2010; 37 SDR 111, effective December 7, 2010; 39 SDR 203, adopted June 10, 2013, repealed January 1, 2014. Rule 20:06:39…

Rule 20:06:39:08.01 Active marketing required. 20:06:39:08.01. Active marketing required. No health insurance issuer may employ marketing practices or benefit designs that will have the effect of discouraging applicants from exercising their open enrollment rights under § 20:06:3…

Rule 20:06:39:09 Prohibited practices. 20:06:39:09. Prohibited practices. No carrier or agent may, directly or indirectly, engage in the following activities: (1) Encouraging or directing eligible individuals to refrain from filing an application for coverage with the carrier bec…