Title 58 — INSURANCE
79 chapters · 3,532 sections in this title.
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
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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 …
SDCL § 58-32-1 Purposes of chapter
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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…
SDCL § 58-32-10.1 Bond of resident surplus line broker--Amount--Conditions--Termination
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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…
SDCL § 58-32-11 Suspension or revocation of license of surplus line broker--Grounds
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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 t…
SDCL § 58-32-12 Procedure for suspension or revocation of license
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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).
SDCL § 58-32-13 Suspension or revocation of surplus line license affects all other licenses
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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).
SDCL § 58-32-14 Revival of suspended or revoked broker's surplus line license--Payment of fine and delinquent taxes--Waiting period
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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 , …
SDCL § 58-32-15 Acceptance of business from licensed insurance producer
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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 2…
SDCL § 58-32-16 Impossibility of procuring coverage from authorized insurers--Procurement from unauthorized insurers
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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 …
SDCL § 58-32-16.1 Certain unauthorized insurers to submit annual report
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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 …
SDCL § 58-32-17 Conditions for export--Amount not procurable from authorized insurers
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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…
SDCL § 58-32-18 Export of insurance where coverage available from authorized insurer prohibited--Exception
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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…
SDCL § 58-32-19 Procurement of exported insurance through licensed surplus line broker
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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).
SDCL § 58-32-2 Broker defined
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"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).
SDCL § 58-32-20 Affidavit of broker as to exported insurance
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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 §§ 58-3…
SDCL § 58-32-21 Placement in authorized insurer--Violation as misdemeanor
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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.
SDCL § 58-32-22 Requirements for placing surplus lines insurance
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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 foll…
SDCL § 58-32-23 Financial condition of surplus line insurer--Director not required to determine
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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 …
SDCL § 58-32-24 Ineligibility of surplus line insurer because of financial condition--Order of director--Grounds
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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 ine…
SDCL § 58-32-25 Financial condition of surplus line insurer--Ascertainment by broker--Violation as misdemeanor
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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 sh…
SDCL § 58-32-26 Violation as misdemeanor--Revocation of licenses after hearing--Waiting period for new license
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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 und…
SDCL § 58-32-27 Evidence of insurance--Certificate, execution, content
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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…
SDCL § 58-32-28 Authority of broker to make certificate as to insurance granted by unauthorized insurer
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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 s…
SDCL § 58-32-29 Change in evidence of insurance--Substitute certificate by broker
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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 cover…
SDCL § 58-32-3 Export defined
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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).
SDCL § 58-32-3.1 Home state defined
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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 …
SDCL § 58-32-30 False certificate by broker--Failure to notify insured as to material change--Misdemeanor
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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 …
SDCL § 58-32-31 Replacement of broker's certificate when policy issued
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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 it…
SDCL § 58-32-32 Endorsement of contract--Violation as misdemeanor
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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 CO…
SDCL § 58-32-33 Surplus line insurance valid
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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.
SDCL § 58-32-34 Liability of insurer as to losses and unearned premiums
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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 pre…
SDCL § 58-32-35 Assumption of surplus line direct risk--Extent of liability
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Each unauthorized insurer assuming a surplus line direct risk shall be deemed thereby to have subjected itself to the terms of §
SDCL § 58-32-36 Venue of action against unauthorized insurer
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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).
SDCL § 58-32-37 SDCL 58-32-37
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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 §
SDCL § 58-32-38 Director appointed process agent--Policy provision--Mailing of process to defendant
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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 §
SDCL § 58-32-39 Record by broker of each surplus line coverage--Violation as misdemeanor
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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; …
SDCL § 58-32-4 Chapter not applicable to life and health insurance, annuities, and reinsurance--Exceptions
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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 …
SDCL § 58-32-40 Record open to examination by director--Violation as misdemeanor
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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 , § 1…
SDCL § 58-32-41 Annual statement of broker--Filing with director--Violation as misdemeanor
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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 (…
SDCL § 58-32-42 Annual statement of broker--Form and contents
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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 informatio…
SDCL § 58-32-42.1 Uniform report may be prescribed in lieu of annual statement or affidavit as to exported insurance
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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 satis…
SDCL § 58-32-43 Records of interstate commerce coverage--Report to director--Violation as misdemeanor
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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 pre…
SDCL § 58-32-44 SDCL 58-32-44
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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 proport…
SDCL § 58-32-45 Premium tax when only part of risk in state--Multi-state agreement--Apportionment
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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 §
SDCL § 58-32-46 Fine for failure to remit tax or to file annual statement or uniform report--Collection
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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 an…
SDCL § 58-32-47 Report of independently procured coverages--Violation as misdemeanor
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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 residen…
SDCL § 58-32-48 Negotiations, application, or premium payment bringing independently procured coverages within jurisdiction
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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 t…
SDCL § 58-32-49 Production of records of insured for examination--Refusal to obey order of director as misdemeanor
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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 t…
SDCL § 58-32-5 Exemption of interstate commerce
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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…
SDCL § 58-32-50 Tax on independently procured coverages--Payment to director, time
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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 premiu…