Title 58, INSURANCE

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).

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 , …

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…

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 …

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 …

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…

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…

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).

"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).

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…

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.

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…

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 …

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…

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…

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…

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…

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…

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…

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).

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 …

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 …

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…

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…

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.

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…

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).

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).

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 reg…

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,…

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; …

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 …

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…

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 (…

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…

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…

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…

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 trans…

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 efficienc…

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…

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…

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…

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…

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…

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…

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.