Title 58 — INSURANCE

For purposes of investigating and prosecuting insurance fraud, the insurance fraud prevention unit is subject to the provisions of this chapter and the procedures set forth in Title 15 or Title 23A if applicable and if not in conflict with this chapter. Source: SL 1999, ch 241 , …

All investigative records and files of the insurance fraud prevention unit are confidential. The investigative records of the insurance fraud prevention unit may not be released except pursuant to a court order. An investigator is not subject to subpoena in civil actions concerni…

Any person acting in good faith is immune from civil liability for filing a report with or for furnishing any information relating to suspected, anticipated, or completed fraudulent insurance acts to: (1) The Department of Labor and Regulation and the director of insurance; (2) A…

The Division of Insurance shall assess each insurer holding a certificate of authority to transact the business of insurance in this state a fee of two hundred fifty dollars to be remitted and payable to the Division of Insurance to be deposited in a separate account, entitled th…

The provisions of this chapter do not: (1) Preempt the authority or relieve the duty of any other law enforcement agency to investigate, examine, and prosecute suspected violations of law; (2) Prevent or prohibit a person from voluntarily disclosing any information concerning ins…

The Division of Insurance shall annually report to the Legislature concerning the activities of the insurance fraud prevention unit including the number, type, and outcome of cases investigated, the number and type of cases that have been pending without final action for more tha…

Each authorized insurer shall, every three years after July 1, 1999, reevaluate its rates based upon the impact that fraud prevention has had upon its rates, considering the impact of §§ 58-4A-1 to 58-4A-17 , inclusive, and the impact of any fraud prevention units of the insurer …

For purposes of this chapter, a person commits a fraudulent insurance act if the person: (1) Knowingly and with intent to defraud or deceive issues or possesses fake or counterfeit insurance policies, certificates of insurance, insurance identification cards, or insurance binders…

The insurance fraud prevention unit through its investigator or attorney may do the following: (1) The investigator or attorney may initiate and conduct independent investigations if the unit has cause to believe that a fraudulent insurance act has been or may be committed; (2) T…

In order to investigate and prosecute activities involving fraudulent insurance acts, the attorney general shall employ a sufficient staff to be known as the insurance fraud prevention unit which shall include a minimum of one clerical employee, one investigator, and one attorney…

The insurance fraud prevention unit may prosecute fraudulent insurance acts through criminal or civil proceedings. The attorney general may appoint the insurance fraud prevention unit attorney as an assistant attorney general for purposes of prosecuting cases of fraudulent insura…

The insurance fraud prevention unit investigators may investigate violations of this chapter. The unit investigators shall be qualified pursuant to the requirements of §§ 23-3-41 , 23-3-42 , and 23-3-44 and have all the powers and authority of law enforcement officers while perfo…

If the insurance fraud prevention unit or its designees initiate civil action against any person and that person is found by a court of competent jurisdiction to have committed a fraudulent insurance act as set forth in § 58-4A-2 , that person is subject to a civil penalty not to…

Any costs associated with the administration and operation of the insurance fraud prevention unit, including salaries and the costs set forth in §§ 58-4A-5 and 58-4A-6 , shall be paid from the insurance fraud prevention unit fund. All disbursements from the insurance fraud preven…

Costs and expenses incurred in any investigation or other action arising out of a violation under this chapter may be sought in any judgment or court decree. Any recovered costs, except civil or criminal penalties, shall be deposited by the unit or its designees in the insurance …

This chapter shall apply only to domestic stock insurers and domestic mutual insurers transacting or proposing to transact insurance on the cash premium or legal reserve plan, except that §§ 58-5-27 , 58-5-28 , 58-5-37 , and 58-5-38 shall also apply to foreign and alien insurers.…

If the attorney general does not approve such articles, he shall return the same to the director with a written statement of his reasons for disapproval. The director shall return all sets of the articles with such written statement to the incorporators. Source: SL 1966, ch 111 ,…

No domestic insurer or insurance producer thereof may knowingly solicit insurance business in any reciprocating state in which it is not then licensed as an authorized insurer. Source: SL 1966, ch 111 , ch 16, § 28 (1); SL 2001, ch 286 , § 70.

Section 58-5-100 shall not prohibit advertising through publication and radio, television, and other broadcasts originating outside such reciprocating state, provided such advertising is not specifically directed to residents of such reciprocating state. Source: SL 1966, ch 111 ,…

Section 58-5-100 shall not prohibit insurance covering persons or risks located in a reciprocating state under contracts solicited and issued in states in which the insurer is then licensed, nor shall it prohibit insurance policies issued by the insurer as an unauthorized insurer…

The director of the Division of Insurance shall, after a hearing, suspend or revoke the certificate of authority of a domestic insurer found by him to have violated §

If provided in its articles of incorporation, a domestic insurer may issue and classify policies with or without participation in profits, savings, or unabsorbed portions of premiums and determine the right to participate and the extent of participation of any class or classes of…

Any domestic insurer which, prior to July 1, 1966, had been issuing all or part of its policies on a participating basis without authorization in its articles of incorporation, may continue to issue such policies. Source: SL 1966, ch 111 , ch 16, § 32 (1).

After the third policy year, no dividend otherwise earned shall be made contingent upon the payment of a renewal premium on any participating policy. Source: SL 1966, ch 111 , ch 16, § 32 (2).

Wherever, in any statutory provision, there is use of the word "member" as applying to a mutual and stock insurance company, the same shall be construed as meaning a participating policyholder of such company and shall have no connotation of membership in such company as when use…

A domestic stock or mutual insurer may borrow money to defray the expenses of its organization, provide it with surplus funds, or for any purpose of its business, upon a written agreement that such money shall be repaid only out of the insurer's surplus in excess of that stipulat…

Any loan pursuant to § 58-5-108 shall be subject to the approval of the director of the Division of Insurance. The insurer shall, in advance of the loan, file with the director a statement of the purpose of the loan and a copy of the proposed loan agreement. The loan and agreemen…

Amendments to the articles of incorporation shall be submitted and filed in the same manner as articles of incorporation in §§ 58-5-8 to 58-5-10 , inclusive, and shall be in compliance with the provisions of this title, the bylaws of such corporation and the laws of this state. S…

Money borrowed pursuant to § 58-5-108 , together with the interest thereon if so stipulated in the agreement, shall not form a part of the insurer's legal liabilities except as to its surplus in excess of the amount thereof stipulated in the agreement, or be the basis of any seto…

Any loan pursuant to § 58-5-108 or substantial portion thereof shall be repaid by the insurer, upon the director's prior approval, when no longer reasonably necessary for the purpose originally intended. Source: SL 1966, ch 111 , ch 16, § 34 (4).

Sections 58-5-108 to 58-5-111 , inclusive, shall not apply to loans obtained by an insurer in the ordinary course of business from banks and other financial institutions, nor to loans secured by pledge or mortgage of assets. Source: SL 1966, ch 111 , ch 16, § 34 (5).

The director may revoke or suspend the certificate of authority of an insurer which has declared or paid a dividend contrary to the general corporation laws of this state. Source: SL 1966, ch 111 , ch 16, § 33.

The deficiency may be cured by cash or assets eligible under chapter 58-27 ; or by amendment of the insurer's certificate of authority to cover only such kind or kinds of insurance thereafter for which such insurer has sufficient basic paid - in capital or minimum basic surplus u…

A stock insurer, upon receiving the director's notice of deficiency as set forth in § 58-5-114 , by resolution of its board of directors and subject to any limitations upon assessment contained in its articles of incorporation, may assess its stockholders for amounts necessary to…

A mutual insurer, upon receiving the director's notice of deficiency as set forth in § 58-5-114 , shall levy such an assessment upon members as is provided for in §§ 58-5-32 to 58-5-36 , inclusive. Source: SL 1966, ch 111 , ch 16, § 36 (2).

If the deficiency is not cured as required by § 58-5-114 , the insurer shall be deemed insolvent and the director shall institute delinquency proceedings as provided in this title. Source: SL 1966, ch 111 , ch 16, § 35 (3).

Before soliciting any applications for insurance as permitted under § 58-5-21 , the incorporators of the proposed insurer shall file with the director a continuing corporate surety bond in the penal sum of twenty - five thousand dollars, to be approved by the director, in favor o…

A domestic stock insurer may reinsure all or substantially all of its insurance in force, or of a major class thereof, with another insurer by an agreement of bulk reinsurance; provided however no such agreement shall become effective unless filed with the director of the Divisio…

The director shall approve such agreement within a reasonable time after such filing unless he finds that it is inequitable to the stockholders or would substantially reduce the protection or service to the policyholders of such domestic insurer. If the director does not approve,…

No director, officer, insurance producer, or employee of any insurer party to such reinsurance, nor any other person, may receive any fee, commission, or other valuable consideration whatsoever for in any manner aiding, promoting, or assisting therein except as set forth in the r…

A domestic mutual insurer may reinsure all or substantially all of its insurance in force, or a major class thereof, with another insurer, by an agreement of bulk reinsurance, provided however no such agreement shall become effective unless filed with the director of the Division…

The director may require that plan and agreement for reinsurance be approved by a vote of not less than two - thirds of each domestic mutual insurer's members voting thereon at meetings of members called for the purpose, pursuant to such reasonable notice and procedure as the dir…

If for reinsurance in a stock insurer of all or substantially all of the insurance in force of a mutual insurer, the agreement must provide for payment in cash to each member of the insurer entitled thereto of his equity, if any, in the business reinsured as determined under a fa…

The director of the Division of Insurance shall approve any agreement pursuant to § 58-5-123 within a reasonable time after filing if he finds it to be fair and equitable to each domestic insurer involved, and that such reinsurance would not substantially reduce the protection or…

No director, officer, insurance producer, or employee of any insurer party to such reinsurance, nor any other person, may receive any fee, commission, or other valuable consideration whatsoever for in any manner aiding, promoting, or assisting therein except as set forth in the r…

A domestic stock insurer may merge or consolidate with other domestic or foreign insurers authorized to transact insurance in this state, by complying with the applicable statutes of this state that govern the merger or consolidation of corporations formed for profit but subject …

Any plan by which a stock insurer proposes to acquire a substantial or controlling stock interest in another stock insurer through an exchange of stock is deemed to be a plan of merger which requires the approval of the director of the Division of Insurance in accordance with pro…

In lieu of such bond, such incorporators may deposit with the director twenty - five thousand dollars or United States government bonds, negotiable and payable to the bearer, with a market value at all times of not less than twenty - five thousand dollars, to be held in trust upo…

No director, officer, insurance producer, or employee of any insurer party to such merger or consolidation may receive any fee, commission, compensation, or other valuable consideration whatsoever for aiding, promoting, or assisting therein except as set forth in such plan and ag…

No such merger or consolidation shall go into effect until the plan and agreement therefor is filed with the director and approved by him after a hearing thereon. Such plan and agreement shall be approved by the director within a reasonable time unless he finds such plan or agree…