Title 58, INSURANCE

Any risk retention group which violates any provision of this chapter is subject to fines and penalties applicable to licensed insurers generally, including revocation of its license or the right to do business in this state. Source: SL 1987, ch 372 , § 21.

Any person acting, or offering to act, as an insurance producer for a risk retention group or purchasing group, which solicits members, sells insurance coverage, purchases coverage for its members located within this state, or otherwise does business in this state shall, before c…

Any order issued by any district court of the United States enjoining a risk retention group from soliciting or selling insurance, or operating in any state or in all states or in any territory or possession of the United States upon a finding that such a group is in a hazardous …

The director may promulgate, pursuant to chapter 1-26 , such rules relating to risk retention groups as may be necessary or desirable to carry out the provisions of this chapter. Source: SL 1987, ch 372 , § 24.

Before offering insurance in this state, a risk retention group not chartered in this state shall submit to the director: (1) A statement identifying the states in which the risk retention group is chartered and licensed as a liability insurance company, date of chartering, its p…

The board of directors of the risk retention group shall have a majority of independent directors. If the risk retention group is a reciprocal, then the attorney-in-fact shall adhere to the same standards regarding independence of operation and governance as imposed on the risk r…

The board of directors shall adopt and disclose a code of business conduct and ethics for directors, officers, and employees. Each director, officer, and employee shall promptly disclose to the board of directors any waivers of the code. The code of business conduct and ethics sh…

If the manager, president, or chief executive officer of the risk retention group becomes aware of any material noncompliance with any standards described in §§ 58-6A-3.1 to 58-6A-3.11 , inclusive, the manager, president, or officer shall promptly notify the domestic regulator in…

Any retention group licensed before July 1, 2016, shall be in compliance with §§ 58-6A-1 to 58-6A-3.11 , inclusive, by July 1, 2017. Any risk retention group licensed after June 30, 2016, shall be in compliance with §§ 58-6A-1 to 58-6A-3.11 , inclusive, at licensure. Source: SL 2…

A material relationship includes: (1) The receipt in any one twelve-month period of compensation or payment of any other item of value greater than or equal to five percent of the risk retention group's gross written premium for the twelve-month period or two percent of the risk …

The term of any material service provider contract with the risk retention group may not exceed five years. Any material service provider contract, or its renewal, requires the approval of the majority of the risk retention group's independent directors. The risk retention group'…

No service provider contract meeting the criteria of material relationship contained in § 58-6A-3.2 may be entered into unless the risk retention group has notified the director in writing of the risk retention group's intention to enter into the contract at least thirty days bef…

The risk retention group's board of directors shall adopt a written policy in the plan of operation as approved by the board that requires the board to: (1) Assure that all owners and insureds of the risk retention group receive evidence of ownership interest; (2) Develop a set o…

The risk retention group shall have an audit committee composed of at least three independent board members as defined in §§ 58-6A-3.1 and 58-6A-3.2 . A nonindependent board member may participate in the activities of the audit committee, if invited by the committee, but cannot b…

The audit committee of the risk retention group shall have a written charter that defines the committee's purpose, which, at a minimum, shall: (1) Assist board oversight of the integrity of financial statements, the compliance with legal and regulatory requirements, and the quali…

The domestic regulator may waive the requirement to establish an audit committee composed of independent board members if the risk retention group is able to demonstrate to the domestic regulator that it is impracticable to do so and the risk retention group's board of directors …

The board of directors shall adopt and disclose governance standards and make the information available electronically through the risk retention group's website or by other means. The risk retention group shall provide the governance standards to members or insureds on request. …

Any risk retention group doing business in this state shall submit to the director: (1) A copy of the group's financial statement submitted to its state of domicile, which shall be certified by an independent public accountant and contain a statement of opinion on loss and loss a…

All premiums paid for coverages within this state to risk retention groups are subject to taxation at the same rate and subject to the same interest, fines, and penalties for nonpayment as that applicable to foreign admitted insurers. To the extent insurance producers are utilize…

The premium tax imposed by chapter 10-44 and taxes on premiums paid for coverage of risks resident or located in this state by a purchasing group or any member of a purchasing group shall be imposed at the same rate and subject to the same interest, fines, and penalties as that a…

Any risk retention group, its insurance producers, and representatives shall comply with the Unfair Trade Practices Act of this state, §§ 58-33-66 to 58-33-69 , inclusive. Source: SL 1987, ch 372 , § 6; SL 2001, ch 286 , § 90.

Any risk retention group shall comply with the laws of this state, chapter 58-33 , regarding deceptive, false, or fraudulent acts or practices. However, if the director seeks an injunction regarding such conduct, the injunction shall be obtained from a court of competent jurisdic…

Any risk retention group shall submit to an examination by the director to determine its financial condition if the director of the jurisdiction in which the group is chartered has not initiated an examination or does not initiate an examination within sixty days after a request …

Any policy issued by any person, firm, association, or corporation licensed pursuant to the provisions of chapter 58-6A , on business placed with risk retention groups or written through a purchasing group, shall inform each prospective insured of the provisions of the notice and…

All deposits required by this title shall be kept in a financial institution approved by the director. A domestic property and casualty or health insurer shall deposit an amount not less than fifty percent of the required unearned premium reserves on their outstanding policies. D…

Deposits of the reserves of a domestic life insurer shall consist of securities and assets permitted for investment by chapter 58-27 . Deposits of reserves made by domestic life insurers shall be held for the common benefit of all the holders of its life insurance policies and an…

Deposits of reserves made by domestic insurers other than life shall be held for the common benefit of all the holders of its policies. Source: SL 1966, ch 111 , ch 7, § 3 (5).

Deposits of foreign insurers made under this title shall consist of such assets as are required by the director. Deposits required pursuant to this title shall be held for such purposes as is required by such law, and as specified by the director's order requiring such deposit to…

The director shall require the insurer to either assign to the director and his successors in office all securities being deposited under this title which are not negotiable by delivery or to give the director irrevocable power of attorney authorizing the transfer of the securiti…

If the insurer uses real estate as a deposit, the insurer shall execute and record a deed of trust to the director which shall be kept by the financial institution. Prior to the execution and recordation of the deed of trust, the insurer shall submit to the director a current app…

The director shall keep a record of the assets and securities comprising each deposit, showing as far as practical the amount and market value of each item. Source: SL 1966, ch 111 , ch 7, § 6 (2); SL 1991, ch 398 , § 8.

Upon release to the insurer, or other person entitled thereto, of any security that may have been assigned pursuant to § 58-7-13 , the director shall reassign the same to such insurer or other person entitled thereto. Source: SL 1966, ch 111 , ch 7, § 8 (2).

Deposits required under this title may be made in South Dakota safe deposit institutions, banks, or trust companies selected by the insurer with the director's prior approval or may be made in the depository outside of the state approved by the director. The director may, upon wr…

Deposits of reserves of a domestic insurer under § 58-7-1 shall consist of securities and assets which the insurer is authorized to hold as admitted assets. Source: SL 1966, ch 111 , ch 7, § 1 (4).

All depository or custodial arrangements shall comply in substance with the requirements of this title as to like deposits of other insurers, as to the amount, purposes, maintenance, replenishment, release, and withdrawal of such deposit or part thereof, as to the rights of the i…

The form and terms of all depository or custodial arrangements shall be prescribed or approved by the director consistent with the applicable provisions of this title. Source: SL 1966, ch 111 , ch 7, § 5 (6); SL 1991, ch 398 , § 12.

The compensation and expenses of the depository or custodian shall be borne by the insurer. Source: SL 1966, ch 111 , ch 7, § 5 (7).

The director and the State of South Dakota shall have no liability as to the safekeeping of any such deposit by the depository or custodian thereof. Source: SL 1966, ch 111 , ch 7, § 7.

The director may terminate any depository or custodial arrangement and require a new arrangement. No arrangement may be terminated without the written authorization of the director. Source: SL 1966, ch 111 , ch 7, § 5 (5); SL 1991, ch 398 , § 13.

If any domestic insurer is required to deposit with a public officer of any foreign state or any agency of that state any securities or assets for security of policyholders, to the extent that those securities or assets are admissible for that purpose under this chapter, and upon…

For the purpose of determining the sufficiency of its deposit in this state the assets and securities of the insurer on deposit shall be valued at current market value except bonds which may, in the discretion of the director, be valued as provided in § 58-26-2 . Source: SL 1966,…

If for any reason the current market value of such assets and securities falls below the amount of deposit required of the insurer under this title, the insurer shall promptly deposit other or additional assets or securities eligible for deposit and in amount sufficient to cure t…

The director may, prior to acceptance for deposit of any particular asset or security, or at any time thereafter while so deposited, have the same appraised or valued by appraisers approved by the director. The costs of any appraisal or valuation shall be borne by the insurer. So…

An insurer may so deposit and have on deposit assets or securities in an amount exceeding its deposit required or otherwise permitted under this title, for the purpose of absorbing fluctuations in the value of assets and securities deposited, and to facilitate the exchange and su…

A domestic insurer may credit toward the deposit the amount of any other deposit of the insurer required by the director for the protection of its policyholders. Source: SL 1966, ch 111 , ch 7, § 1 (3); SL 1991, ch 398 , § 2.

While the insurer remains solvent and is in compliance with this title it may: (1) Demand, receive, sue for, and recover the income from the assets or securities deposited; (2) Exchange and substitute for the deposited assets or securities, or any part thereof, other eligible ass…