CHAPTER 58-6

AUTHORITY TO TRANSACT INSURANCE IN STATE

58-6-1    Certificate of authority required for transaction of insurance business--Exceptions--Violation as misdemeanor.

58-6-2    Solicitation of insurance or transacting business in another state by insurer in this state without certificate of authority prohibited--Misdemeanor.

58-6-3    Preemption of field of insurance regulation by state--Licensing by political subdivisions prohibited.

58-6-4    Activities excepted from certificate of authority requirements.

58-6-5    Foreign insurer--Investments in state without a certificate of authority.

58-6-6    Eligibility of insurer for certificate of authority.

58-6-7    Eligibility of insurer for certificate of authority--Necessity for maintenance of required reserves.

58-6-8    Denial of authority to engage in business when contrary to public interest--Denial when managed by unqualified personnel--Affiliates.

58-6-9    Continuance of authorization of prior authorized mutual and stock insurers--Participating policyholders--Quorum--Proxies--Issuance of nonvoting participating policies.

58-6-10    Governmentally owned insurers prohibited--Exceptions.

58-6-11    Readmission to state as an authorized insurer--Requirements--Payment of back premium taxes.

58-6-12    Unauthorized insurers--Application of insurer violating insurance laws for authority to transact insurance in state--Payment of back premium taxes.

58-6-13    Foreign insurance companies--Compliance with requirements for admissions to do business in state--Waiver.

58-6-14    Use of deceptively similar name prohibited.

58-6-15    Use of deceptively similar name by life insurer prohibited for ten years.

58-6-16    Use of name deceptively similar to name of foreign insurer prohibited.

58-6-17    Name tending to deceive or mislead as to type of organization of insurer prohibited.

58-6-18    Prevention of confusing similarity of names by director.

58-6-19    Combination of insuring power of one insurer--Exception.

58-6-20    Life insurer--Kinds of business authorized, exception.

58-6-21    Reciprocal insurer--Transaction of life or title insurance prohibited.

58-6-22    Title insurer--Transaction of other insurance prohibited.

58-6-23    Paid-in capital and surplus requirements for certificate of authority.

58-6-24    Determination of capital and surplus requirements for certificate of authority.

58-6-25    Additional types of insurance--Request for authority to transact within three years after issuance of initial certificate--Basic surplus or additional surplus required.

58-6-26    Surplus to qualify to transact one or more kinds of insurance by domestic mutual and reciprocal insurers--Laws governing.

58-6-27    Continuation of authority of insurer holding prior certificate--Maintenance of capital stock or surplus requirements.

58-6-28    Additional kinds of insurance authorized for insurer holding prior certificate--Capital and surplus requirements.

58-6-29    Annuities--Granting by life insurer without additional capital or surplus.

58-6-30    Health insurer issuing insurance against congenital defects without additional capital or surplus.

58-6-31    Casualty insurer transacting health insurance without additional capital or surplus.

58-6-32    Property insurer including additional kinds of insurance without additional capital or surplus.

58-6-33    Deposit by all insurers--Exceptions.

58-6-34    Deposits through director--Purpose--Amounts required--Deposits in other states in lieu of deposit with director.

58-6-35    Deposits of foreign or alien insurers in another state--Quality of cash or securities.

58-6-36    Deposit of title insurer--Amount required.

58-6-37    Deposit of title insurer as guaranty fund--Purpose.

58-6-38    Application for initial certificate of authority--Documents accompanying.

58-6-39    Service of process through director.

58-6-40    Time for approval or disapproval of original certificate--Extension--Failure to disapprove deemed approval.

58-6-41    Kinds of insurance specified in certificate--Limitations within class.

58-6-42    Annual reissuance of certificate not required--Annual renewal fee--Expiration of certificate.

58-6-43    Foreign insurer exempt from foreign corporation laws.

58-6-44    Refusal to renew or suspension or revocation of certificate, grounds.

58-6-45    Hearing required on refusal to issue, suspension or revocation of certificate.

58-6-46    Grounds for refusal to renew, suspension, or revocation of certificate.

58-6-47    Suspension or revocation of certificate after hearing, grounds.

58-6-48    Suspension of certificate on commencement of delinquency proceedings.

58-6-49    Order of suspension, revocation, or refusal to renew certificate--Replacement of policies.

58-6-50    Notice to insurance producers of suspension, revocation, or refusal to renew certificate--Insurance Producers' authority.

58-6-51    Publication of notice of suspension, revocation, or refusal to renew certificate of authority.

58-6-52    Duration of suspension of certificate of authority--Rescission or shortening.

58-6-53    Rights and obligations of insurer during suspension.

58-6-54    Reinstatement of certificate of authority which has not terminated where cause for suspension no longer exists.

58-6-55    Reinstatement of authority of insurance producers--Notice to insurer and insurance producers.

58-6-56    Suspension, revocation, or refusal to renew certificate because of deficiency of assets or impairment of capital or surplus--Cessation of business in state.

58-6-57    Failure to notify or continuation of business after notice as felony.

58-6-58    Impairment of assets, capital, or surplus--Suspension, revocation, or refusal to renew certificate of authority--Rehabilitator or receiver of insurer not required to notify agents.

58-6-59    Liability of officers and directors of impaired insurers.

58-6-60    Notice to insurer and insurance producers of refusal, suspension, or revocation of certificate.

58-6-61    Suspension or revocation of authority of insurance producers--Notice by director.

58-6-62    58-6-62 to 58-6-64. Repealed by SL 2007, ch 285, §§ 1 to 3.

58-6-65    58-6-65, 58-6-66. Repealed by SL 2010, ch 241, §§ 4, 5.

58-6-67    Superseded.

58-6-68    Insurers subject to taxation--Filing of returns and reports--Exemption of qualified pension, annuity, or profit-sharing plans.

58-6-69    Report and payment of tax by surplus line brokers.

58-6-70    Retaliatory tax provisions--Exception.

58-6-71    Exemption from retaliatory tax provisions.

58-6-72    Domicile of alien insurer for retaliatory tax purposes.

58-6-73    Domicile of Canadian insurer for retaliatory tax purposes.

58-6-74    Dissolution or retirement of insurer during year--Filing of reports and collection of taxes not defeated.

58-6-75    Annual and quarterly statement of financial condition of insurer--Filing with director--Form and contents--Timeliness of filing.

58-6-76    Summary of statement of financial condition of insurer--Publication by director.

58-6-77    Time for publication of summary statement by director--Publication in judicial circuits.

58-6-78    Director to supply summary statement to each legal newspaper published in each judicial circuit--Recognition of legal newspaper.

58-6-79    Publication requirements do not apply to fraternal or benevolent life association transactions nor to mutual insurance companies or associations.

58-6-80    Confidentiality of analysis ratios and examination synopses--Participation in regulatory information system.

58-6-1. Certificate of authority required for transaction of insurance business--Exceptions--Violation as misdemeanor.

No person may act as an insurer and no insurer or its insurance producers, attorneys, subscribers, or representatives may directly transact insurance in this state except as authorized by a subsisting certificate of authority issued to the insurer by the director, except as to such transactions as are expressly otherwise provided for in this title. Any violation of this section is a Class 2 misdemeanor.

Source: SL 1966, ch 111, ch 3, § 1 (1); SL 1978, ch 359, § 2; SL 2001, ch 286, § 75.

58-6-2. Solicitation of insurance or transacting business in another state by insurer in this state without certificate of authority prohibited--Misdemeanor.

No insurer shall from offices or by personnel or facilities located in this state solicit insurance applications or otherwise transact insurance in another state or country unless it holds a subsisting certificate of authority issued to it by the director authorizing it to transact the same kinds of insurance in this state. Violation of this section is a Class 2 misdemeanor.

Source: SL 1966, ch 111, ch 3, § 1 (2); SL 1978, ch 359, § 2.

58-6-3. Preemption of field of insurance regulation by state--Licensing by political subdivisions prohibited.

The state hereby preempts the field of regulating insurers and their insurance producers and solicitors; and all political subdivisions of the state are prohibited from requiring of any insurer, insurance producer, or solicitor regulated under this title any authorization, permit, or registration of any kind for conducting transactions lawful under the authority granted by the state under this title.

Source: SL 1966, ch 111, ch 3, § 1 (3); SL 2001, ch 286, § 76.

58-6-4. Activities excepted from certificate of authority requirements.

A certificate of authority shall not be required of an insurer with respect to the following:

(1)    Investigation, settlement, or litigation of claims under its policies lawfully written in this state, or liquidation of assets and liabilities of the insurer, other than collection of new premiums, all as resulting from its former authorized operations in this state;

(2)    Transactions thereunder subsequent to issuance of a policy covering only subjects of insurance not resident, located or expressly to be performed in this state at time of issuance, and lawfully solicited, written and delivered outside this state;

(3)    Transactions pursuant to surplus lines coverages lawfully written under the chapter of this title relating to surplus lines;

(4)    Reinsurance, when transacted by an insurer duly authorized by its state of domicile to transact the kind of insurance involved;

(5)    The continuation and servicing of life insurance or health insurance policies or annuity contracts remaining in force as to residents of this state if the insurer has withdrawn from the state and is not transacting new insurance therein.

Source: SL 1966, ch 111, ch 3, § 2.

58-6-5. Foreign insurer--Investments in state without a certificate of authority.

A foreign insurer may make investments in this state without a certificate of authority as provided by § 58-6-1. Such an insurer shall not be subject to any other provisions of this title.

Source: SL 1966, ch 111, ch 3, § 3.

58-6-6. Eligibility of insurer for certificate of authority.

To qualify for and hold authority to transact insurance in this state, an insurer must be otherwise in compliance with this title and with its charter provisions, and must be an incorporated stock insurer, or an incorporated mutual insurer, or a reciprocal insurer, of the same general type as may be formed as a domestic insurer under this title.

Source: SL 1966, ch 111, ch 3, § 4.

58-6-7. Eligibility of insurer for certificate of authority--Necessity for maintenance of required reserves.

No insurer shall be authorized to transact insurance in this state which does not maintain reserves as required by the chapter of this title relating to assets and liabilities, applicable to the kinds of insurance transacted by such insurer, wherever transacted in the United States.

Source: SL 1966, ch 111, ch 3, § 4 (1).

58-6-8. Denial of authority to engage in business when contrary to public interest--Denial when managed by unqualified personnel--Affiliates.

The director, after a hearing, shall not grant or continue authority to engage in the insurance business in this state of any insurer when contrary to public interest or when the principal management personnel of such insurer is found by him to be untrustworthy or not of good character, or so lacking in insurance company managerial experience as to make the proposed operation hazardous to the insurance-buying public or to its stockholders; or which he has good reason to believe is affiliated directly or indirectly through ownership, control, management, reinsurance transactions, or other insurance or business relations, with any person or persons whose business operations, to the detriment of insurers, stockholders, or creditors, are or have been marked by manipulation of assets, accounts, or reinsurance, or by bad faith.

Source: SL 1966, ch 111, ch 3, § 4 (2).

58-6-9. Continuance of authorization of prior authorized mutual and stock insurers--Participating policyholders--Quorum--Proxies--Issuance of nonvoting participating policies.

Any mutual and stock insurer authorized on July 1, 1966, to transact insurance in this state shall be eligible to continue such authorization if otherwise in compliance with this title and its charter provisions. As to any such domestic insurer, each holder of a policy of insurance who is entitled to participate in profits and savings, shall be entitled to participate and vote at all meetings of stockholders and to cast the same number of votes which he was entitled to cast under the articles of incorporation and bylaws of such insurer on July 1, 1966. At all such meetings, to constitute a quorum of such participating policyholders, there shall be present in person or by proxy at least ten percent of the total of such participating policyholders. Solicitation of proxies from such participating policyholders shall be subject to the same regulations and restrictions as apply to a domestic mutual insurer. Except as hereinbefore otherwise provided, such an insurer shall in all respects be subject to all laws regulating stock companies.

Any mutual and stock company authorized and doing business pursuant to this section may issue nonvoting participating policies. The issuance of such nonvoting participating policies may not affect the voting rights of holders of participating policies issued by a mutual and stock company pursuant to the first paragraph of this section.

Source: SL 1966, ch 111, ch 3, § 4 (3); SL 1981, ch 358.

58-6-10. Governmentally owned insurers prohibited--Exceptions.

Except for instrumentalities of the United States government, no insurer, the voting control or ownership of which is held in whole or substantial part by any government or governmental agency, or which is operated for or by any such government or agency, may transact insurance in this state, unless, upon verified application by the insurer, the director finds that:

(1)    The insurer is not subject to any form of subsidy that would enable it to compete unfairly with domestic insurers;

(2)    The insurer is not subject to governmental practices that discriminate on the basis of race, color, creed, or national origin;

(3)    The ownership or financial control does not create the presence of any sovereign immunity in the insurer;

(4)    The insurer has agreed to waive sovereign immunity as a defense should it exist for any action by or against the director pursuant to the director's regulatory authority under Title 58;

(5)    The insurer has agreed that it will exhaust all administrative remedies and will neither commence in, nor remove to, federal court any action by or against the director pursuant to the director's regulatory authority under Title 58;

(6)    Appropriate measures and controls exist to avoid security problems resulting from an insurer's access to confidential information and data of its insured; and

(7)    The ownership or financial control does not result in substantial or undue influence being asserted over the insurer.

Membership in a mutual insurer, or subscribership in a reciprocal insurer, or ownership of stock of an insurer by the alien property custodian or similar official of the United States, or supervision of an insurer by public insurance supervisory authority does not constitute ownership, control, or operation of the insurer for the purposes of this section. Nothing contained in this section prohibits or affects self insurance by school districts as provided in § 13-10-3, or by municipalities as provided in § 9-14-30. The failure of any applicant under this section to submit all information requested by the director pursuant to this section and the director's regulatory authority under Title 58 relevant to any finding to be made under this section is sufficient to deny the application.

Source: SL 1966, ch 111, ch 3, § 5; SL 1978, ch 49, § 5; SL 1997, ch 284, § 1.

58-6-11. Readmission to state as an authorized insurer--Requirements--Payment of back premium taxes.

In addition to other applicable requirements therefor, no insurer, formerly authorized in this state and again seeking admission to this state as an authorized insurer, shall be so authorized unless the insurer, as part of its application for such authority, includes a written statement, duly sworn to by at least two of its executive officers, of all premiums received by the insurer with respect to insurance on subjects of insurance resident, located or to be performed in this state, subsequent to its previous withdrawal for any cause from this state, and pays to the state a premium tax thereon at the same rate and in the same amount as the insurer would have paid on such premiums had it continued to be an authorized insurer in this state during the period between its withdrawal and its reapplication for authority.

Source: SL 1966, ch 111, ch 3, § 6 (1).

58-6-12. Unauthorized insurers--Application of insurer violating insurance laws for authority to transact insurance in state--Payment of back premium taxes.

Any insurer, not before authorized in this state, which, within three years prior to its application for authority to transact insurance in South Dakota, transacted insurance in violation of the laws of South Dakota, may not be granted authority unless it is otherwise fully qualified. In addition, it shall file with the director of the Division of Insurance a written statement, sworn to by two of its executive officers, of all premiums received by it during the three years with respect to insurance on subjects resident, located or to be performed in South Dakota, and shall pay to the director, as an additional fee for the filing of its application for a certificate of authority, an amount of money equal to the premium tax which it would have paid if it had been an authorized insurer in this state throughout that period, plus interest thereon at the Category D rate of interest as established in § 54-3-16.

Source: SL 1966, ch 111, ch 3, § 6 (2); SL 1983, ch 28, § 66; SL 1984, ch 319, § 32.

58-6-13. Foreign insurance companies--Compliance with requirements for admissions to do business in state--Waiver.

No foreign insurance company may be admitted to do business in the State of South Dakota until it has fully complied with the following requirements, in addition to such other requirements as may be specifically provided:

(1)    Such company shall have had two continuous calendar years of operating experience as of the date of application to do business in this state; and

(2)    Shall have been examined within the sixty months next preceding the date of application to do business in this state; and

(3)    Shall fully satisfy any retaliatory requirements imposed by the laws and regulations which the applying company's state of incorporation imposes upon South Dakota insurance companies seeking admission to such state.

Subdivisions (1) and (2) do not apply to a company which is a wholly owned subsidiary, or which is the successor in interest, through merger or consolidation, of an insurer which is an authorized insurer in this state or to a company which satisfies the director that it is in fact a continuation of an older organization. The director may waive the provisions of subdivisions (1) and (2) if a special need or circumstance, as determined by the director, can be demonstrated.

Source: SL 1966, ch 111, ch 3, § 7; SL 1988, ch 389; SL 2023, ch 164, § 1.

58-6-14. Use of deceptively similar name prohibited.

No insurer shall be formed or authorized to transact insurance in this state which has or uses a name or principal identifying name factor which is the same as or deceptively similar to that of another insurer earlier so authorized.

Source: SL 1966, ch 111, ch 3, § 8 (1).

58-6-15. Use of deceptively similar name by life insurer prohibited for ten years.

No life insurer shall be authorized to transact insurance in this state which has or uses a name deceptively similar to that of another insurer authorized to transact insurance in this state within the preceding ten years if life insurance policies originally issued by such other insurer are still outstanding in this state.

Source: SL 1966, ch 111, ch 3, § 8 (2).

58-6-16. Use of name deceptively similar to name of foreign insurer prohibited.

No insurer shall hereafter be formed or newly authorized to transact insurance in this state which has or uses a name the same as or deceptively similar to the name of any foreign insurer doing business elsewhere than in this state if such foreign insurer has within the last preceding twelve months signified its intention to secure incorporation in this state under such name, or do business as a foreign insurer in this state under such name by filing notice of such intention with the director unless the written consent to the use of such name or deceptively similar name has been given by such foreign insurer.

Source: SL 1966, ch 111, ch 3, § 8 (3).

58-6-17. Name tending to deceive or mislead as to type of organization of insurer prohibited.

No insurer shall be authorized to transact insurance in this state which has or uses a name which tends to deceive or mislead as to the type of organization of the insurer.

Source: SL 1966, ch 111, ch 3, § 8 (4).

58-6-18. Prevention of confusing similarity of names by director.

In case of conflict of names hereafter between two insurers, or a conflict otherwise prohibited under §§ 58-6-14 to 58-6-17, inclusive, the director may require, as a condition to the issuance of an original certificate of authority to an applicant insurer, the insurer to use in this state such supplementation or modification of its name or such business name as may reasonably be necessary to avoid the conflict. No such name, supplementation, or modification shall contain the principal identifying factor of the name of any other insurer already authorized to transact insurance in this state.

Source: SL 1966, ch 111, ch 3, § 8 (5).

58-6-19. Combination of insuring power of one insurer--Exception.

An insurer which otherwise qualifies therefor may be authorized to transact any one kind or combination of kinds of insurance as defined in this title except as provided by §§ 58-6-20 to 58-6-22, inclusive.

Source: SL 1966, ch 111, ch 3, § 9.

58-6-20. Life insurer--Kinds of business authorized, exception.

An insurer authorized to engage in the business of life insurance may also grant annuities, but shall not be authorized to engage in any other kind of insurance business except health; except, that the director shall, if the insurer otherwise qualifies therefor, continue so to authorize any life insurer which immediately prior to July 1, 1966, was lawfully authorized to transact in this state a kind or kinds of insurance in addition to life and health insurance and annuity business.

Source: SL 1966, ch 111, ch 3, § 9 (1).

58-6-21. Reciprocal insurer--Transaction of life or title insurance prohibited.

A reciprocal insurer may not transact life or title insurance.

Source: SL 1966, ch 111, ch 3, § 9 (2); SL 1996, ch 290.

58-6-22. Title insurer--Transaction of other insurance prohibited.

A title insurer shall not transact any other kind of insurance.

Source: SL 1966, ch 111, ch 3, § 9 (3).

58-6-23. Paid-in capital and surplus requirements for certificate of authority.

To qualify for authority to transact any one kind of insurance or combination of kinds of insurance as shown below, a foreign insurer, or a domestic stock insurer applying for its original certificate of authority in this state, or any insurer reapplying for a certificate of authority in this state after having withdrawn from this state for any cause, shall possess and thereafter maintain unimpaired basic paid-in capital stock, if a stock insurer, or unimpaired basic surplus, if a foreign mutual insurer or foreign reciprocal insurer, and shall possess when first so authorized additional funds in surplus as follows:

Source: SL 1966, ch 111, ch 3, § 10 (1); SL 1967, ch 129, § 1.

58-6-24. Determination of capital and surplus requirements for certificate of authority.

Capital and surplus requirements of § 58-6-23 are based upon all kinds of insurance transacted by the insurer in any and all areas in which it operates or proposes to operate, whether or not only a portion of such kinds are to be transacted in this state.

Source: SL 1966, ch 111, ch 3, § 10 (2).

58-6-25. Additional types of insurance--Request for authority to transact within three years after issuance of initial certificate--Basic surplus or additional surplus required.

If within three years after date of its initial certificate of authority in this state such an insurer requests authority to transact an additional kind or kinds of insurance, it shall not be so authorized unless it then possesses basic surplus or additional surplus in such an amount as would be required under § 58-6-23 for an original certificate of authority covering all the kinds of insurance the insurer then proposes to transact.

Source: SL 1966, ch 111, ch 3, § 10 (3).

58-6-26. Surplus to qualify to transact one or more kinds of insurance by domestic mutual and reciprocal insurers--Laws governing.

As to surplus required for qualification to transact one or more kinds of insurance and thereafter to be maintained, domestic mutual insurers formed after June 30, 1966, are governed by chapters 58-5 and 58-35 and domestic reciprocal insurers formed after June 30, 1966, are governed by chapter 58-34.

Source: SL 1966, ch 111, ch 3, § 10 (4).

58-6-27. Continuation of authority of insurer holding prior certificate--Maintenance of capital stock or surplus requirements.

A domestic or foreign insurer holding a valid certificate of authority to transact insurance in this state immediately prior to July 1, 1966, may continue to transact the same kinds of insurance as permitted by such certificate of authority by maintaining thereafter unimpaired not less than the same amount of paid-in capital stock, if a stock insurer, or not less than the same amount of surplus, if a mutual or reciprocal insurer, as required under the laws of this state for such authority in force immediately prior to July 1, 1966, and as if such laws had continued in force. Once a stock company has accumulated the capital and surplus to exceed the minimum capital and surplus for the line authorized pursuant to § 58-6-23, then § 58-6-23 shall apply. Once a mutual company has accumulated the capital and surplus to exceed the minimum capital and surplus for the line authorized pursuant to § 58-5-21, then § 58-5-21 shall apply.

Source: SL 1966, ch 111, ch 3, § 11(1); SL 1988, ch 390.

58-6-28. Additional kinds of insurance authorized for insurer holding prior certificate--Capital and surplus requirements.

An insurer described by § 58-6-27 shall not hereafter be granted authority to transact any other or additional kind of insurance unless it then fully complies with the requirements as to capital and surplus, as applied to all the kinds of insurance it then proposes to transact, as provided under §§ 58-6-23 to 58-6-26, inclusive, as to new domestic insurers.

Source: SL 1966, ch 111, ch 3, § 11 (2).

58-6-29. Annuities--Granting by life insurer without additional capital or surplus.

A life insurer may also grant annuities without additional capital or additional surplus.

Source: SL 1966, ch 111, ch 3, § 12 (1).

58-6-30. Health insurer issuing insurance against congenital defects without additional capital or surplus.

A health insurer may also issue insurance against congenital defects without additional capital or additional surplus.

Source: SL 1966, ch 111, ch 3, § 12 (2).

58-6-31. Casualty insurer transacting health insurance without additional capital or surplus.

A casualty insurer may also be authorized to transact health insurance without additional capital or additional surplus.

Source: SL 1966, ch 111, ch 3, § 12 (3).

58-6-32. Property insurer including additional kinds of insurance without additional capital or surplus.

A property insurer may without additional capital or additional surplus include such amount and kind of insurance against legal liability for injury, damage, or loss to the person or property of others, and for medical, hospital, and surgical expense related to such injury, as the director deems to be reasonably incidental to insurance of real property against fire and other perils under policies covering farm properties, or residential properties designed for occupancy by not more than four families, with or without incidental office, professional, private school, or studio occupancy by an insured, whether or not the premium or rate charged for certain perils so covered is specified in the policy. No insurer authorized as to property insurance only may pursuant to this section retain risk as to any one subject of insurance as to hazards, other than property insurance hazards, in an amount exceeding ten percent of its surplus to policyholders.

Source: SL 1966, ch 111, ch 3, § 12 (4); SL 2018, ch 278, § 2.

58-6-33. Deposit by all insurers--Exceptions.

Sections 58-6-34 and 58-6-35 shall apply as to all insurers other than title insurers, existing mutual casualty insurers writing a single line of insurance, and mutual assessment life insurance.

Source: SL 1966, ch 111, ch 3, § 13 (1).

58-6-34. Deposits through director--Purpose--Amounts required--Deposits in other states in lieu of deposit with director.

The director may not authorize any insurer to transact insurance in this state unless it makes and thereafter maintains in trust through the director for the protection of all its policyholders in the United States, a deposit of cash or securities eligible for deposit under the provisions of this title relating to deposits and administration of deposits in an amount of two hundred thousand dollars or more, except that:

(1)    As to foreign insurers, in lieu of the deposit, the director shall accept the certificate in proper form of the public official having supervision over insurers in any other state to the effect that a like deposit or part thereof by the insurer is being maintained in public custody or control pursuant to law in the state in trust for the protection of the insurer's policyholders in the United States.

(2)    As to alien insurers, in lieu of the deposit, the director may accept evidence that the insurer maintains within the United States by way of trust deposits with public depositories, or in trust institutions approved by the director, assets available for discharge of its United States insurance obligations. The assets shall be an amount not less than the outstanding liabilities of the insurer arising out of its insurance transactions in the United States together with a surplus equal to the greater of the following sums, the deposit required by this title to be made by a foreign insurer transacting like kinds of insurance, or three hundred thousand dollars.

Source: SL 1966, ch 111, ch 3, § 13 (2); SL 1994, ch 374.

58-6-35. Deposits of foreign or alien insurers in another state--Quality of cash or securities.

Deposits of foreign insurers or deposits of alien insurers under subdivision 58-6-34(2) in another state shall be in cash or securities of a quality comparable to those eligible for deposit in this state by domestic insurers.

Source: SL 1966, ch 111, ch 3, § 13 (3).

58-6-36. Deposit of title insurer--Amount required.

No title insurer shall be authorized to transact business in this state unless it deposits and maintains on deposit in this state through the director, cash or securities eligible for deposit as set forth in the chapter hereof relating to deposits and administration of deposits, in the amount of one hundred thousand dollars; except, that the deposit of a domestic title insurer which was lawfully transacting such business in this state under laws in force immediately prior to July 1, 1966, shall be in an amount determined as follows:

(1)    Twenty-five thousand dollars, plus

(2)    Twenty-five hundred dollars for each five thousand or terminal fraction thereof of population in excess of one hundred thousand of aggregate population of those counties of South Dakota in which the insurer transacts business, if the insurer transacts business in more than one county of South Dakota;

but in no event shall a deposit in excess of one hundred thousand dollars be so required. For the purpose of this provision, population shall be based upon the most recent official federal census.

Source: SL 1966, ch 111, ch 3, § 14 (1).

58-6-37. Deposit of title insurer as guaranty fund--Purpose.

The deposit shall be known as a "guaranty fund," and shall be held as security for the faithful performance by the insurer of all its undertakings and liabilities under its title policies or other guarantees of title to property, but shall not be subject to any other liabilities of the insurer.

Source: SL 1966, ch 111, ch 3, § 14 (2).

58-6-38. Application for initial certificate of authority--Documents accompanying.

Every insurer applying for an initial certificate of authority shall file the following documents with the director:

(1)    A certified copy of its articles of incorporation with all amendments;

(2)    A certified copy of its bylaws with all amendments;

(3)    A copy of its annual statement as of December thirty-first last preceding;

(4)    A copy of report of last examination, if any, made of the insurer, certified by the insurance supervisory official of the state of domicile of a foreign insurer or the state of entry into the United States of an alien insurer;

(5)    If a foreign or alien insurer, a certificate of the public official having supervision of insurance in the state or country of domicile, or state of entry into the United States, of such insurer, showing that it is authorized to transact the kinds of insurance proposed to be transacted in South Dakota;

(6)    If an alien insurer, a copy of the appointment and authority of its United States manager;

(7)    A certificate of deposit pursuant to §§ 58-6-34 and 58-6-35; and

(8)    Such other information and documents as the director deems necessary for the protection of policyholders or to assure compliance with this title.

Source: SL 1966, ch 111, ch 3, § 15.

58-6-39. Service of process through director.

Each insurer applying for authority to engage in the insurance business in this state shall appoint the director, and his successors in office, as its attorney to receive service of legal process issued against it in South Dakota. The appointment shall be made on a form designated and furnished by the director. The appointment shall be irrevocable, shall bind the insurer and any successor in interest to the assets or liabilities of the insurer, and shall remain in effect as long as there is in force in South Dakota any contract made by the insurer or obligations arising therefrom.

Source: SL 1966, ch 111, ch 3, § 26.

58-6-40. Time for approval or disapproval of original certificate--Extension--Failure to disapprove deemed approval.

Upon the filing and completion of an application for an original certificate of authority, the director shall have sixty days in which to approve the application by issuing an appropriate certificate of authority or to disapprove the application by issuing an order setting forth the grounds for such disapproval. The director may extend such sixty-day period for an additional sixty days by notifying the applicant in writing of such extension. If the application is not approved or disapproved within the time period as set forth above, but in no event to exceed one hundred twenty days, the application shall be deemed to be approved and the director shall thereupon issue the appropriate certificate of authority. The waiting period shall commence as of the date all information and documents required by the director are received.

Source: SL 1966, ch 111, ch 3, § 16 (1).

58-6-41. Kinds of insurance specified in certificate--Limitations within class.

The certificate, if issued, shall specify the kinds of insurance the insurer is authorized to transact in South Dakota. At the insurer's request, the director may issue a certificate of authority limited to particular types of insurance or insurance coverages within the scope of a kind of insurance as defined in this title.

Source: SL 1966, ch 111, ch 3, § 16 (2).

58-6-42. Annual reissuance of certificate not required--Annual renewal fee--Expiration of certificate.

The certificate of authority issued by the director to an insurer shall not require annual reissuance but shall remain in force as long as the insurer pays the annual renewal fee provided in § 58-2-29 on or before the thirtieth day of April of each year and as long as the insurer continues to meet the other requirements of this title, unless the license is otherwise revoked, suspended, or withdrawn.

Source: SL 1966, ch 111, ch 3, § 17; SL 1967, ch 129, § 2.

58-6-43. Foreign insurer exempt from foreign corporation laws.

A foreign insurer authorized to transact insurance in this state and fully complying with this title shall be exempt from complying with other provisions of the South Dakota Code concerning foreign corporations.

Source: SL 1966, ch 111, ch 3, § 24.

58-6-44. Refusal to renew or suspension or revocation of certificate, grounds.

The director shall refuse to renew, or shall suspend or revoke, an insurer's certificate of authority:

(1)    If such action is required by any provision of this title; or

(2)    If a foreign insurer, it no longer meets the requirements for the authority, on account of deficiency of assets or otherwise; or if a domestic insurer, it has failed to cure an impairment of capital or surplus within the time allowed therefor by the director under this title; or

(3)    If the insurer knowingly exceeds its charter powers or powers granted under its certificate of authority; or

(4)    If the insurer's certificate of authority to transact insurance therein is suspended or revoked by its state of domicile, or state of entry into the United States if an alien insurer.

Source: SL 1966, ch 111, ch 3, § 18 (1).

58-6-45. Hearing required on refusal to issue, suspension or revocation of certificate.

Except in cases of insolvency or impairment of required capital or surplus, or suspension or revocation by another state as referred to in subdivision 58-6-44(4), the director shall so refuse, suspend, or revoke the certificate of authority only after a hearing granted to the insurer thereon, unless the insurer waives such hearing in writing.

Source: SL 1966, ch 111, ch 3, § 18 (2).

58-6-46. Grounds for refusal to renew, suspension, or revocation of certificate.

The director may refuse to renew or may suspend or revoke an insurer's certificate of authority if the director finds after a hearing thereon that the insurer has violated or failed to comply with any lawful order of the director, any laws of this state relevant to the business of insurance, or any provision of this title other than those for which suspension or revocation is mandatory.

Source: SL 1966, ch 111, ch 3, § 19 (1); SL 2013, ch 246, § 1.

58-6-47. Suspension or revocation of certificate after hearing, grounds.

The director shall suspend or revoke an insurer's certificate of authority on any of the following grounds if he finds after a hearing thereon that the insurer:

(1)    Is in unsound condition, or in such condition or using such methods and practices in the conduct of its business, as to render its further transaction of business in this state hazardous or injurious to its policyholders or to the public;

(2)    Has failed, after written request therefor by the director, to remove or discharge an officer or director who has been convicted of any crime involving fraud, dishonesty, or moral turpitude;

(3)    With such frequency as to indicate its general business practice in this state, has without just cause refused to pay claims arising under coverages provided by its policies, whether the claim is in favor of an insured or is in favor of a third person with respect to the liability of an insured to such third person, or, with like frequency, without just cause compels insureds or claimants to accept less than the amount due them or to employ attorneys or to bring suit against the insurer or such an insured to obtain full payment or settlement of such claims;

(4)    Is affiliated with and under the same general management, or interlocking directorate, or ownership as another insurer which transacts direct insurance in this state without having a certificate of authority therefor, except as permitted under this title.

(5)    Refuses to be examined, or if its directors, officers, employees, or representatives refuse to submit to examination relative to its affairs, or to produce its accounts, records, and files for examination by the director when required, or refuse to perform any legal obligation relative to the examination;

(6)    Has failed to pay any final judgment rendered against it in this state upon any policy, bond, recognizance, or undertaking issued or guaranteed by it, within thirty days after the judgment became final, or within thirty days after time for taking an appeal has expired, or within thirty days after dismissal of an appeal before final determination, whichever date is the later.

Source: SL 1966, ch 111, ch 3, § 19 (2).

58-6-48. Suspension of certificate on commencement of delinquency proceedings.

The director may without advance notice or a hearing thereon, immediately suspend the certificate of authority of any insurer as to which proceedings for receivership, conservatorship, rehabilitation, or other delinquency proceedings, have been commenced in any state by the public insurance supervisory official of such state.

Source: SL 1966, ch 111, ch 3, § 19 (3).

58-6-49. Order of suspension, revocation, or refusal to renew certificate--Replacement of policies.

Each suspension or revocation of, or refusal to renew, an insurer's certificate of authority shall be by the director's order given to the insurer as provided by § 58-4-17. If the director finds that the public health, safety, and welfare of insureds is imperiled due to being covered under a policy of insurance by an insurer or carrier whose certificate of authority has been revoked, and all appeals of the revocation have been exhausted the director may also order that the insurer or carrier replace all policies with equivalent policies issued by an authorized insurer in this state or otherwise provide for the transfer of all such risk through an arrangement approved by the director.

Source: SL 1966, ch 111, ch 3, § 20 (1); SL 2013, ch 246, § 2.

58-6-50. Notice to insurance producers of suspension, revocation, or refusal to renew certificate--Insurance Producers' authority.

Upon suspending or revoking or refusing to renew the insurer's certificate of authority, the director shall forthwith give, by registered or certified mail, notice thereof to the insurer's insurance producers in this state of record in the department, and shall likewise suspend or revoke the authority of the insurance producers to represent the insurer.

Source: SL 1966, ch 111, ch 3, § 20 (2); SL 1982, ch 28, § 18; SL 2001, ch 286, § 77.

58-6-51. Publication of notice of suspension, revocation, or refusal to renew certificate of authority.

The director may also publish notice of such suspension, revocation, or refusal in one or more newspapers of general circulation in this state.

Source: SL 1966, ch 111, ch 3, § 20 (3).

58-6-52. Duration of suspension of certificate of authority--Rescission or shortening.

Suspension of an insurer's certificate of authority shall be for such period as the director specifies in the order of suspension, but not to exceed one year. During the suspension the director may rescind or shorten the suspension by his further order.

Source: SL 1966, ch 111, ch 3, § 21 (1).

58-6-53. Rights and obligations of insurer during suspension.

During the suspension period the insurer shall not solicit or write any new business in this state, but shall file its annual statement, pay fees, licenses, and taxes as required under this title, and may service its business already in force in this state, as if the certificate of authority had continued in full force.

Source: SL 1966, ch 111, ch 3, § 21 (2).

58-6-54. Reinstatement of certificate of authority which has not terminated where cause for suspension no longer exists.

After an insurer has been suspended and if the insurer's certificate of authority has not terminated, the insurer's certificate of authority shall be reinstated if the insurer can demonstrate to the satisfaction of the director that cause for suspension no longer exists.

Source: SL 1966, ch 111, ch 3, § 21(3); SL 1988, ch 391.

58-6-55. Reinstatement of authority of insurance producers--Notice to insurer and insurance producers.

Upon reinstatement of the insurer's certificate of authority, the authority of its insurance producers in this state to represent the insurer shall likewise reinstate. The director shall promptly notify by registered or certified mail the insurer and its insurance producers in this state, of record in the division, of such reinstatement. If pursuant to § 58-6-51 the director has published notice of the suspension, the director shall in like manner publish notice of the reinstatement.

Source: SL 1966, ch 111, ch 3, § 21 (4); SL 1982, ch 28, § 18; SL 2001, ch 286, § 78.

58-6-56. Suspension, revocation, or refusal to renew certificate because of deficiency of assets or impairment of capital or surplus--Cessation of business in state.

Upon suspension, revocation, or refusal to renew the certificate of authority of an insurer on account of deficiency of assets, if a foreign insurer, or failure to cure an impairment of the capital of a domestic stock insurer, or surplus of a reciprocal or domestic mutual insurer, as provided under subdivision 58-6-44(2), every officer and director of the insurer must, either separately or jointly with one or more of the others and within four days after notice of such suspension, revocation, or refusal was given to the insurer by the director, notify by registered or certified mail every person authorized by the insurer, as of immediately prior to such suspension, revocation, or refusal, to write business for the insurer in South Dakota, immediately to cease such writing; and each such person so notified shall immediately cease to write any further business for the insurer in South Dakota.

Source: SL 1966, ch 111, ch 3, § 22 (1); SL 1982, ch 28, § 18.

58-6-57. Failure to notify or continuation of business after notice as felony.

Each individual made responsible for the notification under § 58-6-56, who fails so to notify, and every person so authorized who, after being so notified or otherwise being informed as to such impairment or suspension, revocation, or refusal, solicits or writes further business for the insurer, is guilty of a Class 4 felony.

Source: SL 1966, ch 111, ch 3, § 22 (2); SL 1978, ch 359, § 5.

58-6-58. Impairment of assets, capital, or surplus--Suspension, revocation, or refusal to renew certificate of authority--Rehabilitator or receiver of insurer not required to notify agents.

Sections 58-6-56 and 58-6-57 do not apply to any person who has been appointed as and is acting as rehabilitator or receiver of the insurer in judicial proceedings in a court of the United States or of the State of South Dakota.

Source: SL 1966, ch 111, ch 3, § 22 (3).

58-6-59. Liability of officers and directors of impaired insurers.

The liability of the officers and directors of impaired insurers shall be determined in accordance with the provisions of § 58-5-118.

Source: SL 1966, ch 111, ch 3, § 23.

58-6-60. Notice to insurer and insurance producers of refusal, suspension, or revocation of certificate.

Upon refusal, suspension, or revocation of an insurer's certificate of authority, the director shall forthwith give notice thereof by registered or certified mail to the insurer and to its insurance producers in this state of record in the director's office.

Source: SL 1966, ch 111, ch 3, § 25 (1); SL 1982, ch 28, § 18; SL 2001, ch 286, § 79.

58-6-61. Suspension or revocation of authority of insurance producers--Notice by director.

Such refusal, suspension, or revocation shall likewise automatically suspend or revoke, as the case may be, the authority of all such insurance producers to act as insurance producers of the insurer in this state, and the director shall so state in the notice to insurance producers provided for in § 58-6-60.

Source: SL 1966, ch 111, ch 3, § 25 (2); SL 2001, ch 286, § 80.