<html xmlns="http://www.w3.org/1999/xhtml"><head><meta charset="UTF-8" /><meta http-equiv='content-language' content='en-us'/><title>SDLRC - Codified Law 58-14-4 - Credit not allowable as an asset or deduction from liability to ceding insurer--Exceptions--Payments. </title><meta name="Generator" content="PowerTools for Open XML" /><style>span { white-space: pre-wrap; } p.s2074663Normal { text-align: justify; font-family: 'Times New Roman', 'serif'; font-size: 12pt; line-height: 108%; margin-top: 0; margin-left: 0; margin-right: 0; margin-bottom: .001pt; } span.s2074663SENU { font-family: 'Times New Roman', 'serif'; font-size: 12pt; font-style: normal; font-weight: bold; margin: 0; padding: 0; } span.s2074663CL { font-family: 'Times New Roman', 'serif'; font-size: 12pt; font-style: normal; font-weight: bold; margin: 0; padding: 0; } p.s2074663Normal-000000 { text-indent: 0.50in; text-align: justify; font-family: 'Times New Roman', 'serif'; font-size: 12pt; line-height: 108%; margin-top: 0; margin-left: 0; margin-right: 0; margin-bottom: .001pt; } span.s2074663DefaultParagraphFont { font-family: 'Times New Roman', 'serif'; font-size: 12pt; font-style: normal; font-weight: normal; margin: 0; padding: 0; } p.s2074663Normal-000001 { margin-left: 0.70in; text-indent: -0.45in; text-align: justify; font-family: 'Times New Roman', 'serif'; font-size: 12pt; line-height: 108%; margin-top: 0; margin-right: 0; margin-bottom: .001pt; } span.s2074663000002 { font-size: 12pt; font-style: normal; font-weight: normal; margin: 0; padding: 0; } span.s2074663SCL { font-family: 'Times New Roman', 'serif'; font-size: 12pt; font-style: normal; font-weight: bold; margin: 0; padding: 0; } span.s2074663SCL-000003 { font-family: 'Times New Roman', 'serif'; font-size: 12pt; font-style: normal; font-weight: normal; margin: 0; padding: 0; } </style></head><body><div><p dir="ltr" class="s2074663Normal"><a href="https://sdlegislature.gov/Statutes/Codified_Laws/DisplayStatute.aspx?Type=Statute&amp;Statute=58-14-4"><span class="s2074663SENU">58-14-4</span></a><span xml:space="preserve" class="s2074663SENU">. </span><span class="s2074663CL">Credit not allowable as an asset or deduction from liability to ceding insurer--Exceptions--Payments.</span></p><p dir="ltr" class="s2074663Normal-000000"><span class="s2074663DefaultParagraphFont">No credit may be allowed, as an asset or as a deduction from liability, to any ceding insurer for reinsurance unless the reinsurance contract provides, in substance, that in the event of the insolvency of the ceding insurer, the reinsurance is payable under a contract reinsured by the reinsurer on the basis of reported claims allowed in the liquidation proceeding or proof of payment of the claim by a guaranty association without diminution because of the insolvency of the ceding insurer. Such payments shall be made directly to the ceding insurer or to its domiciliary liquidator unless:</span></p><p dir="ltr" class="s2074663Normal-000001"><span class="s2074663DefaultParagraphFont">(1)    The contract or other written agreement specifically provides another payee of such reinsurance in the event of the insolvency of the ceding insurer; or</span></p><p dir="ltr" class="s2074663Normal-000001"><span class="s2074663DefaultParagraphFont">(2)    The reinsurer, with the consent of the direct insured, has assumed such policy obligations of the ceding insurer as direct obligations of the reinsurer to the payees under such policies and in substitution for the obligations of the ceding insurer to such payees. The consent of the liquidator is required for any such assumption of policy obligations effected after an order of liquidation.</span></p><p dir="ltr" class="s2074663Normal"><span xml:space="preserve" class="s2074663000002"> </span></p><p dir="ltr" class="s2074663Normal"><span class="s2074663SCL">Source:</span><span xml:space="preserve" class="s2074663SCL-000003"> SL 1966, ch 111, ch 4, § 10 (3); SL 1992, ch 344, § 15; SL 2005, ch 274, § 3.</span></p><p dir="ltr" class="s2074663Normal"><span xml:space="preserve" class="s2074663000002"> </span></p><p dir="ltr" class="s2074663Normal"><span xml:space="preserve" class="s2074663000002"> </span></p></div></body></html><br /><hr><br /><html xmlns="http://www.w3.org/1999/xhtml"><head><meta charset="UTF-8" /><meta http-equiv='content-language' content='en-us'/><title>SDLRC - Codified Law 58-14-4 - Credit not allowable as an asset or deduction from liability to ceding insurer--Exceptions--Payments. </title><meta name="Generator" content="PowerTools for Open XML" /><style>span { white-space: pre-wrap; } p.s2074664Normal { margin-top: 0; margin-bottom: 0; text-align: justify; font-family: 'Times New Roman', 'serif'; font-size: 12pt; line-height: 108%; margin-left: 0; margin-right: 0; } span.s2074664SENU { font-family: 'Times New Roman', 'serif'; font-size: 12pt; font-style: normal; font-weight: bold; margin: 0; padding: 0; } span.s2074664CL { font-family: 'Times New Roman', 'serif'; font-size: 12pt; font-style: normal; font-weight: bold; margin: 0; padding: 0; } p.s2074664Normal-000000 { margin-top: 0; margin-bottom: 0; text-indent: 0.50in; text-align: justify; font-family: 'Times New Roman', 'serif'; font-size: 12pt; line-height: 108%; margin-left: 0; margin-right: 0; } span.s2074664DefaultParagraphFont { font-family: 'Times New Roman', 'serif'; font-size: 12pt; font-style: normal; font-weight: normal; margin: 0; padding: 0; } span.s2074664000001 { font-size: 12pt; font-style: normal; font-weight: normal; margin: 0; padding: 0; } span.s2074664SCL { font-family: 'Times New Roman', 'serif'; font-size: 12pt; font-style: normal; font-weight: bold; margin: 0; padding: 0; } span.s2074664SCL-000002 { font-family: 'Times New Roman', 'serif'; font-size: 12pt; font-style: normal; font-weight: normal; margin: 0; padding: 0; } </style></head><body><div><p dir="ltr" class="s2074664Normal"><a href="https://sdlegislature.gov/Statutes/Codified_Laws/DisplayStatute.aspx?Type=Statute&amp;Statute=58-14-4.1"><span class="s2074664SENU">58-14-4.1</span></a><span xml:space="preserve" class="s2074664SENU">. </span><span class="s2074664CL">Association election to succeed to rights and obligations of insolvent insurer under reinsurance contract--Reinsurer's liability to pay claims.</span></p><p dir="ltr" class="s2074664Normal-000000"><span xml:space="preserve" class="s2074664DefaultParagraphFont">Notwithstanding § </span><a href="https://sdlegislature.gov/Statutes/Codified_Laws/DisplayStatute.aspx?Type=Statute&amp;Statute=58-14-4"><span class="s2074664DefaultParagraphFont">58-14-4</span></a><span class="s2074664DefaultParagraphFont">, if a life and health insurance guaranty association has made the election to succeed to the rights and obligations of the insolvent insurer under the contract of reinsurance, the reinsurer's liability to pay covered reinsured claims continues under the contract of reinsurance, subject to the payment to the reinsurer of the reinsurance premiums for such coverage. Payment for such reinsured claims may only be made by the reinsurer pursuant to the direction of the guaranty association or its designated successor. Any payment made at the direction of the guaranty association or its designated successor by the reinsurer discharges the reinsurer of any further liability to any other party for the claim payment.</span></p><p dir="ltr" class="s2074664Normal"><span xml:space="preserve" class="s2074664000001"> </span></p><p dir="ltr" class="s2074664Normal"><span class="s2074664SCL">Source:</span><span xml:space="preserve" class="s2074664SCL-000002"> SL 2005, ch 274, § 4.</span></p><p dir="ltr" class="s2074664Normal"><span xml:space="preserve" class="s2074664000001"> </span></p></div></body></html><br /><hr><br /><html xmlns="http://www.w3.org/1999/xhtml"><head><meta charset="UTF-8" /><meta http-equiv='content-language' content='en-us'/><title>SDLRC - Codified Law 58-14-4 - Credit not allowable as an asset or deduction from liability to ceding insurer--Exceptions--Payments. </title><meta name="Generator" content="PowerTools for Open XML" /><style>span { white-space: pre-wrap; } p.s2074665Normal { margin-top: 0; margin-bottom: 0; text-align: justify; font-family: 'Times New Roman', 'serif'; font-size: 12pt; line-height: 108%; margin-left: 0; margin-right: 0; } span.s2074665SENU { font-family: 'Times New Roman', 'serif'; font-size: 12pt; font-style: normal; font-weight: bold; margin: 0; padding: 0; } span.s2074665CL { font-family: 'Times New Roman', 'serif'; font-size: 12pt; font-style: normal; font-weight: bold; margin: 0; padding: 0; } p.s2074665Normal-000000 { margin-top: 0; margin-bottom: 0; text-indent: 0.50in; text-align: justify; font-family: 'Times New Roman', 'serif'; font-size: 12pt; line-height: 108%; margin-left: 0; margin-right: 0; } span.s2074665DefaultParagraphFont { font-family: 'Times New Roman', 'serif'; font-size: 12pt; font-style: normal; font-weight: normal; margin: 0; padding: 0; } span.s2074665000001 { font-size: 12pt; font-style: normal; font-weight: normal; margin: 0; padding: 0; } span.s2074665SCL { font-family: 'Times New Roman', 'serif'; font-size: 12pt; font-style: normal; font-weight: bold; margin: 0; padding: 0; } span.s2074665SCL-000002 { font-family: 'Times New Roman', 'serif'; font-size: 12pt; font-style: normal; font-weight: normal; margin: 0; padding: 0; } body { text-decoration-skip-ink: none; } </style></head><body><div><p dir="ltr" class="s2074665Normal"><a href="https://sdlegislature.gov/Statutes/Codified_Laws/DisplayStatute.aspx?Type=Statute&amp;Statute=58-14-4.2"><span class="s2074665SENU">58-14-4.2</span></a><span xml:space="preserve" class="s2074665SENU">. </span><span class="s2074665CL">Liquidator of insolvent ceding insurer to provide notice to reinsurer of claim against ceding insurer--Investigation and election to interpose defense.</span></p><p dir="ltr" class="s2074665Normal-000000"><span xml:space="preserve" class="s2074665DefaultParagraphFont">The reinsurance agreement may provide that the domiciliary liquidator of an insolvent ceding insurer shall give written notice to the reinsurer of the pendency of a claim against such ceding insurer on the contract reinsured within a reasonable time after such claim is filed in the liquidation proceeding. During the pendency of such claim, any reinsurer may investigate such claim and interpose, at its own expense, in the proceeding where such claim is to be adjudicated any defenses that it deems available to the ceding insurer or its liquidator. Such expense may be filed as a claim against the insolvent ceding insurer as a Class 6 claim pursuant to § </span><a href="https://sdlegislature.gov/Statutes/Codified_Laws/DisplayStatute.aspx?Type=Statute&amp;Statute=58-29B-124"><span class="s2074665DefaultParagraphFont">58-29B-124</span></a><span xml:space="preserve" class="s2074665DefaultParagraphFont"> to the extent of a proportionate share of the benefit that may accrue to the ceding insurer solely as result of the defense undertaken by the reinsurer. If two or more reinsurers are involved in the same claim and a majority in interest elect to interpose a defense to such claim, the expense shall be apportioned in accordance with the terms of the reinsurance agreement as though such expense had been incurred by the ceding insurer.</span></p><p dir="ltr" class="s2074665Normal"><span xml:space="preserve" class="s2074665000001"> </span></p><p dir="ltr" class="s2074665Normal"><span class="s2074665SCL">Source:</span><span xml:space="preserve" class="s2074665SCL-000002"> SL 2005, ch 274, § 5.</span></p><p dir="ltr" class="s2074665Normal"><span xml:space="preserve" class="s2074665000001"> </span></p></div></body></html>