<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 58-43-16.9 - Criteria for proportion of audit committee members. </title><meta name="Generator" content="PowerTools for Open XML" /><style>span { white-space: pre-wrap; } p.s2077283Normal { 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.s2077283SENU { font-family: 'Times New Roman', 'serif'; font-size: 12pt; font-style: normal; font-weight: bold; margin: 0; padding: 0; } span.s2077283CL { font-family: 'Times New Roman', 'serif'; font-size: 12pt; font-style: normal; font-weight: bold; margin: 0; padding: 0; } p.s2077283Normal-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; 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font-size: 12pt; font-style: normal; font-weight: bold; margin: 0; padding: 0; } span.s2077283SCL-000010 { 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="s2077283Normal"><a href="https://sdlegislature.gov/Statutes/Codified_Laws/DisplayStatute.aspx?Type=Statute&amp;Statute=58-43-16.9"><span class="s2077283SENU">58-43-16.9</span></a><span xml:space="preserve" class="s2077283SENU">. </span><span class="s2077283CL">Criteria for proportion of audit committee members.</span></p><p dir="ltr" class="s2077283Normal-000000"><span class="s2077283DefaultParagraphFont">The proportion of independent audit committee members shall meet or exceed the following criteria:</span></p><div align="center"><table dir="ltr" class="s2077283000001"><tr><td class="s2077283000002"><p dir="ltr" class="s2077283Normal-000003"><span xml:space="preserve" class="s2077283000004"> </span></p><p dir="ltr" class="s2077283Normal-000005"><span class="s2077283DefaultParagraphFont">Prior Calendar Year Direct Written and Assumed Premiums</span></p></td><td class="s2077283000006"><p dir="ltr" class="s2077283Normal-000005"><span xml:space="preserve" class="s2077283000004"> </span></p></td><td colspan="3" class="s2077283000007"><p dir="ltr" class="s2077283Normal-000005"><span xml:space="preserve" class="s2077283000004"> </span></p></td></tr><tr><td colspan="3" class="s2077283000008"><p dir="ltr" class="s2077283Normal-000003"><span xml:space="preserve" class="s2077283000004"> </span></p><p dir="ltr" class="s2077283Normal-000005"><span class="s2077283DefaultParagraphFont">$0--$300,000,000</span></p></td><td class="s2077283000008"><p dir="ltr" class="s2077283Normal-000003"><span xml:space="preserve" class="s2077283000004"> </span></p><p dir="ltr" class="s2077283Normal-000005"><span class="s2077283DefaultParagraphFont">Over $300,000,000--</span></p></td><td class="s2077283000008"><p dir="ltr" class="s2077283Normal-000003"><span xml:space="preserve" class="s2077283000004"> </span></p><p dir="ltr" class="s2077283Normal-000005"><span class="s2077283DefaultParagraphFont">Over $500,000,000</span></p></td></tr><tr><td colspan="3" class="s2077283000008"><p dir="ltr" class="s2077283Normal-000003"><span xml:space="preserve" class="s2077283000004"> </span></p><p dir="ltr" class="s2077283Normal-000005"><span xml:space="preserve" class="s2077283000004"> </span></p></td><td class="s2077283000008"><p dir="ltr" class="s2077283Normal-000003"><span xml:space="preserve" class="s2077283000004"> </span></p><p dir="ltr" class="s2077283Normal-000005"><span class="s2077283DefaultParagraphFont">$500,000,000</span></p></td><td class="s2077283000008"><p dir="ltr" class="s2077283Normal-000003"><span xml:space="preserve" class="s2077283000004"> </span></p><p dir="ltr" class="s2077283Normal-000005"><span xml:space="preserve" class="s2077283000004"> </span></p></td></tr><tr><td colspan="3" class="s2077283000008"><p dir="ltr" class="s2077283Normal-000003"><span xml:space="preserve" class="s2077283000004"> </span></p><p dir="ltr" class="s2077283Normal-000005"><span class="s2077283DefaultParagraphFont">No minimum requirements. See also Note A and B.</span></p></td><td class="s2077283000008"><p dir="ltr" class="s2077283Normal-000003"><span xml:space="preserve" class="s2077283000004"> </span></p><p dir="ltr" class="s2077283Normal-000005"><span xml:space="preserve" class="s2077283DefaultParagraphFont">Majority (50% or more) of members shall be </span></p></td><td class="s2077283000008"><p dir="ltr" class="s2077283Normal-000003"><span xml:space="preserve" class="s2077283000004"> </span></p><p dir="ltr" class="s2077283Normal-000005"><span xml:space="preserve" class="s2077283DefaultParagraphFont">Supermajority of members (75% or more) shall be </span></p></td></tr><tr><td colspan="3" class="s2077283000008"><p dir="ltr" class="s2077283Normal-000003"><span xml:space="preserve" class="s2077283000004"> </span></p><p dir="ltr" class="s2077283Normal-000005"><span xml:space="preserve" class="s2077283000004"> </span></p></td><td class="s2077283000008"><p dir="ltr" class="s2077283Normal-000003"><span xml:space="preserve" class="s2077283000004"> </span></p><p dir="ltr" class="s2077283Normal-000005"><span class="s2077283DefaultParagraphFont">independent. See also Note</span></p></td><td class="s2077283000008"><p dir="ltr" class="s2077283Normal-000003"><span xml:space="preserve" class="s2077283000004"> </span></p><p dir="ltr" class="s2077283Normal-000005"><span class="s2077283DefaultParagraphFont">independent. See also Note</span></p></td></tr><tr><td colspan="3" class="s2077283000008"><p dir="ltr" class="s2077283Normal-000003"><span xml:space="preserve" class="s2077283000004"> </span></p><p dir="ltr" class="s2077283Normal-000005"><span xml:space="preserve" class="s2077283000004"> </span></p></td><td class="s2077283000008"><p dir="ltr" class="s2077283Normal-000003"><span xml:space="preserve" class="s2077283000004"> </span></p><p dir="ltr" class="s2077283Normal-000005"><span class="s2077283DefaultParagraphFont">A and B.</span></p></td><td class="s2077283000008"><p dir="ltr" class="s2077283Normal-000003"><span xml:space="preserve" class="s2077283000004"> </span></p><p dir="ltr" class="s2077283Normal-000005"><span class="s2077283DefaultParagraphFont">A.</span></p></td></tr></table></div><p dir="ltr" class="s2077283Normal-000009"><span class="s2077283DefaultParagraphFont">Note A: The director has authority afforded by state law to require the entity's board to enact improvements to the independence of the audit committee membership if the insurer is in a risk based capital (RBC) action level event, meets one or more of the standards of an insurer deemed to be in hazardous financial condition, or otherwise exhibits qualities of a troubled insurer.</span></p><p dir="ltr" class="s2077283Normal-000009"><span class="s2077283DefaultParagraphFont">Note B: Any insurer with less than five hundred million in prior year direct written and assumed premiums is encouraged to structure an audit committee with at least a supermajority of independent audit committee members.</span></p><p dir="ltr" class="s2077283Normal-000009"><span class="s2077283DefaultParagraphFont">Note C: Prior calendar year direct written and assumed premiums shall be the combined total of direct premiums and assumed premiums from nonaffiliates for the reporting entities.</span></p><p dir="ltr" class="s2077283Normal"><span xml:space="preserve" class="s2077283000004"> </span></p><p dir="ltr" class="s2077283Normal"><span class="s2077283SCL">Source:</span><span xml:space="preserve" class="s2077283SCL-000010"> SL 2009, ch 271, § 24, eff. Jan. 1, 2010.</span></p></div></body></html>