<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 58-43-9.2 - Disqualification of accountant for services provided contemporaneously with audit. </title><meta name="Generator" content="PowerTools for Open XML" /><style>span { white-space: pre-wrap; } p.s2077262Normal { 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.s2077262SENU { font-family: 'Times New Roman', 'serif'; font-size: 12pt; font-style: normal; font-weight: bold; margin: 0; padding: 0; } span.s2077262CL { font-family: 'Times New Roman', 'serif'; font-size: 12pt; font-style: normal; font-weight: bold; margin: 0; padding: 0; } p.s2077262Normal-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.s2077262DefaultParagraphFont { font-family: 'Times New Roman', 'serif'; font-size: 12pt; font-style: normal; font-weight: normal; margin: 0; padding: 0; } p.s2077262Normal-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; } p.s2077262Normal-000002 { margin-left: 1.14in; text-indent: -0.44in; 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.s2077262000003 { font-size: 12pt; font-style: normal; font-weight: normal; margin: 0; padding: 0; } span.s2077262SCL { font-family: 'Times New Roman', 'serif'; font-size: 12pt; font-style: normal; font-weight: bold; margin: 0; padding: 0; } span.s2077262SCL-000004 { 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="s2077262Normal"><a href="https://sdlegislature.gov/Statutes/Codified_Laws/DisplayStatute.aspx?Type=Statute&amp;Statute=58-43-9.2"><span class="s2077262SENU">58-43-9.2</span></a><span xml:space="preserve" class="s2077262SENU">. </span><span class="s2077262CL">Disqualification of accountant for services provided contemporaneously with audit.</span></p><p dir="ltr" class="s2077262Normal-000000"><span class="s2077262DefaultParagraphFont">The director may not recognize as a qualified independent certified public accountant, nor accept an annual audited financial report, prepared in whole or in part by an accountant who provides to an insurer, contemporaneously with the audit, the following nonaudit services:</span></p><p dir="ltr" class="s2077262Normal-000001"><span class="s2077262DefaultParagraphFont">(1)    Bookkeeping or other services related to the accounting records or financial statements of the insurer;</span></p><p dir="ltr" class="s2077262Normal-000001"><span class="s2077262DefaultParagraphFont">(2)    Financial information systems design and implementation;</span></p><p dir="ltr" class="s2077262Normal-000001"><span class="s2077262DefaultParagraphFont">(3)    Appraisal or valuation services, fairness opinions, or contribution-in-kind reports;</span></p><p dir="ltr" class="s2077262Normal-000001"><span class="s2077262DefaultParagraphFont">(4)    Actuarially-oriented advisory services involving the determination of amounts recorded in the financial statements. The accountant may assist an insurer in understanding the methods, assumptions, and inputs used in the determination of amounts recorded in the financial statement only if it is reasonable to conclude that the services provided will not be subject to audit procedures during an audit of the insurer's financial statements. An accountant's actuary may also issue an actuarial opinion or certification on an insurer's reserves if the following conditions have been met:</span></p><p dir="ltr" class="s2077262Normal-000002"><span class="s2077262DefaultParagraphFont">(a)    Neither the accountant nor the accountant's actuary has performed any management functions or made any management decisions;</span></p><p dir="ltr" class="s2077262Normal-000002"><span class="s2077262DefaultParagraphFont">(b)    The insurer has competent personnel or engages a third party actuary to estimate the reserves for which management takes responsibility; and</span></p><p dir="ltr" class="s2077262Normal-000002"><span class="s2077262DefaultParagraphFont">(c)    The accountant's actuary tests the reasonableness of the reserves after the insurer's management has determined the amount of the reserves;</span></p><p dir="ltr" class="s2077262Normal-000001"><span class="s2077262DefaultParagraphFont">(5)    Internal audit outsourcing services;</span></p><p dir="ltr" class="s2077262Normal-000001"><span class="s2077262DefaultParagraphFont">(6)    Management functions or human resources;</span></p><p dir="ltr" class="s2077262Normal-000001"><span class="s2077262DefaultParagraphFont">(7)    Broker or dealer, investment adviser, or investment banking services;</span></p><p dir="ltr" class="s2077262Normal-000001"><span class="s2077262DefaultParagraphFont">(8)    Legal services or expert services unrelated to the audit; or</span></p><p dir="ltr" class="s2077262Normal-000001"><span xml:space="preserve" class="s2077262DefaultParagraphFont">(9)    Any other services that the director determines, by rules promulgated pursuant to chapter </span><a href="https://sdlegislature.gov/Statutes/Codified_Laws/DisplayStatute.aspx?Type=Statute&amp;Statute=1-26"><span class="s2077262DefaultParagraphFont">1-26</span></a><span class="s2077262DefaultParagraphFont">, are impermissible.</span></p><p dir="ltr" class="s2077262Normal"><span xml:space="preserve" class="s2077262000003"> </span></p><p dir="ltr" class="s2077262Normal"><span class="s2077262SCL">Source:</span><span xml:space="preserve" class="s2077262SCL-000004"> SL 2009, ch 271, § 8.</span></p></div></body></html>