CHAPTER 58-24
FIRE, MARINE, CASUALTY, AND SURETY INSURANCE RATES AND RATING ORGANIZATIONS
58-24-1 Purpose of chapter.
58-24-2 Application of chapter.
58-24-3 Insurance to which chapter does not apply.
58-24-4 Making of rates--Provisions governing.
58-24-5 Excessive, inadequate, or discriminatory rates prohibited.
58-24-6 Making of rates--Matters considered.
58-24-6.1 Failure of rate to reflect difference in expected losses and expenses as unfair discrimination--Averaged group rates not unfairly discriminatory.
58-24-7 Risks grouped by classification for rate-making--Modification of classification rates.
58-24-8 System of expense provisions used in rate-making--Reflection of operating methods.
58-24-9 Uniformity as to rates not required.
58-24-10 Filing of rates with director--Effective date--Character and extent of coverage--Exceptions.
58-24-10.1 Rating rules required to be filed with director--Filing date--Supporting information required.
58-24-10.2 Rate information required to be filed prior to effective date on finding that closer supervision is required--Extension of waiting period--Approval or disapproval.
58-24-11 58-24-11. Repealed by SL 2004, ch 307, § 9
58-24-12 Satisfaction of insurer's obligations by becoming member of or subscriber to licensed rating organization.
58-24-13 Information furnished in support of filing.
58-24-14 Filing open to public inspection--Specially rated inland marine risks.
58-24-15 Review of filings by director.
58-24-16 58-24-16. Repealed by SL 2006, ch 260, § 2
58-24-17 Filing with respect to specially rated risks--Effective date.
58-24-18 Disapproval of filing prohibited if rates meet requirements.
58-24-19 Disapproval of filings by director--Notice--Contents.
58-24-20 Disapproval of filing with respect to specially rated risks--Notice, contents.
58-24-21 Effect of finding and order that filing does not comply with chapter.
58-24-22 Request by aggrieved party for hearing on filing--Grounds for application.
58-24-23 Hearing on filing--Action by director--Notice of hearing.
58-24-24 Finding that filing does not comply--Order discontinuing filing--Effective date.
58-24-25 Issuance of contract or policy contrary to filings prohibited--Inland marine risks excepted.
58-24-26 Excess rate approved for specific risk--Filing application.
58-24-27 Assigned risks--Reasonable rate modifications.
58-24-28 Information to be furnished insureds.
58-24-29 Right of insured to hearing on application of rating system.
58-24-30 Appeal to director from rating organization or insurer--Affirmance or reversal of action.
58-24-31 Recording and reporting of loss and experience--Rules and statistical plans of director.
58-24-32 58-24-32. Repealed by SL 1986, ch 22, § 35
58-24-33 Exchange of information and experience data with other states--Consultation as to rate-making.
58-24-34 Withholding of or giving false or misleading information--Penalties.
58-24-35 Application for license as rating organization--Contents.
58-24-36 Issuance of license--Finding by director--Time for granting or denying application.
58-24-37 Duration of rating organization license--Fee.
58-24-38 Suspension or revocation of license.
58-24-39 Notice to director of change in license application information.
58-24-40 Subscribers to rating services--Rules of rating organization.
58-24-41 Review by director of reasonableness of rule or refusal to admit insurer as subscriber.
58-24-42 Order affirming action of rating organization.
58-24-43 Actuarial, technical, or other services provided to subscribers.
58-24-44 Examination of evidences of insurance or cancellation--Rules as to submission--Information confidential.
58-24-45 Regulation of payment of dividends, savings, or unabsorbed premium deposits prohibited.
58-24-45.1 Group insurance marketing permitted--Conditions.
58-24-46 Cooperation between organizations and insurers authorized--Review of cooperative activities by director.
58-24-47 Appeal to director from action of rating organization--Hearing--Order.
58-24-48 Appeal based on failure to file for different expense system--Application of rate-making standards.
58-24-49 Application of insurer to file deviation--Basis for modification--Copy to rating organization.
58-24-50 Deviations to be uniform within class.
58-24-51 Criteria considered on application for deviation--Order permitting or denying deviation.
58-24-52 Duration of permitted deviation.
58-24-53 Advisory organization license required.
58-24-54 Advisory organization filing requirements.
58-24-55 Unfair or unreasonable advisory organization practices--Order requiring discontinuance.
58-24-56 Filings based on information furnished by noncompliant advisory organization prohibited--Order requiring discontinuance.
58-24-57 Insurers engaging in joint underwriting or joint reinsurance subject to regulation.
58-24-58 Unfair or unreasonable practices of joint underwriters or joint reinsurers--Order requiring discontinuance.
58-24-59 Examination of rating organizations, advisory organizations, joint underwriters, and joint reinsurers--Acceptance of report of official of another state.
58-24-60 58-24-60. Repealed by SL 1986, ch 22, § 36
58-24-61 Violation of chapter--Penalties.
58-24-62 Suspension of license of rating organization or insurer.
58-24-63 Written order of director for imposition of penalty and suspension of license--Hearing, notice, findings.
58-24-64 Request for hearing on order or decision--Notice--Affirmance, reversal, or modification.
58-24-65 Rehearing and appeal from order of director.
58-24-66 Notice required for filing for workers' compensation insurance.
58-24-67 Notice to workers' compensation purchaser organizations.
58-24-68 Exempt commercial policyholder--Definition.
58-24-69 Risk manager defined.
58-24-70 Exemption from rate and form filing requirements for policy issued to exempt commercial policyholder--Disclosure requirements.
58-24-71 Third-party consultant disclosure requirements.
58-24-72 Promulgation of rules.
58-24-73 Insurer to maintain and provide copies of disclosures--Examination.
58-24-74 Insurer to maintain records relating to insurance sales to exempt commercial policyholder--Examination by director.
58-24-75 Premium increase prohibited for certain accidents involving law enforcement, emergency, or snow removal personnel--Exception.
58-24-1. Purpose of chapter.
The purpose of this chapter is to promote the public welfare by regulating insurance rates to the end that they shall not be excessive, inadequate or unfairly discriminatory, and to authorize and regulate cooperative action among insurers in rate-making and in other matters within the scope of this chapter. Nothing in this chapter is intended to prohibit or discourage reasonable competition, or to prohibit or encourage, except to the extent necessary to accomplish the aforementioned purpose, uniformity in insurance rates, rating systems, rating plans, or practices. This chapter shall be liberally interpreted to carry into effect the provisions hereof.
Source: SL 1966, ch 111, ch 15, § 1.
58-24-2. Application of chapter.
This chapter applies to all forms of casualty insurance, including fidelity, surety, and guaranty bonds, to all forms of property, fire, marine, and inland marine insurance, workers' compensation, and to any combination of any of the foregoing, on risks or operations in this state. Inland marine insurance shall be deemed to include insurance now or hereafter defined by statute, or by interpretation thereof, or if not so defined or interpreted, by ruling of the director, or as established by general custom of the business, as inland marine insurance.
Source: SL 1966, ch 111, ch 15, § 2.
58-24-3. Insurance to which chapter does not apply.
This chapter shall not apply to:
(1) Reinsurance, other than joint reinsurance to the extent stated in §§ 58-24-57 and 58-24-58;
(2) Life insurance;
(3) Health insurance;
(4) Insurance of vessels or craft, their cargoes, marine builders' risks, marine protection and indemnity, or other risks commonly insured under marine, as distinguished from inland marine insurance policies; or
(5) Title insurance.
Source: SL 1966, ch 111, ch 15, § 2.
58-24-4. Making of rates--Provisions governing.
Rates shall be made in accordance with the provisions of §§ 58-24-5 to 58-24-8, inclusive.
Source: SL 1966, ch 111, ch 15, § 3 (1).
58-24-5. Excessive, inadequate, or discriminatory rates prohibited.
Rates shall not be excessive, inadequate, or unfairly discriminatory.
Source: SL 1966, ch 111, ch 15, § 3 (1) (a).
58-24-6. Making of rates--Matters considered.
To determine whether rates are excessive, inadequate, or unfairly discriminatory, the director may consider:
(1) Past and prospective loss experience within this state;
(2) Conflagration and catastrophic hazards;
(3) Reasonable margin for the underwriting profit and contingencies;
(4) Dividends, savings, or unabsorbed premium deposits allowed or returned by insurers to their policyholders, members, or subscribers;
(5) Past and prospective expenses specially applicable to this state; and
(6) All other relevant factors within and outside this state.
The loss experience shall be on at least the most recent five-year period for which such experience is available. If South Dakota data are not adequate because of insufficient sample size, the director shall consider the loss experience or the expense data, or both, outside this state.
Source: SL 1966, ch 111, ch 15, § 3 (1) (b); SL 1990, ch 400, § 1.
58-24-6.1. Failure of rate to reflect difference in expected losses and expenses as unfair discrimination--Averaged group rates not unfairly discriminatory.
One rate is unfairly discriminatory in relation to another in the same class if it clearly fails to reflect equitably the difference in expected losses and expenses. Rates are not unfairly discriminatory because different premiums result for policyholders with like loss exposures but different expense factors, or like expense factors but different loss exposures, so long as the rates reflect the differences with reasonable accuracy. Rates are not unfairly discriminatory if they are averaged broadly among persons insured under a group, franchise, or blanket policy.
Source: SL 1979, ch 341, § 11.
58-24-7. Risks grouped by classification for rate-making--Modification of classification rates.
Risks may be grouped by classifications for the establishment of rates and minimum premiums. Classification rates may be modified to produce rates for individual risks in accordance with rating plans which establish standards for measuring variations in hazards or expense provisions, or both. Such standards may measure any differences among risks that can be demonstrated to have a probable effect upon losses or expenses.
Source: SL 1966, ch 111, ch 15, § 3 (1) (d).
58-24-8. System of expense provisions used in rate-making--Reflection of operating methods.
The systems of expense provisions included in the rates for use by any insurer or group of insurers may differ from those of other insurers or group of insurers to reflect the requirements of the operating methods of any such insurer or group of insurers with respect to any kind of insurance, or with respect to any subdivision or combination thereof for which subdivision or combination separate expense provisions are applicable.
Source: SL 1966, ch 111, ch 15, § 3 (1) (c).
58-24-9. Uniformity as to rates not required.
Except to the extent necessary to meet the provisions of § 58-24-5, uniformity among insurers in any matters within the scope of §§ 58-24-4 to 58-24-8, inclusive, is neither required nor prohibited.
Source: SL 1966, ch 111, ch 15, § 3 (2).
58-24-10. Filing of rates with director--Effective date--Character and extent of coverage--Exceptions.
Every insurer shall file with the director of the Division of Insurance every manual, minimum, class rate, rating schedule, or rating plan and every other rating rule, and every modification of any of the foregoing which it proposes to use. Every such filing shall state the proposed effective date thereof, and shall indicate the character and extent of the coverage contemplated. The filing date is the effective date thereof unless the insurer proposes an effective date subsequent to the filing date.
This section does not apply to:
(1) Inland marine risks which by general custom of the business are not written according to manual rates or rating plans; or
(2) Automobile and other motor vehicle insurance subject to § 58-24-10.1.
Source: SL 1966, ch 111, ch 15, § 4 (1); SL 1979, ch 341, § 3; SL 2004, ch 307, § 8.
58-24-10.1. Rating rules required to be filed with director--Filing date--Supporting information required.
Every insurer writing automobile insurance as defined by subdivisions 58-11-45(1) to (3), inclusive, and subdivision 58-23-6(2), and every insurer writing liability insurance, physical damage insurance, and collision insurance on all motor vehicles ordinarily used on the public highways, except for insurance which falls within the inland marine risk exemption of § 58-24-10 or for insurance policies excluded under the definition of "policy" in subdivision 58-11-45(5), shall file with the director of the Division of Insurance every manual, minimum, class rate, rating schedule, or rating plan and every other rating rule, and modification of any of the foregoing which it proposes to use, and shall indicate the character and extent of the coverages contemplated. The filing date shall be the effective date thereof unless the insurer proposes an effective date subsequent to the filing date. If the director is not satisfied with the information provided to support a filing made in accordance with this section, he shall proceed in accordance with § 58-24-13.
Source: SL 1979, ch 341, §§ 4, 5.
58-24-10.2. Rate information required to be filed prior to effective date on finding that closer supervision is required--Extension of waiting period--Approval or disapproval.
The director of the Division of Insurance may by order require that a particular insurer otherwise entitled to file its rates in accordance with § 58-24-10.1, file any or all of its rates and supplementary rate information thirty days prior to their effective date, if and to the extent that he finds, after a hearing, that the protection of the interests of its insureds and the public in this state require closer supervision of its rates because of the insurer's financial condition or rating practices. He may extend the waiting period for any filing for not to exceed thirty additional days by written notice to the insurer before the first thirty-day period expires. A filing not disapproved before the expiration of the waiting period shall be deemed to meet the requirements of this chapter, subject to the possibility of subsequent disapproval under § 58-24-21.
Source: SL 1979, ch 341, § 7.
58-24-12. Satisfaction of insurer's obligations by becoming member of or subscriber to licensed rating organization.
An insurer may satisfy its obligation to make filings pursuant to this chapter by:
(1) Becoming a member of, or a subscriber to, a licensed rating organization that makes filings; and
(2) Authorizing the director to accept filings on its behalf.
Nothing contained in this chapter may be construed as requiring any insurer to become a member of or a subscriber to any rating organization.
Source: SL 1966, ch 111, ch 15, § 4 (2); SL 2014, ch 239, § 1.
58-24-13. Information furnished in support of filing.
If a filing is not accompanied by the information upon which the insurer supports the filing, and the director does not have sufficient information to determine whether the filing meets the requirements of the chapter, the director shall require the insurer to furnish the information upon which the insurer supports the filing. The information furnished in support of a filing may include:
(1) The experience or judgment of the insurer or rating organization making the filing;
(2) Its interpretation of any statistical data it relies upon;
(3) The experience of other insurers or rating organizations; or
(4) Any other relevant factors.
Source: SL 1966, ch 111, ch 15, § 4 (1); SL 2008, ch 269, § 1.
58-24-14. Filing open to public inspection--Specially rated inland marine risks.
A filing and any supporting information shall be open to public inspection after the filing becomes effective. Specific inland marine rates on risks specially rated, made by a rating organization, shall be filed with the director.
Source: SL 1966, ch 111, ch 15, § 4 (1).
58-24-15. Review of filings by director.
The director shall review filings as soon as reasonably possible after they have been made in order to determine whether they meet the requirements of this chapter.
Source: SL 1966, ch 111, ch 15, § 4 (3).
58-24-17. Filing with respect to specially rated risks--Effective date.
Specific inland marine rates on risks specially rated by a rating organization, or any specific filing with respect to a surety or guaranty bond required by law or by court or executive order, or by order, rule, or regulation of a public body and not covered by a previous filing, shall become effective when filed and deemed to meet the requirements of this chapter until such time as the director reviews the filing and so long thereafter as the filing remains in effect.
Source: SL 1966, ch 111, ch 15, § 4 (5).
58-24-18. Disapproval of filing prohibited if rates meet requirements.
No filing shall be disapproved if the rates thereby produced meet the requirements of this chapter.
Source: SL 1966, ch 111, ch 15, § 5 (5).
58-24-19. Disapproval of filings by director--Notice--Contents.
If the director finds that a filing does not meet the requirements of this chapter, the director shall send to the insurer or rating organization which made the filing, written notice of disapproval of the filing specifying therein in what respects the director finds the filing fails to meet the requirements of this chapter and stating that the filing may not become effective.
Source: SL 1966, ch 111, ch 15, § 5 (1); SL 2006, ch 260, § 1.
58-24-20. Disapproval of filing with respect to specially rated risks--Notice, contents.
If within thirty days after a specific inland marine rate on a risk specially rated by a rating organization or after a special surety or guaranty filing subject to § 58-24-17 has become effective, the director finds that such filing does not meet the requirements of this chapter, he shall send to the rating organization or insurer which made such filing written notice of disapproval of such filing specifying therein in what respects he finds that such filing fails to meet the requirements of this chapter and stating when, within a reasonable period thereafter, such filing shall be deemed no longer effective. Said disapproval shall not affect any contract made or issued prior to the expiration of the period set forth in said notice.
Source: SL 1966, ch 111, ch 15, § 5 (2).
58-24-21. Effect of finding and order that filing does not comply with chapter.
If at any time subsequent to the applicable review period provided for in § 58-24-19, 58-24-20, or in the case of a filing made under § 58-24-10.1, the director of the Division of Insurance finds that a filing does not meet the requirements of this chapter, he shall, after a hearing held upon not less than ten days' written notice, specifying the matters to be considered at such hearing, to every insurer and rating organization which made such filing, issue an order specifying in what respect he finds that such filing fails to meet the requirements of this chapter, and stating when, within a reasonable period thereafter, such filing shall be deemed no longer effective. Copies of said order shall be sent to every such insurer and rating organization. Said order shall not affect any contract or policy made or issued prior to the expiration of the period set forth in said order.
Source: SL 1966, ch 111, ch 15, § 5 (3); SL 1979, ch 341, § 6.
58-24-22. Request by aggrieved party for hearing on filing--Grounds for application.
Any person or organization aggrieved with respect to any filing which is in effect may make written application to the director for a hearing thereon, provided, however, that the insurer or rating organization that made the filing shall not be authorized to proceed under this section. Such application shall specify the grounds to be relied upon by the applicant and such application must show that the person or organization making such application has a specific economic interest affected by the filing. No rating or advisory organization shall have any status under this chapter to make application for a hearing on any filing made by an insurer with the director.
Source: SL 1966, ch 111, ch 15, § 5 (4).
58-24-23. Hearing on filing--Action by director--Notice of hearing.
If the director shall find that an application pursuant to § 58-24-22 is made in good faith, that the applicant has a specific economic interest, that the applicant would be so aggrieved if his grounds are established, and that such grounds otherwise justify holding a hearing, he shall within thirty days after receipt of such application hold a hearing upon not less than ten days' written notice to the applicant and to every insurer and rating organization which made such filing.
Source: SL 1966, ch 111, ch 15, § 5 (4).
58-24-24. Finding that filing does not comply--Order discontinuing filing--Effective date.
If, after hearing pursuant to § 58-24-23, the director finds that the filing does not meet the requirements of this chapter, he shall issue an order specifying in what respect he finds that such filing fails to meet the requirements of this chapter, and stating when, within a reasonable period thereafter, such filing shall be deemed no longer effective. Copies of said order shall be sent to the applicant and to every such insurer and rating organization. Said order shall not affect any contract or policy made or issued prior to the expiration of the period set forth in said order.
Source: SL 1966, ch 111, ch 15, § 5 (4).
58-24-25. Issuance of contract or policy contrary to filings prohibited--Inland marine risks excepted.
No insurer shall make or issue a contract or policy except in accordance with the filings which are in effect for said insurer as provided in this chapter. This section shall not apply to contracts or policies for inland marine risks as to which filings are not required.
Source: SL 1966, ch 111, ch 15, § 4 (8).
58-24-26. Excess rate approved for specific risk--Filing application.
Upon written application signed by the insured, stating the reasons therefor, filed with and approved by the director, a rate in excess of that provided by a filing otherwise applicable may be used on any specific risk. The application for approval of this rate shall be filed prior to the effective date of the policy being issued. The director may waive the requirement of prior filing if a special need or circumstance can be demonstrated.
Source: SL 1966, ch 111, ch 15, § 4 (7); SL 1967, ch 133; SL 1990, ch 400, § 2; SL 2009, ch 267, § 1.
58-24-27. Assigned risks--Reasonable rate modifications.
Agreements may be made among insurers with respect to the equitable apportionment among them of insurance which may be afforded applicants who are in good faith entitled to but who are unable to procure such insurance through ordinary methods, and such insurers may agree among themselves on the use of reasonable rate modifications for such insurance, such agreements and rate modifications to be subject to the approval of the director.
Source: SL 1966, ch 111, ch 15, § 15.
58-24-28. Information to be furnished insureds.
Every rating organization and every insurer which makes its own rates shall, within a reasonable time after receiving written request therefor and upon payment of such reasonable charge as it may make, furnish to any insured affected by a rate made by it, or to the authorized representative of such insured, all pertinent information as to such rate.
Source: SL 1966, ch 111, ch 15, § 9.
58-24-29. Right of insured to hearing on application of rating system.
Every rating organization and every insurer which makes its own rates shall provide within this state reasonable means whereby any person aggrieved by the application of its rating system may be heard, in person or by his authorized representative, on his written request to review the manner in which such rating system has been applied in connection with the insurance afforded him. If the rating organization or insurer fails to grant or reject such request within thirty days after it is made, the applicant may proceed in the same manner as if his application had been rejected.
Source: SL 1966, ch 111, ch 15, § 9.
58-24-30. Appeal to director from rating organization or insurer--Affirmance or reversal of action.
Any party affected by the action of such rating organization or such insurer on such request may, within thirty days after written notice of such action, appeal to the director who, after a hearing held upon not less than ten days' written notice to the appellant and to such rating organization or insurer, may affirm or reverse such action.
Source: SL 1966, ch 111, ch 15, § 9.
58-24-31. Recording and reporting of loss and experience--Rules and statistical plans of director.
The director shall promulgate rules and statistical plans, reasonably adapted to each of the rating systems on file with the division, which may be modified from time to time and which shall be used thereafter by each insurer in the recording and reporting of its loss and country-wide expense experience in order that the experience of all insurers may be made available at least annually in such form and detail as may be necessary in determining whether rating systems comply with the standards set forth in §§ 58-24-5 to 58-24-8, inclusive. Such rules and plans may also provide for the recording and reporting of expense experience items which are specially applicable to this state and are not susceptible of determination by a prorating of country-wide expense experience. In promulgating such rules and deciding what plans to use, the director shall give due consideration to the rating systems on file and, in order that the plans may be as uniform as is practicable among the several states, to the rules and to the form of the plans used for such rating systems in other states. No insurer shall be required to record or report its loss experience on a classification basis that is inconsistent with the rating system filed by it. The director may designate one or more rating organizations or other agencies for assistance in gathering such experience and making compilations thereof, and such compilations shall be made available, subject to rules promulgated by the director, to insurers and rating organizations.
Source: SL 1966, ch 111, ch 15, § 13(1); SL 1986, ch 22, § 34.
58-24-33. Exchange of information and experience data with other states--Consultation as to rate-making.
In order to further uniform administration of rate regulatory laws, the director and every insurer and rating organization may exchange information and experience data with insurance supervisory officials, insurers, and rating organizations in other states and may consult with them with respect to rate-making and the application of rating systems.
Source: SL 1966, ch 111, ch 15, § 13 (3).
58-24-34. Withholding of or giving false or misleading information--Penalties.
No person or organization shall willfully withhold information from, or knowingly give false or misleading information to, the director, any statistical agency designated by the director, any rating organization, or any insurer, which will affect the rates or premiums chargeable under this chapter. A violation of this section is a Class 2 misdemeanor and shall subject the one guilty of such violation to the penalties provided in §§ 58-24-61 and 58-24-62.
Source: SL 1966, ch 111, ch 15, § 14; SL 1978, ch 359, § 2.
58-24-35. Application for license as rating organization--Contents.
A corporation, unincorporated association, partnership, individual, or any other legal business entity, whether located within or outside this state, may apply for a license as a rating organization by providing the following information in its application:
(1) A copy of its governing documents, to include its constitution, articles of agreement or association, certificate of incorporation, bylaws, rules, and regulations, as applicable;
(2) A list of its members and subscribers;
(3) The name and address of a resident of this state upon whom notices or orders of the director or process affecting such rating organization may be served;
(4) A statement of its qualifications as a rating organization; and
(5) A statement specifying the kind of insurance, or subdivision, class, or part of risk or combination thereof for which the rating organization intends to be licensed.
Source: SL 1966, ch 111, ch 15, § 6 (1); SL 2014, ch 239, § 2.
58-24-36. Issuance of license--Finding by director--Time for granting or denying application.
If the director finds that the applicant is competent, trustworthy, and otherwise qualified to act as a rating organization and that the contents of its application conform to the requirements of law, the director shall issue a license specifying the kinds of insurance, or subdivisions or classes of risks or parts or combinations thereof for which the applicant is authorized to act as a rating organization. Each application shall be granted or denied in whole or in part by the director within sixty days of the date of its filing with the director.
Source: SL 1966, ch 111, ch 15, § 6 (1); SL 2014, ch 239, § 3.
58-24-37. Duration of rating organization license--Fee.
Each license issued pursuant to § 58-24-36 remains in effect for three years unless suspended or revoked by the director. The license fee for any applicant pursuant to this chapter is twenty-five dollars.
Source: SL 1966, ch 111, ch 15, § 6 (1); SL 2014, ch 239, § 4.
58-24-38. Suspension or revocation of license.
Any license issued pursuant to § 58-24-36 may be suspended or revoked by the director, after hearing upon notice, if the rating organization ceases to meet any requirement of this chapter, including the requirements of initial licensure.
Source: SL 1966, ch 111, ch 15, § 6 (1); SL 2014, ch 239, § 5.
58-24-39. Notice to director of change in license application information.
Each rating organization shall notify the director promptly of any change in information from what was provided in its application pursuant to § 58-24-35.
Source: SL 1966, ch 111, ch 15, § 6 (1); SL 2014, ch 239, § 6.
58-24-40. Subscribers to rating services--Rules of rating organization.
Subject to rules and regulations of the rating organization that have been approved by the director as reasonable, each rating organization shall permit any insurer that is not a member to be a subscriber to its rating services for any kind of insurance for which it is licensed. Notice of any proposed change to a rule shall be given to each subscriber. Each rating organization shall furnish its rating services without discrimination to each member and subscriber.
Source: SL 1966, ch 111, ch 15, § 6 (2); SL 2014, ch 239, § 7.
58-24-41. Review by director of reasonableness of rule or refusal to admit insurer as subscriber.
Any subscriber, member, or insurer may request a hearing held by the director to determine the reasonableness of any rule or regulation of a rating organization in its application to each subscriber or the refusal of any rating organization to admit an insurer as a subscriber. The hearing shall be held upon at least ten days' written notice to such rating organization and to each subscriber or insurer pursuant to chapter 1-26. If the director finds that the rule is unreasonable in its application to subscribers, or that an insurer is denied subscription without justification, the director shall order that the rule is not applicable to subscribers or that the insurer is to be admitted as a subscriber, as applicable.
Source: SL 1966, ch 111, ch 15, § 6 (2); SL 2014, ch 239, § 8.
58-24-42. Order affirming action of rating organization.
If, after the hearing held pursuant to § 58-24-41, the director finds that the action of the rating organization was justified, the director shall issue an order affirming its action.
Source: SL 1966, ch 111, ch 15, § 6 (2); SL 2014, ch 239, § 9.
58-24-43. Actuarial, technical, or other services provided to subscribers.
Any rating organization may subscribe for or purchase actuarial, technical, or other services, and such services shall be available to all members and subscribers without discrimination.
Source: SL 1966, ch 111, ch 15, § 6 (6).
58-24-44. Examination of evidences of insurance or cancellation--Rules as to submission--Information confidential.
Any rating organization may provide for the examination of policies, daily reports, binders, renewal certificates, endorsements, or other evidences of insurance, or the cancellation thereof, and may make reasonable rules governing their submission. Rules shall contain a provision that if any insurer does not furnish satisfactory evidence to the rating organization of the correction of any error or omission previously called to its attention by the rating organization within sixty days, the rating organization shall notify the director thereof. All information submitted for examination under this section is confidential.
Source: SL 1966, ch 111, ch 15, § 6 (5); SL 2014, ch 239, § 10.
58-24-45. Regulation of payment of dividends, savings, or unabsorbed premium deposits prohibited.
No rating organization may adopt any rule the effect of which would prohibit or regulate the payment of dividends, savings, or unabsorbed premium deposits allowed or returned by insurers to their policyholders, members, or subscribers.
Source: SL 1966, ch 111, ch 15, § 6 (3); SL 2014, ch 239, § 11.
58-24-45.1. Group insurance marketing permitted--Conditions.
An insurer may market insurance through a group insurance or mass marketing plan, franchise, or blanket policy for any line of insurance regulated under this chapter if:
(1) The insured group was not formed solely for the purpose of purchasing insurance; and
(2) The premium is paid or collected by:
(a) An employer, labor union, or the trustee of a fund established by the employer or labor union;
(b) The trustee of a fund established by two or more employers in the same industry, or related industries;
(c) Two or more labor unions or an association which have been in existence for one or more years and which have a constitution and bylaws; or
(d) A wireless telecommunications provider from its customers and the premium is for insurance covering wireless telecommunications equipment.
Source: SL 1979, ch 341, § 12; SL 2008, ch 270, § 1; SL 2014, ch 239, § 12.
58-24-46. Cooperation between organizations and insurers authorized--Review of cooperative activities by director.
Cooperation among rating organizations or among rating organizations and insurers in rate-making or in other matters within the scope of this chapter is hereby authorized, provided the filings resulting from such cooperation are subject to all the provisions of this chapter which are applicable to filings generally. The director may review such cooperative activities and practices and if, after a hearing, he finds that any such activity or practice is unfair or unreasonable or otherwise inconsistent with the provisions of this chapter, he may issue a written order specifying in what respects such activity or practice is unfair or unreasonable or otherwise inconsistent with the provisions of this chapter and requiring the discontinuance of such activity or practice.
Source: SL 1966, ch 111, ch 15, § 6 (4).
58-24-47. Appeal to director from action of rating organization--Hearing--Order.
Any member or subscriber to a rating organization may appeal to the director from the action or decision of the rating organization in approving or rejecting any proposed change in or addition to the filings of the rating organization. The director shall, after a hearing held upon not less than ten days' written notice to the appellant and to the rating organization, issue an order approving the action or decision of the rating organization or, if the director finds that the action or decision was unreasonable, issue an order directing the rating organization to make an addition to its filings on behalf of its members and subscribers, in a manner consistent with the director's findings within a reasonable time after the issuance of the order.
Source: SL 1966, ch 111, ch 15, § 8; SL 2014, ch 239, § 13.
58-24-48. Appeal based on failure to file for different expense system--Application of rate-making standards.
If an appeal under § 58-24-47 is based upon the failure of the rating organization to make a filing on behalf of the member or subscriber, which is based on a system of expense provisions which differs, in accordance with the right granted in § 58-24-8, from the system of expense provisions included in a filing made by the rating organization, the director shall, if the director grants the appeal, order the rating organization to make the requested filing for use by the appellant. In deciding the appeal the director shall apply the standards set forth in §§ 58-24-5 to 58-24-9, inclusive.
Source: SL 1966, ch 111, ch 15, § 8; SL 2014, ch 239, § 14.
58-24-49. Application of insurer to file deviation--Basis for modification--Copy to rating organization.
Every member of or subscriber to a rating organization shall adhere to the filings made on its behalf by such organization except that any such insurer may make written application to the director to file a deviation from the class rates, schedules, rating plans, or rules respecting any kind of insurance, or class of risk within a kind of insurance, or combination thereof. Such application shall specify the basis for the modification and a copy shall also be sent simultaneously to such rating organization.
Source: SL 1966, ch 111, ch 15, § 7.
58-24-50. Deviations to be uniform within class.
As to all forms of casualty insurance, including workers' compensation or any combination thereof, no application shall be granted under § 58-24-51 unless the requested deviation is based upon a uniform percentage decrease or increase to be applied to the premiums produced by such rating system, as filed, for a kind of insurance or for a class of insurance which is found by the director to be a proper rating unit for the application of such uniform percentage decrease or increase, or for a subdivision of a kind of insurance comprised of a group of manual classifications which are treated as a separate unit for rate-making purposes or for which separate expense provisions are included in the filings of the rating organization.
Source: SL 1966, ch 111, ch 15, § 3 (2).
58-24-51. Criteria considered on application for deviation--Order permitting or denying deviation.
In considering the application to file such deviation, the director shall give consideration to the available statistics and the principles for rate-making as provided in §§ 58-24-5 to 58-24-9, inclusive. The director shall issue an order permitting the deviation for such insurer to be filed if he finds it to be justified and it shall thereupon become effective. He shall issue an order denying such application if he finds that the deviation applied for does not meet the requirements of this chapter.
Source: SL 1966, ch 111, ch 15, § 7.
58-24-52. Duration of permitted deviation.
Each deviation permitted to be filed shall remain in effect for a period of not less than one year from the effective date unless sooner withdrawn by the insurer with the approval of the director or until terminated in accordance with the provisions of §§ 58-24-21 to 58-24-24, inclusive.
Source: SL 1966, ch 111, ch 15, § 7.
58-24-53. Advisory organization license required.
Each group, association, or other organization of insurers, whether located within or outside this state, which assists insurers which make their own filings or rating organizations in rate-making, by the collection and furnishing of loss or expense statistics, or by the submission of recommendations, but which does not make filings under this chapter shall be subject to licensure pursuant to this chapter as an advisory organization.
Source: SL 1966, ch 111, ch 15, § 10 (1); SL 2014, ch 239, § 15.
58-24-54. Advisory organization filing requirements.
Each advisory organization shall file with the director the requirements of § 58-24-35 and an agreement that the director may examine the advisory organization in accordance with the provisions of § 58-24-59.
Source: SL 1966, ch 111, ch 15, § 10 (2); SL 2014, ch 239, § 16.
58-24-55. Unfair or unreasonable advisory organization practices--Order requiring discontinuance.
If the director finds that an advisory organization has furnished information or assistance that involves any act or practice which is unfair or unreasonable or otherwise inconsistent with the provisions of this chapter, the director may issue an order specifying in what respect such act or practice is unfair or unreasonable or otherwise inconsistent with the provisions of this chapter, and requiring the discontinuance of such act or practice.
Source: SL 1966, ch 111, ch 15, § 10 (3); SL 2014, ch 239, § 17.
58-24-56. Filings based on information furnished by noncompliant advisory organization prohibited--Order requiring discontinuance.
No insurer that makes its own filings or any rating organization that submits filings with the division may support its filings by statistics or adopt rate-making recommendations furnished to it by an advisory organization which has not complied with § 58-24-54 or with an order of the director involving statistics or recommendations issued under § 58-24-55. If the director finds an insurer or rating organization to be in violation of this section the director may issue an order requiring the discontinuance of the violation.
Source: SL 1966, ch 111, ch 15, § 10 (4); SL 2014, ch 239, § 18.
58-24-57. Insurers engaging in joint underwriting or joint reinsurance subject to regulation.
Every group, association, or other organization of insurers which engages in joint underwriting or joint reinsurance shall be subject to regulation with respect thereto as provided in this title.
Source: SL 1966, ch 111, ch 15, § 11 (1).
58-24-58. Unfair or unreasonable practices of joint underwriters or joint reinsurers--Order requiring discontinuance.
If, after a hearing, the director finds that any activity or practice of any group identified in § 58-24-57 is unfair or unreasonable or otherwise inconsistent with the provisions of this chapter, the director may issue an order specifying in what respect the activity or practice is unfair or unreasonable or otherwise inconsistent with the provisions of this chapter and requiring the discontinuance of the activity or practice.
Source: SL 1966, ch 111, ch 15, § 11 (2); SL 2014, ch 239, § 19.
58-24-59. Examination of rating organizations, advisory organizations, joint underwriters, and joint reinsurers--Acceptance of report of official of another state.
As often as the director deems necessary, the director shall examine each rating organization licensed in this state as provided in §§ 58-24-35 to 58-24-39, inclusive, each advisory organization referred to in § 58-24-53, and each group, association, or other organization referred to in § 58-24-57. The cost of any examination shall be paid by the rating organization, advisory organization, or group, association or other organization examined. The officers, manager, agents, and employees of the rating organization, advisory organization, or group, association, or other organization may be examined at any time under oath and shall exhibit all books, records, accounts, documents, or agreements governing its method of operation. In lieu of the above, the director may accept the report of an examination made by the insurance supervisory official of another state. No rating organization examined may be reimbursed from the examination fund.
Source: SL 1966, ch 111, ch 15, § 12; SL 2014, ch 239, § 20.
58-24-61. Violation of chapter--Penalties.
The director may, if the director finds that any person or organization has violated any provision of this chapter, issue an order which imposes a penalty of not more than five hundred dollars for each violation, but if the director finds a violation to be willful the director may impose a penalty of not more than five thousand dollars for each violation. The penalties may be in addition to any other penalty provided by law or order of the director issued pursuant to this chapter.
Source: SL 1966, ch 111, ch 15, § 16; SL 2014, ch 239, § 21.
58-24-62. Suspension of license of rating organization or insurer.
The director may suspend the license of any rating organization or insurer that fails to comply with an order of the director after the time prescribed for an appeal therefrom has expired or the order has been affirmed on appeal. The director may determine when a suspension of license becomes effective. Any suspension remains in effect for the period fixed by the director, or until the order upon which the suspension is based is modified, rescinded, or reversed.
Source: SL 1966, ch 111, ch 15, § 16; SL 2014, ch 239, § 22.
58-24-63. Written order of director for imposition of penalty and suspension of license--Hearing, notice, findings.
No penalty shall be imposed and no license shall be suspended or revoked except upon a written order of the director, stating his findings, made after a hearing held upon not less than ten days' written notice to such person or organization specifying the alleged violation.
Source: SL 1966, ch 111, ch 15, § 16.
58-24-64. Request for hearing on order or decision--Notice--Affirmance, reversal, or modification.
Any insurer or rating organization aggrieved by any order or decision of the director made without a hearing, may, within thirty days after notice of the order to the insurer or organization, make written request to the director for a hearing thereon. The director shall issue a notice of hearing pursuant to chapter 1-26 within twenty days after receipt of a request and shall give not less than ten days' written notice of the time and place of the hearing. Within a reasonable time after the hearing the director shall affirm, reverse, or modify the director's previous action, specifying the reasons therefor. Pending the hearing and decision thereon the director may suspend or postpone the effective date of the director's previous action.
Source: SL 1966, ch 111, ch 15, § 17 (1); SL 2014, ch 239, § 23.
58-24-65. Rehearing and appeal from order of director.
Any order or decision of the director in proceedings arising under this chapter shall be subject to rehearing and review on appeal in the same manner and by the same procedure as provided by chapter 1-26, and such procedure shall be exclusive of all other remedies.
Source: SL 1966, ch 111, ch 15, § 17 (2).
58-24-66. Notice required for filing for workers' compensation insurance.
At least fifteen days before any rating organization makes a loss cost filing required by § 58-24-10 for workers' compensation insurance, the rating organization shall give the director of the Division of Insurance notice of its intent to make a loss cost filing.
Source: SL 1990, ch 401, § 1; SL 1993, ch 362, § 4.
58-24-67. Notice to workers' compensation purchaser organizations.
Within thirty days of receipt of a notice pursuant to § 58-24-66, the director of the Division of Insurance shall schedule an informal hearing and send notice of the intent to conduct the informal hearing to organizations of purchasers of workers' compensation insurance and insurers who have registered with the director to receive such notices.
Source: SL 1990, ch 401, § 2; SL 1993, ch 362, § 5.
58-24-68. Exempt commercial policyholder--Definition.
For the purposes of §§ 58-24-68 to 58-24-74, inclusive, the term, exempt commercial policyholder, means any person who applies for or procures any kind of property casualty insurance, except title or workers' compensation insurance, through the use of a risk manager employed or retained by such person, and meets at least two of the following qualifications:
(1) Has purchased the insurance with aggregate premiums in the sum of at least fifty thousand dollars, during the most recently completed calendar year;
(2) Has a net worth of at least ten million dollars, as reported in the policyholder's most recently issued financial statement, reviewed or audited by an independent certified public accountant;
(3) Has annual net revenues or net sales of at least ten million dollars, as reported in the policyholder's most recently issued financial statement, reviewed or audited by an independent certified public accountant;
(4) Employs at least one hundred full-time employees, either individually or, if the policyholder is a member of an affiliated group, collectively with all members of the affiliated group;
(5) Has, if the policyholder is a nonprofit organization, an annual operating budget of at least two million five hundred thousand dollars, for the most recently completed calendar or fiscal year, whichever applies;
(6) Has, if the policyholder is a public entity, an operating budget of at least ten million dollars, for the most recently completed calendar or fiscal year, whichever applies; or
(7) Has, if the policyholder is a municipality, a population of at least twenty thousand.
Source: SL 2004, ch 307, § 1; SL 2022, ch 183, § 1.
58-24-69. Risk manager defined.
For the purposes of §§ 58-24-68 to 58-24-74, inclusive, the term, risk manager, means an employee of the exempt commercial policyholder, or a third-party consultant retained by the policyholder who provides skilled services in loss prevention, loss reduction, or risk and insurance coverage analysis, and the purchase of insurance, and who possesses at least one of the following credentials:
(1) A bachelor's or higher degree in risk management issued by an accredited college or university;
(2) A designation as a chartered property and casualty underwriter issued by the American Institute for Chartered Property and Casualty Underwriters and Insurance Institute of America;
(3) A designation as an associate in risk management issued by the American Institute for Chartered Property and Casualty Underwriters and Insurance Institute of America;
(4) A designation as a certified risk manager issued by the National Alliance for Insurance Education and Research;
(5) A designation as a fellow in risk management or RIMS fellow issued by the Global Risk Management Institute; or
(6) At least seven years of experience in one or more of the following areas of commercial property and casualty insurance:
(a) Risk financing;
(b) Claims administration;
(c) Loss prevention; or
(d) Risk and insurance coverage analysis.
Source: SL 2004, ch 307, § 2.
58-24-70. Exemption from rate and form filing requirements for policy issued to exempt commercial policyholder--Disclosure requirements.
An insurer issuing a policy to an exempt commercial policyholder is exempt, except as provided for in §§ 58-24-68 to 58-24-74, inclusive, from the rate filing requirements of chapter 58-24 and the form filing requirements of § 58-11-12. At the time of soliciting an exempt commercial policyholder to purchase insurance, the insurance producer, or the insurer in the case of a direct procurement from the insurer, shall disclose to the policyholder and the policyholder's risk manager, on a form created by the insurer, that a premium or rate may be quoted or a policy form may be used that is not subject to the rate and form filing requirements of the Division of Insurance.
Source: SL 2004, ch 307, § 3.
58-24-71. Third-party consultant disclosure requirements.
If a third-party consultant is retained by the exempt commercial policyholder to act as the policyholder's risk manager when a quote for insurance is delivered to the policyholder, the consultant shall disclose, in writing, the existence of any commission, fee, or contingency arrangement the third-party consultant has with the insurer.
Source: SL 2004, ch 307, § 4.
58-24-72. Promulgation of rules.
The director may promulgate rules, pursuant to chapter 1-26, to carry out the provisions of §§ 58-24-68 to 58-24-74, inclusive, to ensure that insurers make policyholders aware of their exempt status and that insurers keep separate records of exempt policies. The rules may include certification, record keeping, and notices.
Source: SL 2004, ch 307, § 5.
58-24-73. Insurer to maintain and provide copies of disclosures--Examination.
The insurer shall maintain copies of the disclosures required by §§ 58-24-68 to 58-24-73, inclusive. The copies are subject to examination. The insurer shall provide the copies to the division upon request as provided by this title.
Source: SL 2004, ch 307, § 6.
58-24-74. Insurer to maintain records relating to insurance sales to exempt commercial policyholder--Examination by director.
Any insurer who sells any kind of insurance to an exempt commercial policyholder shall maintain records relating to the insurance sales as required by §§ 58-24-68 to 58-24-74, inclusive. At a minimum, the records shall include: any data, statistics, rates, rating plans, rating systems, and underwriting rules used in underwriting and issuing such policies; claims-made policy forms; annual experience data on each risk insured, including written premiums, written premiums at a manual rate, paid losses, outstanding losses, loss adjustment expenses, underwriting expenses, underwriting profits, and profits from contingencies; and complaint information required under South Dakota law.
The insurer shall maintain the records for five years. The insurer shall make such records available for examination by the director at any reasonable hour.
Source: SL 2004, ch 307, § 7.
58-24-75. Premium increase prohibited for certain accidents involving law enforcement, emergency, or snow removal personnel--Exception.
No insurer may increase the premium or rate of an insured at policy issuance, during the term of a policy, or at renewal because of an accident if the insured was lawfully engaged in the performance of official duties as a law enforcement officer, firefighter, emergency medical technician, or operator of emergency snow removal equipment, if the operation of the emergency snow removal equipment is in response to a request from and in support of a law enforcement officer, firefighter, or emergency medical technician for any accident:
(1) That occurred while the law enforcement officer, firefighter, emergency medical technician, or operator of emergency snow removal equipment was lawfully engaged in the performance of official duties; and
(2) That occurred while the law enforcement officer, firefighter, emergency medical technician, or operator of emergency snow removal equipment was driving an emergency vehicle; and
(3) For which the law enforcement officer, firefighter, emergency medical technician, or operator of emergency snow removal equipment furnishes notice to the insurer that the accident occurred under circumstances identified in subdivisions (1) and (2) of this section.
This section is not applicable to commercial lines policies. Any premium or rate increase in violation of this section, which is made erroneously and does not constitute a continuing business practice of the insurer, may not be the basis of any disciplinary action by the division against the insurer if the insurer refunds any excess premium promptly upon discovery of the error or upon request by the insured.
Source: SL 2007, ch 181, § 3; SL 2008, ch 162, § 2; SL 2014, ch 240, § 1.
