South Dakota Insurance Laws, Rules, and Regulations
Who regulates what
South Dakota insurance law is codified in SDCL Title 58 and administered by the South Dakota Division of Insurance, which licenses producers and companies, reviews rates and forms, and conducts market conduct examinations. Unfair trade practice rules in SDCL chapter 58-33 govern misrepresentation, twisting, churning, rebating, boycott, coercion, and unfair claim settlement practices.
Licensing and producer conduct
A person must hold a license for the line before soliciting, negotiating, or selling, and the insurer must appoint the producer before business is written; appointments and terminations are filed with the Division. Nonresident producers license by reciprocity. Continuing education is required on a biennial cycle with an ethics component; verify current hour counts in the licensing chapter before the exam. Premiums collected belong to the insurer or the insured, not the producer, so producers hold them in a fiduciary capacity and must account for and remit them promptly. Commissions may be paid only to properly licensed persons, and controlled business and rebating are restricted.
South Dakota coverage rules
Private passenger auto liability minimums are 25/50/25 -- $25,000 per person, $50,000 per accident for bodily injury, and $25,000 for property damage. Uninsured motorist coverage must be offered and may be rejected in writing. Insurers must follow statutory notice rules for cancellation and nonrenewal, and the state guaranty association responds when an admitted insurer becomes insolvent.
Trap and worked example
Rebating means offering anything of value not stated in the policy to induce a sale. A producer who advertises "we will pay your first month's premium" has offered an unlawful inducement even though the customer benefits -- the remedy is an administrative penalty and possible license action.