§ 58-29A-55 — Definition of terms.

South Dakota § 58-29A-55

• Jurisdiction: South Dakota
• Title 58: INSURANCE
• Ch. 58-29A: INSURANCE GUARANTY ASSOCIATION

Text

Terms used in this chapter mean: (1) "Account," any one of the three accounts created by this chapter; (2) "Affiliate," any person who, directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with another person on December thirty-first of the year immediately preceding the date the insurer becomes an insolvent insurer; (3) "Association," the South Dakota Insurance Guaranty Association created under this chapter; (4) "Claimant," any insured making a first party claim or any person instituting a liability claim. No person who is an affiliate of the insolvent insurer may be a claimant; (5) "Director," the director of the Division of Insurance of the Department of Labor and Regulation; (6) "Control," the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract other than a commercial contract for goods or nonmanagement services, or otherwise, unless the power is the result of an official position with or corporate office held by the person. Control is presumed to exist if a person, directly or indirectly, owns, controls, holds with the power to vote, or holds proxies representing ten percent or more of the voting securities of any other person. This presumption may be rebutted by a showing that control does not exist in fact; (7) "Covered claim," (a) An unpaid claim, including one for unearned premiums, submitted by a claimant, which arises out of and is within the coverage and is subject to the applicable limits of an insurance policy to which this chapter applies issued by an insurer, if the insurer becomes an insolvent insurer after July 1, 1970, and: (i) The claimant or insured is a resident of this state at the time of the insured event. However, for entities other than an individual, the residence of a claimant, insured, or policyholder is the state in which its principal place of business is located at the time of the insured event; or (ii) The claim is a first party claim for damage to property with a permanent location in this state. (b) The term, covered claim, does not include: (i) Any amount awarded as punitive or exemplary damages; (ii) Any amount sought as a return of premium under any retrospective rating plan; (iii) Any amount due any reinsurer, insurer, insurance pool, or underwriting association as subrogation recoveries, reinsurance recoveries, contribution, indemnification, or otherwise. No claim for any amount due any reinsurer, insurer, insurance pool, or underwriting association may be asserted against a person insured under a policy issued by an insolvent insurer other than to the extent the claim exceeds the association obligation limitations set forth in this chapter; (iv) Any first party claims by an insured whose net worth exceeds fifty million dollars. An insured's net worth shall be deemed to include the aggregate net worth of the insured and any of its subsidiaries and affiliates as calculated on a consolidated basis; (v) Any first party claims by an insured which is an affiliate of the insolvent insurer; (8) "Insolvent insurer," an insurer authorized to transact insurance in this state, either at the time the policy was issued or when the insured event occurred, and against whom a final order of liquidation has been entered after July 1, 1970, with a finding of insolvency by a court of competent jurisdiction in the insurer's state of domicile; (9) "Member insurer," any person who: (a) Writes any kind of insurance to which this chapter applies, including the exchange of reciprocal or interinsurance contracts; and (b) Is licensed to transact insurance in this state except companies defined in chapter 58-35 . An insurer shall cease to be a member insurer effective on the day following the termination or expiration of its license to transact the kinds of insurance to which this chapter applies, however, the insurer shall remain liable as a member insurer for any obligations, including obligations for assessments levied prior to the termination or expiration of the insurer's license and assessments levied after the termination or expiration, with respect to any insurer that became an insolvent insurer prior to the termination or expiration of the insurer's license; (10) "Net direct written premiums," direct gross premiums written in this state on insurance policies to which this chapter applies, less return premiums thereon and dividends paid or credited to policyholders on such direct business. The term, net direct written premiums, does not include premiums on contracts between insurers or reinsurers; (11) "Net worth," the total assets of a person less the total liabilities against those assets as determined in accordance with generally accepted accounting principles. If the person is one who prepares an annual report to shareholders, the annual report for the fiscal year immediately preceding the date the insurer becomes an insolvent insurer shall be used to determine net worth. If the person is one who does not prepare an annual report, but does prepare an annual financial report for management which reflects net worth, then the annual financial report for management for the fiscal year immediately preceding the date the insurer becomes an insolvent insurer shall be used to determine net worth; (12) "Person," any individual, corporation, partnership, association, or voluntary organization; (13) "Unearned premium," the premium for the unexpired period of a policy that has been terminated prior to the expiration of the period for which the premium has been paid. The term does not include any premium that is returnable to the insured for any other reason.

Legislative History

SL 2000, ch 247, § 2; SL 2003, ch 272 (Ex. Ord. 03-1), § 27; SL 2004, ch 310, § 1; SL 2011, ch 1 (Ex. Ord.