S.D. Admin. R. 20:06:31:24

Current through Register Vol. 51, page 67, December 16, 2024

Section 20:06:31:24 - Insolvency and intermediary clauses

Credit will not be granted, nor an asset or reduction from liability allowed, to a ceding insurer for reinsurance effected with assuming insurers meeting the requirements of §§ 20:06:31:01 to 20:06:31:12, inclusive, 20:06:31:25 to 20:06:31:33, inclusive, or otherwise in compliance with SDCL 58-14-7 to 58-14-16.1, inclusive, and 58-14-16.16 to 58-14-16.20, inclusive, after the effective date of this section unless the reinsurance agreement:

(1) Includes a proper insolvency clause, which stipulates that reinsurance is payable directly to the liquidator or successor without diminution regardless of the status of the ceding company, in compliance with SDCL chapter 58-29 B;

(2) Includes a provision pursuant to SDCL 58-14-7 to 58-14-16.1,inclusive, and 58-14-16.16 to 58-14-16.20, inclusive, whereby the assuming insurer, if an unauthorized assuming insurer, has submitted to the jurisdiction of an alternative dispute resolution panel or court of competent jurisdiction within the United States, has agreed to comply with all requirements necessary to give the court or panel jurisdiction, has designated an agent upon whom service of process may be effected, and has agreed to abide by the final decision of the court or panel; and

(3) Includes a proper reinsurance intermediary clause, if applicable, which stipulates that the credit risk for the intermediary is carried by the assuming insurer.

S.D. Admin. R. 20:06:31:24

44 SDR 71, effective 10/23/2017

General Authority: SDCL 58-14-17.

Law Implemented: SDCL 58-14-17.