South Dakota's insurance law is in Title 58 of the South Dakota Codified Laws (SDCL), with details in the Division's rules at ARSD Article 20:06. Every South Dakota exam draws its state questions from the same core: the Director, producer licensing, appointments, CE, fiduciary duties, unfair trade and claims practices, fraud and the guaranty associations. This guide covers those rules with citations. The general concepts (types of insurers, agency law, the classic unfair practices) are in the national Insurance Regulation guide.

About the exam

South Dakota's licensing exams are delivered by Pearson VUE and scored on a scaled score of 70 to pass. South Dakota sells single-line and combined exams for both families of lines.

• A combined exam is reported as one score. If you fail it, you can't be licensed for either single line from it.
• You may retake after 24 hours, paying a new fee.
• After passing a major-line exam, apply within 180 days (Pearson VUE candidate handbook, 2026).

The regulator

• The Division of Insurance is part of the Department of Labor and Regulation (DLR) (SDCL 58-1-2, 58-2-1.1). It keeps its own quasi-judicial and rulemaking functions.
• It's headed by the Director of Insurance. The Director is appointed by the Secretary of Labor and Regulation and serves at the Secretary's pleasure (58-2-2.1). The office isn't elected, and the title isn't "Commissioner."
• The Director needs at least 5 years of practical insurance experience or equivalent professional experience (58-2-3).
• Examinations:
  • Each domestic insurer is examined at least every 5 years. Other insurers are examined as often as the Director finds advisable (58-3-1).
  • Producers' and surplus line brokers' records may be examined as often as the Director finds advisable (58-3-5).
• Enforcement:
  • Temporary cease and desist order pending a hearing. The hearing is set 10–20 days from the order. The Director may also sue for an injunction (58-4-7).
  • Money penalty up to $5,000 per offense for a producer and $25,000 per offense for an insurer or other entity. A hearing comes first unless the licensee agrees to the penalty in writing (58-4-28.1).
  • Violating a desist order is a Class 2 misdemeanor (58-33-45).
  • Most chapter 58-33 unfair practices are Class 2 misdemeanors.

Insurers

• Domestic = formed under South Dakota law. Foreign = another U.S. jurisdiction. Alien = outside the United States (58-1-2).
• An insurer needs a certificate of authority from the Director (58-6-1). Transacting insurance without one is a Class 2 misdemeanor.
  • Exceptions include lawfully written surplus lines, reinsurance and run-off claims (58-6-4).
• To be admitted, a foreign insurer generally needs 2 years of operating experience and an examination within the past 60 months (58-6-13).
• Mutual insurers are owned by their policyholders, who elect the directors (58-5-3).
• A fraternal benefit society has no capital stock. It operates on a lodge system for its members, not for profit (58-37A-1).
• Policy forms must be filed 30 days before use. A form is deemed approved after 30 days unless the Director acts (58-11-12, 58-11-17).

Producer licensing (SDCL 58-30)

Lines of authority (58-30-152): life, accident and health or sickness, property, casualty, personal lines and a variable contracts line (ARSD 20:06:07:08), among others. A crop hail-only license also exists (ARSD 20:06:18:03).

• Personal lines means P&C coverage for individuals and families for mainly noncommercial purposes.

Who needs a license

• No one may sell, solicit or negotiate a line without that line of authority (58-30-143).
• A business entity acting as a producer needs its own license (58-30-149).
• Exempt (58-30-144):
  • noncommissioned insurer employees doing clerical work, underwriting, loss control, inspection or claims
  • employers administering their own employees' benefit plans without compensation
  • salaried employees who advise only their employer

Getting licensed (58-30-145, 58-30-148)

• You must be at least 18, have committed no act that's grounds for denial, pay the fees and pass the exam for each line.
• No college degree is required (58-30-148).
• Exam exemptions (58-30-52):
  • an out-of-state producer who applies within 90 days of moving to South Dakota
  • someone who held the same South Dakota license within the past 5 years
  • attorneys licensed in South Dakota
• Nonresidents need a resident license in good standing at home, and their home state must grant reciprocity (58-30-159). If the home-state license is lost, the South Dakota license can be revoked without a hearing (58-30-160).
• Temporary license: issued without an exam for up to 180 days (58-30-165). It's available to:
  • the surviving spouse or personal representative of a deceased or disabled producer
  • the designee of a producer entering military service
  • the Director may require supervision by a licensed producer (58-30-166)
• Assumed name: notify the Director before using it (58-30-164).

Keeping the license

• Report within 30 days (58-30-157, 58-30-162, 58-30-193, 58-30-194):
  • a change of address
  • for a move out of state, certification from the new home state (no fee or new application)
  • an administrative action in another jurisdiction, counted from the final disposition
  • a felony prosecution, counted from the initial pretrial hearing (the arraignment or first court appearance, ARSD 20:06:18:21)
• Continuing education (SDCL 58-30-116; ARSD 20:06:18:03):
  • Due every 2 years by the last day of your birth month.
  • 10 hours for P&C lines. 10 hours for life/health. 20 hours if you hold both.
  • 4 hours if you hold only crop hail.
  • An hour is 50 minutes. Hours can't be carried over.
  • Exempt: licensees over 65 with at least 10 years of licensure who no longer sell, solicit or negotiate (58-30-115).
  • The Director may extend the deadline for good cause, up to 1 year. The written request must arrive at least 21 days before the period ends (58-30-119; ARSD 20:06:18:13).
• Lapsed license: reinstate within 12 months without an exam by paying double the unpaid renewal fee (58-30-154).
• A producer unable to renew because of military service or another extenuating circumstance may request a waiver (58-30-155).

Appointments and compensation

• A producer may act as an insurer's agent only if appointed by that insurer (58-30-175).
  • The insurer files the notice within 15 days of the contract or first application (58-30-176).
  • The appointment takes effect when the Director approves it (ARSD 20:06:18:19).
  • The insurer pays the appointment fee (58-30-178).
• Termination of an appointment (58-30-180 to 58-30-183):
  • The insurer notifies the Director within 30 days of the termination.
  • It sends the producer a copy within 15 days.
  • The producer may file comments within 30 days.
  • An insurer can't terminate an appointment solely because it received a notice of hearing (58-30-167.1).
• Fire and casualty agency contracts need 90 days' written notice to terminate, with exceptions such as exclusive agents and gross misconduct (58-30-8.1, 58-30-8.2).
• Commissions:
  • Commissions may be shared only with producers licensed for that line (58-30-174).
  • Paying or accepting commissions for unlicensed selling is prohibited (58-30-171, 58-30-172).
  • Renewal commissions are allowed if you were licensed at the time of sale (58-30-173).
  • An unlicensed person may get a referral fee only as a fixed amount that doesn't depend on premium or on a sale (58-30-174).
• A consultant who also earns a commission on the placement can't charge a fee for it, unless the fee and commission are for separate products. Fees must be in a written agreement (58-30-144.1).
• Loans from clients require a written repayment contract filed with the Division within 30 days. Loans from close relatives and lending institutions are excepted (58-30-140).

Fiduciary duties and records

• Premiums and return premiums are trust funds held in a fiduciary capacity (58-30-88).
• Diverting them to your own use is theft (58-30-89).
• Trust funds may be commingled in a separate account only if each person's share can be determined from the records (58-30-90).
• Records:
  • Keep transaction records at your place of business for 5 years after the transaction (58-30-91). The required records include bank records for accounts used for insurance (ARSD 20:06:01:05.01).
  • Answer a Division inquiry within 20 days (58-33-66).
  • After two notices without a response, the Director may revoke a license by order. You then have 60 days to request a hearing (58-30-167.2, 58-30-167.3).

Discipline (58-30-167, 58-30-168)

• The Director may suspend a license for up to 12 months, revoke it or refuse to renew it.
  • Grounds include fraud, misrepresentation, forgery, a felony, discipline in another state, using notes on the licensing exam, unpaid child support and knowingly accepting business from an unlicensed person.
• Notice of the hearing goes to the licensee and to the insurers it represents at least 20 days before the hearing.
• An applicant who is denied a license or a renewal gets written reasons and may request a hearing within 30 days.
• Action against one license automatically applies to all licenses you hold under Title 58 (58-30-108).
• After a revocation, no new license may be issued for 1 year (58-30-111).
• Licenses remain the property of the state (58-30-112).
• The Director can still impose penalties after a license lapses or is surrendered (58-30-170).

Unfair trade practices (SDCL 58-33)

• Misrepresentation, including a misleading policy name (58-33-5).
• False advertising (58-33-6). Ads must be truthful and not misleading to a person of average education (58-33A-10). Keep ads 5 years or until the next exam report, whichever is longer (58-33A-11).
• Defamation of an insurer's finances (58-33-7).
• Twisting (58-33-8).
• Boycott, coercion, intimidation (58-33-32).
  • A lender may approve or disapprove the insurer on reasonable, nondiscriminatory grounds, but can't require a particular producer or insurer (58-33-31).
• Rebating (58-33-14, 58-33-24). The insured who knowingly accepts a rebate also commits a Class 2 misdemeanor (58-33-25).
  • Allowed: promotional merchandise worth $100 or less (58-33-74), lawful dividends, and qualifying value-added services offered on documented, nondiscriminatory criteria (58-33-136).
• Unfair discrimination (58-33-12, 58-33-13, 58-33-26). Coverage can't be denied based on sex or marital status (58-33-13.1).
• Using the guaranty association to sell insurance is prohibited (58-29A-104, 58-29C-62).
• A victim of an unfair practice may sue for actual and consequential damages and attorney fees (58-33-46.1).

Unfair claims practices (58-33-67):

• not acknowledging and acting on claim communications within 30 days
• paying a claim without stating the coverage it's paid under
• not settling promptly when liability is reasonably clear
• requiring repairs at a particular shop

The Director must first notify the insurer and give it a chance to correct the violation (58-33-68). Non-OEM auto parts must be identified on the estimate, with a disclosure in 10-point type (58-33-71).

Fraud (SDCL 58-4A, 58-33-37)

• Fraudulent insurance acts include false claim statements, counterfeit ID cards, binders or certificates, and a producer converting premium (58-4A-2).
• Grading by amount:

• A knowingly false statement on an application is a Class 1 misdemeanor.
• Civil penalties run up to $5,000 / $10,000 / $15,000 for the first, second and later violations (58-4A-7).
• The insurance fraud prevention unit is in the Attorney General's office (58-4A-4). Its investigators have law-enforcement powers (58-4A-6).
• Good-faith reporters are immune from civil liability (58-4A-13).

Policy delivery, replacement and privacy

• Delivery receipt: the policyowner signs it and the producer forwards it to the insurer (58-15-8.2).
  • A policy sent with a certificate of mailing is presumed received 10 days after mailing.
  • Receipts are kept 5 years.
• The life buyer's guide and policy summary must be provided before the insurer accepts the initial premium (58-33A-9).
• Life replacement (ARSD 20:06:08):
  • The producer presents and reads the replacement notice by the time of application, and both sign it.
  • The replacing insurer notifies the existing insurer within 5 business days.
  • The replaced policy's owner gets a 30-day right to return the new one.
• Privacy: the Director's rules protect health records and nonpublic financial information (58-2-40, 58-2-41).
• Military sales: special rules apply to active-duty service members. Examples: no soliciting in barracks, and no policy that replaces SGLI before separation (58-33-118 to 58-33-130).

Guaranty associations

• The P&C association has 3 accounts: workers compensation, automobile and all other (58-29A-74).
• The life/health association's summary document is delivered with the policy (58-29C-62).
• Surplus lines placements aren't covered.

Surplus lines (SDCL 58-32)

• Coverage may be exported only if it can't be obtained from authorized insurers after diligent effort. Only the excess may be exported (58-32-17).
• The policy must state, in 10-point boldface, that the insurer is nonadmitted and not under the Director's jurisdiction (58-32-32).
• Independently procured coverage carries a 2.5% tax paid by the insured (58-32-50).

Common exam traps

• The head is the Director, appointed by the Secretary of Labor and Regulation. Not an elected commissioner.
• CE is 10 hours per line group per 2 years, with no separate ethics hour. It can't be carried over.
• Appointment notice within 15 days. Termination notice within 30 days, and a copy to the producer within 15 days.
• Temporary license: 180 days. Reinstatement: 12 months at double the fee.
• Producer penalty cap: $5,000 per offense. Insurer cap: $25,000.
• Promotional gifts up to $100.
• A $1,000+ false claim is a Class 4 felony.