Marcia Hultman

Cabinet Secretary

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Division of Insurance

Property/Casualty Rate & Form Filing Requirements


  1. No insurer shall make or issue a contract or policy unless it is in accordance with the filings, which are in effect on its behalf. (South Dakota Codified Law (SDCL) 58-24-25)
  2. Every insurer must file for approval every rate and rule which is proposed to use SDCL 58-24-10. Rates are file and use effective July 1, 2004. See number five below. See exceptions, SDCL 58-35-43 and 58-24-68 through 58-24-74.
  3. No insurer may issue any policy or related form unless the form has been filed and approved by this office. (SDCL 58-11-12)
  4. All electronic filings must comply with all of the Division's filing requirements.
    • All rate filings must include the most recent five-year South Dakota experience. Since most companies' South Dakota data is not credible, please provide countrywide data as well as your expected loss ratio. It should also include the impact on South Dakota insureds.
    • A cover letter of explanation and a filing memorandum indicating the changes being made, including the date of the last rate filing and the amount of that increase or decrease.
  5. An insurer may satisfy its obligation to make filings as per numbers two and three above by becoming a member of a licensed rating organization, but a company must file its own loss cost modifier on all rate filings on rating organizations which file only loss cost. (SDCL 58-11-16 and 58-24-12) See Bulletin number 03-03.
  6. If an insurer wishes to deviate from a filing made on his or her behalf by a rating organization, the insurer must file with the Director of Insurance its request to deviate from the rate or rule. The filing must specify the basis for the modification. If filing to delay or defer the adoption date, the insurer must also file this notice with the Director.
  7. Record retention in South Dakota is five years. However, the insurer should maintain a copy of the Division's approval until the rate/rule/forms are withdrawn from use in South Dakota.
  8. Blank or manuscript endorsements will not be approved if they do not contain sufficient language to denote intent or purpose.
  9. South Dakota mandates all filings be made via SERFF, and all filings fees must be submitted via EFT through SERFF. The Division will not be billing quarterly. (See Bulletin 07-01).
  10. "A" rates or "range" rates, factors or modifiers can not be approved pursuant to SDCL 58-24-10.
  11. Companies are required to comply with changes in South Dakota Codified Law and must refile outdated material to be in compliance. The Division of Insurance has no duty to notify companies of changes in South Dakota Codified Law.
  12. Consent to rate filings can only be made for rates in excess of filed rates and must be signed by the policyholder submitted to the Division prior to the effective date. (SDCL 58-24-26)

To speed data processing, companies are requested to put their five-digit National Association of Insurance Commissioners (NAIC) identification number on the filing cover letter. (Group numbers or Internal Revenue Service numbers are not required.)

Subjective IRPMs are limited to - /+25%.

See also:

Premium Refunds
All Property and Casualty Except Personal Auto - Cancellation/Non-Renewal Provisions
Homeowners' Non-Renewal
Personal Auto - Cancellation/Non-Renewals
Supplemental Coverages for Personal Automobile Vehicles
Personal Auto and Commercial Auto
All Liability
Exempt Commercial Policyholders


Binding appraisal and arbitration provisions are prohibited in South Dakota insurance contracts pursuant to Bulletin 98-5 and SDCL 21-25A-3. However, the Division has approved language that can be utilized in filings which complied with South Dakota law. The criteria to be met are:

  1. Both parties must agree to the appraisal or arbitration.
  2. The decision determined could not be binding on either the insured/claimant or the insurer.

The following is language the Division has approved.

If we and you do not agree on the amount of loss, then an appraisal of the loss may be made if both parties agree to the appraisal. If so agreed, each party will select a competent appraiser. The two appraisers will select an umpire. The appraisers will state separately the actual cash value and the amount of loss. If they fail to agree, they will submit their differences to the umpire. A decision agreed to by any two will not be binding.

Each party will:

  • Pay its chosen appraiser; and
  • Bear the expenses of the appraisal and umpire equally.

We do not waive any of our rights under this policy by agreeing to an appraisal.

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Premium Refunds

An insurance company can not charge a cancellation fee. However, the insurer can calculate return premium short-rate if the insured cancels mid-term. Also, if an insured replaces coverage with another company, cancellation must coincide with the date of the new coverage. (Administrative Rule of South Dakota (ARSD) 20:06:29:01, 20:06:29:02 and 20:06:29:03).

Calculating Cancellation Pro Rata Earned Refund

Divide the number of days the policy was in force by the policy term. (For a one-year policy term, divide by 365; for a six-month policy term, divide by 182.5; and for a three-month policy term, divide by 91.25.)

Example: suppose an annual policy was in force for 60 days and had an annual premium of $4,365:

60 ÷ 365 = .1644

Next, multiply the resulting quotient by the total policy premium:

.1644 x $4,365 = $717.61 (This is the amount the company earned.)

Calculating Cancellation Pro Rata Unearned Refund

Divide the number of days the policy was not in force by the policy term. (For a one-year policy term, divide by 365; for a six-month policy term, divide by 182.5; and for a three-month policy term, divide by 91.25.)

Example: Suppose an annual policy is in force for 60 days and has an annual premium of $4,365. First, divide 305 (the number of days the policy was not in force) by 365 (the number of days in the policy term):

305 ÷ 365 = .836

Next, multiply the resulting quotient (.836) by the total policy premium, $4,365 in this example.

.836 x $4,365 = $3,649.14

($3,659.14 is the amount the company did not earn.)

You can also calculate the unearned as follows: Subtract the earned premium's percentage and subtract it from 1. Using the above example,

1 - .1644 = .8356

(When rounded, this gives you the same answer as above, .836)

Calculating Short Rate Unearned

Multiply the pro rate unearned (.836 in the example above) by .9. Then multiply the resulting product by the total policy premium.

.836 x .9 = .7524

.7524 x $4,365 - $3,284.23

($3,284 is the short-rate unearned premium.)

Calculating Cancellation Short Rate Earned Refund

Subtract the short-rate unearned (.7524 in the example above) from 1. Then multiply the resulting product by the total policy premium, $4.365 in the example above.

1 - .7524 = .2476

.2476 x $4,365 = $1,080.77

($1.080.77 is the short-rate earned premium.)

See ARSD 20:06:29:04 - Format for notice of transfer of insurance and ARSD 20:06:29:05 - Definitions.

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All Property and Casualty Except Personal Auto - Cancellation/Non-Renewal Provisions

A property/casualty insurance contract may not be canceled mid-term unless the cancellation is based on one of the reasons listed in SDCL 58-33-61. If this can be documented, you must provide the insured with 20 days' prior notice as required by SDCL 58-33-60.

SDCL 58-1-14 - Notice of nonrenewal of policy must be mailed sixty days prior to renewal date - Exceptions.

SDCL 58-33-60 - Notice of cancellation required - Time - Contents.

SDCL 58-33-61 - Grounds for cancellation.

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Homeowners' Non-Renewal

SDCL 58-1-15 - Homeowners insurance policy defined - Notice of nonrenewal to policyholder required - Timing of notice.

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Personal Auto - Cancellation/Non-Renewals

An automobile insurance contract can be canceled for any reason as long as the policy has not been in effect for more than 60 days (SDCL 58-11-47). If the policy has been in effect for more than 60 days, it can only be canceled for two reasons:

  1. Non-payment of premium and
  2. The named insured or a member of the household has lost his or her driver's license (SDCL 58-11-46). The insurer is required to provide 20 days' prior notice (SDCL 58-11-49).

An insurance company can non-renew an insurance contract for any reason as long as it gives 60 days' prior notice (except those grounds prohibited by SDCL 58-11-51).

This section shall not apply to nonrenewal.

Renewal of a policy shall not constitute a waiver or estoppel with respect to grounds for cancellation which existed before the effective date of such renewal.

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Supplemental Coverages for Personal Automobile Policies

An insurance agent must offer the three supplemental coverages listed in SDCL 58-23-8. (See also SDCL 58-23-7) These coverages are not required to be offered on commercial policies.

SDCL 58-23-6 - Supplemental automobile coverage - Definition of terms.

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Personal Auto and Commercial Auto

Taking Betterment on an Automobile Claim

The Division only allows betterment to be taken when the following two criteria have been met:

  1. You must have betterment defined in your policy, and
  2. You must be able to provide proof that the entire vehicle value has increased.

The following definition and provision have been approved for use in South Dakota.

Provision: We may deduct for betterment from the amount we pay for the loss only if the repair or replacement results in an increase in the fair market value of the vehicle.

Definition: Betterment as used in this provision means the difference between:

  • The fair market value of the vehicle before the loss.
  • The fair market value of the vehicle after repair or replacement.

Uninsured Motorist Coverage

Pursuant to Clark vs. Regent Ins. Co. (1978) 270 NW 2d 26, an insurance policy requiring physical contact between vehicles as a condition of coverage under uninsured motorist hit-and-run coverage was unenforceable as in violation of the public policy and the general purpose of SDCL 58-11-9.

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All Liability

The Division has also established the following minimum requirements for the approval of Extended Reporting Period endorsements:

  • The insured must offer a three (3) year Extended Reporting Period endorsement with a sixty (60) day time interval in which to exercise this option. One (1) and Two (2) year Extended Reporting Periods may also be offered as long as the the company offers a three (3) year also.
  • The maximum premium allowable for a three (3) year Extended Reporting Period endorsement is 200% of the most recent annual premium.

Defense Within Limits Policies

The South Dakota Division of Insurance established a Division Policy in 1989 with regard to liability policies having defense within the policy limits. The Division also established a Policy in regards to extended reporting period endorsements for Claims Made Policies. The criteria established for these Division Policies is as follows:

  1. "Defense Within Limits" must appear on the declaration page in at least twelve (12) point bold print.
  2. Defense Within Limits will only be considered in policies which have a minimum limit per occurrence of $1 million. Neither the $1 million minimum limit requirement, nor the defense within limit requirement, applies to the following types of insurance:
    • Fidelity and/or Surety Bonds
    • Agent's Professional Liability
    • Employment Practices Liability* (must have $1 million option)
    • Pollution Liability
    • Architects & Engineers Professional Liability
  3. Defense Within Limits is not acceptable in medical malpractice policies.
  4. Defense Within Limits will only be approved by the Division for the following types of policies:
    • Errors and Omissions Liability
    • Directors & Officers Liability
    • Professional Liability
    • Fidelity and/or Surety Bonds
    • Livestock/Agricultural Related Business (Feedlots, Elevators)
    • Other very difficult, volatile lines of insurance; these lines are to be determined and confirmed by information conference between the Division Rate/Form Analyst and the Director.

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Exempt Commercial Policyholders

SDCL 58-24-68 - "Exempt commercial policyholder" defined.

SDCL 58-24-69 - "Risk manager" defined.

SDCL 58-24-70 - Exemption from rate and form filing requirements for policy issued to exempt commercial policyholder - Disclosure requirements.

SDCL 58-24-71 - Third-party consultant disclosure requirements.

SDCL 58-24-72 - Promulgation of rules.

SDCL 58-24-73 - Insurer to maintain and provide copies of disclosures--Examination.

SDCL 58-24-74 - Insurer to maintain records relating to insurance sales to exempt commercial policyholder - Examination by director.

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