Marcia Hultman

Cabinet Secretary

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Division of Insurance

Surplus Lines Broker Information

Anyone writing business through insurance companies not licensed in South Dakota including Risk Purchasing Groups and Risk Retention Groups is required to have a Surplus Lines Broker license. The information listed below briefly outlines the requirements and information for a surplus lines broker license and some of the procedures and rules to follow.

Surplus Lines Broker Eligibility

Only licensed producers are eligible to be licensed as Surplus Lines Brokers. Both residents and non-residents are eligible for a Surplus Lines Broker license.

Application and Supporting Documentation to complete licensing:

  1. Application - Apply online at Sircon (Vertafore)
  2. $2,000 Bond - Only required of resident surplus lines brokers
  3. $50 License Fee - Payment will be made through Sircon when applying for or renewing a license.

It is the responsibility of the Surplus Lines Broker to ascertain the financial responsibility and stability of any company with whom any business is placed. (See South Dakota Codified Law (SDCL) 58-32-23).

Each policy written by a Surplus Lines Broker must be stamped, in at least 10-point print or larger boldface type, with the following:
"This insurance contract is issued by a nonadmitted insurer which is not licensed by nor under the jurisdiction of the South Dakota Insurance Director."
(See SDCL 58-32-32).

If the policy written by the Surplus Lines Broker is placed with a risk retention group or written through a risk purchasing group the following statement must be in at least ten-point or larger boldface print on the front page and the declaration page:
"This policy is issued by your risk retention group. Your risk retention group may not be subject to all of the insurance laws and regulations of your state. State insurance insolvency guaranty funds are not available for your risk retention group."
(See SDCL 58-6A-9).

A Surplus Lines Broker writing policies with a risk retention group or risk purchasing group is restricted to solicitation of commercial liability insurance only to risk purchasing group and risk retention group members located in South Dakota. (See SDCL 58-6A-1).

Pursuant to SDCL 10-44-16, all taxes and installments not paid when due shall be paid together with a penalty assessment on the unpaid balance at the rate of one and one-half percent per month, or fraction thereof.

Pursuant to SDCL 58-32-38, an unauthorized insurer issuing such policy shall be deemed thereby to have authorized service of process against it in the manner and the effect as provided in SDCL 58-32-37. Any such policy shall contain a provision stating the substance of SDCL 58-32-36 to 58-32-38, inclusive, and designating the person to whom the director shall mail process provided in SDCL 58-32-37.

Th onus is on the Surplus Lines Broker to satisfy him or herself that the nonadmitted company is financially solvent and meets the eligibility requirements of SDCL 58-32-22.

Contact the Division of Insurance