58-29C-62. Use of existence of association for sales, solicitation, or inducement to purchase insurance prohibited--Summary document of purposes and limitations of chapter--Disclaimer.
A. No person, including a member insurer, agent, or affiliate of a member insurer may make, publish, disseminate, circulate, or place before the public, or cause directly or indirectly, to be made, published, disseminated, circulated, or placed before the public, in any newspaper, magazine, or other publication, or in the form of a notice, circular, pamphlet, letter, or poster, or over any radio station or television station, or in any other way, any advertisement, announcement, or statement, written or oral, which uses the existence of the Life and Health Insurance Guaranty Association of this state for the purpose of sales, solicitation, or inducement to purchase any form of insurance covered by the South Dakota Life and Health Insurance Guaranty Association chapter. However, this section does not apply to the South Dakota Life and Health Insurance Guaranty Association or any other entity which does not sell or solicit insurance.
B. Within one hundred eighty days of July 1, 2003, the association shall prepare a summary document describing the general purposes and current limitations of the chapter and complying with subpart C of this section. This document shall be submitted to the director for approval. At the expiration of the sixtieth day after the date on which the director approves the document, a member insurer may not deliver a policy or contract to a policy owner, contract owner, or certificate owner unless the summary document is delivered to the policy owner, contract owner, or certificate holder at the time of delivery of the policy or contract. The document shall also be available upon request by a policy owner, contract owner, or certificate holder. The distribution, delivery, or contents or interpretation of this document does not guarantee that either the policy or the contract or the policy owner, contract owner, or certificate holder is covered in the event of the impairment or insolvency of a member insurer. The description document shall be revised by the association as amendments to the chapter may require. Failure to receive this document does not give the policy owner, contract owner, certificate holder, or insured any greater rights than those stated in this chapter.
C. The document prepared under subpart B shall contain a clear and conspicuous disclaimer on its face. The director shall establish the form and content of the disclaimer. The disclaimer shall:
(1)State the name and address of the Life and Health Insurance Guaranty Association and insurance department;
(2)Prominently warn the policy owner, contract owner, or certificate holder that the Life and Health Insurance Guaranty Association may not cover the policy or, if coverage is available, it shall be subject to substantial limitations and exclusions and conditioned on continued residence in this state;
(3)State the types of policies or contracts for which guaranty funds will provide coverage;
(4)State that the member insurer and the member insurer's agents are prohibited by law from using the existence of the Life and Health Insurance Guaranty Association for the purpose of sales, solicitation, or inducement to purchase any form of insurance;
(5)State that the policy owner, contract owner, or certificate holder should not rely on coverage under the Life and Health Insurance Guaranty Association when selecting an insurer;
(6)Explain rights available and procedures for filing a complaint to allege a violation of any provisions of this chapter; and
(7)Provide other information as directed by the director including sources for information about the financial condition of insurers provided that the information is not proprietary and is subject to disclosure under that state's public records law.
D. A member insurer shall retain evidence of compliance with subpart B as long as the policy or contract for which the notice is given remains in effect.
Source: SL 2003, ch 252, §19; SL 2013, ch 252, §11; SL 2020, ch 210, § 9.