On February 22, 2023, the South Dakota Legislature enacted Senate Bill 85 which revises the state's rebating provisions related to certain insurance practices, such as the offering of value-added products or services, conduct of raffles or drawings, and the use of certain phrases in advertisements. The bill becomes effective July 1, 2023.
In order to ensure consumer protection, data privacy, and prevent unfair discrimination, Senate Bill 85 addresses the offer or provision of value-added products or services by insurers by setting out criteria that must be met in order for such products or services to be offered at no or reduced cost without being considered discriminatory or rebates. These criteria include that the value-added product or service must relate to the policy of insurance, be designed to mitigate loss or control risk, and have a reasonable cost compared to the consumer's premiums or insurance coverage.
Senate Bill 85 also prohibits insurers from offering insurance as an inducement to purchase another policy, and it places restrictions on the use of certain words and phrases in advertisements.
