Any person or business entity that sells, solicits or negotiates insurance in this state for any class or classes of insurance must be licensed for that line of authority in accordance with South Dakota law. If the person or business entity represents the insurer or acts as an agent of the insurer, they shall also hold a valid appointment with that insurer.
South Dakota does not issue licenses to consultants although, if a person is acting in the capacity of a consultant and providing insurance advice, they may obtain a Producer License. Whenever a person is acting as an agent or consultant for the insured, they are not required to obtain an appointment. Please note South Dakota law does not permit a producer to charge fees in addition to premium. Therefore, no producer may act as both agent of the insured and charge the consumer consultant fees in addition to commissions earned on policies.
A General Agent who receives only a commission override for business produced by persons he or she solicited as producers and has no involvement whatsoever in the sale, solicitation or negotiation of insurance does not have to obtain a license or appointment with that same insurer. For example, if the General Agent has direct contact with the client or receives applications or receives premiums, that General Agent must obtain a license and appointment as they would in fact be selling, soliciting or negotiating insurance.
South Dakota does not require a license of property/casualty adjusters; they simply hold the insurance company responsible for the actions of their adjusters.
Risk Managers are exempt from licensing if they are a salaried fulltime employee who only counsels or advises his or her employer relative to the insurance interests of the employer or of the subsidiaries or business affiliates of the employer, if the employee does not sell or solicit insurance or receive a commission.
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This article is intended to be helpful and informative. But even common legal matters can become complex and stressful. A qualified insurance lawyer can address your particular legal needs, explain the law, and represent you in court. Take the first step now and contact a local insurance attorney to discuss your specific legal situation.