South Dakota Life Insurance laws & compensation compliance analysis

South Dakota Life Insurance: What you need to know

Employers have no obligation under South Dakota law to offer life insurance to their employees. However, if group life insurance is among the benefits offered to workers, certain minimum requirements must be satisfied (SD Cod. Laws Sec. 58-16-1et seq.).
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Group characteristics. The group must include all employees or all employees belonging to a class or classes determined by conditions pertaining to their employment. The amount of insurance must be based on a plan precluding individual selection either by the employees or by the employer. Supplemental life coverage may be purchased at the employee's option subject to the underwriting criteria of the insurer. Those eligible for coverage may include employees of the employer's subsidiary businesses and affiliated corporations, proprietors, or partnerships that are under common control, retired employees, the individual proprietor or partners if the employer is an individual proprietor or a partnership. Corporate directors may only be eligible for coverage if otherwise eligible as bona fide employees of the corporation by virtue of performing services other than the usual duties of a director. Partners and proprietors may be covered if actively engaged in the conduct of the business of the proprietorship or partnership. A policy issued to insure the employees of a public body may provide that the term “employees” must include elected or appointed officials.
Beneficiary. The employee can name anyone except the employer as beneficiary. Employees of nonprofit charitable organizations may name their employer as beneficiary if they provide a notarized statement that such designation is voluntary.
Employer/employee contributions. Employers are not ...

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