SD law bans release of captive-insurance info

PIERRE, S.D. (KELO) — An exception to South Dakota’s public-record laws allows the state Division of Insurance to keep confidential the information that captive-insurance companies provide to the division, according to the South Dakota Supreme Court.

In a recent unanimous opinion, the state’s highest court upheld lower decisions that Division of Insurance officials were right to deny a public-records request from Jason M. Schupp of Frederick, Maryland. A state law specifically allows those records to be confidential, Justice Mark Salter wrote.

The same law also limits what the captive-insurance company can do with those records: “Under no circumstances may a captive insurance company disclose a report or any supporting documentation to anyone, other than directors and officers of the captive insurance company or anyone acting in a fiduciary capacity for the captive insurance company, without written permission from the director.”

According to the National Association of Insurance Commissioners, “In its simplest form, a captive is a wholly owned subsidiary created to provide insurance to its non-insurance parent company (or companies). Captives are essentially a form of self-insurance whereby the insurer is owned wholly by the insured.”

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Wrote Justice Salter, “Under an elementary reading of SDCL 58-46-31’s plain and unambiguous terms, an applicant’s name and address must be filed with the DOI and are confidential. Consequently, disclosure of the names and addresses contained in a certificate of authority, to a member of the public, like Schupp, is prohibited.”

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