58-20-28. Requirements to obtain self-insurance certificate. To obtain and maintain its certificate an association shall:
(1) Have sufficient assets, net worth, and liquidity to promptly meet all obligations of the association's members under §§ 58-20-25 to 58-20-40, inclusive, and their workers' compensation liability. In determining whether an association is in sound financial condition, consideration shall be given to the combined net worth of the member companies; the combined long-term and short-term debt to equity ratios of the member companies; other financial data requested by the department or submitted by the group; and the combined workers' compensation experience of the group for the last three years;
(2) Furnish to the department security in the form of a bond, cash, certificate of deposit, government securities, irrevocable letter of credit, irrevocable trust, in any combination, in an amount equal to the greater of:
(a) Two hundred fifty thousand dollars; or
(b) Twenty-five percent of the association's preceding year's gross annual assessments to its members;
(3) Obtain specific and aggregate excess insurance by an insurance company licensed to conduct business in South Dakota; and
(4) Maintain an indemnity agreement jointly and severally binding the association and each member of the association to meet the workers' compensation liability of each member.Source: SL 1995, ch 282, § 4.
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