South Dakota allows a captive’s ownership interest to be held in a trust or trusts and South Dakota has some of the most favourable trust laws in the nation.
[Last updated: 25/07/16]
Regulatory contact:
Johanna Nickelson
Address of regulator
124 S. Euclid 2nd Floor
Pierre, SD 57501
Telephone Number
605-773-3563
Email Address
johanna.nickelson@state.sd.us
Website
http://www.dlr.sd.gov/insurance
Name of Captive Legislation
South Dakota captive legislation can be found under SDCL Chapter 58-46.
Year Legislation Passed
Original legislation passed in 1996
Recent Amendments
One of the more recent amendments was to allow other types of captives. Prior to 2013 South Dakota law allowed both pure and group captives. During 2013 the law was amended to add sponsored cell, trust and special purpose captives. During 2015 the law was again amended to allow agency captives.
Do you allow Cell Captives?
Yes
Total Number of Licenced Captives
14 standalone captives
20 cells
Number of Risk Retention Groups or Group Captives
Risk Retention Groups are not licensed as captives in South Dakota
South Dakota has no Group Captives
Number of Single Parent Captives
12
Number of Cell Captives
2 Cell Captives with a total of 20 cells.
Number of licences granted in the past year (2015 calendar year)
5 standalone captives
17 cell captives
Approximate (or Average) length of time to process a new captive
Varies based on the complexity of the captive
Captive tax rates
South Dakota does not have a tax on captives; we have an annual supervision fee.
The annual supervision fee for Pure, Group, Trust, Special Purpose, or Agency is the greater of $5,000 or eight one-hundredths of one percent on gross premiums, less returned premium, with a maximum fee of $50,000.
The annual supervision fee for Sponsored captives is the same as above plus an additional annual supervision fee for each protected cell. The annual supervision fee for each protected cell is the greater of $500 or eight hundredths of one percent on gross premiums, less returned premium.
Minimum capitalisation rate
Pure, Group, Sponsored, Special Purpose, or Agency captives must have a minimum of $250,000 unimpaired paid-in capital and surplus.
A Trust captive must have a minimum of a minimum of $100,000 unimpaired paid-in capital and surplus.
Licencing fees
Pure, Group, Trust, Special Purpose, or Agency captive applications have a licensing fee of $2,000 for each application submitted.
Sponsored captives have a $2,000 licensing fee for the sponsor and one underlying cell. Each additional underlying cell has a fee of $1,000 for each application submitted.
Industry sectors best represented in the domicile
Various
Top uses for captives in the domicile
Various types of property and casualty coverage
Captive Insurance Managers registered to conduct business in the domicile
Currently, South Dakota does not require Captive Managers to register with the State of South Dakota