CHAPTER 230

(HB 1156)

Transmission of electronic documents
related to insurance policies, permitted.

ENTITLED, An Act to allow the transmission of electronic documents related to insurance policies.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF SOUTH DAKOTA:

Section 1. That chapter 58-1 be amended by adding thereto a NEW SECTION to read as follows:

(b) Posting on an electronic network or site accessible via the internet, mobile application, computer, mobile device, tablet, or any other electronic device, together with separate notice to a party directed to the electronic mail address at which the party consents to receive notice of the posting;

(2) "Party," any recipient of any notice or document required as part of an insurance transaction, including an applicant, an insured, a policyholder, or an annuity contract holder.

Section 2. That chapter 58-1 be amended by adding thereto a NEW SECTION to read as follows:

Subject to section 4 of this Act, any notice to a party or any other document required under applicable law in an insurance transaction or that is to serve as evidence of insurance coverage may be delivered, stored, and presented by electronic means if it meets the requirements of chapter 53-10.

Section 3. That chapter 58-1 be amended by adding thereto a NEW SECTION to read as follows:

Delivery of a notice or document in accordance with the provisions of this Act is equivalent to any delivery method required under applicable law.

Section 4. That chapter 58-1 be amended by adding thereto a NEW SECTION to read as follows:

(b) The right of the party to withdraw consent to have a notice or document delivered by electronic means and any fees, conditions, or consequences that may be imposed in the event consent is withdrawn;

(e) The procedure a party must follow to withdraw consent to have a notice or document delivered by electronic means and to update information needed to contact the party electronically;

(a) Is provided with a statement of the hardware and software requirements for access to and retention of a notice or document delivered by electronic means before the party consents to electronic delivery; and

(b) Consents electronically, or confirms consent electronically, in a manner that reasonably demonstrates the party can access information in the electronic form that will be used for notices or documents delivered by electronic means; and

(4) The insurer, in the event a change in the hardware or software requirements needed to access or retain a notice or document delivered by electronic means creates a material risk that the party will not be able to access or retain a subsequent notice or document, provides the consenting party with a statement of:

(a) The revised hardware and software requirements for access to and retention

of a notice or document delivered by electronic means; and

(b) The right of the party to withdraw consent without the imposition of any fee, condition, or consequence that was not disclosed under subsection (2)(b) of this section.

Section 5. That chapter 58-1 be amended by adding thereto a NEW SECTION to read as follows:

Nothing in this Act affects any requirement related to content or timing of any notice or document otherwise required pursuant to applicable law.

Section 6. That chapter 58-1 be amended by adding thereto a NEW SECTION to read as follows:

If a provision of applicable law requiring a notice or document to be provided to a party expressly requires verification or acknowledgment of receipt of the notice or document, the notice or document may only be delivered by electronic means if the method used provides for verification or acknowledgment of receipt.

Section 7. That chapter 58-1 be amended by adding thereto a NEW SECTION to read as follows:

The legal effectiveness, validity, or enforceability of any contract or policy of insurance executed by a party may not be denied solely because of the failure to obtain electronic consent or confirmation of consent of the party in accordance with subsection (3)(b) of section 4 of this Act.

Section 8. That chapter 58-1 be amended by adding thereto a NEW SECTION to read as follows:

A withdrawal of consent by a party does not affect the legal effectiveness, validity, or enforceability of a notice or document delivered by electronic means to the party before the withdrawal of consent is effective. A withdrawal of consent by a party is effective within a reasonable period of time after receipt of the withdrawal by the insurer. If an insurer fails to comply with section 4 of this Act, the party may treat the failure as a withdrawal of consent for purposes of this Act.

Section 9. That chapter 58-1 be amended by adding thereto a NEW SECTION to read as follows:

The provisions of this Act do not apply to a notice or document delivered by an insurer in an electronic form before the effective date of this Act to a party who, before that date, consented to receive notice or document in an electronic form otherwise allowed by law.

Section 10. That chapter 58-1 be amended by adding thereto a NEW SECTION to read as follows:

If the consent of a party to receive certain notices or documents in an electronic form is on

file with an insurer before the effective date of this Act, and pursuant to this Act, an insurer intends to deliver additional notices or documents to such party in an electronic form, then prior to delivering such additional notices or documents electronically, the insurer shall notify the party of:

(2) The party's right to withdraw consent to have notices or documents delivered by electronic means.

Section 11. That chapter 58-1 be amended by adding thereto a NEW SECTION to read as follows:

Except as otherwise provided by law, if an oral communication or a recording of an oral communication from a party is reliably stored and reproduced by an insurer, the oral communication or recording qualifies as a notice or document delivered by electronic means for purposes of this Act. If a provision of applicable law requires a signature, notice, or document to be notarized, acknowledged, verified, or made under oath, the requirement is satisfied if the electronic signature of the person authorized to perform those acts, together with all other information required to be included by the provision, is attached to or logically associated with the signature, notice, or document.

Section 12. That chapter 58-1 be amended by adding thereto a NEW SECTION to read as follows:

Notwithstanding any other provision of this Act, if a standard property and casualty insurance policy or endorsement does not contain personally identifiable information, an insurer may mail, deliver, or post the policy or endorsement on the insurer's website. If the insurer elects to post an insurance policy or endorsement on the insurer's website in lieu of mailing or delivering the document to the insured, the insurer must comply with the following conditions:

(2) After the policy expires, the insurer must maintain and archive the policy and endorsement for five years after the expiration of the policy and shall make the documents available to the party on request;

(3) The insurer must post the policy and endorsement in a manner that allows the insured to print and save the policy and endorsement using a program or application that is widely available on the internet and free to use;

(4) The insurer provides the following information in, or simultaneous with each declarations page provided at the time of issuance of the initial policy and any renewals of that policy;

(5) The insurer provides notice, in the format preferred by the insured, of any changes to the form or endorsement, the insured's right to obtain, upon request and without charge, a paper copy of a form, and the internet address where the form and endorsement is posted.

Section 13. That chapter 58-1 be amended by adding thereto a NEW SECTION to read as follows:

The provisions of this Act apply to the insurance products and documents, including insurance policies, insurance riders, insurance endorsements, and annuity contracts filed with and regulated by the director pursuant to title 58.