FOR AN ACT ENTITLED, An Act to amend provisions regarding captive insurance companies.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF SOUTH DAKOTA:
    Section 1. That chapter 58-46 be amended by adding thereto a NEW SECTION to read as follows:

    Notwithstanding §§ 58-46-23 and 58-46-23.1, pure captive insurance companies may cede or assume risk from related or unaffiliated captive insurance companies by forming reinsurance risk pools for the purpose of reinsurance upon approval of the director.
    Section 2. That chapter 58-46 be amended by adding thereto a NEW SECTION to read as follows:

    The director may approve any application for the formation of or participation in a reinsurance risk pool by pure captive insurance companies as long as the risk pool is domesticated in South Dakota, and complies with the regulatory standards for a pure captive insurance company under chapter 58-46.
    Section 3. That chapter 58-46 be amended by adding thereto a NEW SECTION to read as

follows:

     Any reinsurance risk pool formed pursuant to this Act shall be treated as a pure captive insurance company for all regulatory and tax purposes.
    Section 4. That chapter 58-46 be amended by adding thereto a NEW SECTION to read as follows:

    The director may promulgate rules, in accordance with the existing department rules regulating pure captive insurance companies pursuant to chapter 1-26 regarding the administration of reinsurance risk pools.