Contracts in restraint of trade, exception for insurance agents.
ENTITLED, An Act to
except contracts of independent contractors who are captive insurance
agents from the prohibition against contracts in restraint of trade.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF SOUTH DAKOTA:
be amended to read as follows:
contract restraining exercise of a lawful profession, trade, or business is
void to that extent, except as provided by §§ 53-9-9 to 53-9-11, inclusive
, and section 2 of this
be amended by adding thereto a NEW SECTION to read as
Any independent contractor who is an insurance producer as defined in subdivision 58-1-2(16)
and is a captive agent who is not an independent agent and who works exclusively for a single
insurance company or an affiliated group of insurance companies, even if the single insurance
company allows its captive agents to market the products of another insurance company pursuant
to contract, may agree with an insurer at the time of contracting or at any time during the term of
(1) Not to engage directly or indirectly in the same business or profession as that of the
insurer for any period not exceeding two years from the date of termination of the
independent contractor's agreement with the insurer; and
(2) Not to solicit existing customers of the insurer within a specified county, first or second
class municipality, or other specified area for any period not exceeding two years from
the date of termination of the agreement, if the insurer continues to carry on a like
business within the specified area.