#1NAIC NATIONAL ASSOCIATION OF INSURANCE COMMISSIONERS State Insurance Regulation: Key Facts and Market Trends South Dakota / 2022#2NAIC NATIONAL ASSOCIATION OF INSURANCE COMMISSIONERS Overview of the 2022 Insurance Market in South Dakota South Dakota has 1,489 total domestic and licensed foreign insurers. South Dakota has 19 captive insurance companies with total captive premium of $26,549,660. • South Dakota ranks 6th in crop premium with 5.98% of the U.S. market. South Dakota ranks 6th in farm premium with 5.66% of the U.S. market. • Total direct premium written in-state has increased 80% since 2013. The cost of regulation in South Dakota is $0.39, based on an Insurance Department budget per $1,000 in written premium. NAIC Scorecard / 2022 / South Dakota#31 NAIC Scorecard State Insurance Regulation: Key Facts and Market Trends NAIC NATIONAL ASSOCIATION OF INSURANCE COMMISSIONERS The mission of the National Association of Insurance Commissioners (NAIC) is to assist state insurance regulators, individually and collectively, in serving the public interest and achieving the following fundamental insurance regulatory goals in a responsive, efficient and cost effective manner, consistent with the wishes of its members. As part of this mission, the NAIC compiles meaningful data about the insurance regulatory community, as well as the insurance industry. Number of Insurance Companies The number of insurance companies is provided by state insurance regulators and is compiled annually by the NAIC. Depending on the type of insurance companies provided, they are classified either as property/casualty, life and fraternal, health, or title insurers. Insurers with primary corporate headquarters located in a particular state are called domestic insurers. The insurance regulator in the insurer's state of domicile is the primary regulator of that insurer. Foreign insurers are those that are allowed to sell insurance in a state but have a primary legal residence in another state. The state rank represents the rank relative to the state with the largest number of insurers among all states. U.S. Premiums by NAIC Financial Statement Type The premium volume from the NAIC financial filing database is direct written premium derived from insurer annual financial statement filings provided to the NAIC. The total is comprised of aggregate premium and deposits generated without any adjustments for reinsurance. This data is grouped according to insurer financial statement filing type (i.e., property/casualty; life, accident and health/fraternal; health; and title). Data in one financial statement type could contain data that seemingly fits better under another line of business. For example, traditional health data may be filed by an insurer using the filing type of life, accident and health. Depending on the regulatory requirements in the state of domicile, captives and risk retention groups are not always required to file with the NAIC and, consequently, this data may not be considered complete. Not all state funds are required to file with the NAIC. State fund data contained herein is reported separately and added to the premium volume during composition of this report. Some categories are modified to more closely align with the structure of the NAIC financial statement filings and may not be comparable to data reported in prior years. The state rank represents the rank relative to the state with the largest premium volume among all states. U.S. Premiums by IDRR Premium Type The premium volume from the Insurance Department Resources Report (IDRR) is comprised of direct written premium that the states report to the NAIC in compiling the IDRR. This data is grouped by type of business and will not match up with data grouped by NAIC financial statement type. This data includes total direct written premium reported by each state insurance department and does not include premiums from captives or surplus lines business. It was requested that each state include state funds in its premium volume reported. Some companies may report premium data to the state insurance department that are not required to report to the NAIC due to sales volume or other regulatory requirements of their domiciliary state. Insurance Department Data The insurance department data is provided by state insurance regulators and is compiled annually by the NAIC. Total taxes include premium, retaliatory, franchise and income taxes paid by insurers. Total revenue includes other NAIC Scorecard / 2023 / United States#4NAIC NATIONAL ASSOCIATION OF INSURANCE COMMISSIONERS sources of revenue, such as licensing fees and fines and assessments, as well as total taxes. Total budget represents the annual operating budget of the state insurance department. Total employment is the number of full-time state insurance department employees. The state rank represents the rank relative to the state with the largest respective number among all states. Cost of Regulation The cost of regulation is calculated from data supplied by state insurance regulators and collected from insurers' financial filings. It is a ratio that compares the insurance department budget to total premium written in the state. For state- specific details on the figures used, please refer to the IDRR technical notes. Property/Casualty Premium by Line of Business The premiums are from the annual financial statement information that property/casualty insurers file with the NAIC. Property/casualty premium is subdivided into several categories. This data includes information on state funds reported separately and added to the premium volume during composition of this report. The state rank represents the rank relative to the state with the largest respective premium by line of business among all states. Insurance Industry Employment The U.S. Bureau of Labor Statistics (BLS) produces the Quarterly Census of Employment and Wages (QCEW). The QCEW is derived from quarterly unemployment insurance tax reports submitted by employers to state workforce agencies. The reports are subject to state unemployment insurance laws, as well as to the Unemployment Compensation for Federal Employees (UCFE) program. According to the BLS, the QCEW program publishes a quarterly count of employment and wages covering 98% of U.S. jobs, available by industry in the county, metropolitan statistical area (MSA), state and national levels. Employment is the total number of persons employed full-time or part-time in non- farm establishments during a specified payroll period. Temporary employees are included. In general, data refer to persons who worked during, or received pay for, any part of the pay period that includes the 12th of the month, which is standard for all federal agencies collecting employment data from business establishments. Insurance carriers include employees of direct insurers from all insurance types and reinsurers. Agencies, brokerages and other insurance- related activities include insurance agents and brokers, independent claims adjusters, third-party administrators of insurance and pension funds, and other insurance-related activities. Consumer Complaints Complaints include all formal complaints lodged with the insurance department. Consumer Inquiries Inquiries include all requests for information about insurance-related issues made by any medium, including phone calls, written letters, emails, etc. Requests for brochures are included, as are incidents where a complaint is voiced, but is not formally lodged. Gross Domestic Product The U.S. Bureau of Economic Analysis (BEA) produces the gross domestic product (GDP). The BEA defines GDP by state as the most comprehensive measure of overall economic activity in the individual states. Per the BEA, GDP by state is calculated as the sum of incomes earned by labor and capital and the costs incurred in the production of goods and services. It includes workers' wages and salaries; income earned by sole proprietorships, partnerships and corporations; and business taxes (such as sales, property, and federal excise taxes) that count as a business expense. 2 NAIC Scorecard / 2023 / United States#5NAIC NATIONAL ASSOCIATION OF INSURANCE COMMISSIONERS State Insurance Regulation: Key Facts and Market Trends The primary goal of state regulation is to protect insurance consumers, while recognizing that consumers as well as companies are well served by efficient, market-oriented regulation of the business of insurance. OVERVIEW OF THE UNITED STATES INSURANCE MARKET 2022 Insurance Group Five Largest Insurance Groups in the U.S. by Direct Premium Written Direct Premium Written* % of Total Premium Funds, trusts, and other financial vehicles U.S. Gross Domestic Product (Millions) 2021 2022 29,567 N/A UNITEDHEALTH GRP $220,056,634,079 7.21% 638,501 Insurance carriers and related activities N/A METROPOLITAN GRP $120,586,066,997 3.95% ELEVANCE HLTH INC GRP $103,593,396,083 3.39% CENTENE CORP GRP $96,779,952,547 3.17% HUMANA INC $87,045,174,657 2.85% $628,061,224,363 Top 5 Total *Includes Deposit Type Funds and premium written in U.S. territories from Property, Life, Fraternal, Title, and Health Annual Statements. Source: National Association of Insurance Commissioners *Figure is an estimate. Source: US Department of Commerce, Bureau of Economic Analysis Securities, commodity contracts, and other financial investments and related activities Monetary Authorities- central bank, credit intermediation, and related services 348,880 N/A 835,722 N/A Finance and insurance 1,852,670 1,932,937 U.S. Financial Sector Employment 2020 Insurance Carriers and Related Activities 2022 2021 2,419,845 2,449,834 2,520,241 Insurance Carriers 1,216,922 1,200,301 1,221,112 Direct Life and Health Insurance Carriers 641,994 637,235 623,829 Direct Life Insurance Carriers 240,024 233,651 224,738 Direct Health and Medical Insurance Carriers 403,979 405,846 415,025 Securities, Commodity Contracts, Investments 18.83% Direct Insurers (except Life and Health) 514,994 503,471 515,110 Direct Property and Casualty Insurers 463,586 444,392 456,633 Insurance Direct Title Insurance Carriers 59,556 66,151 65,005 Carriers and Related Other Direct Insurance Carriers 15,957 16,346 17,351 Activities 34.46% Reinsurance Carriers 19,571 19,443 20,249 Insurance Agencies and Brokerages 1,202,923 1,249,542 1,299,132 Other Insurance Related Activities 351,072 356,126 366,728 Claims Adjusting 56,707 60,144 62,681 Third Party Administration of Insurance Funds 205,640 207,608 209,690 All Other Insurance Related Activities 88,725 88,369 94,364 Securities, Commodity Source: U.S. Department of Labor, Bureau of Labor Statistics Copyright ©2023 National Association of Insurance Commissioners. All rights reserved. Contracts, Investments 19.10% U.S. Gross Dometic Product Shares of Financial Institutions By Component, 2021 U.S. Gross Dometic Product Shares of Financial Institutions By Component, 2020 Federal Reserve Banks, Credit -Internediation and Related Services 45.11% Funds, Trusts, and Other Financial Vehicles 1.60% Federal Reserve Banks, Credit Internediation and Related Services 43.68% Insurance Carriers and Related Funds, Trusts, and Other Financial Vehicles 1.40% Activities 35.82%#6(Millions) $8,000 (Millions) $350,000 $280,000 $210,000 $140,000 $70,000 $0 Billions $3,500 $3,000 $2,500 $2,000 $1,500 $1,000 $500 $0 Total U.S. Premium All Types of Insurance ($ billions) $1,865 $1,990 $2,136 $2,224 $2,321 $2,473 (Premiums from Property, Life, Fraternal, Health and Title Annual Statements plus State Funds for Property and Health) Source: National Association of Insurance Commissioners Premium Written for Automobile Insurance 2014 2015 230,999 218,408 2016 247,400 2017 267,402 2018 2019 287,161 299,098 2020 295,942 2021 2022 337,809 315,396 $12,000 $10,000 Premium Written for Medical Liability Insurance $0 ៖ ៖ $6,000 $4,000 $2,000 2013 9,785 2014 9,658 C 2015 9,386 2016 9,319 2017 9,194 2018 9,351 2019 9,785 2020 10,155 2021 11,179 2022 11,903 (Millions) (Millions) $2,624 NAIC NATIONAL ASSOCIATION OF INSURANCE COMMISSIONERS State Insurance Regulation: Key Facts and Market Trends OVERVIEW OF THE UNITED STATES INSURANCE MARKET 2022 $2,791 $3,034 $3,270 Homeowners Insurance $150,000 $125,000 $100,000 $75,000 Line of Business Fire U.S. Property & Casualty Premium by Line of Business 2022 20,962,005,810 2021 17,949,409,479 Allied lines 18,359,180,650 21,900,339,418 Federal flood 3,095,227,225 2,777,000,344 Crop 1,267,688,228 1,471,672,366 Private Flood 1,021,026,151 1,263,628,480 Farm. 18,991,653,046 24,291,432,551 Homeowners multiple peril 119,769,512,885 133,766,985,693 Commercial multi peril 49,791,768,120 55,133,567,113 Mortgage guaranty 5,715,488,991 5,600,575,886 Ocean & Inland Marine 33,377,833,123 38,100,524,324 Financial guaranty 332,979,456 362,677,279 Medical professional liability 11,179,056,258 Medical professional liability - Occurance 2,637,584,556 Medical professional liability - Claims Made Earthquake 9,265,022,140 3,780,527,198 4,197,676,654 Accident & Health 1,926,940,928 7,511,190,572 Workers' compensation 55,164,050,344 60,315,579,452 Products liability 4,318,476,538 Products liability - Occurance 4,003,788,955 Products liability - Claims Made 873,774,350 Automobile Aircraft (all perils) Fidelity Surety Burglary and theft Boiler and machinery Credit Other Total 315,395,762,148 337,809,381,741 2,386,530,987 2,659,199,705 1,388,357,460 1,458,418,263 7,346,320,499 8,476,476,212 481,827,739 559,620,839 2,131,779,842 2,343,181,198 2,228,858,989 2,646,389,699 108,956,132,487 791,239,640,851 117,786,785,693 868,174,860,180 Source: National Association of Insurance Commissioners (Premiums from Property Annual Statements plus State Funds) Premium Written for Premium Written for Commercial MP Insurance 582,750 618,128 619,440 633,065 678,880 739,903 $1,000,000 $800,000 $600,000 $400,000 $200,000 $0 Premium Written for Life Insurance * $50,000 $25,000 $0 2014 86,270 2015 89,113 2016 91,384 2017 94,243 2018 98,808 2019 104,155 798,281 2020 110,449 872,628 2021 119,770 933,164 2022 133,767 * Figures include Life, Annuities, Deposit Type Funds, and Other Considerations from the NAIC Life, and Fraternal financial statements. ** Figures includes Health data from the NAIC Health, Life, and Fraternal financial statements and California Insurance data. Figures include data from State Funds where applicable. Copyright ©2023 National Association of Insurance Commissioners. All rights reserved. (Millions) $60,000 $50,000 $40,000 $30,000 $20,000 (Millions) $10,000 $0 2014 38,962 2015 39,553 2016 39,834 2017 40,641 2018 41,806 2019 44,131 2020 46,231 2021 49.792 2022 55,134 $1,600,000 $1,400,000 Premium Written & Deposits for Health Insurance ** $1,200,000 $1,000,000 $800,000 $600,000 $400,000 $200,000 $0 2014 817,217 2015 903,154 2016 967,255 2017 1,022,008 2018 1,091,886 2019 1,156,652 2020 1,251,408 2021 1,344,341 2022 1,446,152#7NAIC NATIONAL ASSOCIATION OF INSURANCE COMMISSIONERS State Insurance Regulation: Key Facts and Market Trends The primary goal of state regulation is to protect insurance consumers, while recognizing that consumers as well as companies are well served by efficient, market-oriented regulation of the business of insurance. OVERVIEW OF THE UNITED STATES INSURANCE MARKET 2022 Data Year Property & Casualty* Life Health** U.S. Premiums by NAIC Financial Statement Type Fraternal Organizations*** Title Total 2013 $542,833,227,696 2014 $567,105,061,580 2015 2016 2017 2018 2019 2020 $674,190,146,476 $707,303,784,088 $723,246,793,358 $1,006,632,235,604 $589,667,150,148 $611,195,728,207 $785,304,558,898 $639,878,165,766 $810,086,066,759 $869,600,291,092 $942,312,241,837 $728,875,641,516 $737,379,318,108 $777,515,604,883 $570,418,613,975 $664,142,345,327 $10,215,713,285 $12,451,832,623 $1,864,795,029,095 $10,458,718,584 $11,060,055,329 $1,990,145,498,928 $745,397,969,897 $802,132,413,342 $846,780,935,013 $904,474,399,538 $958,805,424,749 $0 $1,042,296,991,090 $0 $10,867,996,721 $12,885,170,798 $2,136,333,892,447 $11,028,741,281 $14,030,332,178 $2,223,691,773,906 $10,222,142,527 $14,506,091,538 $2,321,473,401,603 $10,303,786,208 $14,631,346,937 $2,473,199,970,251 $15,650,177,336 $2,624,071,628,010 $19,243,067,702 $2,791,419,087,754 2021 $791,239,640,117 $1,085,563,498,797 $1,131,279,898,893 $0 $26,122,328,491 $3,034,205,366,298 2022 $868,174,858,151 $1,143,369,956,898 $1,236,369,783,627 $0 $21,895,885,175 $3,269,810,483,851 *Starting in 2004, Property/Casualty premiums include Supplemental State Funds. ** Starting in 2007, Health premiums include data filed with the California Department of Insurance. *** Starting in 2019, the Fraternal Organizations financial statement was combined with the Life financial statement. Source: National Association of Insurance Commissioners 2022 U.S. Premiums by NAIC IDRR Premium Category Total Life/ Annuities $3,128,658,831,179 $953,226,467,160 Property / Casualty Health Title Risk Retention Group All Other $5,684,795,947 $10,398,215,415 $785,807,492,523 $1,352,317,961,054 $21,223,899,080 Source: NAIC Insurance Department Resources Report 2022 U.S. Insurance Industry Information Captive Premium $44,918,924,655 Num of Captives 4,167 Captive Mean Premium $10,779,680 Domestic Premium $3,128,658,831,179 Num of Domestic 5,965 Source: NAIC Insurance Department Resources Report Domestic Mean Premium $524,502,738 2022 U.S. Insurance Department Information for All States Total Revenue Total State Tax Revenue $27,501,755,217 Total Budget $32,706,405,896 Source: NAIC Insurance Department Resources Report $1,745,764,738 Copyright ©2023 National Association of Insurance Commissioners. All rights reserved. Total Employment Consumer Inquiries Consumer Complaints 10,862 1,516,175 282,567#8NAIC NATIONAL ASSOCIATION OF INSURANCE COMMISSIONERS State Insurance Regulation in South Dakota: Key Facts and Market Trends Overview of the 2022 Insurance Market In South Dakota Number of Insurance Companies in South Dakota Premiums & Deposits by Type of Annual Statement Filing in South Dakota State Type Number Rank Statement Type Premium State % of Written Rank U.S. Domestic 38 43 Health $2,087,288,213 47 0.17% Total Domestic and Licensed 1,489 37 Life, Accident, and Health $3,760,317,342 42 0.33% Foreign Insurers Property and Casualty $3,671,372,864 40 0.42% Captives not included. Title $37,588,563 48 0.17% Source: NAIC Insurance Department Resources Report Captive Insurance Companies in South Dakota Total South Dakota $9,556,566,982 47 0.29% Source: National Association of Insurance Commissioners Number of Direct Total Captives Written Premium Captive Premium 19 $26,549,660 $26,549,660 IDRR Premiums by Category in South Dakota Source: NAIC Insurance Department Resources Report Category Premiums State % of Tvpe Rank U.S. Insurance Department Data for South Dakota Property and Casualty $3,576,472,539 39 0.46% State % of Life/Annuities $3,278,199,557 40 0.34% Description Amount Rank U.S. Risk Retention Group $3,990,142 47 0.07% Total Taxes: $103,284,080 43 0.38% All Other $0 17 0.00% Total Revenue: Total Budget: Total Employment: $119,487,839 45 0.37% Title $37,588,563 47 0.18% $3,715,676 51 0.21% 34 50 0.31% Health $2,558,346,613 48 0.19% Total Inquiries: Total Complaints: 1,549 39 0.10% Total $9,454,597,414 46 0.30% 458 46 0.16% Source: NAIC Insurance Department Resources Report Source: NAIC Insurance Department Resources Report Cost of Regulation in South Dakota Insurance Department Dept. Budget Per $1,000 Year Budget Premium 2013 $2,380,493 $0.45 2014 $2,582,718 $0.46 2015 $2,947,324 $0.50 2016 $3,139,340 $0.52 2017 $2,952,780 $0.45 2018 $3,389,422 $0.53 2019 $3,389,422 $0.49 2020 $3,426,602 $0.44 2021 $3,635,118 $0.41 2022 $3,715,676 $0.39 Source: NAIC Insurance Department Resources Report Insurance Dept Budget (Thousands) $4,000,000 $3,500,000 $3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,000,000 Cost of Regulation $0.60 $0.50 $0.40 $0.30 $0.20 $0.10 $500,000 $0 $0.00 2013 2014 2015 2016 2017 2018 Fiscal Year 2019 2020 2021 2022 Insurance Department Dept Budget per $1,000 Budget Premium Copyright ©2023 National Association of Insurance Commissioners. All rights reserved. Cost of Regulation per $1,000 Premium#9$20 $16 $12 $8 (Millions) $4 $0 (Millions) $1,000 $800 $600 $400 $200 $0 17 L 17 17 NAIC NATIONAL ASSOCIATION OF INSURANCE COMMISSIONERS State Insurance Regulation in South Dakota: Key Facts and Market Trends Overview of the 2022 Insurance Market In South Dakota Premium by Line of Business in South Dakota Total Direct Premium Written In-State Line of Business All Types of Insurance Farm Premium Written $1,375,812,920 State % of Rank U.S. 6 5.66% $10,000 Automobile $887,442,484 46 0.26% Homeowners multiple peril $373,651,753 46 0.28% Other $203,814,220 50 0.17% Commercial multi peril $202,172,768 48 0.37% $8,000 Workers' compensation $181,201,041 49 0.30% Ocean & Inland Marine $101,018,622 50 0.27% Crop $88,074,496 6 5.98% Allied lines $60,871,401 42 0.28% Millions $6,000 Fire $58,345,396 48 0.28% $4,000 $2,000 $5,296 $0 $5,617 $5,924 $5,989 2017 $6,615 $6,448 $6,936 $7,728 2021 $8,833 $9,557 Surety $32,699,719 46 0.39% Medical professional-Claims Made $15,917,849 51 0.17% Products liability-Occurance $15,785,349 38 0.39% Accident & Health $15,189,572 50 0.20% Aircraft (all perils) $14,383,153 40 0.54% Mortgage guaranty $13,636,481 49 0.24% Boiler and machinery $10,853,827 44 0.46% Credit $7,277,738 45 0.28% Fidelity $3,658,262 48 0.25% Medical professional-Occurance $2,393,664 51 0.09% 2022 Federal flood $2,065,143 47 0.07% Products liability-Claims Made $1,723,032 45 0.20% Private Flood $1,268,467 52 0.10% Burglary and theft $932,974 49 0.17% Earthquake $928,323 53 0.02% Source: National Assoication of Insurance Commissioners. Financial guaranty Total $253,787 $3,671,372,864 39 0.07% 40 0.42% Premium Written for Automobile Insurance 5/9 706 745 763 821 887 (Millions) $400 $350 $300 $250 $200 $150 $100 $50 $0 234 Premium Written for Homeowners Insurance ▬▬▬▬▬▬ Source: National Association of Insurance Commissioners 279 298 330 374 (Millions) Premium Written for Commercial MP Insurance $240 $200 $160 $120 $80 127 $40 $0 2014 2015 129 2016 133 2017 134 2018 137 2019 144 2020 153 2021 172 2022 202 Premium Written for Medical Premium Written & Deposits for Liability Insurance Life Insurance * $3,500 $3,000 $2,800 $2,400 $2,500 $2,000 C 15 от L 8T 18 18 (Millions) $2,000 $1,500 $1,000 $500 5 9 7 2014 1,422 2015 1c21 1,621 2016 1,555 2017 2,040 2018 2019 2,201 1,805 2,332 3,362 3,280 (Millions) $1,600 $1,200 $800 $400 $0 Premiums Written & Deposits for $0 Figures include Life, Annuities, Deposit Type Funds, and Other Considerations from the NAIC Life, and Fraternal financial statements. ** Figures include Health data from the NAIC Health, Life, and Fraternal financial statements and California Insurance data. Figures include data from State Funds where applicable. Copyright ©2023 National Association of Insurance Commissioners. All rights reserved. Health Insurance *** 1,700 1771 1,896 1,982 2,067 2,145 2,305 2,367 2,551#10NAIC NATIONAL ASSOCIATION OF INSURANCE COMMISSIONERS State Insurance Regulation in South Dakota: Key Facts and Market Trends Overview of the 2022 Insurance Market In South Dakota Insurance Industry Employment in South Dakota Gross Domestic Product for South Dakota (Millions) Insurance Carriers and Agents Brokers and Other 2019 2020 2021 2022 Related Year Activities Insurance Carriers Related Funds, trusts, and other $2 $1 $143 N/A Activities financial vehicles 2015 7,459 2,543 4,916 Insurance carriers and $1,371 $1,352 $1,368 N/A 2016 7,415 2,649 4,766 related activities 2017 7,353 2,551 4,802 Securities, commodity $222 $238 $279 N/A 2018 7,298 2,507 4,791 contracts, and other financial 2019 7,172 2,428 4,744 investments and related 2020 7,023 2,436 4,586 activities 2021 6,994 2,426 4,569 Monetary Authorities- $9,110 $8,070 $8,565 N/A 2022 6,978 2,437 4,541 central bank, credit intermediation, and related Source: US Department of Labor, Bureau of Labor Statistics services Finance and insurance $10,705 $9,661 $10,354 $10,252 Source: US Department of Commerce, Bureau of Economic Analysis Gross Dometic Product in South Dakota Shares of Financial Institutions By Component, 2022 Funds, trusts, Monetary Authorities- central bank, credit intermediation, and related services 82.72% and other financial vehicles 1.38% Insurance carriers and related activities 13.21% Securities, commodity contracts, and other financial investments and related activities 2.69% Copyright ©2023 National Association of Insurance Commissioners. All rights reserved.