Key Takeaways
- South Dakota requires suitability analysis before recommending annuities
- Annuity replacements require detailed comparison disclosures
- Producers must document the basis for annuity recommendations
- South Dakota follows NAIC model annuity regulations
- Incontestability provisions apply to annuities (Section 58-15-61)
Last updated: January 2026
South Dakota Annuity Regulations
South Dakota has adopted comprehensive annuity regulations to protect consumers from unsuitable sales.
Suitability Requirements
South Dakota follows the NAIC Suitability in Annuity Transactions Model Regulation:
Producer Duties
Before recommending an annuity, the producer must:
- Make reasonable efforts to obtain customer information
- Analyze whether the recommendation is suitable
- Document the basis for the recommendation
- Disclose all material information about the product
Required Information
| Category | Information Required |
|---|---|
| Financial Status | Income, liquid assets, financial needs |
| Tax Status | Tax bracket, qualified vs. non-qualified funds |
| Investment Objectives | Goals, time horizon, risk tolerance |
| Existing Coverage | Current annuities and life insurance |
| Liquidity Needs | Expected need for funds |
Replacement Requirements
When replacing an existing annuity, producers must:
- Provide comparison of existing and proposed contracts
- Document suitability of replacement
- Disclose surrender charges and other costs
- Provide notice to existing insurer
Annuity Incontestability
Under Section 58-15-61, annuity and endowment contracts have incontestability provisions similar to life insurance.
Test Your Knowledge
What must a South Dakota producer obtain before recommending an annuity?
A
B
C
D