20:06:42:01.  Eligible associations defined. An association is a group of persons who have joined for some common purpose or goal. An association is eligible for the issuance of group health insurance if all of the following factors are met:

          (1)  There is a shared or common purpose that is not generally applicable to the population at large;

          (2)  There is a constitution and by-laws which indicate a legitimate purpose other than the purchase of insurance; and

          (3)  The primary method of obtaining new members is not through, or in conjunction with, the solicitation of insurance. However, solicitation of insurance may be one of the methods of obtaining new members.

          When determining eligibility for the issuance of group health insurance, the division may consider whether the association ever existed independently of an insurance product.

          Source: 26 SDR 44, effective October 6, 1999.

          General Authority: SDCL 58-18-62.

          Law Implemented: SDCL 58-18-3, 58-18-6.