SDCL § 58-5-104: Participating policies--Issuance authorized by articles of domestic insurer--Nondiscrimination between policyholders.

If provided in its articles of incorporation, a domestic insurer may issue and classify policies with or without participation in profits, savings, or unabsorbed portions of premiums and determine the right to participate and the extent of participation of any class or classes of policies. Any such classification or determination shall be reasonable, and shall not discriminate between policyholders within the same classification. A life insurer may issue both participating and nonparticipating policies only if the right or absence of right to participate is reasonably related to the premium charged.