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New North Dakota Insurance Laws Now in Effect

The North Dakota Insurance Department recently released a list of new insurance-related laws enacted from bills that passed the state’s legislature in 2019.

Following is a limited list of new laws in North Dakota that may be of interest to property/casualty insurance producers. The summaries of the new laws are not meant to serve as legal descriptions. Unless indicated, the laws were effective on Aug. 1.

SB 2167 – Insurance producer continuing education credit: Producers who are active members of a professional insurance association may receive up to four hours of continuing education credit within a two-year reporting period, if granted by the insurance commissioner. Limit is two credits per calendar year. Credit does not apply to ethics. The professional insurance association must verify the active participation claimed by the producer.

HB 1137 – Electronic delivery: Allows all business insurance lines to receive and access policy information through company secure websites and email notification on an opt-in basis.

HB 144 – Fees for insurance services: Allows insurance producer to collect both a commission and fees for service on commercial business. Written disclosure is required and must disclose:

• The nature of the services for which fee will be charged along with a separate itemization of the fees and total amount.
• That the fees are in addition to any premiums paid.
• That if the insurance producer is also an appointed agent of the insurer with which coverage is being considered for placement, a statement indicating the producer also represents the insurer and owes the insurer a duty of loyalty.
• If the insurance producer is receiving a commission from the sale of an insurance policy related to the services rendered, a statement must clearly and completely disclose that the commission to be received is paid from the premiums owed for the insurance and that amount of the producer’s commission may vary depending on the insurance product and insurer.

The law also stipulates that a producer charging a fee for services for risk management services owes a “higher standard of care” to the person being charged.

The disclosure must be signed and dated by the producer and the party being charged on a form approved by the insurance commissioner. The signed disclosure must be retained by the producer for a minimum of five years following the completion of the service.

For both personal or commercial lines, an insurance producer may also charge an individual a fee for agency-billed premiums and fees by credit card or other electronic means. The fee must be disclosed and agreed to by the client in writing.

SB 2010 – Rebating: Allows insurance producers to make gifts to 501(c)(3) charitable organizations even if the gift induces to obtain a quote for insurance from the producer. Became law on July 1.

HB 1123 – Property/casualty risk rating: Allows for consumers/agents to assert a fire protection class that may be different from the standard class used by the insurer within 30 days for when a policy is quoted, issued or renewed. The assertion to the insurer must be accompanied by factual and credible information. The insurer has 90 days in which to investigate the assertion and either keep the asserted class or document why it is re-implementing the original class. The insurer must also inform the policyholder of its determination.

HB 1280 – Inception and expiration of insurance policies: Prohibits insurance carriers from voiding an in-force auto policy after an accident has occurred. Clarifies that a motor vehicle liability policy may be voided when the application for the policy was made after the accident occurred.

HB 1212 – Public adjuster licensing: Requires public adjusters operating in North Dakota to be licensed, including resident, non-resident and business entities. Resident public adjusters must submit fingerprints, have a background check and pass a required exam in order to be licensed. Continuing education requirements apply. Bill became law on July 1.

Source: North Dakota Insurance Department