The North Dakota insurance commissioner has the authority to require insurance companies to pay restitution to harmed policyholders under a bill signed into last month.
House Bill 1088, signed into law on April. 10 by Gov. Kelly Armstrong, grants the insurance commissioner the authority to require restitution, after a hearing, to a person directly harmed by a violation of the North Dakota insurance code. The commissioner has the ability to fine insurance companies up to $10,000 for each violation.
The bill states that the commissioner may not determine or adjudicate whether an obligation is owed under a policy, or require a person to pay a claim or an amount claimed owed under a policy.
John Arnold, deputy insurance commissioner, testified in favor of the bill in February, saying it was a response to an open case where a broker sold a farm family a deceptive health insurance policy.
The family was paying the broker a fee to be uninsured, Arnold told the Senate Industry and Business Committee. When the family suffered a medical emergency, they acquired over $500,000 in medical debt and nearly had to sell their farm.
Arnold said that while the department of insurance has been successful in negotiating restitution in lieu of all, or a portion of, administrative fines, the department needs formal authority to help make victims financially whole.
“We are not requesting carte blanche authority to attach subjective punitive or pain and suffering damages to any penalties,” Arnold said.
A similar bill in Washington went before lawmakers earlier this year. The bill made it out of the Senate but failed to pass a House committee vote.
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