AN ACT to amend and reenact section 26.1-01-03.3 of the North Dakota Century Code, relating to penalties for violation of the insurance title; and to provide a penalty.
Summary
HB 1088 amends North Dakota’s insurance code to adjust the penalty framework for violations of Title 26.1. The bill authorizes the Insurance Commissioner, after a hearing, to impose an administrative monetary penalty of up to $10,000 for each violation unless another law provides a different penalty. It also preserves the commissioner’s authority to order restitution for direct financial loss to a person harmed by a violation.
The bill makes clear that restitution authority does not extend to deciding whether an insurance policy or contract actually requires payment, or to ordering payment of a disputed claim or amount allegedly owed under a policy. In other words, the commissioner may address regulatory violations and direct losses, but not adjudicate coverage disputes or act as a substitute for a court or claims process on contract liability.
Impact
HB 1088 updates section 26.1-01-03.3 of the North Dakota Century Code by clarifying and reinforcing the Insurance Commissioner’s enforcement tools. It affects insurers, producers, and other persons subject to the insurance title by exposing them to administrative fines for violations and by allowing restitution orders for direct financial harm. At the same time, it limits the commissioner’s role in insurance disputes by expressly prohibiting determinations of policy obligations or compelled payment of claims, preserving those issues for other legal or contractual processes.
Sentiment
The bill appears to have received broad support. It passed the House and Senate by large margins, suggesting general agreement that the Insurance Commissioner should have clear penalty authority and restitution powers to enforce insurance laws. The vote totals indicate only limited opposition, and there is no committee transcript indicating significant public or legislative controversy.
Contention
The main point of potential contention is the balance between stronger regulatory enforcement and limits on administrative authority. Supporters likely favored giving the commissioner clearer tools to penalize violations and compensate harmed parties, while opponents may have been concerned about the scope of administrative fines or the possibility of restitution being used too aggressively. The bill addresses that concern by explicitly stating that the commissioner cannot determine coverage obligations or require payment of disputed insurance claims, which narrows the enforcement power and likely reduced opposition.