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.
HB 1088 amends North Dakota Century Code section 26.1-01-03.3, which governs penalties for violations of the state insurance title. 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 directly harmed by a violation.
The bill also clarifies a limit on the commissioner’s authority: the commissioner may not decide whether an insurance obligation is owed under a policy or contract, and may not order a person to pay a disputed insurance claim or amount allegedly owed under a policy or contract. In effect, the measure strengthens enforcement tools for insurance-law violations while drawing a line between administrative penalties and adjudicating coverage or claim disputes.
HB 1088 updates the enforcement provisions in the insurance code by replacing the prior penalty language with a clearer administrative fine structure and reaffirming restitution authority. It affects insurers, insurance producers, and other persons subject to North Dakota’s insurance title, while also defining the scope of the Insurance Commissioner’s enforcement powers. The bill does not change substantive coverage law, but it reinforces regulatory penalties and limits administrative adjudication of policy-payment disputes.
The available legislative record suggests broad support for the bill. It passed the House 76-13 and the Senate 45-1, indicating strong bipartisan approval. The bill was introduced at the request of the Insurance Commissioner and moved through the House Industry, Business and Labor Committee, which also suggests it was viewed as a technical or enforcement-oriented update rather than a controversial policy shift.
The main point of potential concern is the balance between stronger enforcement and the commissioner’s limits. The bill increases the clarity and availability of administrative monetary penalties, which could raise compliance concerns for regulated insurance entities, but it also explicitly prevents the commissioner from deciding coverage disputes or compelling payment of claims. That limitation likely addresses concerns from insurers and policyholders about administrative overreach. The narrow vote opposition in the House and Senate suggests only limited disagreement, likely over the size or use of penalties rather than the overall structure of the bill.