North Dakota Advances Digital-First Insurance Oversight
North Dakota is introducing new legislation to modernize its oversight of insurance producers. The changes, spearheaded by the state’s Insurance Commissioner, focus on electronic communication and stricter compliance requirements for public adjusters and nonresident licensees.
Senate Bill No. 2125, which originated from the Industry and Business Committee and was signed last week, amends several sections of the North Dakota Century Code. The bill seeks to streamline communication and modernize regulatory processes.
Mandatory Electronic Mailing Addresses
A key element of the new law is the requirement for all licensed insurance producers to provide an electronic mailing address specifically for regulatory purposes. This signals a significant move towards digital-first enforcement. This means email will now be the default method for official communication.
Under the new rules, the Insurance Commissioner can now send service of process and official communications via email. Producers, especially those licensed in other states, are expected to check these designated email accounts regularly. Failure to do so could result in legal or administrative issues.
The bill establishes section 26.1-26-33.1, which stipulates that insurance producers must both maintain and monitor their provided electronic mailing address. Additionally, amendments to section 26.1-26-22 allow the Insurance Commissioner to send official notices to nonresident producers via email, with service considered complete upon sending.
Stricter Rules for Nonresident Licenses
The legislation also expands the circumstances under which nonresident producer licenses can be revoked. According to revisions to section 26.1-26-42.1, a nonresident license may now be suspended or revoked without notice or a hearing if the producer’s home state license is revoked, suspended, or overdue for renewal. Notification of these actions may come through email or the National Association of Insurance Commissioners (NAIC) national producer database.
This streamlined process emphasizes the importance for nonresident producers of maintaining good standing in both their home state and North Dakota.
Changes for Public Adjusters
Public adjusters will also see changes from the proposed legislation. The bill adjusts sections related to license renewals, bond requirements, and continuing education.
The renewal notice period for public adjuster licenses will be extended from 60 to 90 days before expiration. Adjusters who let their licenses lapse will have a limited window – 12 months for individuals, and 30 days for business entities – to reinstate or renew without examination, often at a higher cost.
In addition, bond requirements remain at a minimum of $20,000, but bond terminations must now be reported at least 30 days in advance, changed from 60 days. Any lapse in financial responsibility will immediately terminate the adjuster’s authority to act.
The bill also updates continuing education mandates, mandating that adjusters complete 24 credit hours every two years, which must include three hours of ethics training. Nonresident adjusters can meet these requirements by fulfilling those of their home state.
Digital Accountability
Senate Bill 2125 is aimed at modernizing the state’s oversight of the insurance industry. It places an increased responsibility on producers and adjusters to adhere to licensing, renewal, and educational standards in a timely manner.
