North Dakota 2025-2026 Regular Session

North Dakota House Bill HB1124 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
1		-	Sixty-ninth Legislative Assembly of North Dakota
2		-	In Regular Session Commencing Tuesday, January 7, 2025
3		-	HOUSE BILL NO. 1124
4		-	(Industry, Business and Labor Committee)
	1	+	25.8125.01000
	2	+	Sixty-ninth
	3	+	Legislative Assembly
	4	+	of North Dakota
	5	+	Introduced by
	6	+	Industry, Business and Labor Committee
5	7		(At the request of the Insurance Commissioner)
6		-	AN ACT to amend and reenact sections 26.1-10-01, 26.1-10-04, 26.1-10-05, and ~~26.1-10-07 of the~~
7		-	North Dakota Century Code, relating to the standards and management of an ~~insurer with an~~
8		-	insurance holding company system and the confidential treatment of ~~investigation and~~
9		-	examination records of insurance holding companies.
	8	+	A BILL for an Act to amend and reenact sections 26.1-10-01, 26.1-10-04, 26.1-10-05, and
	9	+	26.1-10-07 of the North Dakota Century Code, relating to the standards and management of an
	10	+	insurer with an insurance holding company system and the confidential treatment of
	11	+	investigation and examination records of insurance holding companies.
10	12		BE IT ENACTED BY THE LEGISLATIVE ASSEMBLY OF NORTH DAKOTA:
11		-	SECTION 1. AMENDMENT. Section 26.1-10-01 of the North Dakota Century Code is ~~amended and~~
12		-	reenacted as follows:
	13	+	SECTION 1. AMENDMENT. Section 26.1-10-01 of the North Dakota Century Code is
	14	+	amended and reenacted as follows:
13	15		26.1-10-01. Definitions.
14	16		As used in this chapter, unless the context or subject matter otherwise requires:
15		-	1."Affiliate" means a person that directly, or indirectly through one or more intermediaries,
16		-	controls, or is under the control of, or is under common control with, the person specified.
17		-	2."Control" means the possession, direct or indirect, of the power to direct or cause the direction
18		-	of the management and policies of a person, whether through the ownership of voting
19		-	securities, by contract other than a commercial contract for goods or nonmanagement
20		-	services, or otherwise, unless the power is the result of an official position with or corporate
21		-	office held by the person. Control is presumed to exist if any person, directly or indirectly,
22		-	owns, controls, holds with the power to vote, or holds proxies representing ten percent or
23		-	more of the voting securities of any other person. This presumption may be rebutted by a
24		-	showing made in the manner provided for in subsection 9 of section 26.1-10-04, that control
25		-	does not exist in fact. The commissioner may determine, after furnishing all persons in interest
26		-	notice and opportunity to be heard and making specific findings of fact to support such
27		-	determination, that control exists in fact, notwithstanding the absence of a presumption to that
28		-	effect.
29		-	3."Enterprise risk" means any activity, circumstance, event, or series of events involving one or
30		-	more affiliates of an insurer which, if not remedied promptly, is likely to have a material
31		-	adverse effect upon the financial condition or liquidity of the insurer or the insurer's insurance
32		-	holding company system as a whole including anything that would cause the insurer's risk-
33		-	based capital to fall into company action level as set forth in section 26.1-03.1-03 or would
34		-	cause the insurer to be in hazardous financial condition as set forth in North Dakota
35		-	Administrative Code section 45-03-13-01.
	17	+	1."Affiliate" means a person that directly, or indirectly through one or more
	18	+	intermediaries, controls, or is under the control of, or is under common control with,
	19	+	the person specified.
	20	+	2."Control" means the possession, direct or indirect, of the power to direct or cause the
	21	+	direction of the management and policies of a person, whether through the ownership
	22	+	of voting securities, by contract other than a commercial contract for goods or
	23	+	nonmanagement services, or otherwise, unless the power is the result of an official
	24	+	position with or corporate office held by the person. Control is presumed to exist if any
	25	+	person, directly or indirectly, owns, controls, holds with the power to vote, or holds
	26	+	proxies representing ten percent or more of the voting securities of any other person.
	27	+	This presumption may be rebutted by a showing made in the manner provided for in
	28	+	subsection 9 of section 26.1-10-04, that control does not exist in fact. The
	29	+	commissioner may determine, after furnishing all persons in interest notice and
	30	+	opportunity to be heard and making specific findings of fact to support such
	31	+	Page No. 1 25.8125.01000
	32	+	HOUSE BILL NO. 1124
	33	+
	34	+	1
	35	+	2
	36	+	3
	37	+	4
	38	+	5
	39	+	6
	40	+	7
	41	+	8
	42	+	9
	43	+	10
	44	+	11
	45	+	12
	46	+	13
	47	+	14
	48	+	15
	49	+	16
	50	+	17
	51	+	18
	52	+	19
	53	+	20
	54	+	21
	55	+	22
	56	+	23 Sixty-ninth
	57	+	Legislative Assembly
	58	+	determination, that control exists in fact, notwithstanding the absence of a presumption
	59	+	to that effect.
	60	+	3."Enterprise risk" means any activity, circumstance, event, or series of events involving
	61	+	one or more affiliates of an insurer which, if not remedied promptly, is likely to have a
	62	+	material adverse effect upon the financial condition or liquidity of the insurer or the
	63	+	insurer's insurance holding company system as a whole including anything that would
	64	+	cause the insurer's risk-based capital to fall into company action level as set forth in
	65	+	section 26.1-03.1-03 or would cause the insurer to be in hazardous financial condition
	66	+	as set forth in North Dakota Administrative Code section 45-03-13-01.
36	67		4."Group capital calculation instructions" means the group capital calculation instructions
37	68		adopted by the national association of insurance commissioners and as amended in
38	69		accordance with the procedures adopted by the national association of insurance
39	70		commissioners.
40		-	5."Groupwide supervisor" means the regulatory official authorized to engage in conducting and
41		-	coordinating groupwide supervision activities who is determined or acknowledged by the
42		-	commissioner under section 26.1-10-06.2 to have sufficient significant contacts with the
43		-	internationally active insurance group.
44		-	5.6."Insurance holding company system" means two or more affiliated persons, one or more of
45		-	which is an insurer. H. B. NO. 1124 - PAGE 2
46		-	6.7."Insurer" has the same definition as provided in section 26.1-29-02, except the term does not
47		-	include an agency, authority, or instrumentality of the United States or its possessions or a
48		-	state or political subdivision of a state.
49		-	7.8."Internationally active insurance group" means an insurance holding company system that
50		-	includes an insurer registered under section 26.1-10-04, and meets the following criteria:
	71	+	5."Groupwide supervisor" means the regulatory official authorized to engage in
	72	+	conducting and coordinating groupwide supervision activities who is determined or
	73	+	acknowledged by the commissioner under section 26.1-10-06.2 to have sufficient
	74	+	significant contacts with the internationally active insurance group.
	75	+	5.6."Insurance holding company system" means two or more affiliated persons, one or
	76	+	more of which is an insurer.
	77	+	6.7."Insurer" has the same definition as provided in section 26.1-29-02, except the term
	78	+	does not include an agency, authority, or instrumentality of the United States or its
	79	+	possessions or a state or political subdivision of a state.
	80	+	7.8."Internationally active insurance group" means an insurance holding company system
	81	+	that includes an insurer registered under section 26.1-10-04, and meets the following
	82	+	criteria:
51	83		a.Premiums written in at least three countries;
52		-	b.The percentage of gross premiums written outside the United States is at least ten
53		-	percent of the insurance holding company system's total gross written premiums; and
54		-	c.Based on a three-year rolling average, the total assets of the insurance holding company
55		-	system are at least fifty billion dollars or the total gross written premiums of the insurance
56		-	holding company system are at least ten billion dollars.
57		-	8.9."Liquidity stress test framework" means the national association of insurance commissioners
58		-	liquidity stress test framework that includes a history of the association's development of
59		-	regulatory liquidity stress testing, the scope criteria applicable for a specific data year, the
60		-	liquidity stress test instructions, and reporting templates for a specific data year, as adopted
61		-	and amended in accordance with the procedures adopted by the association.
62		-	10."Person" means an individual, a corporation, a limited liability company, a partnership, an
63		-	association, a joint stock company, a trust, or an unincorporated organization or any similar
64		-	entity or any combination of the foregoing acting in concert. The term does not include any
65		-	joint venture partnership exclusively engaged in owning, managing, leasing, or developing real
66		-	or tangible personal property.
67		-	11."Scope criteria" means the designated exposure bases along with minimum magnitudes of
68		-	those bases for the specified data year, used to establish a preliminary list of insurers
69		-	considered scoped into the national association of insurance commissioners liquidity stress
70		-	test framework for that data year.
	84	+	b.The percentage of gross premiums written outside the United States is at least
	85	+	ten percent of the insurance holding company system's total gross written
	86	+	premiums; and
	87	+	c.Based on a three-year rolling average, the total assets of the insurance holding
	88	+	company system are at least fifty billion dollars or the total gross written
	89	+	Page No. 2 25.8125.01000
	90	+	1
	91	+	2
	92	+	3
	93	+	4
	94	+	5
	95	+	6
	96	+	7
	97	+	8
	98	+	9
	99	+	10
	100	+	11
	101	+	12
	102	+	13
	103	+	14
	104	+	15
	105	+	16
	106	+	17
	107	+	18
	108	+	19
	109	+	20
	110	+	21
	111	+	22
	112	+	23
	113	+	24
	114	+	25
	115	+	26
	116	+	27
	117	+	28
	118	+	29
	119	+	30
	120	+	31 Sixty-ninth
	121	+	Legislative Assembly
	122	+	premiums of the insurance holding company system are at least ten billion
	123	+	dollars.
	124	+	8.9."Liquidity stress test framework" means the national association of insurance
	125	+	commissioners liquidity stress test framework that includes a history of the
	126	+	association's development of regulatory liquidity stress testing, the scope criteria
	127	+	applicable for a specific data year, the liquidity stress test instructions, and reporting
	128	+	templates for a specific data year, as adopted and amended in accordance with the
	129	+	procedures adopted by the association.
	130	+	10."Person" means an individual, a corporation, a limited liability company, a partnership,
	131	+	an association, a joint stock company, a trust, or an unincorporated organization or
	132	+	any similar entity or any combination of the foregoing acting in concert. The term does
	133	+	not include any joint venture partnership exclusively engaged in owning, managing,
	134	+	leasing, or developing real or tangible personal property.
	135	+	11."Scope criteria" means the designated exposure bases along with minimum
	136	+	magnitudes of those bases for the specified data year, used to establish a preliminary
	137	+	list of insurers considered scoped into the national association of insurance
	138	+	commissioners liquidity stress test framework for that data year.
71	139		9.12."Securityholder" of a specified person means the owner of any security of the person,
72		-	including common stock, preferred stock, debt obligations, and any other security ~~convertible~~
73		-	into or evidencing the right to acquire any of the foregoing.
74		-	10.13."Subsidiary" of a specified person means an affiliate under the control of the person ~~directly, or~~
75		-	indirectly through one or more intermediaries.
76		-	11.14."Voting security" includes any security convertible into or evidencing a right to acquire ~~a voting~~
77		-	security.
78		-	SECTION 2. AMENDMENT. Section 26.1-10-04 of the North Dakota Century Code is ~~amended and~~
79		-	reenacted as follows:
	140	+	including common stock, preferred stock, debt obligations, and any other security
	141	+	convertible into or evidencing the right to acquire any of the foregoing.
	142	+	10.13."Subsidiary" of a specified person means an affiliate under the control of the person
	143	+	directly, or indirectly through one or more intermediaries.
	144	+	11.14."Voting security" includes any security convertible into or evidencing a right to acquire
	145	+	a voting security.
	146	+	SECTION 2. AMENDMENT. Section 26.1-10-04 of the North Dakota Century Code is
	147	+	amended and reenacted as follows:
80	148		26.1-10-04. Registration of insurers.
81		-	1.Every insurer that is authorized to do business in this state and which is a member of an
82		-	insurance holding company system shall register with the commissioner, except a foreign
83		-	insurer subject to registration requirements and standards adopted by statute or rule in the
84		-	jurisdiction of its domicile which are substantially similar to those contained in this section and
85		-	section 26.1-10-05. Any insurer subject to registration under this section shall register within
86		-	fifteen days after it becomes subject to registration, and annually thereafter by March first of
87		-	each year for the previous calendar year unless the commissioner for good cause shown
88		-	extends the time for registration, and then within the extended time. The commissioner may
89		-	require any insurer authorized to do business in the state which is a member of an insurance
90		-	holding company system not subject to registration under this section to furnish a copy of the H. B. NO. 1124 - PAGE 3
91		-	registration statement, the summary specified in subsection 10 of section 26.1-10-04, or other
92		-	information filed by the insurer with the insurance regulatory authority of the domiciliary
93		-	jurisdiction.
94		-	2.Every insurer subject to registration shall file a registration statement with the commissioner
95		-	on a form approved by the commissioner, which must contain current information about:
96		-	a.The capital structure, general financial condition, ownership, and management of the
97		-	insurer and any person in control of the insurer.
98		-	b.The identity and relationship of every member of the insurance holding company system.
99		-	c.The following agreements in force and transactions currently outstanding or which have
100		-	occurred during the last calendar year between the insurer and its affiliates:
101		-	(1)Loans, other investments, or purchases, sales, or exchanges of securities of the
102		-	affiliates by the insurer or of the insurer by its affiliates.
	149	+	1.Every insurer that is authorized to do business in this state and which is a member of
	150	+	an insurance holding company system shall register with the commissioner, except a
	151	+	foreign insurer subject to registration requirements and standards adopted by statute
	152	+	or rule in the jurisdiction of its domicile which are substantially similar to those
	153	+	Page No. 3 25.8125.01000
	154	+	1
	155	+	2
	156	+	3
	157	+	4
	158	+	5
	159	+	6
	160	+	7
	161	+	8
	162	+	9
	163	+	10
	164	+	11
	165	+	12
	166	+	13
	167	+	14
	168	+	15
	169	+	16
	170	+	17
	171	+	18
	172	+	19
	173	+	20
	174	+	21
	175	+	22
	176	+	23
	177	+	24
	178	+	25
	179	+	26
	180	+	27
	181	+	28
	182	+	29
	183	+	30
	184	+	31 Sixty-ninth
	185	+	Legislative Assembly
	186	+	contained in this section and section 26.1-10-05. Any insurer subject to registration
	187	+	under this section shall register within fifteen days after it becomes subject to
	188	+	registration, and annually thereafter by March first of each year for the previous
	189	+	calendar year unless the commissioner for good cause shown extends the time for
	190	+	registration, and then within the extended time. The commissioner may require any
	191	+	insurer authorized to do business in the state which is a member of an insurance
	192	+	holding company system not subject to registration under this section to furnish a copy
	193	+	of the registration statement, the summary specified in subsection 10 of section
	194	+	26.1-10-04, or other information filed by the insurer with the insurance regulatory
	195	+	authority of the domiciliary jurisdiction.
	196	+	2.Every insurer subject to registration shall file a registration statement with the
	197	+	commissioner on a form approved by the commissioner, which must contain current
	198	+	information about:
	199	+	a.The capital structure, general financial condition, ownership, and management of
	200	+	the insurer and any person in control of the insurer.
	201	+	b.The identity and relationship of every member of the insurance holding company
	202	+	system.
	203	+	c.The following agreements in force and transactions currently outstanding or
	204	+	which have occurred during the last calendar year between the insurer and its
	205	+	affiliates:
	206	+	(1)Loans, other investments, or purchases, sales, or exchanges of securities of
	207	+	the affiliates by the insurer or of the insurer by its affiliates.
103	208		(2)Purchases, sales, or exchange of assets.
104	209		(3)Transactions not in the ordinary course of business.
105		-	(4)Guarantees or undertakings for the benefit of an affiliate which result in an actual
106		-	contingent exposure of the insurer's assets to liability, other than insurance
107		-	contracts entered into in the ordinary course of the insurer's business.
108		-	(5)All management agreements, service contracts, and all cost-sharing arrangements.
	210	+	(4)Guarantees or undertakings for the benefit of an affiliate which result in an
	211	+	actual contingent exposure of the insurer's assets to liability, other than
	212	+	insurance contracts entered into in the ordinary course of the insurer's
	213	+	business.
	214	+	(5)All management agreements, service contracts, and all cost-sharing
	215	+	arrangements.
109	216		(6)Reinsurance agreements.
	217	+	Page No. 4 25.8125.01000
	218	+	1
	219	+	2
	220	+	3
	221	+	4
	222	+	5
	223	+	6
	224	+	7
	225	+	8
	226	+	9
	227	+	10
	228	+	11
	229	+	12
	230	+	13
	231	+	14
	232	+	15
	233	+	16
	234	+	17
	235	+	18
	236	+	19
	237	+	20
	238	+	21
	239	+	22
	240	+	23
	241	+	24
	242	+	25
	243	+	26
	244	+	27
	245	+	28
	246	+	29
	247	+	30
	248	+	31 Sixty-ninth
	249	+	Legislative Assembly
110	250		(7)Dividends and other distributions to shareholders.
111	251		(8)Consolidated tax allocation agreements.
112		-	d.Any pledge of the insurer's stock, including stock of any subsidiary or controlling affiliate,
113		-	for a loan made to any member of the insurance holding company system.
114		-	e.If requested by the commissioner, the insurer shall include financial statements of or
115		-	within an insurance holding company system, including all affiliates. A financial statement
116		-	may include an annual audited financial statement filed with the United States securities
117		-	and exchange commission pursuant to the federal Securities Act of 1933, as amended,
118		-	[15 U.S.C. 77a et seq.] or the federal Securities Exchange Act of 1934, as amended,
119		-	[15 U.S.C. 78a et seq.] or the financial statement pursuant to this subdivision may satisfy
120		-	the request by providing the commissioner with the most recently filed parent corporation
121		-	financial statements that have been filed with the United Sates securities and exchange
122		-	commission.
123		-	f.Other matters concerning transactions between registered insurers and any affiliates as
124		-	may be included from time to time in any registration forms adopted or approved by the
125		-	commissioner.
126		-	g.Statements that the insurer's board of directors is responsible for and supervises, relating
127		-	to corporate governance and internal controls that the insurer's officers or senior
128		-	management have approved, implemented, and continue to maintain and monitor.
	252	+	d.Any pledge of the insurer's stock, including stock of any subsidiary or controlling
	253	+	affiliate, for a loan made to any member of the insurance holding company
	254	+	system.
	255	+	e.If requested by the commissioner, the insurer shall include financial statements of
	256	+	or within an insurance holding company system, including all affiliates. A financial
	257	+	statement may include an annual audited financial statement filed with the United
	258	+	States securities and exchange commission pursuant to the federal Securities
	259	+	Act of 1933, as amended, [15 U.S.C. 77a et seq.] or the federal Securities
	260	+	Exchange Act of 1934, as amended, [15 U.S.C. 78a et seq.] or the financial
	261	+	statement pursuant to this subdivision may satisfy the request by providing the
	262	+	commissioner with the most recently filed parent corporation financial statements
	263	+	that have been filed with the United Sates securities and exchange commission.
	264	+	f.Other matters concerning transactions between registered insurers and any
	265	+	affiliates as may be included from time to time in any registration forms adopted
	266	+	or approved by the commissioner.
	267	+	g.Statements that the insurer's board of directors is responsible for and supervises,
	268	+	relating to corporate governance and internal controls that the insurer's officers or
	269	+	senior management have approved, implemented, and continue to maintain and
	270	+	monitor.
129	271		h.Any other information required by the commissioner by rule.
130		-	3.No information need be disclosed on the registration statement filed pursuant to subsection 2
131		-	if the information is not material for the purposes of this section. Unless the commissioner by H. B. NO. 1124 - PAGE 4
132		-	rule or order provides otherwise, sales, purchases, exchanges, loans or extensions of credit,
133		-	or investments, or guarantees involving one-half of one percent or less of an insurer's
134		-	admitted assets as of December thirty-first next preceding are not material for purposes of this
135		-	section. The definition of materiality provided in this subsection does not apply for purposes of
136		-	the group capital calculation or the liquidity stress test framework.
137		-	4.In addition to the annual filing requirement under subsection 1, each registered insurer shall
138		-	keep current the information required to be disclosed in its registration statement by reporting
139		-	all material changes or additions on amendment forms approved by the commissioner within
140		-	fifteen days after the end of the month in which it learns of each change or addition; provided,
141		-	however, that subject to subsections 7, 8, and 9 of section 26.1-10-05, each registered insurer
142		-	shall report all dividends and other distributions to shareholders within five business days
143		-	following the declaration and no less than ten business days prior to payment thereof.
144		-	5.The commissioner shall terminate the registration of any insurer that demonstrates it no longer
145		-	is a member of an insurance holding company system.
146		-	6.The commissioner may require or allow two or more affiliated insurers subject to registration to
147		-	file a consolidated registration statement.
148		-	7.The commissioner may allow an insurer which is authorized to do business in this state and
149		-	which is part of an insurance holding company system to register on behalf of any affiliated
150		-	insurer which is required to register under subsection 1 to file all information and material
151		-	required to be filed under this section.
152		-	8.This section does not apply to any insurer, information, or transaction if and to the extent
153		-	excepted by the commissioner by rule or order.
154		-	9.Any person may file with the commissioner a disclaimer of affiliation with any authorized
155		-	insurer or a disclaimer may be filed by the insurer or any member of an insurance holding
156		-	company system. The disclaimer must fully disclose all material relationships and bases for
157		-	affiliation between the person and the insurer as well as the basis for disclaiming the affiliation.
158		-	A disclaimer of affiliation is deemed to have been granted unless the commissioner, within
159		-	thirty days following receipt of a complete disclaimer, notifies the filing party the disclaimer is
160		-	disallowed. In the event of disallowance, the disclaiming party may request an administrative
161		-	hearing, which must be granted. The disclaiming party is relieved of its duty to register under
162		-	this section if approval of the disclaimer has been granted by the commissioner or if the
163		-	disclaimer is deemed to have been approved.
	272	+	3.No information need be disclosed on the registration statement filed pursuant to
	273	+	subsection 2 if the information is not material for the purposes of this section. Unless
	274	+	the commissioner by rule or order provides otherwise, sales, purchases, exchanges,
	275	+	loans or extensions of credit, or investments, or guarantees involving one-half of one
	276	+	percent or less of an insurer's admitted assets as of December thirty-first next
	277	+	preceding are not material for purposes of this section. The definition of materiality
	278	+	provided in this subsection does not apply for purposes of the group capital calculation
	279	+	or the liquidity stress test framework.
	280	+	Page No. 5 25.8125.01000
	281	+	1
	282	+	2
	283	+	3
	284	+	4
	285	+	5
	286	+	6
	287	+	7
	288	+	8
	289	+	9
	290	+	10
	291	+	11
	292	+	12
	293	+	13
	294	+	14
	295	+	15
	296	+	16
	297	+	17
	298	+	18
	299	+	19
	300	+	20
	301	+	21
	302	+	22
	303	+	23
	304	+	24
	305	+	25
	306	+	26
	307	+	27
	308	+	28
	309	+	29
	310	+	30 Sixty-ninth
	311	+	Legislative Assembly
	312	+	4.In addition to the annual filing requirement under subsection 1, each registered insurer
	313	+	shall keep current the information required to be disclosed in its registration statement
	314	+	by reporting all material changes or additions on amendment forms approved by the
	315	+	commissioner within fifteen days after the end of the month in which it learns of each
	316	+	change or addition; provided, however, that subject to subsections 7, 8, and 9 of
	317	+	section 26.1-10-05, each registered insurer shall report all dividends and other
	318	+	distributions to shareholders within five business days following the declaration and no
	319	+	less than ten business days prior to payment thereof.
	320	+	5.The commissioner shall terminate the registration of any insurer that demonstrates it
	321	+	no longer is a member of an insurance holding company system.
	322	+	6.The commissioner may require or allow two or more affiliated insurers subject to
	323	+	registration to file a consolidated registration statement.
	324	+	7.The commissioner may allow an insurer which is authorized to do business in this
	325	+	state and which is part of an insurance holding company system to register on behalf
	326	+	of any affiliated insurer which is required to register under subsection 1 to file all
	327	+	information and material required to be filed under this section.
	328	+	8.This section does not apply to any insurer, information, or transaction if and to the
	329	+	extent excepted by the commissioner by rule or order.
	330	+	9.Any person may file with the commissioner a disclaimer of affiliation with any
	331	+	authorized insurer or a disclaimer may be filed by the insurer or any member of an
	332	+	insurance holding company system. The disclaimer must fully disclose all material
	333	+	relationships and bases for affiliation between the person and the insurer as well as
	334	+	the basis for disclaiming the affiliation. A disclaimer of affiliation is deemed to have
	335	+	been granted unless the commissioner, within thirty days following receipt of a
	336	+	complete disclaimer, notifies the filing party the disclaimer is disallowed. In the event of
	337	+	disallowance, the disclaiming party may request an administrative hearing, which must
	338	+	be granted. The disclaiming party is relieved of its duty to register under this section if
	339	+	approval of the disclaimer has been granted by the commissioner or if the disclaimer is
	340	+	deemed to have been approved.
164	341		10.All registration statements must contain a summary outlining all items in the current
165	342		registration statement representing changes from the prior registration statement.
166		-	11.Any person within an insurance holding company system subject to registration must provide
167		-	complete and accurate information to an insurer, when the information is reasonably
168		-	necessary to enable the insurer to comply with the provisions of this chapter.
169		-	12.The ultimate controlling person of every insurer subject to registration shall file an annual
170		-	enterprise risk report. To the best of the ultimate controlling person's knowledge and belief, the
171		-	report must identify the material risks within the insurance holding company system which
172		-	could pose enterprise risk to the insurer. The report must be filed with the lead state
173		-	commissioner of the insurance holding company system as determined by the procedures
174		-	within the financial analysis handbook adopted by the national association of insurance
175		-	commissioners.
176		-	13.Except as provided in subsection 14, the ultimate controlling person of each insurer subject to
177		-	registration shall concurrently file with the registration an annual group capital calculation as
178		-	directed by the lead state commissioner. The report must be completed in accordance with the
179		-	national association of insurance commissioners group capital calculation instructions, which H. B. NO. 1124 - PAGE 5
180		-	may permit the lead state commissioner to allow a controlling person that is not the ultimate
181		-	controlling person to file the group capital calculation. The report must be filed with the lead
182		-	state commissioner of the insurance holding company system as determined by the
183		-	commissioner in accordance with the financial analysis handbook procedures adopted by the
184		-	national association of insurance commissioners.
185		-	14.An insurance holding company system is exempt from filing the group capital calculation if the
186		-	insurance holding company system meets any of the criteria described below.
	343	+	Page No. 6 25.8125.01000
	344	+	1
	345	+	2
	346	+	3
	347	+	4
	348	+	5
	349	+	6
	350	+	7
	351	+	8
	352	+	9
	353	+	10
	354	+	11
	355	+	12
	356	+	13
	357	+	14
	358	+	15
	359	+	16
	360	+	17
	361	+	18
	362	+	19
	363	+	20
	364	+	21
	365	+	22
	366	+	23
	367	+	24
	368	+	25
	369	+	26
	370	+	27
	371	+	28
	372	+	29
	373	+	30
	374	+	31 Sixty-ninth
	375	+	Legislative Assembly
	376	+	11.Any person within an insurance holding company system subject to registration must
	377	+	provide complete and accurate information to an insurer, when the information is
	378	+	reasonably necessary to enable the insurer to comply with the provisions of this
	379	+	chapter.
	380	+	12.The ultimate controlling person of every insurer subject to registration shall file an
	381	+	annual enterprise risk report. To the best of the ultimate controlling person's
	382	+	knowledge and belief, the report must identify the material risks within the insurance
	383	+	holding company system which could pose enterprise risk to the insurer. The report
	384	+	must be filed with the lead state commissioner of the insurance holding company
	385	+	system as determined by the procedures within the financial analysis handbook
	386	+	adopted by the national association of insurance commissioners.
	387	+	13.Except as provided in subsection 14, the ultimate controlling person of each insurer
	388	+	subject to registration shall concurrently file with the registration an annual group
	389	+	capital calculation as directed by the lead state commissioner. The report must be
	390	+	completed in accordance with the national association of insurance commissioners
	391	+	group capital calculation instructions, which may permit the lead state commissioner to
	392	+	allow a controlling person that is not the ultimate controlling person to file the group
	393	+	capital calculation. The report must be filed with the lead state commissioner of the
	394	+	insurance holding company system as determined by the commissioner in accordance
	395	+	with the financial analysis handbook procedures adopted by the national association of
	396	+	insurance commissioners.
	397	+	14.An insurance holding company system is exempt from filing the group capital
	398	+	calculation if the insurance holding company system meets any of the criteria
	399	+	described below.
187	400		a.An insurance holding company system that has only one insurer within its holding
188		-	company structure, only writes business, is only licensed in its domestic state, and
189		-	assumes no business from any other insurer.
190		-	b.If a system is required to perform a group capital calculation specified by the United
191		-	States federal reserve board, the lead state commissioner shall request the calculation
192		-	from the federal reserve board under the terms of information sharing agreements in
193		-	effect. If the federal reserve board cannot share the calculation with the lead state
194		-	commissioner, the insurance holding company system is not exempt from the group
195		-	capital calculation filing.
	401	+	company structure, only writes business, is only licensed in its domestic state,
	402	+	and assumes no business from any other insurer.
	403	+	b.If a system is required to perform a group capital calculation specified by the
	404	+	United States federal reserve board, the lead state commissioner shall request
	405	+	the calculation from the federal reserve board under the terms of information
	406	+	sharing agreements in effect. If the federal reserve board cannot share the
	407	+	Page No. 7 25.8125.01000
	408	+	1
	409	+	2
	410	+	3
	411	+	4
	412	+	5
	413	+	6
	414	+	7
	415	+	8
	416	+	9
	417	+	10
	418	+	11
	419	+	12
	420	+	13
	421	+	14
	422	+	15
	423	+	16
	424	+	17
	425	+	18
	426	+	19
	427	+	20
	428	+	21
	429	+	22
	430	+	23
	431	+	24
	432	+	25
	433	+	26
	434	+	27
	435	+	28
	436	+	29
	437	+	30
	438	+	31 Sixty-ninth
	439	+	Legislative Assembly
	440	+	calculation with the lead state commissioner, the insurance holding company
	441	+	system is not exempt from the group capital calculation filing.
196	442		c.An insurance holding company system that has a non-United States groupwide
197		-	supervisor located within a reciprocal jurisdiction as set forth in subsection 7 of ~~section~~
198		-	26.1 - 31.2 - 01 which recognizes the United States state regulatory ~~approach to group~~
199		-	supervision and group capital.
	443	+	supervisor located within a reciprocal jurisdiction as set forth in subsection 7 of
	444	+	section 26.1 - 31.2 - 01 which recognizes the United States state regulatory
	445	+	approach to group supervision and group capital.
200	446		d.An insurance holding company system that:
201		-	(1)Provides information to the lead state that meets the requirements for accreditation
202		-	under the national association of insurance commissioners financial standards and
203		-	accreditation program, either directly or indirectly through the groupwide supervisor,
204		-	who has determined the information is satisfactory to allow the lead state to comply
205		-	with the national association of insurance commissioners group supervision
206		-	approach, as detailed in the national association of insurance commissioners
207		-	financial analysis handbook; and
208		-	(2)Has a non-United States groupwide supervisor that is not in a reciprocal jurisdiction
209		-	which recognizes and accepts, as specified by the commissioner by rule, the group
210		-	capital calculation as the worldwide group capital assessment for United States
211		-	insurance groups that operate in that jurisdiction.
212		-	e.Notwithstanding subdivisions c and d, a lead state commissioner shall require the group
213		-	capital calculation for United States operations of any non-United States based insurance
214		-	holding company system where, after any necessary consultation with other supervisors
215		-	or officials, it is deemed appropriate by the lead state commissioner for prudential
216		-	oversight and solvency monitoring purposes or for ensuring the competitiveness of the
217		-	insurance marketplace.
218		-	f.Notwithstanding subdivisions a through d, the lead state commissioner may exempt the
219		-	ultimate controlling person from filing the annual group capital calculation or accept a
220		-	limited group capital filing or report in accordance with criteria as specified by the
221		-	commissioner by rule.
222		-	g.If the lead state commissioner determines an insurance holding company system no
223		-	longer meets one or more of the requirements for an exemption from filing the group
224		-	capital calculation under this section, the insurance holding company system shall file the
225		-	group capital calculation at the next annual filing date, unless an extension is provided by
226		-	the lead state commissioner based on reasonable grounds shown. H. B. NO. 1124 - PAGE 6
227		-	15.The ultimate controlling person of every insurer subject to registration and scoped into the
228		-	national association of insurance commissioners liquidity stress test framework shall file the
229		-	results of a specific year's liquidity stress test. The results must be filed with the lead state
230		-	insurance commissioner of the insurance holding company system as determined by the
231		-	financial analysis handbook procedures adopted by the national association of insurance
232		-	commissioners.
233		-	a.The national association of insurance commissioners liquidity stress test framework
234		-	includes scope criteria applicable to a specific data year. The scope criteria are reviewed
235		-	at least annually by the financial stability task force or its successor. A change to the
236		-	national association of insurance commissioners liquidity stress test framework or to the
237		-	data year for which the scope criteria are to be measured is effective on January first of
238		-	the year following the calendar year when the change is adopted. An insurer that meets
239		-	at least one threshold of the scope criteria is considered scoped into the national
240		-	association of insurance commissioners liquidity stress test framework for the specified
241		-	data year unless the lead state insurance commissioner, in consultation with the national
242		-	association of insurance commissioners financial stability task force or its successor,
243		-	determines the insurer should not be scoped into the framework for that data year. An
244		-	insurer that does not trigger at least one threshold of the scope criteria is considered
245		-	scoped out of the liquidity stress test framework for the specified data year, unless the
246		-	lead state insurance commissioner, in consultation with the national association of
247		-	insurance commissioners financial stability task force or its successor, determines the
248		-	insurer should be scoped into the framework for that data year.
249		-	b.To avoid having insurers scoped in and out of the national association of insurance
250		-	commissioners liquidity stress test framework on a frequent basis, the lead state
251		-	insurance commissioner, in consultation with the financial stability task force or its
252		-	successor, shall assess this concern as part of the determination for an insurer.
253		-	c.The performance of, and filing of the results from, a specific year's liquidity stress test
254		-	must comply with the national association of insurance commissioners liquidity stress test
255		-	framework's instructions and reporting templates for that year and any lead state
256		-	insurance commissioner determinations, in consultation with the financial stability task
257		-	force or its successor, provided within the framework.
258		-	13.16.The failure to file a registration statement or any summary of the registration statement or
259		-	enterprise risk filing required by this section within the time specified for the filing is a violation
260		-	of this section.
261		-	SECTION 3. AMENDMENT. Section 26.1-10-05 of the North Dakota Century Code is amended and
262		-	reenacted as follows:
263		-	26.1-10-05. Standards and management of an insurer with an insurance holding company
264		-	system.
265		-	1.Transactions within an insurance holding company system to which an insurer subject to
266		-	registration is a party are subject to the following standards:
	447	+	(1)Provides information to the lead state that meets the requirements for
	448	+	accreditation under the national association of insurance commissioners
	449	+	financial standards and accreditation program, either directly or indirectly
	450	+	through the groupwide supervisor, who has determined the information is
	451	+	satisfactory to allow the lead state to comply with the national association of
	452	+	insurance commissioners group supervision approach, as detailed in the
	453	+	national association of insurance commissioners financial analysis
	454	+	handbook; and
	455	+	(2)Has a non-United States groupwide supervisor that is not in a reciprocal
	456	+	jurisdiction which recognizes and accepts, as specified by the commissioner
	457	+	by rule, the group capital calculation as the worldwide group capital
	458	+	assessment for United States insurance groups that operate in that
	459	+	jurisdiction.
	460	+	e.Notwithstanding subdivisions c and d, a lead state commissioner shall require the
	461	+	group capital calculation for United States operations of any non-United States
	462	+	based insurance holding company system where, after any necessary
	463	+	consultation with other supervisors or officials, it is deemed appropriate by the
	464	+	lead state commissioner for prudential oversight and solvency monitoring
	465	+	purposes or for ensuring the competitiveness of the insurance marketplace.
	466	+	f.Notwithstanding subdivisions a through d, the lead state commissioner may
	467	+	exempt the ultimate controlling person from filing the annual group capital
	468	+	calculation or accept a limited group capital filing or report in accordance with
	469	+	criteria as specified by the commissioner by rule.
	470	+	Page No. 8 25.8125.01000
	471	+	1
	472	+	2
	473	+	3
	474	+	4
	475	+	5
	476	+	6
	477	+	7
	478	+	8
	479	+	9
	480	+	10
	481	+	11
	482	+	12
	483	+	13
	484	+	14
	485	+	15
	486	+	16
	487	+	17
	488	+	18
	489	+	19
	490	+	20
	491	+	21
	492	+	22
	493	+	23
	494	+	24
	495	+	25
	496	+	26
	497	+	27
	498	+	28
	499	+	29
	500	+	30 Sixty-ninth
	501	+	Legislative Assembly
	502	+	g.If the lead state commissioner determines an insurance holding company system
	503	+	no longer meets one or more of the requirements for an exemption from filing the
	504	+	group capital calculation under this section, the insurance holding company
	505	+	system shall file the group capital calculation at the next annual filing date, unless
	506	+	an extension is provided by the lead state commissioner based on reasonable
	507	+	grounds shown.
	508	+	15.The ultimate controlling person of every insurer subject to registration and scoped into
	509	+	the national association of insurance commissioners liquidity stress test framework
	510	+	shall file the results of a specific year's liquidity stress test. The results must be filed
	511	+	with the lead state insurance commissioner of the insurance holding company system
	512	+	as determined by the financial analysis handbook procedures adopted by the national
	513	+	association of insurance commissioners.
	514	+	a.The national association of insurance commissioners liquidity stress test
	515	+	framework includes scope criteria applicable to a specific data year. The scope
	516	+	criteria are reviewed at least annually by the financial stability task force or its
	517	+	successor. A change to the national association of insurance commissioners
	518	+	liquidity stress test framework or to the data year for which the scope criteria are
	519	+	to be measured is effective on January first of the year following the calendar
	520	+	year when the change is adopted. An insurer that meets at least one threshold of
	521	+	the scope criteria is considered scoped into the national association of insurance
	522	+	commissioners liquidity stress test framework for the specified data year unless
	523	+	the lead state insurance commissioner, in consultation with the national
	524	+	association of insurance commissioners financial stability task force or its
	525	+	successor, determines the insurer should not be scoped into the framework for
	526	+	that data year. An insurer that does not trigger at least one threshold of the scope
	527	+	criteria is considered scoped out of the liquidity stress test framework for the
	528	+	specified data year, unless the lead state insurance commissioner, in consultation
	529	+	with the national association of insurance commissioners financial stability task
	530	+	force or its successor, determines the insurer should be scoped into the
	531	+	framework for that data year.
	532	+	Page No. 9 25.8125.01000
	533	+	1
	534	+	2
	535	+	3
	536	+	4
	537	+	5
	538	+	6
	539	+	7
	540	+	8
	541	+	9
	542	+	10
	543	+	11
	544	+	12
	545	+	13
	546	+	14
	547	+	15
	548	+	16
	549	+	17
	550	+	18
	551	+	19
	552	+	20
	553	+	21
	554	+	22
	555	+	23
	556	+	24
	557	+	25
	558	+	26
	559	+	27
	560	+	28
	561	+	29
	562	+	30 Sixty-ninth
	563	+	Legislative Assembly
	564	+	b.To avoid having insurers scoped in and out of the national association of
	565	+	insurance commissioners liquidity stress test framework on a frequent basis, the
	566	+	lead state insurance commissioner, in consultation with the financial stability task
	567	+	force or its successor, shall assess this concern as part of the determination for
	568	+	an insurer.
	569	+	c.The performance of, and filing of the results from, a specific year's liquidity stress
	570	+	test must comply with the national association of insurance commissioners
	571	+	liquidity stress test framework's instructions and reporting templates for that year
	572	+	and any lead state insurance commissioner determinations, in consultation with
	573	+	the financial stability task force or its successor, provided within the framework.
	574	+	13.16.The failure to file a registration statement or any summary of the registration statement
	575	+	or enterprise risk filing required by this section within the time specified for the filing is
	576	+	a violation of this section.
	577	+	SECTION 3. AMENDMENT. Section 26.1-10-05 of the North Dakota Century Code is
	578	+	amended and reenacted as follows:
	579	+	26.1-10-05. Standards and management of an insurer with an insurance holding
	580	+	company system.
	581	+	1.Transactions within an insurance holding company system to which an insurer subject
	582	+	to registration is a party are subject to the following standards:
267	583		a.The terms must be fair and reasonable.
268		-	b.Agreements for cost-sharing services and management must include provisions as
269		-	required by rules adopted by the commissioner.
270		-	c.The books, accounts, and records of each party must clearly and accurately ~~disclose the~~
271		-	precise nature and details of the transactions, including that ~~accounting information that~~
272		-	is necessary to support the reasonableness of the ~~charges or fees to the respective~~
273		-	parties. ~~H. B. NO. 1124 - PAGE 7~~
274		-	d.The insurer's surplus as regards to policyholders following any dividends or ~~distributions~~
275		-	to shareholder affiliates must be reasonable in relation to the ~~insurer's outstanding~~
276		-	liabilities and adequate to its financial needs.
	584	+	b.Agreements for cost-sharing services and management must include provisions
	585	+	as required by rules adopted by the commissioner.
	586	+	c.The books, accounts, and records of each party must clearly and accurately
	587	+	disclose the precise nature and details of the transactions, including that
	588	+	accounting information that is necessary to support the reasonableness of the
	589	+	charges or fees to the respective parties.
	590	+	d.The insurer's surplus as regards to policyholders following any dividends or
	591	+	distributions to shareholder affiliates must be reasonable in relation to the
	592	+	insurer's outstanding liabilities and adequate to its financial needs.
277	593		e.Charges or fees for services performed must be reasonable.
278		-	f.Expenses incurred and payment received must be allocated to the insurer in conformity
279		-	with statutory accounting practices consistently applied.
280		-	g.If an insurer subject to this chapter is deemed by the commissioner to be in a hazardous
281		-	financial condition as defined by North Dakota Administrative Code chapter 45 - 03 - 13 or a
282		-	condition that would be grounds for supervision, conservation, or a delinquency
283		-	proceeding, the commissioner may require the insurer to secure and maintain a deposit,
284		-	held by the commissioner, or a bond, as determined by the insurer at the insurer's
285		-	discretion, for the protection of the insurer for the duration of the contracts or
286		-	agreements, or the existence of the condition for which the commissioner is required to
287		-	secure and maintain the deposit or the bond. In determining whether a deposit or a bond
288		-	is required, the commissioner must consider whether concerns exist with respect to the
289		-	affiliated person's ability to fulfill the contracts or agreements if the insurer were to be put
290		-	into liquidation. Once the insurer is deemed to be in a hazardous financial condition or a
291		-	condition that would be grounds for supervision, conservation or a delinquency
292		-	proceeding, and a deposit or bond is necessary, the commissioner may determine the
293		-	amount of the deposit or bond, not to exceed the value of the contracts or agreements in
294		-	any one year, and whether such deposit or bond should be required for a single contract,
295		-	multiple contracts, or a contract only with specific persons.
296		-	h.All records and data of the insurer held by an affiliate are and remain the property of the
297		-	insurer, are subject to the control of the insurer, are identifiable, and are segregated or
298		-	readily capable of segregation, at no additional cost to the insurer, from all other persons'
299		-	records and data. This includes all records and data that are otherwise the property of
300		-	the insurer, in whatever form maintained, including claims and claim files, policyholder
301		-	lists, application files, litigation files, premium records, rate books, underwriting manuals,
302		-	personnel records, financial records, or similar records within the possession, custody or
303		-	control of the affiliate. At the request of the insurer, the affiliate shall permit the receiver to
304		-	obtain a complete set of all records of any type that pertain to the insurer's business,
305		-	obtain access to the operating systems on which the data is maintained, obtain the
306		-	software that runs those systems either through assumption of licensing agreements or
307		-	otherwise, and restrict the use of the data by the affiliate if it is not operating the insurer's
308		-	business. The affiliate shall provide a waiver of any landlord lien or other encumbrance to
309		-	give the insurer access to all records and data in the event of the affiliate's default under
310		-	a lease or other agreement.
311		-	i.Premiums or other funds belonging to the insurer which are collected by or held by an
312		-	affiliate are the exclusive property of the insurer and are subject to the control of the
313		-	insurer. Any right of offset in the event an insurer is placed into receivership shall be
314		-	subject to chapter 26.1 - 06.1.
	594	+	Page No. 10 25.8125.01000
	595	+	1
	596	+	2
	597	+	3
	598	+	4
	599	+	5
	600	+	6
	601	+	7
	602	+	8
	603	+	9
	604	+	10
	605	+	11
	606	+	12
	607	+	13
	608	+	14
	609	+	15
	610	+	16
	611	+	17
	612	+	18
	613	+	19
	614	+	20
	615	+	21
	616	+	22
	617	+	23
	618	+	24
	619	+	25
	620	+	26
	621	+	27
	622	+	28
	623	+	29
	624	+	30 Sixty-ninth
	625	+	Legislative Assembly
	626	+	f.Expenses incurred and payment received must be allocated to the insurer in
	627	+	conformity with statutory accounting practices consistently applied.
	628	+	g.If an insurer subject to this chapter is deemed by the commissioner to be in a
	629	+	hazardous financial condition as defined by North Dakota Administrative Code
	630	+	chapter 45 - 03 - 13 or a condition that would be grounds for supervision,
	631	+	conservation, or a delinquency proceeding, the commissioner may require the
	632	+	insurer to secure and maintain a deposit, held by the commissioner, or a bond, as
	633	+	determined by the insurer at the insurer's discretion, for the protection of the
	634	+	insurer for the duration of the contracts or agreements, or the existence of the
	635	+	condition for which the commissioner is required to secure and maintain the
	636	+	deposit or the bond. In determining whether a deposit or a bond is required, the
	637	+	commissioner must consider whether concerns exist with respect to the affiliated
	638	+	person's ability to fulfill the contracts or agreements if the insurer were to be put
	639	+	into liquidation. Once the insurer is deemed to be in a hazardous financial
	640	+	condition or a condition that would be grounds for supervision, conservation or a
	641	+	delinquency proceeding, and a deposit or bond is necessary, the commissioner
	642	+	may determine the amount of the deposit or bond, not to exceed the value of the
	643	+	contracts or agreements in any one year, and whether such deposit or bond
	644	+	should be required for a single contract, multiple contracts, or a contract only with
	645	+	specific persons.
	646	+	h.All records and data of the insurer held by an affiliate are and remain the property
	647	+	of the insurer, are subject to the control of the insurer, are identifiable, and are
	648	+	segregated or readily capable of segregation, at no additional cost to the insurer,
	649	+	from all other persons' records and data. This includes all records and data that
	650	+	are otherwise the property of the insurer, in whatever form maintained, including
	651	+	claims and claim files, policyholder lists, application files, litigation files, premium
	652	+	records, rate books, underwriting manuals, personnel records, financial records,
	653	+	or similar records within the possession, custody or control of the affiliate. At the
	654	+	request of the insurer, the affiliate shall permit the receiver to obtain a complete
	655	+	set of all records of any type that pertain to the insurer's business, obtain access
	656	+	to the operating systems on which the data is maintained, obtain the software
	657	+	Page No. 11 25.8125.01000
	658	+	1
	659	+	2
	660	+	3
	661	+	4
	662	+	5
	663	+	6
	664	+	7
	665	+	8
	666	+	9
	667	+	10
	668	+	11
	669	+	12
	670	+	13
	671	+	14
	672	+	15
	673	+	16
	674	+	17
	675	+	18
	676	+	19
	677	+	20
	678	+	21
	679	+	22
	680	+	23
	681	+	24
	682	+	25
	683	+	26
	684	+	27
	685	+	28
	686	+	29
	687	+	30
	688	+	31 Sixty-ninth
	689	+	Legislative Assembly
	690	+	that runs those systems either through assumption of licensing agreements or
	691	+	otherwise, and restrict the use of the data by the affiliate if it is not operating the
	692	+	insurer's business. The affiliate shall provide a waiver of any landlord lien or other
	693	+	encumbrance to give the insurer access to all records and data in the event of
	694	+	the affiliate's default under a lease or other agreement.
	695	+	i.Premiums or other funds belonging to the insurer which are collected by or held
	696	+	by an affiliate are the exclusive property of the insurer and are subject to the
	697	+	control of the insurer. Any right of offset in the event an insurer is placed into
	698	+	receivership shall be subject to chapter 26.1 - 06.1.
315	699		2.The following transactions involving a domestic insurer and any person in its insurance
316		-	holding company system, including an amendment or modification of an affiliate agreement
317		-	previously filed pursuant to this section, which is subject to any materiality standards
318		-	contained in subdivisions a through g, may not be entered unless the insurer has notified the
319		-	commissioner in writing of its intention to enter into the transaction at least thirty days prior
320		-	thereto, or a shorter period as the commissioner may permit, and the commissioner has not
321		-	disapproved it within that period. The notice for an amendment or modification must include
322		-	the reason for the change and the financial impact on the domestic insurer. Within thirty days
323		-	after a termination of a previously filed agreement, informal notice must be reported to the
324		-	commissioner for determination of the type of filing required, if any. H. B. NO. 1124 - PAGE 8
325		-	a.Sales, purchases, exchanges, loans, or extensions of credit, or investments provided the
326		-	transactions are equal to or exceed:
327		-	(1)With respect to nonlife insurers, the lesser of three percent of the insurer's admitted
328		-	assets or twenty-five percent of surplus as regards policyholders as of December
329		-	thirty-first next preceding.
330		-	(2)With respect to life insurers, three percent of the insurer's admitted assets as of
331		-	December thirty-first next preceding.
332		-	b.Loans or extensions of credit to any person that is not an affiliate, if the insurer makes
333		-	loans or extensions of credit with the agreement or understanding that the proceeds of
334		-	the transactions, in whole or in substantial part, are to be used to make loans or
335		-	extensions of credit to, to purchase assets of, or to make investments in any affiliate of
336		-	the insurer making the loans or extensions of credit provided the transactions are equal
337		-	to or exceed:
338		-	(1)With respect to nonlife insurers, the lesser of three percent of the insurer's admitted
339		-	assets or twenty-five percent of surplus as regards policyholders as of December
340		-	thirty-first next preceding.
341		-	(2)With respect to life insurers, three percent of the insurer's admitted assets as of
342		-	December thirty-first next preceding.
	700	+	holding company system, including an amendment or modification of an affiliate
	701	+	agreement previously filed pursuant to this section, which is subject to any materiality
	702	+	standards contained in subdivisions a through g, may not be entered unless the
	703	+	insurer has notified the commissioner in writing of its intention to enter into the
	704	+	transaction at least thirty days prior thereto, or a shorter period as the commissioner
	705	+	may permit, and the commissioner has not disapproved it within that period. The
	706	+	notice for an amendment or modification must include the reason for the change and
	707	+	the financial impact on the domestic insurer. Within thirty days after a termination of a
	708	+	previously filed agreement, informal notice must be reported to the commissioner for
	709	+	determination of the type of filing required, if any.
	710	+	a.Sales, purchases, exchanges, loans, or extensions of credit, or investments
	711	+	provided the transactions are equal to or exceed:
	712	+	(1)With respect to nonlife insurers, the lesser of three percent of the insurer's
	713	+	admitted assets or twenty-five percent of surplus as regards policyholders
	714	+	as of December thirty-first next preceding.
	715	+	(2)With respect to life insurers, three percent of the insurer's admitted assets
	716	+	as of December thirty-first next preceding.
	717	+	b.Loans or extensions of credit to any person that is not an affiliate, if the insurer
	718	+	makes loans or extensions of credit with the agreement or understanding that the
	719	+	proceeds of the transactions, in whole or in substantial part, are to be used to
	720	+	make loans or extensions of credit to, to purchase assets of, or to make
	721	+	Page No. 12 25.8125.01000
	722	+	1
	723	+	2
	724	+	3
	725	+	4
	726	+	5
	727	+	6
	728	+	7
	729	+	8
	730	+	9
	731	+	10
	732	+	11
	733	+	12
	734	+	13
	735	+	14
	736	+	15
	737	+	16
	738	+	17
	739	+	18
	740	+	19
	741	+	20
	742	+	21
	743	+	22
	744	+	23
	745	+	24
	746	+	25
	747	+	26
	748	+	27
	749	+	28
	750	+	29
	751	+	30
	752	+	31 Sixty-ninth
	753	+	Legislative Assembly
	754	+	investments in any affiliate of the insurer making the loans or extensions of credit
	755	+	provided the transactions are equal to or exceed:
	756	+	(1)With respect to nonlife insurers, the lesser of three percent of the insurer's
	757	+	admitted assets or twenty-five percent of surplus as regards policyholders
	758	+	as of December thirty-first next preceding.
	759	+	(2)With respect to life insurers, three percent of the insurer's admitted assets
	760	+	as of December thirty-first next preceding.
343	761		c.Reinsurance agreements or modifications thereto, including:
344	762		(1)All reinsurance pooling agreements.
345	763		(2)Agreements in which the reinsurance premium or a change in the insurer's
346	764		liabilities, or the projected reinsurance premium or a change in the insurer's
347		-	liabilities in any of the next three years, equals or exceeds five percent of the
348		-	insurer's surplus as regards policyholders, as of December thirty-first next
349		-	preceding, including those agreements which may require as consideration the
350		-	transfer of assets from an insurer to a nonaffiliate, if an agreement or understanding
351		-	exists between the insurer and nonaffiliate that any portion of such assets will be
352		-	transferred to one or more affiliates of the insurer.
353		-	d.All management agreements, service contracts, tax allocation agreements, guarantees,
354		-	and cost-sharing arrangements.
355		-	e.Any guarantee made by a domestic insurer; however, a guarantee that is quantifiable as
356		-	to amount is not subject to the notice requirements of this subsection unless the
357		-	guarantee exceeds the lesser of one-half of one percent of the insurer's admitted assets
358		-	or ten percent of surplus as regards policyholders as of December thirty-first next
359		-	preceding. Additionally, all guarantees that are not quantifiable as to amount are subject
360		-	to the notice requirements of this subsection.
361		-	f.Any direct or indirect acquisition or investment in a person that controls the insurer or in
362		-	an affiliate of the insurer in an amount that, together with its present holdings in such
363		-	investments, exceeds two and one-half percent of the insurer's surplus to policyholders.
364		-	A direct or indirect acquisition or investment in a subsidiary acquired pursuant to section
365		-	26.1-10-02, or authorized under any other section of this chapter, or in a nonsubsidiary
366		-	insurance affiliate that is subject to this chapter, is exempt from this requirement.
367		-	g.Any material transactions, specified by rule, which the commissioner determines may
368		-	adversely affect the interests of the insurer's policyholders. H. B. NO. 1124 - PAGE 9
369		-	Nothing in this subsection may be deemed to authorize or permit any transactions which, in
370		-	the case of an insurer which is not a member of the same insurance holding company system,
371		-	would be otherwise contrary to law.
	765	+	liabilities in any of the next three years, equals or exceeds five percent of
	766	+	the insurer's surplus as regards policyholders, as of December thirty-first
	767	+	next preceding, including those agreements which may require as
	768	+	consideration the transfer of assets from an insurer to a nonaffiliate, if an
	769	+	agreement or understanding exists between the insurer and nonaffiliate that
	770	+	any portion of such assets will be transferred to one or more affiliates of the
	771	+	insurer.
	772	+	d.All management agreements, service contracts, tax allocation agreements,
	773	+	guarantees, and cost-sharing arrangements.
	774	+	e.Any guarantee made by a domestic insurer; however, a guarantee that is
	775	+	quantifiable as to amount is not subject to the notice requirements of this
	776	+	subsection unless the guarantee exceeds the lesser of one-half of one percent of
	777	+	the insurer's admitted assets or ten percent of surplus as regards policyholders
	778	+	as of December thirty-first next preceding. Additionally, all guarantees that are not
	779	+	quantifiable as to amount are subject to the notice requirements of this
	780	+	subsection.
	781	+	f.Any direct or indirect acquisition or investment in a person that controls the
	782	+	insurer or in an affiliate of the insurer in an amount that, together with its present
	783	+	holdings in such investments, exceeds two and one-half percent of the insurer's
	784	+	surplus to policyholders. A direct or indirect acquisition or investment in a
	785	+	Page No. 13 25.8125.01000
	786	+	1
	787	+	2
	788	+	3
	789	+	4
	790	+	5
	791	+	6
	792	+	7
	793	+	8
	794	+	9
	795	+	10
	796	+	11
	797	+	12
	798	+	13
	799	+	14
	800	+	15
	801	+	16
	802	+	17
	803	+	18
	804	+	19
	805	+	20
	806	+	21
	807	+	22
	808	+	23
	809	+	24
	810	+	25
	811	+	26
	812	+	27
	813	+	28
	814	+	29
	815	+	30
	816	+	31 Sixty-ninth
	817	+	Legislative Assembly
	818	+	subsidiary acquired pursuant to section 26.1-10-02, or authorized under any
	819	+	other section of this chapter, or in a nonsubsidiary insurance affiliate that is
	820	+	subject to this chapter, is exempt from this requirement.
	821	+	g.Any material transactions, specified by rule, which the commissioner determines
	822	+	may adversely affect the interests of the insurer's policyholders.
	823	+	Nothing in this subsection may be deemed to authorize or permit any transactions
	824	+	which, in the case of an insurer which is not a member of the same insurance holding
	825	+	company system, would be otherwise contrary to law.
372	826		3.A domestic insurer may not enter transactions that are part of a plan or series of like
373		-	transactions with persons within the insurance holding company system if the purpose of
374		-	those separate transactions is to avoid the statutory threshold amount and thus avoid the
375		-	review that would occur otherwise. If the commissioner determines that the separate
376		-	transactions were entered over any twelve-month period for that purpose, the commissioner
377		-	may exercise the commissioner's authority under the penalty sections of this chapter.
378		-	4.The commissioner, in reviewing transactions pursuant to subsection 2, shall consider whether
379		-	the transactions comply with the standards set forth in subsection 1 and whether they may
380		-	adversely affect the interests of the policyholders.
381		-	5.The commissioner must be notified within thirty days of any investment of the domestic insurer
382		-	in any one corporation if the total investment in that corporation by the insurance holding
383		-	company system exceeds ten percent of the corporation's voting securities.
	827	+	transactions with persons within the insurance holding company system if the purpose
	828	+	of those separate transactions is to avoid the statutory threshold amount and thus
	829	+	avoid the review that would occur otherwise. If the commissioner determines that the
	830	+	separate transactions were entered over any twelve-month period for that purpose, the
	831	+	commissioner may exercise the commissioner's authority under the penalty sections
	832	+	of this chapter.
	833	+	4.The commissioner, in reviewing transactions pursuant to subsection 2, shall consider
	834	+	whether the transactions comply with the standards set forth in subsection 1 and
	835	+	whether they may adversely affect the interests of the policyholders.
	836	+	5.The commissioner must be notified within thirty days of any investment of the
	837	+	domestic insurer in any one corporation if the total investment in that corporation by
	838	+	the insurance holding company system exceeds ten percent of the corporation's voting
	839	+	securities.
384	840		6.For purposes of this chapter, in determining whether an insurer's surplus as regards
385		-	policyholders is reasonable in relation to the insurer's outstanding liabilities and adequate to
386		-	meet its financial needs, the following factors, among others, must be considered:
387		-	a.The size of the insurer as measured by its assets, capital and surplus, reserves, premium
388		-	writings, insurance in force, and other appropriate criteria.
389		-	b.The extent to which the insurer's business is diversified among the several lines of
390		-	insurance.
	841	+	policyholders is reasonable in relation to the insurer's outstanding liabilities and
	842	+	adequate to meet its financial needs, the following factors, among others, must be
	843	+	considered:
	844	+	a.The size of the insurer as measured by its assets, capital and surplus, reserves,
	845	+	premium writings, insurance in force, and other appropriate criteria.
	846	+	b.The extent to which the insurer's business is diversified among the several lines
	847	+	of insurance.
391	848		c.The number and size of risks insured in each line of business.
	849	+	Page No. 14 25.8125.01000
	850	+	1
	851	+	2
	852	+	3
	853	+	4
	854	+	5
	855	+	6
	856	+	7
	857	+	8
	858	+	9
	859	+	10
	860	+	11
	861	+	12
	862	+	13
	863	+	14
	864	+	15
	865	+	16
	866	+	17
	867	+	18
	868	+	19
	869	+	20
	870	+	21
	871	+	22
	872	+	23
	873	+	24
	874	+	25
	875	+	26
	876	+	27
	877	+	28
	878	+	29
	879	+	30
	880	+	31 Sixty-ninth
	881	+	Legislative Assembly
392	882		d.The extent of the geographical dispersion of the insurer's insured risks.
393	883		e.The nature and extent of the insurer's reinsurance program.
394	884		f.The quality, diversification, and liquidity of the insurer's investment portfolio.
395		-	g.The recent past and projected future trend in the size of the insurer's investment portfolio.
	885	+	g.The recent past and projected future trend in the size of the insurer's investment
	886	+	portfolio.
396	887		h.The surplus as regards policyholders maintained by other comparable insurers.
397	888		i.The adequacy of the insurer's reserves.
398		-	j.The quality and liquidity of investments in affiliates. The commissioner may treat the
399		-	investment as a disallowed asset for purposes of determining the adequacy of surplus as
400		-	regards policyholders whenever in the commissioner's judgment the investment so
401		-	warrants.
402		-	7.A domestic insurer may not pay any extraordinary dividend or make any other extraordinary
403		-	distribution to its shareholders until thirty days after the commissioner has received notice of
404		-	the declaration thereof and has not within that period disapproved the payment, or until the
405		-	commissioner has approved the payment within the thirty-day period.
406		-	8.For purposes of this section, an extraordinary dividend or distribution includes any dividend or
407		-	distribution of cash or other property, when the fair market value together with that of other
408		-	dividends or distributions made within the preceding twelve months exceeds the lesser of:
409		-	a.Ten percent of the insurer's surplus as regards policyholders as of December thirty-first
410		-	next preceding; or H. B. NO. 1124 - PAGE 10
411		-	b.The net gain from operations of the insurer, if the insurer is a life insurer, or the net
412		-	income, if the company is not a life insurer, not including realized capital gains, for the
413		-	twelve-month period ending December thirty-first next preceding, but shall not include
414		-	pro rata distributions of any class of the insurer's own securities.
415		-	9.In determining whether a dividend or distribution is extraordinary under subsection 8, an
416		-	insurer other than a life insurer may carry forward net income from the previous two calendar
417		-	years which has not already been paid out as dividends. This carry-forward must be computed
418		-	by taking the net income from the second and third preceding calendar years, not including
419		-	realized capital gains, less dividends paid in the second and immediate preceding calendar
420		-	years.
421		-	10.Notwithstanding any other provision of law, an insurer may declare an extraordinary dividend
422		-	or distribution which is conditional upon the commissioner's approval, and the declaration
423		-	confers no rights upon shareholders until:
	889	+	j.The quality and liquidity of investments in affiliates. The commissioner may treat
	890	+	the investment as a disallowed asset for purposes of determining the adequacy
	891	+	of surplus as regards policyholders whenever in the commissioner's judgment the
	892	+	investment so warrants.
	893	+	7.A domestic insurer may not pay any extraordinary dividend or make any other
	894	+	extraordinary distribution to its shareholders until thirty days after the commissioner
	895	+	has received notice of the declaration thereof and has not within that period
	896	+	disapproved the payment, or until the commissioner has approved the payment within
	897	+	the thirty-day period.
	898	+	8.For purposes of this section, an extraordinary dividend or distribution includes any
	899	+	dividend or distribution of cash or other property, when the fair market value together
	900	+	with that of other dividends or distributions made within the preceding twelve months
	901	+	exceeds the lesser of:
	902	+	a.Ten percent of the insurer's surplus as regards policyholders as of December
	903	+	thirty-first next preceding; or
	904	+	b.The net gain from operations of the insurer, if the insurer is a life insurer, or the
	905	+	net income, if the company is not a life insurer, not including realized capital
	906	+	gains, for the twelve-month period ending December thirty-first next preceding,
	907	+	but shall not include pro rata distributions of any class of the insurer's own
	908	+	securities.
	909	+	9.In determining whether a dividend or distribution is extraordinary under subsection 8,
	910	+	an insurer other than a life insurer may carry forward net income from the previous two
	911	+	calendar years which has not already been paid out as dividends. This carry-forward
	912	+	must be computed by taking the net income from the second and third preceding
	913	+	Page No. 15 25.8125.01000
	914	+	1
	915	+	2
	916	+	3
	917	+	4
	918	+	5
	919	+	6
	920	+	7
	921	+	8
	922	+	9
	923	+	10
	924	+	11
	925	+	12
	926	+	13
	927	+	14
	928	+	15
	929	+	16
	930	+	17
	931	+	18
	932	+	19
	933	+	20
	934	+	21
	935	+	22
	936	+	23
	937	+	24
	938	+	25
	939	+	26
	940	+	27
	941	+	28
	942	+	29
	943	+	30
	944	+	31 Sixty-ninth
	945	+	Legislative Assembly
	946	+	calendar years, not including realized capital gains, less dividends paid in the second
	947	+	and immediate preceding calendar years.
	948	+	10.Notwithstanding any other provision of law, an insurer may declare an extraordinary
	949	+	dividend or distribution which is conditional upon the commissioner's approval, and the
	950	+	declaration confers no rights upon shareholders until:
424	951		a.The commissioner has approved the payment of the dividend or distribution; or
425		-	b.The commissioner has not disapproved the payment within the thirty-day period ~~referred~~
426		-	to in subsection 7.
427		-	11.An affiliate that is a party to an agreement or contract with a domestic insurer that is ~~subject to~~
428		-	subdivision d of subsection 2 shall be subject to the jurisdiction of any ~~supervision, seizure,~~
429		-	conservatorship, or receivership proceedings against the insurer ~~and to the authority of any~~
430		-	supervisor, conservator, rehabilitator, or liquidator for the ~~insurer appointed under chapters~~
431		-	26.1 - 06.1 and 26.1 - 06.2 for the purpose of ~~interpreting, enforcing, and overseeing the~~
432		-	affiliate's obligations under the agreement ~~or contract to perform services for the insurer that~~
433		-	are:
	952	+	b.The commissioner has not disapproved the payment within the thirty-day period
	953	+	referred to in subsection 7.
	954	+	11.An affiliate that is a party to an agreement or contract with a domestic insurer that is
	955	+	subject to subdivision d of subsection 2 shall be subject to the jurisdiction of any
	956	+	supervision, seizure, conservatorship, or receivership proceedings against the insurer
	957	+	and to the authority of any supervisor, conservator, rehabilitator, or liquidator for the
	958	+	insurer appointed under chapters 26.1 - 06.1 and 26.1 - 06.2 for the purpose of
	959	+	interpreting, enforcing, and overseeing the affiliate's obligations under the agreement
	960	+	or contract to perform services for the insurer that are:
434	961		a.An integral part of the insurer's operations, such as management, administrative,
435		-	accounting, data processing, marketing, underwriting, claims handling, ~~investment, or~~
436		-	any other similar functions; or
	962	+	accounting, data processing, marketing, underwriting, claims handling,
	963	+	investment, or any other similar functions; or
437	964		b.Essential to the insurer's ability to fulfill its obligations under insurance policies.
438	965		12.The commissioner may require that an agreement or contract under subdivision d of
439		-	subsection 2 for the provision of services in subdivision a and b specify the affiliate ~~consents~~
440		-	to the jurisdiction as set forth in subsection 11.
441		-	SECTION 4. AMENDMENT. Section 26.1-10-07 of the North Dakota Century Code is ~~amended and~~
442		-	reenacted as follows:
	966	+	subsection 2 for the provision of services in subdivision a and b specify the affiliate
	967	+	consents to the jurisdiction as set forth in subsection 11.
	968	+	SECTION 4. AMENDMENT. Section 26.1-10-07 of the North Dakota Century Code is
	969	+	amended and reenacted as follows:
443	970		26.1-10-07. Confidential treatment.
444		-	1.Any document, material, or other information in the possession or control of the North Dakota
445		-	insurance department which is obtained by or disclosed to the commissioner or any other
446		-	person in the course of an examination or investigation made pursuant to section 26.1-10-06
447		-	and all information reported pursuant to subdivisions l and m of subsection 2 of section
448		-	26.1-10-03 and sections 26.1-10-04 and 26.1-10-05 is confidential and privileged, not subject
449		-	to section 44-04-18, not subject to subpoena, and not subject to discovery or admissible in
450		-	evidence in any private civil action. However, the commissioner may use the document,
451		-	material, or other information in the furtherance of any regulatory or legal action brought as a
452		-	part of the commissioner's official duties. The commissioner may not otherwise make the
453		-	document, material, or other information public without the prior written consent of the insurer
454		-	to which it pertains unless the commissioner, after giving the insurer and its affiliates that
455		-	would be affected thereby, notice and opportunity to be heard, determines that the interests of
456		-	policyholders, shareholders, or the public will be served by the publication thereof, in which H. B. NO. 1124 - PAGE 11
457		-	event the commissioner may publish all or any part thereof in any manner the commissioner
458		-	deems appropriate.
459		-	a.For purposes of the information reported and provided under subsections 13 and 14 of
460		-	section 26.1 - 10 - 04, the commissioner shall maintain the confidentiality of the group
461		-	capital calculation and group capital ratio produced within the calculation and any group
462		-	capital information received from an insurance holding company supervised by the
463		-	federal reserve board or any United States groupwide supervisor.
464		-	b.For purposes of the information reported and provided under subsection 15 of section
465		-	26.1 - 10 - 04, the commissioner shall maintain the confidentiality of the liquidity stress test
466		-	results and supporting disclosures and any liquidity stress test information received from
467		-	an insurance holding company supervised by the federal reserve board and non-United
468		-	States groupwide supervisors.
469		-	2.Neither the commissioner nor any person that received any document, material, or other
470		-	information while acting under the authority of the commissioner or with whom such
471		-	document, material, or other information is shared under this chapter is permitted or required
472		-	to testify in any private civil action concerning any confidential document, material, or
473		-	information subject to subsection 1.
	971	+	1.Any document, material, or other information in the possession or control of the North
	972	+	Dakota insurance department which is obtained by or disclosed to the commissioner
	973	+	or any other person in the course of an examination or investigation made pursuant to
	974	+	section 26.1-10-06 and all information reported pursuant to subdivisions l and m of
	975	+	subsection 2 of section 26.1-10-03 and sections 26.1-10-04 and 26.1-10-05 is
	976	+	confidential and privileged, not subject to section 44-04-18, not subject to subpoena,
	977	+	Page No. 16 25.8125.01000
	978	+	1
	979	+	2
	980	+	3
	981	+	4
	982	+	5
	983	+	6
	984	+	7
	985	+	8
	986	+	9
	987	+	10
	988	+	11
	989	+	12
	990	+	13
	991	+	14
	992	+	15
	993	+	16
	994	+	17
	995	+	18
	996	+	19
	997	+	20
	998	+	21
	999	+	22
	1000	+	23
	1001	+	24
	1002	+	25
	1003	+	26
	1004	+	27
	1005	+	28
	1006	+	29
	1007	+	30
	1008	+	31 Sixty-ninth
	1009	+	Legislative Assembly
	1010	+	and not subject to discovery or admissible in evidence in any private civil action.
	1011	+	However, the commissioner may use the document, material, or other information in
	1012	+	the furtherance of any regulatory or legal action brought as a part of the
	1013	+	commissioner's official duties. The commissioner may not otherwise make the
	1014	+	document, material, or other information public without the prior written consent of the
	1015	+	insurer to which it pertains unless the commissioner, after giving the insurer and its
	1016	+	affiliates that would be affected thereby, notice and opportunity to be heard,
	1017	+	determines that the interests of policyholders, shareholders, or the public will be
	1018	+	served by the publication thereof, in which event the commissioner may publish all or
	1019	+	any part thereof in any manner the commissioner deems appropriate.
	1020	+	a.For purposes of the information reported and provided under subsections 13 and
	1021	+	14 of section 26.1 - 10 - 04, the commissioner shall maintain the confidentiality of
	1022	+	the group capital calculation and group capital ratio produced within the
	1023	+	calculation and any group capital information received from an insurance holding
	1024	+	company supervised by the federal reserve board or any United States
	1025	+	groupwide supervisor.
	1026	+	b.For purposes of the information reported and provided under subsection 15 of
	1027	+	section 26.1 - 10 - 04, the commissioner shall maintain the confidentiality of the
	1028	+	liquidity stress test results and supporting disclosures and any liquidity stress test
	1029	+	information received from an insurance holding company supervised by the
	1030	+	federal reserve board and non-United States groupwide supervisors.
	1031	+	2.Neither the commissioner nor any person that received any document, material, or
	1032	+	other information while acting under the authority of the commissioner or with whom
	1033	+	such document, material, or other information is shared under this chapter is permitted
	1034	+	or required to testify in any private civil action concerning any confidential document,
	1035	+	material, or information subject to subsection 1.
474	1036		3.To assist in the performance of the commissioner's duties:
475		-	a.If the recipient agrees in writing to maintain the confidentiality and privileged status of the
476		-	document, material, or other information, and has verified in writing the legal authority to
477		-	maintain confidentiality, the commissioner may share any document, material, or other
478		-	information, including the confidential and privileged document, material, or information
479		-	subject to subsection 1, including proprietary and trade secret documents and materials,
480		-	with any other state, federal, and international regulatory agency, the national association
481		-	of insurance commissioners and its affiliates and subsidiaries, any third-party consultant
482		-	designated by the commissioner, and any state, federal, or international law enforcement
483		-	authority, including members of any supervisory college described in section
484		-	26.1-10-06.1;
485		-	b.Notwithstanding subdivision a, the commissioner may share a confidential and privileged
486		-	document, material, or information reported under subsection 12 of section 26.1-10-04
487		-	only with a commissioner of a state having statutes or regulations substantially similar to
488		-	subsection 1 and who has agreed in writing not to disclose the information;
489		-	c.The commissioner may receive any document, material, or information, including any
490		-	otherwise confidential and privileged document, material, or information, including
491		-	propriety and trade secret information, from the national association of insurance
492		-	commissioners and its affiliates and subsidiaries and from any regulatory and law
493		-	enforcement official of other foreign or domestic jurisdiction, and shall maintain as
494		-	confidential or privileged any document, material, or information received with notice or
495		-	the understanding the document, material, or information is confidential or privileged
496		-	under the laws of the jurisdiction that is the source of the document, material, or
497		-	information; and
498		-	d.The commissioner shall enter a written agreement with the national association of
499		-	insurance commissioners and any third-party consultant designated by the commissioner
500		-	governing sharing and use of information provided under this chapter consistent with this
501		-	subsection and which must:
502		-	(1)Specify procedures and protocols regarding the confidentiality and security of
503		-	information shared with the national association of insurance commissioners and its
504		-	affiliates and subsidiariesor any third-party consultant designated by the
505		-	commissioner under this chapter, including procedures and protocols for sharing by H. B. NO. 1124 - PAGE 12
506		-	the national association of insurance commissioners with any other state, federal, or
507		-	international regulator;. The written agreement must provide the recipient agrees to
508		-	maintain the confidentiality and privileged status of the documents, materials, or
509		-	other information and has verified in writing the legal authority to maintain such
	1037	+	a.If the recipient agrees in writing to maintain the confidentiality and privileged
	1038	+	status of the document, material, or other information, and has verified in writing
	1039	+	the legal authority to maintain confidentiality, the commissioner may share any
	1040	+	document, material, or other information, including the confidential and privileged
	1041	+	Page No. 17 25.8125.01000
	1042	+	1
	1043	+	2
	1044	+	3
	1045	+	4
	1046	+	5
	1047	+	6
	1048	+	7
	1049	+	8
	1050	+	9
	1051	+	10
	1052	+	11
	1053	+	12
	1054	+	13
	1055	+	14
	1056	+	15
	1057	+	16
	1058	+	17
	1059	+	18
	1060	+	19
	1061	+	20
	1062	+	21
	1063	+	22
	1064	+	23
	1065	+	24
	1066	+	25
	1067	+	26
	1068	+	27
	1069	+	28
	1070	+	29
	1071	+	30
	1072	+	31 Sixty-ninth
	1073	+	Legislative Assembly
	1074	+	document, material, or information subject to subsection 1, including proprietary
	1075	+	and trade secret documents and materials, with any other state, federal, and
	1076	+	international regulatory agency, the national association of insurance
	1077	+	commissioners and its affiliates and subsidiaries, any third-party consultant
	1078	+	designated by the commissioner, and any state, federal, or international law
	1079	+	enforcement authority, including members of any supervisory college described in
	1080	+	section 26.1-10-06.1;
	1081	+	b.Notwithstanding subdivision a, the commissioner may share a confidential and
	1082	+	privileged document, material, or information reported under subsection 12 of
	1083	+	section 26.1-10-04 only with a commissioner of a state having statutes or
	1084	+	regulations substantially similar to subsection 1 and who has agreed in writing
	1085	+	not to disclose the information;
	1086	+	c.The commissioner may receive any document, material, or information, including
	1087	+	any otherwise confidential and privileged document, material, or information,
	1088	+	including propriety and trade secret information, from the national association of
	1089	+	insurance commissioners and its affiliates and subsidiaries and from any
	1090	+	regulatory and law enforcement official of other foreign or domestic jurisdiction,
	1091	+	and shall maintain as confidential or privileged any document, material, or
	1092	+	information received with notice or the understanding the document, material, or
	1093	+	information is confidential or privileged under the laws of the jurisdiction that is
	1094	+	the source of the document, material, or information; and
	1095	+	d.The commissioner shall enter a written agreement with the national association
	1096	+	of insurance commissioners and any third-party consultant designated by the
	1097	+	commissioner governing sharing and use of information provided under this
	1098	+	chapter consistent with this subsection and which must:
	1099	+	(1)Specify procedures and protocols regarding the confidentiality and security
	1100	+	of information shared with the national association of insurance
	1101	+	commissioners and its affiliates and subsidiariesor any third-party consultant
	1102	+	designated by the commissioner under this chapter, including procedures
	1103	+	and protocols for sharing by the national association of insurance
	1104	+	commissioners with any other state, federal, or international regulator;. The
	1105	+	Page No. 18 25.8125.01000
	1106	+	1
	1107	+	2
	1108	+	3
	1109	+	4
	1110	+	5
	1111	+	6
	1112	+	7
	1113	+	8
	1114	+	9
	1115	+	10
	1116	+	11
	1117	+	12
	1118	+	13
	1119	+	14
	1120	+	15
	1121	+	16
	1122	+	17
	1123	+	18
	1124	+	19
	1125	+	20
	1126	+	21
	1127	+	22
	1128	+	23
	1129	+	24
	1130	+	25
	1131	+	26
	1132	+	27
	1133	+	28
	1134	+	29
	1135	+	30
	1136	+	31 Sixty-ninth
	1137	+	Legislative Assembly
	1138	+	written agreement must provide the recipient agrees to maintain the
	1139	+	confidentiality and privileged status of the documents, materials, or other
	1140	+	information and has verified in writing the legal authority to maintain such
510	1141		confidentiality;
511		-	(2)Specify ownership of information shared with the national association of insurance
512		-	commissioners and its affiliates and subsidiariesor a third-party consultant under
513		-	this chapter remains with the commissioner, and the national association of
514		-	insurance commissioner's or a third-party consultant's, as designated by the
515		-	commissioner, use of the information is subject to the direction of the commissioner;
516		-	(3)Excluding documents, materials, or information reported under subsections 13 and
517		-	14 of section 26.1 - 10 - 04, prohibit the national association of insurance
518		-	commissioners or a third-party consultant designated by the commissioner from
519		-	storing the information shared under this chapter in a permanent database after the
520		-	underlying analysis is complete;
	1142	+	(2)Specify ownership of information shared with the national association of
	1143	+	insurance commissioners and its affiliates and subsidiariesor a third-party
	1144	+	consultant under this chapter remains with the commissioner, and the
	1145	+	national association of insurance commissioner's or a third-party
	1146	+	consultant's, as designated by the commissioner, use of the information is
	1147	+	subject to the direction of the commissioner;
	1148	+	(3)Excluding documents, materials, or information reported under
	1149	+	subsections 13 and 14 of section 26.1 - 10 - 04, prohibit the national
	1150	+	association of insurance commissioners or a third-party consultant
	1151	+	designated by the commissioner from storing the information shared under
	1152	+	this chapter in a permanent database after the underlying analysis is
	1153	+	complete;
521	1154		(3)(4)Require prompt notice to be given to an insurer if the insurer's confidential
522	1155		information in the possession of the national association of insurance
523		-	commissioners or a third-party consultant designated by the commissioner under
524		-	this chapter is subject to a request or subpoena to the national association of
525		-	insurance commissioners or a third-party consultant designated by the
526		-	commissioner for disclosure or production; and
527		-	(4)(5)Require the national association of insurance commissioners and its affiliates and
528		-	subsidiariesor third-party consultants designated by the commissioner to consent to
529		-	intervention by an insurer in any judicial or administrative action in which the
530		-	national association of insurance commissioners and its affiliates and subsidiariesor
531		-	a third-party consultant designated by the commissioner may be required to
532		-	disclose confidential information about the insurer shared with the national
533		-	association of insurance commissioners and its affiliates and subsidiariesor a third-
534		-	party consultant designated by the commissioner under this chapter.; and
535		-	(6)Documents, materials, or information reported under subsection 13 and 14 of
536		-	section 26.1 - 10 - 04, in the case of an agreement involving a third-party consultant,
537		-	provide for notification of the identity of the consultant to the applicable insurer.
538		-	4.The sharing of information by the commissioner under this chapter does not constitute a
539		-	delegation of regulatory authority or rulemaking, and the commissioner is solely responsible
540		-	for the administration, execution, and enforcement of this chapter.
541		-	5.Waiver of any applicable privilege or claim of confidentiality in any document, material, or
542		-	information may not occur as a result of disclosure to the commissioner under this section or
543		-	as a result of sharing as authorized in subsection 3.
544		-	6.Any document, material, or other information in the possession or control of the national
545		-	association of insurance commissioners or a third-party consultant designated by the
546		-	commissioner under this chapter is confidential and privileged, not subject to section
547		-	44-04-18, not subject to subpoena, and not subject to discovery or admissible in evidence in
548		-	any private civil action.
549		-	7.The group capital calculation and resulting group capital ratio required under subsections 13
550		-	and 14 of section 26.1 - 10 - 04 and the liquidity stress test along with its results and supporting
551		-	disclosures required under subsection 15 of section 26.1 - 10 - 04, are regulatory tools for
552		-	assessing group risks and capital adequacy and group liquidity risks, respectively, and are not
553		-	intended as a means to rank insurers or insurance holding company systems generally. H. B. NO. 1124 - PAGE 13
554		-	8.Except as otherwise required under this chapter, the making, publishing, disseminating,
555		-	circulating or placing before the public, or causing directly or indirectly to be made, published,
556		-	disseminated, circulated or placed before the public in a newspaper, magazine or other
557		-	publication, or in the form of a notice, circular, pamphlet, letter or poster, or over any radio or
558		-	television station or any electronic means of communication available to the public, or in any
559		-	other way as an advertisement, announcement or statement containing a representation or
560		-	statement that would be misleading is prohibited when made regarding:
	1156	+	commissioners or a third-party consultant designated by the commissioner
	1157	+	under this chapter is subject to a request or subpoena to the national
	1158	+	association of insurance commissioners or a third-party consultant
	1159	+	designated by the commissioner for disclosure or production; and
	1160	+	(4)(5)Require the national association of insurance commissioners and its
	1161	+	affiliates and subsidiariesor third-party consultants designated by the
	1162	+	commissioner to consent to intervention by an insurer in any judicial or
	1163	+	administrative action in which the national association of insurance
	1164	+	commissioners and its affiliates and subsidiariesor a third-party consultant
	1165	+	designated by the commissioner may be required to disclose confidential
	1166	+	information about the insurer shared with the national association of
	1167	+	insurance commissioners and its affiliates and subsidiariesor a third-party
	1168	+	consultant designated by the commissioner under this chapter.; and
	1169	+	Page No. 19 25.8125.01000
	1170	+	1
	1171	+	2
	1172	+	3
	1173	+	4
	1174	+	5
	1175	+	6
	1176	+	7
	1177	+	8
	1178	+	9
	1179	+	10
	1180	+	11
	1181	+	12
	1182	+	13
	1183	+	14
	1184	+	15
	1185	+	16
	1186	+	17
	1187	+	18
	1188	+	19
	1189	+	20
	1190	+	21
	1191	+	22
	1192	+	23
	1193	+	24
	1194	+	25
	1195	+	26
	1196	+	27
	1197	+	28
	1198	+	29
	1199	+	30
	1200	+	31 Sixty-ninth
	1201	+	Legislative Assembly
	1202	+	(6)Documents, materials, or information reported under subsection 13 and 14
	1203	+	of section 26.1 - 10 - 04, in the case of an agreement involving a third-party
	1204	+	consultant, provide for notification of the identity of the consultant to the
	1205	+	applicable insurer.
	1206	+	4.The sharing of information by the commissioner under this chapter does not constitute
	1207	+	a delegation of regulatory authority or rulemaking, and the commissioner is solely
	1208	+	responsible for the administration, execution, and enforcement of this chapter.
	1209	+	5.Waiver of any applicable privilege or claim of confidentiality in any document, material,
	1210	+	or information may not occur as a result of disclosure to the commissioner under this
	1211	+	section or as a result of sharing as authorized in subsection 3.
	1212	+	6.Any document, material, or other information in the possession or control of the
	1213	+	national association of insurance commissioners or a third-party consultant designated
	1214	+	by the commissioner under this chapter is confidential and privileged, not subject to
	1215	+	section 44-04-18, not subject to subpoena, and not subject to discovery or admissible
	1216	+	in evidence in any private civil action.
	1217	+	7.The group capital calculation and resulting group capital ratio required under
	1218	+	subsections 13 and 14 of section 26.1 - 10 - 04 and the liquidity stress test along with its
	1219	+	results and supporting disclosures required under subsection 15 of section 26.1 - 10 - 04,
	1220	+	are regulatory tools for assessing group risks and capital adequacy and group liquidity
	1221	+	risks, respectively, and are not intended as a means to rank insurers or insurance
	1222	+	holding company systems generally.
	1223	+	8.Except as otherwise required under this chapter, the making, publishing,
	1224	+	disseminating, circulating or placing before the public, or causing directly or indirectly
	1225	+	to be made, published, disseminated, circulated or placed before the public in a
	1226	+	newspaper, magazine or other publication, or in the form of a notice, circular,
	1227	+	pamphlet, letter or poster, or over any radio or television station or any electronic
	1228	+	means of communication available to the public, or in any other way as an
	1229	+	advertisement, announcement or statement containing a representation or statement
	1230	+	that would be misleading is prohibited when made regarding:
561	1231		a.A group capital calculation;
562	1232		b.A group capital ratio;
	1233	+	Page No. 20 25.8125.01000
	1234	+	1
	1235	+	2
	1236	+	3
	1237	+	4
	1238	+	5
	1239	+	6
	1240	+	7
	1241	+	8
	1242	+	9
	1243	+	10
	1244	+	11
	1245	+	12
	1246	+	13
	1247	+	14
	1248	+	15
	1249	+	16
	1250	+	17
	1251	+	18
	1252	+	19
	1253	+	20
	1254	+	21
	1255	+	22
	1256	+	23
	1257	+	24
	1258	+	25
	1259	+	26
	1260	+	27
	1261	+	28
	1262	+	29
	1263	+	30
	1264	+	31 Sixty-ninth
	1265	+	Legislative Assembly
563	1266		c.Liquidity stress test results;
564		-	d.Supporting disclosures for the liquidity stress test of any insurer or any insurer group; or
	1267	+	d.Supporting disclosures for the liquidity stress test of any insurer or any insurer
	1268	+	group; or
565	1269		e.Any component derived in the calculation by any insurer, broker, or other person
566	1270		engaged in any manner in the insurance business.
567		-	9.Notwithstanding subsection 8, if any written publication contains a materially false statement
568		-	and the insurer demonstrates to the commissioner with substantial proof the falsity or
569		-	inappropriateness of the statement, the insurer may publish announcements in a written
570		-	publication, provided the sole purpose of the announcement is to rebut the materially false
571		-	statement. For this subsection to apply, the existence of any materially false statement in a
572		-	written publication must relate to at least one of the following subject areas:
	1271	+	9.Notwithstanding subsection 8, if any written publication contains a materially false
	1272	+	statement and the insurer demonstrates to the commissioner with substantial proof the
	1273	+	falsity or inappropriateness of the statement, the insurer may publish announcements
	1274	+	in a written publication, provided the sole purpose of the announcement is to rebut the
	1275	+	materially false statement. For this subsection to apply, the existence of any materially
	1276	+	false statement in a written publication must relate to at least one of the following
	1277	+	subject areas:
573	1278		a.A group capital calculation;
574	1279		b.A resulting group capital ratio;
575		-	c.An inappropriate comparison of any amount to an insurer's or insurance group's ~~group~~
576		-	capital calculation or resulting group capital ratio;
	1280	+	c.An inappropriate comparison of any amount to an insurer's or insurance group's
	1281	+	group capital calculation or resulting group capital ratio;
577	1282		d.A liquidity stress test result;
578	1283		e.Supporting disclosures for the liquidity stress test; or
579		-	f.An inappropriate comparison of any amount to an insurer's or insurance group's liquidity
580		-	stress test result or supporting disclosures. H. B. NO. 1124 - PAGE 14
581		-	____________________________ ____________________________
582		-	Speaker of the House President of the Senate
583		-	____________________________ ____________________________
584		-	Chief Clerk of the House Secretary of the Senate
585		-	This certifies that the within bill originated in the House of Representatives of the Sixty-ninth Legislative
586		-	Assembly of North Dakota and is known on the records of that body as House Bill No. 1124.
587		-	House Vote: Yeas 93 Nays 0 Absent 1
588		-	Senate Vote:Yeas 46 Nays 1 Absent 0
589		-	____________________________
590		-	Chief Clerk of the House
591		-	Received by the Governor at ________M. on _____________________________________, 2025.
592		-	Approved at ________M. on __________________________________________________, 2025.
593		-	____________________________
594		-	Governor
595		-	Filed in this office this ___________day of _______________________________________, 2025,
596		-	at ________ o’clock ________M.
597		-	____________________________
598		-	Secretary of State
	1284	+	f.An inappropriate comparison of any amount to an insurer's or insurance group's
	1285	+	liquidity stress test result or supporting disclosures.
	1286	+	Page No. 21 25.8125.01000
	1287	+	1
	1288	+	2
	1289	+	3
	1290	+	4
	1291	+	5
	1292	+	6
	1293	+	7
	1294	+	8
	1295	+	9
	1296	+	10
	1297	+	11
	1298	+	12
	1299	+	13
	1300	+	14
	1301	+	15
	1302	+	16
	1303	+	17
	1304	+	18
	1305	+	19
	1306	+	20