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HB 1088

AN ACT to amend and reenact section 26.1-01-03.3 of the North Dakota Century Code, relating to penalties for violation of the insurance title; and to provide a penalty.

69th Legislative Assembly (2025-26)

ND: Insurance Commissioner may fine up to $10,000 per violation and order restitution for direct losses after a hearing; preserves courts/claims process for policy obligations.

Filed with Secretary Of State 04/11
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Bill Summary · HB 1088

HB 1088 — Summary (North Dakota)

Status: Filed with Secretary of State (04/11/2025)
Introduced: November 12, 2024
Subject: Amend NDCC § 26.1‑01‑03.3 — penalties for violations of the Insurance title

Main purpose

To update the penalty authority of the North Dakota Insurance Commissioner for violations of the Insurance title by (1) codifying an administrative fine cap and (2) authorizing restitution to harmed parties, while preserving limits on the commissioner’s authority to adjudicate insurance policy or contract obligations.

Key provisions

  • Amends and reenacts NDCC § 26.1‑01‑03.3.
  • Administrative fine: a person who violates the Insurance title is, after a hearing by the commissioner, subject to an administrative monetary penalty (fine) of up to $10,000 for each violation.
  • Restitution: in addition to or in lieu of a fine, after a hearing the commissioner may require restitution equal to the direct financial loss sustained by any person directly harmed by the violation.
  • Limitation on adjudicatory power: the commissioner may not determine whether an obligation is owed under an insurance policy or contract, nor may the commissioner require a person to pay a claim or an amount claimed as owed under a policy or contract of insurance. (This preserves the role of courts or claims processes in deciding policy obligations.)

Who is affected

  • Entities and individuals subject to the North Dakota Insurance title (insurers, producers/agents, adjusters, other regulated parties).
  • Consumers or other persons directly harmed by violations — now eligible to receive restitution ordered by the commissioner.
  • The Insurance Department — gains clearer statutory enforcement authority (fine plus restitution) but remains limited in adjudicating contract disputes.

Enforcement & procedure

  • Penalties and restitution may be imposed only after a hearing conducted by the Insurance Commissioner (administrative process).
  • Fines may be assessed per violation (i.e., multiple violations can lead to multiple fines up to the stated cap each).

Legislative/timeline notes

  • Sponsored/requested by the Insurance Commissioner; considered by Industry, Business and Labor Committee.
  • Committee reports and amendments were adopted during early 2025 (committee adoption dates in January–March 2025).
  • Bill passed both chambers (House and Senate votes recorded) and was filed with the Secretary of State on April 11, 2025.

Practical implications / considerations

  • Strengthens the Insurance Commissioner’s administrative enforcement toolkit by clarifying a $10,000-per-violation penalty and enabling restitution for direct losses.
  • The statutory prohibition against adjudicating policy obligations preserves separation between regulatory enforcement and contract/claim adjudication, helping avoid overlap with judicial or claims processes.
  • May increase compliance costs for regulated insurers/agents and could lead to more enforcement proceedings seeking restitution on behalf of harmed consumers.

Compiled from official sources — confirm details with the bill’s official record.

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