HB 1087 — North Dakota (Sixty‑ninth Legislative Assembly)
Summary — Licensing for administrators of life & health insurance and pharmacy benefit managers
Status and timeline
- Introduced: November 12, 2024 (at the request of the Insurance Commissioner).
- Passed both chambers (House vote 92–1; Senate vote 47–0).
- Filed with the Secretary of State: March 14, 2025 (documented in enrollment).
Purpose / intent
- To clarify and update licensing requirements and enforcement for third‑party administrators (referred to in statute as “administrators”) of life, annuity, and health coverage and to explicitly require pharmacy benefit managers (PBMs) operating in North Dakota to hold the same administrator registration/license.
Key provisions
- Amends North Dakota Century Code sections 26.1‑27‑03 and 26.1‑27.1‑02.
- Licensing requirement (26.1‑27‑03):
- Prohibits a person from acting as an administrator in North Dakota without a commissioner‑issued certificate/license. Acting without a license is a Class C felony.
- Applications must include a $100 filing fee.
- Annual renewal fee for the certificate/license: $50.
- The Insurance Commissioner must issue a certificate/license unless, after notice and hearing, the applicant is found not competent, trustworthy, financially responsible, or of poor reputation, or has had an insurance license denied for cause within five years.
- Enforcement: after notice and hearing the Commissioner may revoke a license or impose fines up to $10,000 (or suspend a license and/or fine up to $5,000) for specified violations or if the administrator fails to meet character/fitness standards.
- PBM licensing (26.1‑27.1‑02):
- A person may not perform or act as a pharmacy benefits manager in the state unless that person holds the certificate/registration/license as an administrator under chapter 26.1‑27.
Who is affected
- Third‑party administrators (TPAs) administering life, annuity, or health benefits for North Dakota residents, including entities handling claims, underwriting, premium collection, or administration for self‑funded plans.
- Pharmacy benefit managers (PBMs) that arrange pharmacy drug coverage for plans — they must obtain administrator registration/license.
- Insurance Commissioner’s office (regulatory oversight, licensing, hearings, enforcement).
Potential impacts and considerations
- Regulatory: consolidates PBM oversight under existing administrator licensing framework, increasing regulatory control and enabling denial/revocation/fines for noncompliance.
- Administrative costs/fees: modest fee revenue to the department (application $100; renewal $50) and potential compliance costs for PBMs/administrators to obtain and maintain licenses.
- Consumer protection: the statutory authority enables disciplinary actions against administrators/PBMs judged unfit, which could improve oversight of entities that administer health benefits.
- Implementation: the Commissioner gains explicit statutory grounds and fee structure for licensing and enforcement; entities currently operating as PBMs or administrators should expect to apply for registration/license to continue operations legally in North Dakota.
Text notes
- The enrolled bill replaces or modernizes certain statutory terminology (certificate/certificate of authority → license) and consolidates PBM registration into the administrator licensing chapter (26.1‑27).
