2013 North Dakota Century Code Title 26.1 Insurance Chapter 26.1-03 Examinations, Reports, and Tax
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CHAPTER 26.1-03
EXAMINATIONS, REPORTS, AND TAX
26.1-03-01. Limitation on risks acceptable by company.
An insurance company transacting an insurance business in this state may not expose itself
to loss on any one risk or hazard to an amount exceeding ten percent of its paid-up capital and
surplus if a stock company, or ten percent of its surplus if a mutual company, unless the excess
is reinsured. An insurance company offering group or individual insurance that is subject to the
lifetime or annual benefit limit restrictions of the Patient Protection and Affordable Care
Act [Pub. L. 111-148], as amended by the Health Care and Education Reconciliation Act of 2010
[Pub. L. 111-152], is not subject to this section.
26.1-03-02. Valuation of securities held by company.
Repealed by S.L. 1993, ch. 292, § 49.
26.1-03-02.1. Valuation of securities and other investments.
1. All securities and investments of insurance companies must be valued in accordance
with published valuation standards of the national association of insurance
commissioners including the accounting practices and procedure manuals and
publications by the valuation of securities office of the national association of insurance
commissioners.
2. All investments of insurance companies authorized to do business in this state, for
which no method of valuation has been otherwise provided, must be valued in the
discretion of the commissioner at their fair market value, appraised value, or at
amounts determined by the commissioner as their fair market value. If any valuation of
an investment by an insurer appears to be an unreasonable estimate of its true value,
the commissioner has the authority to cause the investment to be appraised, and the
appraised value must be substituted as the true value. The appraisal must be made by
two disinterested and competent persons, one to be appointed by the commissioner
and one to be appointed by the insurer. In the event these two persons fail to agree,
they shall appoint a third disinterested and competent person, and the estimate of the
value of the investment, as arrived at by these three persons, must be substituted as
the true value.
26.1-03-03. Cooperative and assessment life associations - Valuation of policies.
Cooperative or assessment life associations must be admitted to transact business in this
state upon compliance with the provisions of this title relating to the licensing and admission of
life insurance companies without being required to value their policies in conformity with chapter
26.1-35. These associations shall value their policies in the same manner as yearly renewable
term policies are valued, according to the standard of valuation of life insurance policies
prescribed by this title.
26.1-03-04. Assets required of cooperative and assessment life associations.
Every cooperative or assessment life association authorized to do business in this state
shall accumulate and maintain assets in excess of actual liabilities for death losses sustained
and expenses incurred equal to two percent of all insurance which the association has in force.
The assets must be cash, money on deposit in banks, and securities eligible for investment by
insurance companies under this title.
26.1-03-05. Surplus of life insurance company doing business on mutual plan
apportioned annually.
Every life insurance company conducted on the mutual plan, or upon any other plan in
which the policyholders are entitled to share in the profits or surplus of the company, doing
business in this state shall make an annual apportionment and accounting of divisible surplus to
each policyholder beginning not later than the end of the third policy year. Each policyholder is
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entitled to, and must be credited with or paid in the manner provided in this chapter, the portion
of the entire divisible surplus as has been contributed thereto by the policyholder's policy. Every
life insurance company, upon policies other than industrial policies, issued before July 1, 1907,
under the conditions of which the distribution of surplus was deferred to a fixed or specified time
and made contingent upon the policy being in force and the insured living at that time, shall
ascertain annually the amount of surplus to which all of the policies as a separate class are
entitled, and shall apportion to the policies as a class the amount of surplus so ascertained and
must carry the amount of the apportioned surplus, and the actual interest earnings and
accretions of the fund, as a distinct and separate liability to the class of policies on and for which
the same was accumulated. Neither the company nor any of its officers may use any part of the
apportioned surplus for any purpose whatsoever other than for the express purpose for which
the apportioned surplus was accumulated.
26.1-03-06. Life insurance company may maintain contingency reserve - Limitations.
Any life insurance company doing business in this state may accumulate and maintain, in
addition to the capital and surplus contributed by its stockholders and in addition to an amount
equal to the net values of its policies computed according to the laws of the jurisdiction under
which it is organized, a contingency reserve not exceeding the following respective percentages
of the net values:
1. When the net values are less than one hundred thousand dollars, twenty percent
thereof or the sum of ten thousand dollars, whichever is the greater.
2. When the net values are greater than one hundred thousand dollars, the percentage
thereof measuring the contingency reserve decreases one-half of one percent for each
one hundred thousand dollars of the net values up to one million dollars and may
include one-half of one percent for each additional one million dollars up to ten million
dollars.
3. If the net values equal or exceed the last mentioned amount, the contingency reserve
may not exceed ten percent thereof.
As the net values of the policies increase and the maximum percentage measuring the
contingency reserve decreases, the company may maintain the contingency reserve already
accumulated, although for the time being, it may exceed the maximum percentage herein
prescribed. The company, however, may not add to the contingency reserve when the addition
will bring it beyond the maximum percentage prescribed in this section. For cause shown, the
commissioner may permit a company to accumulate and maintain a contingency reserve in
excess of the limit specified in this section for a prescribed period, not exceeding one year
under any one permission, by filing in the commissioner's office a decision stating the reasons
therefor and causing the same to be published in the commissioner's next annual report. This
section does not apply to any company doing exclusively a nonparticipating business.
26.1-03-07. Annual statement to be filed.
Every insurance company doing business in this state shall transmit to the commissioner,
not later than March first of each year, a statement of its condition and business for the year
ending on the preceding December thirty-first. If March first falls on a Saturday or legal holiday,
the statement is due on the next succeeding business day. A company organized under the law
of any foreign country or province shall include in the statement only business transacted within
the United States, and shall file a supplemental statement of business transacted without the
United States not later than December first. The commissioner shall stamp the date of receipt
on every statement. The commissioner may not accept the annual statement from any company
if the statement was transmitted after the date designated in this section unless the statement is
accompanied by the penalty prescribed by section 26.1-03-16. The commissioner may
designate the national association of insurance commissioners as the repository for the filing.
26.1-03-08. Statements of receiver of company.
A receiver of an insurance company doing business in this state, on or before June thirtieth
of each year, and at any other time, when required to do so by the commissioner, shall make
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and file a statement of the assets and liabilities of the company and of the income and
expenditures during the receivership in the same manner and form as is required by this chapter
from the officers of insurance companies. A receiver is subject to the same penalty for the failure
or refusal to make and file the statement.
26.1-03-09. Statements to be verified by specified officers - Duty of commissioner to
distribute information.
The annual statement must be verified by the signature and oath of the president or the vice
president and of the secretary, the actuary, if a life insurance company, and the treasurer or
corresponding person having charge of the accounts and finances of the insurance company, or
by a majority of the members of the board of directors of the company. The commissioner shall
arrange the information in the statements in a tabular form and annually print and distribute the
information to the companies doing business in this state and to the legislative assembly.
26.1-03-10. Publication of abstract of annual statement and certificate of authority.
An insurance company, at the time it submits its annual statement for filing, shall submit an
abstract of the annual statement for publication upon the form prescribed by the commissioner.
The abstract of the annual statement of each company, other than a state or county mutual
insurance company, must be published at least three times in one newspaper of general
circulation, designated by the commissioner, printed and published in each judicial district in this
state in which the company has an agency. The abstract of the annual statement of each state
or county mutual insurance company must be published once in a newspaper published in the
county in which the company has its principal place of business, the newspaper to be
designated by the members of the company at their annual meeting. The certificate of authority
issued by the commissioner to authorize the company to do business within this state must be
published in connection with the publication of the abstract of its annual statement. The fees for
publication are those provided under section 46-05-03. Proof of publication must be filed with
the commissioner within four months after the filing of the annual statement.
26.1-03-11. Fire companies to report statistical data - Failure to report - Exceptions to
reporting requirements.
Each insurance company issuing fire insurance policies covering property in this state shall
annually report information setting forth the amount of earned premiums in this state for policies
covering insured property located in this state and the amount of claims incurred. This
information is not to include personal lines or farm property insurance. This information must be
reported on a form prescribed by the commissioner. The company shall file the form with the
commissioner or shall certify to the commissioner that the information has been reported directly
to an advisory organization upon whose filings the majority of the fire insurance rates for North
Dakota are based. The form or certification must accompany the annual statement required
under section 26.1-03-07. The commissioner shall forward information filed under this section to
the advisory organization upon whose filings a majority of the fire insurance rates for North
Dakota are based. Each advisory organization filing pursuant to chapter 26.1-25 shall use this
information in its filing. The commissioner shall revoke the certificate of authority of an insurance
company failing to file the information required by this section.
26.1-03-11.1. Insurance company annual statements - Filed with national association
of insurance commissioners.
1. Every domestic, foreign, and alien insurance company in this state shall transmit to the
national association of insurance commissioners, not later than March first of each
year, a copy of its annual statement, along with any additional filings as described by
the commissioner for the preceding year. The information filed with the national
association of insurance commissioners must be in the same format and scope as that
required by the commissioner and must include the signed jurat page and the actuarial
certification. Any amendments and addenda to the annual statement filing
subsequently filed with the commissioner must also be filed with the national
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2.
3.
association of insurance commissioners. The insurance commissioner may exempt
any domestic company or category or class of domestic companies from the filing
requirement.
Foreign insurance companies domiciled in a state which has a law substantially similar
to subsection 1 are deemed to be in compliance with this section.
a. Documents, materials, or other information in the possession or control of the
commissioner which are an actuarial report, workpapers, or actuarial opinion
summary provided in support of the actuarial certification commonly known as the
statement of actuarial opinion, and any other material provided by the insurance
company to the commissioner in connection with the actuarial report, workpapers,
or actuarial opinion summary, is confidential and privileged and is not subject to
section 44-04-18. This subsection may not be construed to limit the authority to
subpoena or otherwise discover the documents, materials, or other information or
to limit use of the documents, materials, or other information in criminal
investigations or proceedings.
b. This subsection may not be construed to limit the commissioner's authority to
release the documents to the actuarial board for counseling and discipline so long
as the material is required for the purpose of professional disciplinary
proceedings and the actuarial board for counseling and discipline establishes
procedures satisfactory to the commissioner for preserving the confidentiality of
the documents. This section may not be construed to limit the commissioner's
authority to use the documents, materials, or other information in furtherance of
any regulatory or legal action brought as part of the commissioner's official duties.
c. This subsection does not apply to actuarial opinions required under
chapter 26.1-35.
26.1-03-11.2. Immunity of national association of insurance commissioners'
employees.
In the absence of actual malice, members of the national association of insurance
commissioners and their employees and all others charged with the responsibility of collecting,
reviewing, analyzing, and disseminating the information developed from the filing of the annual
statement act as agents of the commissioner under the authority of sections 26.1-03-11.1
through 26.1-03-11.3 and are not subject to civil liability for libel, slander, or any other cause of
action by virtue of their collection, review, and analysis or dissemination of the data and
information collected from the filings required by sections 26.1-03-11.1 through 26.1-03-11.3.
26.1-03-11.3. Confidentiality.
The commissioner shall maintain, as confidential, any confidential documents or information
received from the national association of insurance commissioners or state, federal, or
international regulatory or law enforcement officials of this state and other states or jurisdictions.
The information may not be disclosed by the department and is exempt from section 44-04-18.
The commissioner may share information that is confidential under the laws of this state with the
national association of insurance commissioners and with state, federal, or international
regulatory or law enforcement officials from this state and other states or jurisdictions providing
that the officials are required, under their law, to maintain its confidentiality.
26.1-03-12. Definition of product liability insurance.
Repealed by S.L. 2003, ch. 245, § 4.
26.1-03-13. Reporting of product liability information.
Repealed by S.L. 2003, ch. 245, § 4.
26.1-03-14. Confidentiality of product liability information reports.
Repealed by S.L. 2003, ch. 245, § 4.
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26.1-03-15. Limitation of liability.
Repealed by S.L. 2003, ch. 245, § 4.
26.1-03-16. Penalty for not making statement.
Any insurance company doing business in this state which neglects to make and file any
statement in the manner and within the time prescribed in this chapter forfeits one hundred
dollars for each day's neglect, and upon notice by the commissioner to that effect, its authority
to do new business ceases during the default. Any new business done by an insurance
company after it has neglected to make a required statement is in violation of law. The
commissioner may grant an insurance company an extension beyond the date designated in
this section and may waive or reduce any penalty during the extension, upon a showing of good
cause by the insurance company.
26.1-03-17. Commissioner to collect premium tax - Insurance companies generally Computation - Credits - Penalty - Estimated tax.
1. Before issuing the annual certificate required by law, the commissioner shall collect
from every stock and mutual insurance company, nonprofit health service corporation,
health maintenance organization, and prepaid legal service organization, except
fraternal benefit and benevolent societies, doing business in this state, a tax on the
gross amount of premiums, assessments, membership fees, subscriber fees, policy
fees, service fees collected by any third-party administrator providing administrative
services to a group that is self-insured for health care benefits, and finance and
service charges received in this state during the preceding calendar year, at the rate of
two percent with respect to life insurance, one and three-fourths percent with respect
to accident and health insurance, and one and three-fourths percent with respect to all
other lines of insurance. This tax does not apply to considerations for annuities. The
total tax is payable on or before March first following the year for which the tax is
assessable. If the due date falls on a Saturday or legal holiday, the tax is payable on
the next succeeding business day. Collections from this tax must be deposited in the
insurance tax distribution fund under section 18-04-04.1 but not in an amount
exceeding one-half of the biennial amount appropriated for distribution under section
18-04-05 and chapter 23-46 in any fiscal year. Collections from this tax exceeding the
sum of the amount deposited in the insurance tax distribution fund must be deposited
in the general fund in the state treasury.
2. An insurance company, nonprofit health service corporation, health maintenance
organization, or prepaid legal service organization subject to the tax imposed by
subsection 1 is entitled to a credit against the tax due for the amount of any
assessment paid as a member of a comprehensive health association under
subsection 3 of section 26.1-08-09 for which the member may be liable for the year in
which the assessment was paid, a credit as provided under section 26.1-38.1-10, a
credit against the tax due for an amount equal to the examination fees paid to the
commissioner under sections 26.1-01-07, 26.1-02-02, 26.1-03-19.6, 26.1-03-22,
26.1-17-32, and 26.1-18.1-18, and a credit against the tax due for an amount equal to
the ad valorem taxes, whether direct or in the form of rent, on that proportion of
premises occupied as the principal office in this state for over one-half of the year for
which the tax is paid. The credits under this subsection must be prorated on a
quarterly basis and may not exceed the total tax liability under subsection 1.
3. Any company failing to pay the tax imposed by subsection 1, within the time required,
is subject to a penalty of one hundred dollars plus twenty-five dollars per day,
excepting the first day after the tax became due. Any company failing to file the
appropriate tax statement required by rule if the tax is zero is subject to a penalty of
twenty-five dollars per day for each day's neglect not to exceed five hundred dollars.
The commissioner, if satisfied that the delay was excusable, may waive, and if paid,
issue a premium tax credit for all or any part of the penalty and interest.
4. Every stock and mutual insurance company, nonprofit health service corporation,
health maintenance organization, and prepaid legal service organization, except
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5.
6.
fraternal benefit or benevolent societies, doing business in this state required to pay
premium taxes in this state shall make and file a statement of estimated premium
taxes. The statement and payment must be made on a quarterly basis as prescribed
by the commissioner. Failure of a company to make payments of at least one-fourth of
the total tax paid during the previous calendar year, or eighty percent of the actual tax
for the quarter being reported of the current calendar year, shall subject the company
to the penalty and interest provided in subsection 3.
If an amount of tax, penalty, or interest has been paid which was not due under the
provisions of this section, a refund may be issued to the taxpayer who made the
erroneous payment. The refund is allowed as a credit against any tax due or to
become due under this section or as a cash refund, at the discretion of the
commissioner. The taxpayer who made the erroneous payment shall present a claim
for refund to the commissioner not later than two years after the due date of the return
for the period for which the erroneous payment was made.
In lieu of the tax required by subsection 1, the commissioner shall collect from each
entity subject to this section an annual filing fee in the amount of two hundred dollars,
provided the total tax liability of the entity pursuant to subsection 1 is less than two
hundred dollars. No annual filing fee is due or may be collected from an entity if its
total tax liability pursuant to subsection 1 is in excess of two hundred dollars. The
annual filing fee may be reduced by any credits available pursuant to subsections 2
and 5. Failure of a company to pay the two hundred dollar filing fee subjects the
company to the penalty as provided in subsection 3.
26.1-03-18. Insurance or surety company to file statement of business done before
authorization and to pay tax.
Before a surety company or an insurance company, other than a life insurance company,
may be authorized to transact business in this state, the commissioner may require it to file with
the commissioner a sworn statement and other proof that it has not written, or caused to be
written, any surety bond or insurance contract on any person, firm, or corporation, or on
property in this state, at any time prior to filing its application for a certificate of authority to do
business in this state. If it appears that the company has written, or caused to be written, any
such surety bond or insurance contract while it was not authorized to do business in this state, it
shall file a statement of all such bonds and contracts written by it, and the company shall pay
the premium tax due thereon before a certificate of authority is issued to it.
26.1-03-19. Examination of companies - Times - Expense.
Repealed by S.L. 1993, ch. 292, § 49.
26.1-03-19.1. Examination of companies - Definitions.
In sections 26.1-03-19.1 through 26.1-03-19.7, unless the context otherwise requires:
1. "Company" means any foreign or domestic insurance company as defined in section
26.1-02-01.
2. "Examiner" means any individual or firm having been authorized by the commissioner
to conduct an examination under this chapter.
3. "Person" means any individual, aggregation of individuals, trust, association,
partnership, or corporation, or any affiliate thereof.
26.1-03-19.2. Authority, scope, and scheduling of examinations.
1. The commissioner or any of the commissioner's examiners may conduct an
examination under this chapter of any company whenever the commissioner in the
commissioner's sole discretion deems appropriate but shall at a minimum, conduct an
examination of every insurer licensed in this state not less frequently than once every
five years. In scheduling and determining the nature, scope, and frequency of the
examinations, the commissioner shall consider the matters as the results of financial
statement analyses and ratios, changes in management or ownership, actuarial
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2.
3.
opinions, reports of independent certified public accountants, and other criteria as set
forth in the examiners' financial condition and market conduct handbook adopted by
the national association of insurance commissioners and in effect when the
commissioner exercises discretion under this section.
For purposes of completing an examination of any company under this chapter, the
commissioner may examine or investigate any person, or the business of any person,
insofar as the examination or investigation is, in the sole discretion of the
commissioner, necessary or material to the examination of the company.
In lieu of an examination under this chapter of any foreign insurer licensed in this state,
the commissioner may accept an examination report on the company as prepared by
the insurance department for the company's state of domicile or port-of-entry state
until January 1, 1994. Thereafter, the reports may only be accepted if the insurance
department was at the time of the examination accredited under the national
association of insurance commissioners' financial regulation standards and
accreditation program, or the examination is performed under the supervision of an
accredited insurance department or with the participation of one or more examiners
who are employed by an accredited state insurance department and who, after a
review of the examination workpapers and report, state under oath that the
examination was performed in a manner consistent with the standards and procedures
required by their insurance department, or the commissioner finds that the
examination was performed by the insurance department of a state that was
previously accredited under the national association of insurance commissioners but
has lost its accreditation, provided that state's consumer protection laws are no less
protective than those present under North Dakota law.
26.1-03-19.3. Conduct of examinations.
1. Upon determining that an examination should be conducted, the commissioner or the
commissioner's designee shall issue a letter appointing one or more examiners to
perform the examination and instructing them as to the scope of the examination. In
conducting the examination, the examiner shall observe those guidelines and
procedures set forth in the examiners' handbook adopted by the national association
of insurance commissioners. The commissioner may also employ other guidelines or
procedures as the commissioner may deem appropriate.
2. For the purposes of making any examination required or authorized by law, every
company or person from whom information is sought, its officers, directors, trustees,
and agents must provide to the examiners appointed under subsection 1, in any
examination required or authorized by law, timely, convenient, and free access at all
reasonable hours at its offices to all books, records, accounts, papers, documents, and
any or all computer or other recordings relating to the property, assets, business, and
affairs of the company being examined. The officers, directors, employees, trustees,
and agents of the company or person must facilitate the examination and aid in the
examination so far as it is in their power to do so. The refusal of any company, by its
officers, directors, employees, trustees, or agents to submit to examination or to
comply with any reasonable request of the examiners is grounds for suspension or
refusal of, or nonrenewal of, any license or authority held by the company to engage in
an insurance or other business subject to the commissioner's jurisdiction. Any
proceedings for suspension, revocation, or refusal of any license or authority must be
conducted pursuant to sections 26.1-01-03.1 and 26.1-11-09.
3. The commissioner or any of the commissioner's examiners have the power to issue
subpoenas, to administer oaths, and to examine under oath any person as to any
matter pertinent to the examination. Upon the failure or refusal of any person to obey a
subpoena, the commissioner may petition a court of competent jurisdiction, and upon
proper showing, the court may enter an order compelling the witness to appear and
testify or produce documentary evidence. Failure to obey the court order is punishable
as contempt of court.
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4.
5.
6.
Qualified regular employees of the commissioner, or the commissioner's designated
representatives acting as independent contract examiners under the direction of
regular employees of the commissioner, shall conduct all examinations of an insurance
company required or permitted by law to be conducted by the commissioner, whether
or not the examinations are convention examinations called in accordance with rules
promulgated by the national association of insurance commissioners. The
commissioner may contract for and procure the services of financial and market
conduct examiners and other or additional specialized technical or professional
assistants, as independent contractors. None of the persons providing those services
or assistance on a contract or fee basis may be in the classified service of the state.
Nothing contained in this chapter may be construed to limit the commissioner's
authority to terminate or suspend any examination in order to pursue other legal or
regulatory action pursuant to the insurance laws of this state. Findings of fact and
conclusions made pursuant to any examination will be prima facie evidence in any
legal or regulatory action by and before the insurance commissioner.
Except as provided in subsections 5 and 6 of section 26.1-03-19.4, nothing contained
in this chapter may be construed to limit the commissioner's authority to use and, if
appropriate, to make public any final or preliminary examination report, any examiner
or company workpapers or other documents, or any other information discovered or
developed during the course of any examination in the furtherance of any legal or
regulatory action which the commissioner may, in the commissioner's sole discretion,
deem appropriate.
26.1-03-19.4. Examination reports.
1. All examination reports must be comprised of only facts appearing upon the books,
records, or other documents of the company, its agents, or other persons examined, or
as ascertained from the testimony of its officers or agents or other persons examined
concerning its affairs, and the conclusions and recommendations as the examiners
find reasonably warranted from the facts.
2. No later than sixty days following completion of the examination, the examiner in
charge shall file with the department a verified written report of examination under
oath. Upon receipt of the verified report, the department shall transmit the report to the
company examined, together with a notice which must afford the company examined a
reasonable opportunity of not more than thirty days to make a written submission or
rebuttal with respect to any matters contained in the examination report.
3. Within thirty days of the end of the period allowed for the receipt of written submissions
or rebuttals, the commissioner shall fully consider and review the report, together with
any written submissions or rebuttals and any relevant portions of the examiner's
workpapers, and enter an order:
a. Adopting the examination report as filed or with modification or corrections. If the
examination report reveals that the company is operating in violation of any law,
regulation, or prior order of the commissioner, the commissioner may order the
company to take any action the commissioner considers necessary and
appropriate to cure the violation;
b. Rejecting the examination report with directions to the examiners to reopen the
examination for purposes of obtaining additional data, documentation, or
information and refiling pursuant to subsection 1; or
c. Calling for an investigatory hearing with no less than twenty days' notice to the
company for purposes of obtaining additional documentation, data, information,
and testimony.
4. a. All orders entered pursuant to subdivision a of subsection 3, except those entered
pursuant to section 26.1-01-03.1 or 26.1-11-09, must be accompanied by findings
and conclusions resulting from the commissioner's consideration and review of
the examination report, relevant examiner workpapers, and any written
submissions or rebuttals. The company may, within thirty days of the entry of any
such order, request a hearing to vacate or amend the order. This hearing must be
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b.
5.
a.
b.
c.
6.
a.
b.
conducted in compliance with chapter 28-32. The order must be served upon the
company, together with a copy of the adopted examination report. Within thirty
days of the issuance of the adopted report, the company shall acknowledge
receipt of the adopted report and related orders.
Any hearing conducted under subdivision c of subsection 3 by the commissioner
or authorized representative must be conducted as a nonadversarial confidential
investigatory proceeding as necessary for the resolution of any inconsistencies,
discrepancies, or disputed issues apparent upon the face of the filed examination
report or raised by or as a result of the commissioner's review of relevant
workpapers or by the written submission or rebuttal of the company. Within
twenty days of the conclusion of any hearing, the commissioner shall enter an
order pursuant to subdivision a of subsection 3.
Upon the adoption of a financial examination report under subdivision a of
subsection 3, the commissioner shall continue to hold the content of the
examination report as private and confidential information for a period of fifteen
days except to the extent provided in subsection 2. Thereafter, the commissioner
may open the report for public inspection so long as no court of competent
jurisdiction has stayed its publication.
Nothing contained in this code prevents or may be construed as prohibiting the
commissioner from disclosing the content of an examination report, preliminary
examination report, or results, or any matter relating thereto, to the insurance
department of this or any other state or country, or to law enforcement officials of
this or any other state or agency of the federal government at any time, so long
as the agency or office receiving the report or matters relating thereto agrees in
writing to hold it confidential and in a manner consistent with this chapter.
In the event the commissioner determines that regulatory action is appropriate as
a result of any examination, the commissioner may initiate any proceedings or
actions as provided by law.
All working papers, recorded information, documents, and copies thereof
produced by, obtained by, or disclosed to the commissioner or any other person
in the course of a financial examination made under this chapter must be given
confidential treatment and are not subject to subpoena and may not be made
public by the commissioner or any other person, except to the extent provided in
subsection 5. Access may also be granted to the national association of
insurance commissioners. The parties must agree in writing prior to receiving the
information to provide to it the same confidential treatment as required by this
section, unless the prior written consent of the company to which it pertains has
been obtained.
For purposes of any other examination other than financial examinations required
or authorized by law, all preliminary data, drafts, notes, impressions, memoranda,
working papers, and work product generated by the commissioner or the person
making an examination or inspection are confidential and not open for public
inspection until the commissioner releases a final report concerning the
examination or inspection or upon a declaration by the commissioner that the
material is nonconfidential. If a declaration of nonconfidentiality is requested by
any person and denied, the commissioner, in the denial, shall state the reason for
the confidentiality and the date, as can best be reasonably determined at the
time, when it will be made public.
26.1-03-19.5. Conflict of interest.
No examiner may be appointed by the commissioner if the examiner, either directly or
indirectly, has a conflict of interest or is affiliated with the management of or owns a pecuniary
interest in any person subject to examination under this chapter. This section must not be
construed to automatically preclude an examiner from being:
1. A policyholder or claimant under an insurance policy.
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2.
A grantor of a mortgage or similar instrument on the examiner's residence to a
regulated entity if done under customary terms and in the ordinary course of business.
3. An investment owner in shares of regulated diversified investment companies.
4. A settlor or beneficiary of a "blind trust" into which any otherwise impermissible
holdings have been placed.
Notwithstanding the requirements of this section, the commissioner may retain from time to
time, on an individual basis, qualified actuaries, certified public accountants, or other similar
individuals who are independently practicing their professions, even though said persons may
from time to time be similarly employed or retained by persons subject to examination under this
chapter.
26.1-03-19.6. Cost of examinations.
For purposes of any examination authorized or required by law, the company being
examined shall pay the same charge for the examination as is provided in section 26.1-01-07
for an official examination. The compensation to be paid to the employees of the commissioner
is to be paid out of the appropriation for the commissioner's office. Any sum paid to the
employees or to the commissioner by the company examined, as an examination fee or
otherwise, is state money, and forthwith must be paid into the insurance regulatory trust fund.
Any sum paid to the employee or the commissioner as expense money for the examiner may be
paid directly to the employee, and no employee may charge or collect from the state any
expenses incurred in connection with any examination for or during which expenses or any part
thereof have been paid by any other person, firm, or corporation. However, the compensation
and expenses paid for independent contract examiners must be paid directly by the company
examined after approval by the commissioner.
26.1-03-19.7. Immunity from liability.
1. No cause of action arises, nor may any liability be imposed, against the commissioner,
the commissioner's authorized representatives, or any examiner appointed by the
commissioner for any statements made or conduct performed in good faith while
carrying out the provisions of this chapter.
2. No cause of action arises, nor may any liability be imposed, against any person for the
act of communicating or delivering information or data to the commissioner or the
commissioner's authorized representative or examiner pursuant to an examination
made under this chapter, if the act of communication or delivery was performed in
good faith and without fraudulent intent or the intent to deceive.
3. This section does not abrogate or modify in any way any common law or statutory
privilege or immunity heretofore enjoyed by any person identified in subsection 1.
4. A person identified in subsection 1 is entitled to an award of attorney's fees and costs if
that person is the prevailing party in a civil cause of action for libel, slander, or any
other relevant tort arising out of activities in carrying out the provisions of this chapter
and the party bringing the action was not substantially justified in doing so. For
purposes of this section, a proceeding is "substantially justified" if it had a reasonable
basis in law or fact at the time that it was initiated.
26.1-03-20. Examinations - By whom conducted - Compensation to be paid into
insurance regulatory trust fund.
Repealed by S.L. 1993, ch. 292, § 49.
26.1-03-21. Powers of commissioner or person making an examination.
Repealed by S.L. 1993, ch. 292, § 49.
26.1-03-22. State auditor to make examination when commissioner is disqualified.
If the commissioner is a director, officer, agent, attorney, or stockholder of, or is interested
directly in, any insurance company except as an insured, the state auditor or a person
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appointed by the state auditor shall examine the company. No officer or agent of any insurance
company doing business in this state may be appointed to examine the affairs of the company.
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