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Committee OKs bill to give reinsurance board flexibility on attachment point and coinsurance
Summary
The Industry, Business and Labor Committee voted to pass Senate Bill 2,091, which lets the Reinsurance Association of North Dakota annually set the attachment point (between $100,000 and $1,000,000) and adjust the coinsurance percentage (up to the existing 75%). An emergency clause would let changes take effect for 2026 rate-setting if adopted.
The Industry, Business and Labor Committee on Thursday approved Senate Bill 2,091, a measure that gives the Reinsurance Association of North Dakota (RAND) authority to annually adjust the attachment point for individual-market catastrophic claims and to change the coinsurance percentage used for reimbursements.
RAND was created under a Section 1332 waiver of the Affordable Care Act and has operated for five years to reinsure very large individual-market claims. Under current law, RAND reimburses 75% of claim amounts above a $100,000 attachment point and up to a $1,000,000 stop-loss level; amounts above $1,000,000 are covered by federal programs under the Affordable Care Act. The bill would allow RAND’s board to move the attachment point anywhere between $100,000 and $1,000,000 and to lower (but not raise above) the 75% coinsurance rate.
Insurance Department Division Director Matt Fisher told the committee RAND helped lower individual-market premiums by roughly 20% when first implemented under the 1332 waiver and that federal pass-through savings plus assessments on carriers fund RAND. Fisher said the department and RAND board want flexibility so changes can be priced into carriers’ 2026 rate filings and asked the committee to add an emergency clause to allow board changes to apply for the 2026 plan year.
Committee members asked how the attachment point and coinsurance mechanics work in practice and how raising the attachment point could affect carriers’ rate-setting. Fisher explained an example: with a $100,000 attachment point, a $150,000 claim exposes the carrier for the first $100,000 and RAND pays 75% of the $50,000 excess; changing the attachment point to $150,000 would reduce RAND recoveries on similar claims. Fisher said RAND collects federal pass-through savings from the 1332 waiver and conducts carrier assessments by market share, but could not predict precise rate impacts if attachment points or coinsurance changed.
Fisher also said RAND’s recoveries rose from about $22 million in 2020 to approximately $43.5 million for the 2024 period as health-care costs have grown, and cited that variability in federal funding and utilization drove the need for flexibility. He confirmed RAND applies only to policies sold in the individual marketplace and does not cover small-group or large-group plans.
The committee recorded the motion for a “do pass” from Representative Ruby, seconded by Representative Shower. The roll call recorded a tally of 11 yes, 0 no, 2 abstentions; the committee chair instructed the bill be carried forward.
The bill text also contains an emergency clause request; Fisher said the clause would allow RAND’s board to set attachment and coinsurance levels in time for insurers’ 2026 rate filings if the committee and subsequent chambers approve the change.
