House committee advances bill requiring insurance producers to maintain electronic mailing addresses for regulators

The House Industry, Business and Labor Committee advanced Senate Bill 2,125 on a do-pass recommendation after a hearing that included testimony from the North Dakota Insurance Department.

The bill would require insurance producers to maintain an electronic mailing address for regulatory communications, allow the department to use electronic service of process for resident and nonresident producers, and adopt several technical and substantive updates to producer and public-adjuster licensing to align with the Producer Licensing Model Act (PLMA) and the National Insurance Producer Registry (NIPR).

Janelle Mittelstead, producer licensing division director at the North Dakota Insurance Department, told the committee the agency brought the proposal to align state licensing language with the PLMA and to streamline the department’s paperless operations. “This cuts down on the cost of postage, as well as the transaction time for sending and receiving documents,” Mittelstead said. She described updates that would standardize line-of-authority names (for example, life, accident and health; variable life and variable annuity), allow electronic service in place of certified mail, and make technical changes to public adjuster renewal notices, bond requirements, and continuing-education reporting.

The bill would also allow the department to revoke a nonresident producer’s North Dakota license if the producer’s home-state license lapses and the department receives notification of that lapse. Mittelstead said the department already receives monthly notifications on nonresident licenses and that the change is intended to address producers who remain listed as active in North Dakota after their home-state license becomes inactive.

Representative Balmer asked how many producers would be affected; Mittelstead replied the department licenses roughly 136,000 resident and nonresident producers and that the measure is primarily an administrative alignment and a clarification rather than a substantive expansion. Representative Schauer questioned enforcement of the requirement to maintain and monitor an electronic mailing address; Mittelstead said the department has moved to a paperless system, has been notifying producers for some time, and that disciplinary steps or fines could be applied if producers fail to provide or maintain required contact information.

Committee members also discussed practical issues such as corporate spam filters and producers who still use paper mail. Mittelstead said the department has been working with producers to transition to electronic communications and will provide notice and assistance where needed; she said the department allows some grace when messages bounce to junk mail so that producers are not immediately penalized when emails are missed.

After public testimony and questions, Vice Chair Johnson moved a do-pass recommendation; Representative Greenberg seconded. The motion carried on a roll call; the committee designated Vice Chair Johnson to carry the bill.

The bill’s changes are largely procedural and intended to bring North Dakota’s licensing and notice practices into alignment with national producer-registration systems and best practices. Formal disciplinary processes and the department’s existing licensing authorities remain in place under the bill as presented.

Committee action: due-pass recommendation; carrier: Vice Chair Johnson.