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Bill to transfer fire and tornado fund administration to OMB draws neutral support; counties and fund manager urge careful drafting on coverage exclusions
Summary
House Bill 10‑27 would transfer administration of the state fire and tornado fund from the Insurance Department to the Office of Management and Budget (OMB) and require a legislative study; witnesses said they are neutral or supportive but urged safeguards to keep the North Dakota Insurance Reserve Fund (NDRF) administering day‑to‑day operations.
Senators heard neutral testimony on House Bill 10‑27, a bill that would transfer administration of the state fire and tornado fund to the Office of Management and Budget (OMB) and require a legislative management study. Department and vendor witnesses said they support the transfer in principle so long as day‑to‑day administration by the North Dakota Insurance Reserve Fund (NDRF) continues uninterrupted.
John Arnold, deputy insurance commissioner, told the committee the department supports transferring the fund to OMB and said the change would remove a potential conflict from the department’s dual role as regulator and administrator. "Removing that completely, transferring these funds over to the office of management budget, allowing them to have that contractual relationship with a vendor to administer the funds, allowing us to just have that regulatory relationship with the entity, seems to be the ideal solution," Arnold said.
Todd Anderson, director of the risk management division at OMB, testified in a neutral position and said OMB’s primary concern is continuity: if the NDRF were to stop administering the fund, OMB lacks staff to resume direct administration. Anderson said the bill’s language (as amended in the House) and contract timing should address the potential gap between policy renewals and a contract effective date.
Keith Peach, chief executive officer of the North Dakota Insurance Reserve Fund, described the fund’s mission and capacity and said NDRF wants to continue administering the fund regardless of which agency holds statutory responsibility. "North Dakota Insurance Reserve Fund's mission is to be the source of risk services for North Dakota's political subdivisions," Peach said. He told senators that members’ equity in NDRF is about $35 million and that the fire and tornado fund balance is roughly $18 million; state statute sets a $12 million floor before assessments would be triggered.
Committee members raised a separate proposed amendment from the House that would bar coverage — i.e., permit a coverage denial — for claims "that involves in whole or in part an ordinance, policy or action that interferes or conflicts with an energy infrastructure project permitted or approved by a state agency." The proposed language drew questions about how a coverage trigger would be implemented in practice and whether it should be narrowly or broadly applied.
Aaron Burst, executive director of the North Dakota Association of Counties and a current NDRF board member, said counties want to work through the issue carefully and suggested a focused approach rather than a broad exclusion. NDRF representatives said coverage determinations depend on the lawsuit’s allegations and the memorandum of coverage; if a claim falls outside coverage, NDRF issues a denial and the political subdivision would be responsible for its defense or indemnity costs.
No final committee vote on the policy‑content amendment was recorded in the hearing; senators asked staff and stakeholders to continue discussions and invited further drafting and study.
Ending: House Bill 10‑27 drew neutral to supportive testimony on moving administration to OMB while maintaining NDRF’s operational role; the committee asked stakeholders to continue refining proposed coverage‑exclusion language before formal action.
