Committee backs updates to insurer holding‑company rules to adopt NAIC group capital, liquidity and receivership tools

The Senate Industry and Business Committee voted to recommend passage of House Bill 11‑24 after testimony that the bill would modernize North Dakota’s insurance holding‑company statutes by adopting model provisions from the National Association of Insurance Commissioners (NAIC).

Matt Fisher, division director of company licensing and examinations at the North Dakota Insurance Department, told the committee he supports the bill and said it aligns state law with NAIC accreditation requirements. "This bill amends the existing insurance holding company statutes to reflect the changes made by the National Association of Insurance Commissioners," Fisher said.

Fisher told the committee the bill has three primary components: a group capital calculation (GCC) to assess capital at the holding‑company level, a liquidity stress test (LST) targeted at large life insurance groups, and receivership updates to preserve intercompany services if an insurer enters a receivership. "We currently have a tool for use at the individual insurer level, but not for the group level," Fisher said of the GCC. He said the LST would apply only to designated large life insurers and that North Dakota presently has none that meet that designation.

Fisher described the GCC and LST as tools developed by state regulators after the 2008 financial crisis and in response to federal developments such as the Dodd‑Frank Act and covered‑agreement concerns. He said the receivership provisions are intended to keep administrative and service agreements in place so an insurer placed in receivership can continue day‑to‑day operations.

Committee members asked about how the LST is applied and how often. Fisher said NAIC sets stress parameters and that designated firms currently perform the LST annually under NAIC guidance. He also said the GCC applies to any insurer that is part of a holding company system and that the stress test parameters are consistent across groups, with results varying by each group’s asset and risk profile.

The bill passed the House unanimously and the committee moved a due‑pass recommendation. A due‑pass motion was made and seconded and the committee recorded a 5–0 do‑pass recommendation on House Bill 11‑24.

The bill’s supporters said adopting the NAIC changes preserves North Dakota’s accredited status in the NAIC program and reduces the risk of federal preemption. Fisher said the NAIC model is part of the accreditation program that states must adopt for consistent multi‑state solvency oversight.

The committee closed the hearing after the recorded recommendation; no opposition testimony was heard in committee.

Ending: The committee’s recommendation advances House Bill 11‑24 to the next stage; if enacted, the department would gain new group‑level tools to analyze capital and liquidity and clearer authority to preserve intercompany agreements during receivership proceedings.