Insurance Commissioner Briefs Committee on Market Trends, Health‑care Costs and Long‑term Care Risks

Commissioner Godfried told the joint committee the U.S. insurance market remains a global leader and that state regulation — rooted in the McCarran‑Ferguson Act — focuses on two core duties: ensuring insurer solvency and protecting consumers.

He outlined the three broad lines of insurance: property and casualty (P&C), life and annuity, and health insurance, and flagged current pressures including inflation, rising claim costs, cyber risk and reinsurance‑price volatility. "We're in a hard market," the commissioner said, describing an environment in which insurers tighten underwriting, reduce capacity and increase premiums.

On North Dakota numbers, the commissioner said the state has 29 domestic insurers, more than 9,100 business entities licensed to operate here, roughly 5,800 resident insurance producers and about 119,000 producers authorized to sell in the state. He said premium taxes totalled about $102 million to the general fund in the last biennium and noted the insurance department is specially funded (agency operations come from industry fees rather than general‑fund appropriations).

Health insurance, the commissioner said, presents acute challenges. He described a department study that found large regional price variation for procedures such as colonoscopies, and said for every dollar some insurers collected recently they were paying out roughly $1.10 on claims. He warned that health care price growth is a primary driver of rising premiums and that the state lacks equivalent access to provider pricing data to fully explain cost drivers.

Long‑term care was highlighted as a particularly fraught area. The commissioner described how legacy stand‑alone long‑term care blocks were underpriced in earlier decades, leading insurers to seek rate increases that in some cases exceed 100–200 percent for existing policyholders. He said regulators are exploring options including multi‑year phase‑in of increases, incentivizing hybrid life/long‑term‑care products, and consumer education — but that insolvencies and large premium shocks remain a risk.

The commissioner also discussed federal preemption limits on state authority over employer self‑funded (ERISA) plans and recent court rulings. He said the U.S. Supreme Court in Rutledge v. PCMA and state cases such as PCMA v. WEBEE have allowed states to regulate third‑party intermediaries (for example PBMs) without directly regulating ERISA plan design, but they do not give states broad authority to change plan benefits or funding for self‑insured plans.

Lawmakers asked about insurer market exits, hospital price transparency and prescription‑drug middlemen (PBMs). The commissioner said California’s market experience is unique and that insurer exits are generally business decisions governed by filing and notice requirements. On PBMs and prescription pricing, he said states can pursue transparency and disclosure for PBMs but warned the department lacks pharmacy technical expertise and would need assistance interpreting detailed pharmacy reimbursement data.

Ending: The joint committee thanked the commissioner for a wide‑ranging overview and said members would consult the department on follow‑up questions and possible legislation on health‑care cost data, PBM transparency and long‑term care options. No committee votes were taken at the conclusion of the briefing.