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Committee advances holding‑company and group capital changes required by NAIC accreditation
Summary
House Bill 1124 updates North Dakota's insurance holding company system law to adopt NAIC model changes, adding group capital calculation and liquidity stress‑test tools and updating receivership provisions; committee approved a due‑pass recommendation.
The House Industry, Business and Labor Committee recommended due pass Tuesday on House Bill 1124, which updates North Dakota's insurance holding company supervision statute to align with revisions to a National Association of Insurance Commissioners (NAIC) model.
Matt Fisher, division director of company licensing and examinations for the North Dakota Insurance Department, presented the bill. He said the changes implement three areas of the NAIC model: a group capital calculation (GCC), a liquidity stress test (LST) for designated large life insurer groups, and receivership updates intended to ensure essential services continue if an insurer enters receivership. "The GCC is the tool that closes that gap," Fisher said, explaining that the GCC provides a consistent analytical framework to evaluate capital across affiliates in a holding company system.
Fisher told the committee that North Dakota must adopt the updated model law to maintain NAIC accreditation by the January 1, 2026 deadline and that 35 states have already adopted the changes. He said the LST currently would not apply to any designated entity domiciled in North Dakota but that adopting the framework is necessary to keep the state available for redomestication by large groups.
Committee members asked questions about the role of NAIC guidance and why some of the operational details are set by NAIC procedures rather than in statute. Fisher said the NAIC-based guidance provides consistent statewide standards and keeps North Dakota aligned with other states to avert potential federal preemption.
Representative Ruby moved a due‑pass recommendation; Representative Volmer seconded. The committee recorded a roll‑call approval on the due‑pass motion. (Committee members present recorded "yes" on the motion during roll call; the committee chair declared the recommendation carried.) The committee will carry the bill to the floor with a due‑pass recommendation.
The bill text contains provisions to allow the department to assess group capital and liquidity and to update receivership powers so that an insurer in receivership continues to receive essential services provided by affiliates while protecting policyholders and the Solomon of state regulation.
