Senate panel backs bill to modernize insurer data calls, remove emergency clause

Senate Industry and Business Committee members voted to amend and give a due-pass recommendation to Senate Bill 2124, a measure that would modernize the North Dakota Insurance Department’s authority to collect insurer data and permit coordinated, multistate data calls through the National Association of Insurance Commissioners.

The bill’s sponsor and the department argued the changes are intended to let North Dakota participate in NAIC’s Market Conduct Annual Statement (MCAS) process, protect confidentiality of carrier data, and permit public release of aggregated, anonymized market information.

John Arnold, deputy insurance commissioner, told the committee the department seeks to “modernize the commissioner’s data call authority and to allow for coordinating data calls with other states to better understand the insurance sector.” Arnold said current law — citing response deadlines in a statutory provision that requires companies to answer inquiries within 20 days — lacks the same confidentiality protections available during formal company examinations and prevents sharing useful, anonymized information with the public or the legislature.

Arnold explained section 3 of the bill would keep the 20-day response window, permit the commissioner to designate the NAIC as a repository for filings (the same arrangement used for annual financial statements), and extend examination-level confidentiality protections to data-call information. He said the department would be able to use carrier information in administrative or legal actions where appropriate and could publish aggregate, anonymized market data.

Several senators pressed on practical effects. Senator Kessel asked whether participation in MCAS could increase premiums for North Dakotans; Arnold replied participation and publication of aggregated, anonymized data would not enable one company to use another company’s experience to set rates, and therefore would not by itself cause premiums to rise. Arnold also said the broader marketplace forces — such as reinsurance cost increases after large disasters — are driving premium pressure nationally and can affect North Dakota even when local claim rates are low.

Blue Cross Blue Shield of North Dakota provided neutral testimony. Megan Ruby said internal estimates show MCAS reporting could require substantial staff time in the first year: “in total, I think around an estimate of 400 to 500 hours of time focused on completing the market conduct annual statement.” Ruby requested removal of the bill’s emergency clause to allow carriers time to prepare; she recommended a delayed implementation so carriers could automate reporting and avoid duplication with other required filings.

Deputy Commissioner Arnold said the bill already includes authority for the commissioner to exempt companies and that the department would be willing to grant exemptions or reasonable delays for carriers that need extra time. After discussion, committee members voted to amend the bill to remove the emergency clause and then gave the amended measure a due-pass recommendation.

Votes at a glance: The committee recorded unanimous aye votes on the amendment and on the due-pass recommendation during the hearing roll calls (senators recorded as voting aye included Senator Klein, Senator Kessel, Chairman Barta, Vice Chairman Behm and Senator Engott). The clerks’ roll calls show the amendment and the final due-pass recommendation carried on voice/roll call as amended.

The committee discussion noted several operational and policy points: most North Dakota-domiciled carriers are small county mutuals that likely would be exempted from MCAS reporting; multistate carriers already filing MCAS in other states will have some familiarity with the process; and the bill aims to preserve confidentiality while enabling the department to publish useful, aggregated market information and to participate in coordinated, multistate examinations of market conduct.

The committee closed the hearing after rejecting the emergency clause in favor of an implementation schedule that allows carriers time to comply, and referred the amended bill forward with a due-pass recommendation.