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Insurance Department proposes fee increases to bolster regulatory trust fund; lawmakers press for alternative fixes
Summary
The Insurance Department proposed increases to company and producer licensing fees that it estimates would raise about $2.4 million per biennium; lawmakers questioned whether altering the trust fund turnback threshold or more modest fee changes could address the department’s reported cash‑flow timing issue.
Rachel Krieg, administrative division director for the Insurance Department, presented House Bill 1123, an agency bill that would increase several company and producer licensing fees and consolidate where fees are listed in Title 26.1. Krieg said the department reviewed other states’ fees and found North Dakota’s renewal and annual fees had not been updated for decades.
Krieg said Legislative Council’s updated fiscal note estimates the proposed changes would generate about $2,400,000 in additional revenue for the Insurance Regulatory Trust Fund per biennium. The department showed changes that would increase a company renewal total from $155 to $1,000 (split across renewal, annual statement and other fees) and raise the producer appointment fee from $10 to $25. Krieg said the added revenue would flow into the Insurance Regulatory Trust Fund and, under current practice, amounts above $1,000,000 are transferred to the general fund at fiscal year end.
Representative Ben Koppelman and Representative Jim Casper questioned the size of the increases and whether changing the trust fund turnback threshold would be a preferred alternative. Krieg said the fund experiences a negative cash balance during certain months because of timing—payments such as NDFA (a prior obligation) are due in August—then recoups when company licensing renewals arrive. Krieg confirmed the trust fund had a negative cash balance at the time of testimony (about $1,048,221 negative on the day reported) but said the fund typically normalizes later in the fiscal cycle.
Koppelman volunteered to work with the department on amendments that could include a less sweeping fee increase or a statutory change to the turnback threshold. Committee members agreed to pursue negotiations between the department and legislators on fee levels and trust fund mechanics before advancing the bill.
