# Title 26.1 — Insurance

## Chapter 26.1-10 — Insurance Holding Company Systems

### § 26.1-10-01. Definitions.

As used in this chapter, unless the context or subject matter otherwise requires:
1. "Affiliate" means a person that directly, or indirectly through one or more
intermediaries, controls, or is under the control of, or is under common control with, the
person specified.
2. "Control" means the possession, direct or indirect, of the power to direct or cause the
direction of the management and policies of a person, whether through the ownership
of voting securities, by contract other than a commercial contract for goods or
nonmanagement services, or otherwise, unless the power is the result of an official
position with or corporate office held by the person. Control is presumed to exist if any
person, directly or indirectly, owns, controls, holds with the power to vote, or holds
proxies representing ten percent or more of the voting securities of any other person.
This presumption may be rebutted by a showing made in the manner provided for in
subsection 9 of section 26.1-10-04, that control does not exist in fact. The
commissioner may determine, after furnishing all persons in interest notice and
opportunity to be heard and making specific findings of fact to support such
determination, that control exists in fact, notwithstanding the absence of a presumption
to that effect.
3. "Enterprise risk" means any activity, circumstance, event, or series of events involving
one or more affiliates of an insurer which, if not remedied promptly, is likely to have a
material adverse effect upon the financial condition or liquidity of the insurer or the
insurer's insurance holding company system as a whole including anything that would
cause the insurer's risk-based capital to fall into company action level as set forth in
section 26.1-03.1-03 or would cause the insurer to be in hazardous financial condition
as set forth in North Dakota Administrative Code section 45-03-13-01.
4. "Group capital calculation instructions" means the group capital calculation instructions
adopted by the national association of insurance commissioners and as amended in
accordance with the procedures adopted by the national association of insurance
commissioners.
5. "Groupwide supervisor" means the regulatory official authorized to engage in
conducting and coordinating groupwide supervision activities who is determined or
acknowledged by the commissioner under section 26.1-10-06.2 to have sufficient
significant contacts with the internationally active insurance group.
6. "Insurance holding company system" means two or more affiliated persons, one or
more of which is an insurer.
7. "Insurer" has the same definition as provided in section 26.1-29-02, except the term
does not include an agency, authority, or instrumentality of the United States or its
possessions or a state or political subdivision of a state.
8. "Internationally active insurance group" means an insurance holding company system
that includes an insurer registered under section 26.1-10-04, and meets the following
criteria:
a. Premiums written in at least three countries;
b. The percentage of gross premiums written outside the United States is at least
ten percent of the insurance holding company system's total gross written
premiums; and
c. Based on a three-year rolling average, the total assets of the insurance holding
company system are at least fifty billion dollars or the total gross written
premiums of the insurance holding company system are at least ten billion
dollars.
9. "Liquidity stress test framework" means the national association of insurance
commissioners liquidity stress test framework that includes a history of the
association's development of regulatory liquidity stress testing, the scope criteria
applicable for a specific data year, the liquidity stress test instructions, and reporting

templates for a specific data year, as adopted and amended in accordance with the
procedures adopted by the association.
10. "Person" means an individual, a corporation, a limited liability company, a partnership,
an association, a joint stock company, a trust, or an unincorporated organization or any
similar entity or any combination of the foregoing acting in concert. The term does not
include any joint venture partnership exclusively engaged in owning, managing,
leasing, or developing real or tangible personal property.
11. "Scope criteria" means the designated exposure bases along with minimum
magnitudes of those bases for the specified data year, used to establish a preliminary
list of insurers considered scoped into the national association of insurance
commissioners liquidity stress test framework for that data year.
12. "Securityholder" of a specified person means the owner of any security of the person,
including common stock, preferred stock, debt obligations, and any other security
convertible into or evidencing the right to acquire any of the foregoing.
13. "Subsidiary" of a specified person means an affiliate under the control of the person
directly, or indirectly through one or more intermediaries.
14. "Voting security" includes any security convertible into or evidencing a right to acquire
a voting security.
### § 26.1-10-02. Subsidiaries of insurers.

1. Any domestic insurer, either by itself or in cooperation with one or more persons, may
organize or acquire one or more subsidiaries. A subsidiary may conduct any kind of
business and its authority to do so is not limited because it is a subsidiary of a
domestic insurer.
2. In addition to investments in common stock, preferred stock, debt obligations, and
other securities permitted under all other sections of this chapter, a domestic insurer
may also:
a. Invest, in common stock, preferred stock, debt obligations, and other securities of
one or more subsidiaries, amounts which do not exceed the lesser of ten percent
of the insurer's assets or fifty percent of the insurer's surplus as regards
policyholders; provided, that after the investments the insurer's surplus as
regards policyholders will be reasonable in relation to the insurer's outstanding
liabilities and adequate to meet its financial needs. In calculating the amount of
the investments, investments in domestic or foreign insurance subsidiaries and
health maintenance organizations shall be excluded, and there must be included:
(1) Total net moneys or other consideration expended and obligations assumed
in the acquisition or formation of a subsidiary, including all organizational
expenses and contributions to capital and surplus of such subsidiary
whether or not represented by the purchase of capital stock or issuance of
other securities; and
(2) All amounts expended in acquiring additional common stock, preferred
stock, debt obligations, and other securities, and all contributions to the
capital or surplus of a subsidiary subsequent to its acquisition or formation.
b. Invest any amount in common stock, preferred stock, debt obligations, and other
securities of one or more subsidiaries engaged or organized to engage
exclusively in the ownership and management of assets authorized as
investments for the insurer, provided that each subsidiary agrees to limit its
investments in any asset so that the investments will not cause the amount of the
total investment of the insurer to exceed any of the investment limitations
specified in subdivision a. "The total investment of the insurer" includes:
(1) Any direct investment by the insurer in an asset; and
(2) The insurer's proportionate share of any investment in an asset by any
subsidiary of the insurer which must be calculated by multiplying the amount
of the subsidiary's investment by the percentage of the ownership of the
subsidiary.

c. With the approval of the commissioner, invest any greater amount in common
stock, preferred stock, debt obligations, or other securities of one or more
subsidiaries; provided, that after the investment the insurer's surplus as regards
policyholders will be reasonable in relation to the insurer's outstanding liabilities
and adequate to its financial needs.
3. Investments in common stock, preferred stock, debt obligations, or other securities of
subsidiaries made pursuant to subsection 2 are not subject to any of the otherwise
applicable restrictions or prohibitions applicable to such investments of an insurer.
4. Whether any investment pursuant to subsection 2 meets the applicable requirements
thereof is to be determined before the investment is made, by calculating the
applicable investment limitations as though the investment had already been made,
taking into account the then outstanding principal balance on all previous investments
in debt obligations, and the value of all previous investments in equity securities as of
the date they were made net of any return of capital invested, not including dividends.
5. If an insurer ceases to control a subsidiary, it shall dispose of any investment therein
made pursuant to this section within three years from the time of the cessation of
control or within such further time as the commissioner prescribes, unless at any time
after the investment has been made, the investment has met the requirements for
investment under any other section, and the insurer has so notified the commissioner.
### § 26.1-10-03. Acquisition of control of or merger with domestic insurer - Penalties.

1. a. A person other than the issuer may not make a tender offer for or a request or
invitation for tenders of, or enter into any agreement to exchange securities for,
seek to acquire, or acquire, in the open market or otherwise, any voting security
of a domestic insurer if, after consummation, the person would, directly or
indirectly, or by conversion or by exercise of any right to acquire, be in control of
the insurer, and a person may not enter an agreement to merge with or otherwise
to acquire control of a domestic insurer or any person controlling a domestic
insurer unless, at the time the offer, request, or invitation is made or the
agreement is entered into, or prior to the acquisition of the securities if no offer or
agreement is involved, the person has filed with the commissioner and has sent
to the insurer, a statement containing the information required by this section and
the offer, request, invitation, agreement, or acquisition has been approved by the
commissioner in the manner prescribed in this chapter.
b. For purposes of this section, any controlling person of a domestic insurer seeking
to divest the person's controlling interest in the domestic insurer, in any manner,
shall file with the commissioner, with a copy to the insurer, confidential notice of
the person's proposed divestiture at least thirty days before the cessation of
control. The commissioner shall determine those instances in which a party
seeking to divest or to acquire a controlling interest in an insurer, will be required
to file for and obtain approval of the transaction. The information remains
confidential until the conclusion of the transaction unless the commissioner
determines confidential treatment will interfere with enforcement of this section. If
the statement referred to in subdivision a is otherwise filed, this subdivision does
not apply.
c. With respect to a transaction subject to this section, the acquiring person shall file
a preacquisition notification with the commissioner which must contain the
information set forth in subdivision a of subsection 3 of section 26.1-10-03.1.
Failure to file the notification may result in penalties specified in subdivision e of
subsection 5 of section 26.1-10-03.1.
d. For purposes of this section, a domestic insurer includes any other person in
control of a domestic insurer unless the other person, as determined by the
commissioner, is either directly or through its affiliates primarily engaged in
business other than the business of insurance. For purposes of this section, the
term "person" does not include a securities broker holding, in the usual and

customary broker's function, less than twenty percent of the voting securities of
an insurer or of any person that controls an insurer.
2. The statement to be filed with the commissioner must be made under oath or
affirmation and must contain the following:
a. The name and address of each person by whom or on whose behalf the merger
or other acquisition of control referred to in subsection 1 is to be effected,
hereinafter called the "acquiring party":
(1) If the person is an individual, the individual's principal occupation and all
offices and positions held during the past five years, and any conviction of
crimes other than minor traffic violations during the past ten years.
(2) If the person is not an individual, a report of the nature of its business
operations during the past five years or for any lesser period as the person
and any predecessors thereof have been in existence; an informative
description of the business intended to be done by the person and the
person's subsidiaries; and a list of all individuals who are or who have been
selected to become directors or executive officers of the person, or who
perform or will perform functions appropriate to these positions. The list
must include for each individual the information required by this subsection.
b. The source, nature, and amount of the consideration used or to be used in
effecting the merger or other acquisition of control, a description of any
transaction that funds were or are to be obtained for any such purpose, including
any pledge of the insurer's stock, or the stock of any of the insurer's subsidiaries
or controlling affiliates, and the identity of persons furnishing the consideration;
provided, however, that if a source of the consideration is a loan made in the
lender's ordinary course of business, the identity of the lender must remain
confidential, if the person filing the statement so requests.
c. Fully audited financial information as to the earnings and financial condition of
each acquiring party for the preceding five fiscal years of each acquiring party, or
for any lesser period as the acquiring party and any predecessors thereof have
been in existence, and similar unaudited information as of a date not earlier than
ninety days prior to the filing of the statement.
d. Any plans or proposals which each acquiring party may have to liquidate the
insurer, to sell its assets or merge or consolidate it with any person, or to make
any other material change in its business or corporate structure or management.
e. The number of shares of any security referred to in subsection 1 which each
acquiring party proposes to acquire, and the terms of the offer, request, invitation,
agreement, or acquisition referred to in subsection 1, and a statement as to the
method used to arrive at the fairness of the proposal.
f. The amount of each class of any security referred to in subsection 1 which is
beneficially owned or concerning which there is a right to acquire beneficial
ownership by each acquiring party.
g. A full description of any contracts, arrangements, or understandings with respect
to any security referred to in subsection 1 in which any acquiring party is involved,
including transfer of any of the securities, joint ventures, loan or option
arrangements, puts or calls, guarantees of loans, guarantees against loss or
guarantees of profits, division of losses or profits, or the giving or withholding of
proxies. The description must identify the persons who have entered into the
contracts, arrangements, or understandings.
h. A description of the purchase of any security referred to in subsection 1 during
the twelve calendar months preceding the filing of the statement, by any acquiring
party, including the dates of purchase, names of the purchasers, and
consideration paid or agreed to be paid.
i. A description of any recommendations to purchase any security referred to in
subsection 1 made during the twelve calendar months preceding the filing of the
statement, by any acquiring party, or by anyone based upon interviews or at the
suggestion of the acquiring party.

j. Copies of all tender offers for, requests or invitations for tenders of, exchange
offers for, and agreements to acquire or exchange any securities referred to in
subsection 1, and, if distributed, of additional soliciting material relating thereto.
k. The term of any agreement, contract, or understanding made with or proposed to
be made with any broker-dealer as to solicitation of securities referred to in
subsection 1 for tender, and the amount of any fees, commissions, or other
compensation to be paid to broker-dealers with regard thereto.
l. An agreement by the person required to file the statement referred to in
subsection 1 to provide the annual report, specified in subsection 12 of section
26.1-10-04, for so long as control exists.
m. An acknowledgment by the person required to file the statement referred to in
subsection 1, that the person and all subsidiaries within the person's control in
the insurance holding company system will provide information to the
commissioner upon request as necessary to evaluate enterprise risk to the
insurer.
n. Any additional information the commissioner by rule prescribes as necessary or
appropriate for the protection of policyholders of the insurer or in the public
interest.
If the person required to file the statement referred to in subsection 1 is a
partnership, limited partnership, syndicate, or other group, the commissioner may
require that the information called for by subdivisions a through n must be given with
respect to each partner of the partnership or limited partnership, each member of the
syndicate or group, and each person who controls the partner or member. If any
partner, member, or person is a corporation or the person required to file the statement
referred to in subsection 1 is a corporation, the commissioner may require that the
information called for by subdivisions a through n must be given with respect to the
corporation, each officer and director of the corporation, and each person who is
directly or indirectly the beneficial owner of more than ten percent of the outstanding
voting securities of the corporation.
If any material change occurs in the facts set forth in the statement filed with the
commissioner and sent to the insurer pursuant to this section, an amendment setting
forth the change, together with copies of all documents and other material relevant to
the change, must be filed with the commissioner and sent to the insurer within two
business days after the person learns of the change.
3. If any offer, request, invitation, agreement, or acquisition referred to in subsection 1 is
proposed to be made by means of a registration statement under the Securities Act of
1933 or in circumstances requiring the disclosure of similar information under the
Securities Exchange Act of 1934, or under a state law requiring similar registration or
disclosure, the person required to file the statement referred to in subsection 1 may
utilize those documents in furnishing the information called for by that statement.
4. a. The commissioner shall approve any merger or other acquisition of control
referred to in subsection 1 unless, after a public hearing, the commissioner finds
that:
(1) After the change of control, the domestic insurer referred to in subsection 1
would not be able to satisfy the requirements for the issuance of a certificate
of authority to write the lines of insurance for which it is presently licensed.
(2) The effect of the merger or other acquisition of control would be substantially
to lessen competition in insurance in this state or tend to create a monopoly.
In applying the competitive standard in this subdivision:
(a) The information requirements of subdivision a of subsection 3 of
section 26.1-10-03.1 and the standards of subdivision b of
subsection 4 of section 26.1-10-03.1;
(b) The merger or other acquisition may not be disapproved if the
commissioner finds that any of the situations meeting the criteria
provided by subdivision c of subsection 4 of section 26.1-10-03.1
exist; and

(c) The commissioner may condition the approval of the merger or other
acquisition on the removal of the basis of disapproval within a
specified period of time.
(3) The financial condition of any acquiring party might jeopardize the financial
stability of the insurer or prejudice the interest of its policyholders.
(4) The plans or proposals which the acquiring party has to liquidate the insurer,
sell its assets or consolidate or merge it with any person, or to make any
other material change in its business or corporate structure or management,
are unfair and unreasonable to policyholders of the insurer and not in the
public interest.
(5) The competence, experience, and integrity of those persons who would
control the operation of the insurer are such that it would not be in the
interest of policyholders of the insurer and of the public to permit the merger
or other acquisition of control.
(6) The acquisition is likely to be hazardous or prejudicial to the insurance
buying public.
b. The public hearing referred to in subdivision a must be held within thirty days
after the statement required by subsection 1 is filed and at least twenty days'
notice must be given by the commissioner to the person filing the statement. Not
less than seven days' notice of the hearing must be given by the person filing the
statement to the insurer and to other persons designated by the commissioner.
The commissioner shall make a determination within the sixty-day period
preceding the effective date of the proposed transaction. At the hearing, the
person filing the statement, the insurer, any person to whom notice of hearing
was sent, and any other person whose interests may be affected have the right to
present evidence, examine and cross-examine witnesses, and offer oral and
written arguments and in connection therewith are entitled to conduct discovery
proceedings in the same manner allowed in district court of this state. All
discovery proceedings must be concluded not later than three days prior to the
hearing.
c. If the proposed acquisition of control will require the approval of more than one
commissioner, the public hearing referred to in subdivision b may be held on a
consolidated basis upon request of the person filing the statement referred to in
subsection 1. Within five days of making the request for a public hearing, the
person shall file the statement referred to in subsection 1 with the national
association of insurance commissioners. A commissioner may opt out of a
consolidated hearing and shall provide notice to the applicant of the opt out within
ten days of the receipt of the statement referred to in subsection 1. A hearing
conducted on a consolidated basis is public and must be held within the United
States before the commissioners of the states in which the insurers are
domiciled. The commissioners shall hear and receive evidence. A commissioner
may attend the hearing in person or by telecommunication.
d. In connection with a change of control of a domestic insurer, any determination by
the commissioner that the person acquiring control of the insurer must be
required to maintain or restore the capital of the insurer to the level required by
the laws and rules of this state must be made not later than sixty days after the
date of notification of the change in control submitted pursuant to subdivision a of
subsection 1.
e. The commissioner may retain at the acquiring person's expense any attorneys,
actuaries, accountants, and other experts not otherwise a part of the
commissioner's staff as may be reasonably necessary to assist the commissioner
in reviewing the proposed acquisition of control.
5. This section does not apply to:
a. Any transaction which is subject to the provisions of chapter 26.1-07, dealing with
the merger or consolidation of two or more insurers.

b. Any offer, request, invitation, agreement, or acquisition which the commissioner
by order exempts as not having been made or entered for the purpose and not
having the effect of changing or influencing the control of a domestic insurer or as
otherwise not comprehended within the purposes of this section.
6. The following is a violation of this section:
a. The failure to file any statement, amendment, or other material required to be
filed pursuant to subsection 1 or 2.
b. The effectuation or any attempt to effectuate an acquisition of control of,
divestiture of, or merger with, a domestic insurer without the approval of the
commissioner.
7. The courts of this state have jurisdiction over every person not resident, domiciled, or
authorized to do business in this state who files a statement with the commissioner
under this section, and over all actions involving the person arising out of violations of
this section, and each person is deemed to have performed acts equivalent to and
constituting appointment of the commissioner as the person's attorney upon whom
may be served all lawful process in any action, suit, or proceeding arising out of
violations of this section. Copies of all lawful process must be served on the
commissioner and transmitted by registered mail by the commissioner to the person at
the person's last-known address.
### § 26.1-10-03.1. Acquisitions involving insurers not otherwise covered.

1. For the purpose of this section:
a. "Acquisition" means any agreement, arrangement, or activity the consummation
of which results in a person acquiring directly or indirectly the control of another
person, and includes the acquisition of voting securities, the acquisition of assets,
bulk reinsurance, and mergers.
b. An "involved insurer" includes an insurer which either acquires or is acquired, is
affiliated with an acquirer or acquired, or is the result of a merger.
2. a. Except as exempted in subdivision b, this section applies to any acquisition in
which there is a change in control of an insurer authorized to do business in this
state.
b. This section does not apply to:
(1) A purchase of securities solely for investment purposes so long as the
securities are not used by voting or otherwise to cause or attempt to cause
the substantial lessening of competition in any insurance market in this
state. If a purchase of securities results in a presumption of control under
subsection 2 of section 26.1-10-01, it is not solely for investment purposes
unless the commissioner of the insurer's state of domicile accepts a
disclaimer of control or affirmatively finds that control does not exist and the
disclaimer action or affirmative finding is communicated by the domiciliary
commissioner to the commissioner of this state.
(2) The acquisition of a person by another person when both persons are
neither directly nor through affiliates primarily engaged in the business of
insurance, if preacquisition notification is filed with the commissioner in
accordance with subdivision a of subsection 3 thirty days prior to the
proposed effective date of the acquisition. However, the preacquisition
notification is not required for exclusion from this section if the acquisition
would otherwise be excluded from this section by any other paragraph of
this subdivision.
(3) The acquisition of already affiliated persons.
(4) An acquisition if, as an immediate result of the acquisition:
(a) In no market would the combined market share of the involved
insurers exceed five percent of the total market;
(b) There would be no increase in any market share; or
(c) In no market would the combined market share of the involved
insurers exceed twelve percent of the total market, and in no market

would the market share increase by more than two percent of the total
market.
For the purpose of this paragraph, a "market" means direct written
insurance premium in this state for a line of business as contained in the
annual statement required to be filed by insurers licensed to do business in
this state.
(5) An acquisition for which a preacquisition notification would be required
pursuant to this section due solely to the resulting effect on the ocean
marine insurance line of business.
(6) An acquisition of an insurer whose domiciliary commissioner affirmatively
finds that the insurer is in failing condition, there is a lack of feasible
alternative to improving the insurer's condition, the public benefits of
improving the insurer's condition through the acquisition exceed the public
benefits that would arise from not lessening competition, and the findings
are communicated by the domiciliary commissioner to the commissioner of
this state.
3. An acquisition covered by subsection 2 may be subject to an order pursuant to
subsection 5 unless the acquiring person files a preacquisition notification and the
waiting period has expired. The acquired person may file a preacquisition notification.
The commissioner shall give confidential treatment to information submitted under this
subsection in the same manner as provided in section 26.1-10-07.
a. The preacquisition notification must be in the form and contain the information
prescribed by the national association of insurance commissioners relating to
those markets which, under paragraph 4 of subdivision b of subsection 2, cause
the acquisition not to be exempted from the provisions of this section. The
commissioner may require additional material and information as the
commissioner deems necessary to determine whether the proposed acquisition, if
consummated, would violate the competitive standard of subsection 4. The
required information may include an opinion of an economist as to the
competitive impact of the acquisition in this state accompanied by a summary of
the education and experience of such person indicating that person's ability to
render an informed opinion.
b. The waiting period required begins on the date of receipt of the commissioner of
a preacquisition notification and ends on the earlier of the thirtieth day after the
date of its receipt, or termination of the waiting period by the commissioner. Prior
to the end of the waiting period, the commissioner on a one-time basis may
require the submission of additional needed information relevant to the proposed
acquisition, in the event the waiting period ends on the earlier of the thirtieth day
after receipt of the additional information by the commissioner or termination of
the waiting period by the commissioner.
4. a. The commissioner may enter an order under subdivision a of subsection 5 with
respect to an acquisition if there is substantial evidence that the effect of the
acquisition may be substantially to lessen competition in any line of insurance in
this state or tend to create a monopoly therein or if the insurer fails to file
adequate information in compliance with subsection 3.
b. In determining whether a proposed acquisition would violate the competitive
standard of subdivision a, the commissioner shall consider the following:
(1) Any acquisition covered under subsection 2 involving two or more insurers
competing in the same market is prima facie evidence of violation of the
competitive standards:
(a) If the market is highly concentrated and the involved insurers possess
the following shares of the market:
Insurer A Insurer B
4% 4% or more
10% 2% or more
15% 1% or more

(b) Or, if the market is not highly concentrated and the involved insurers
possess the following shares of the market:
Insurer A Insurer B
5% 5% or more
10% 4% or more
15% 3% or more
19% 1% or more
A highly concentrated market is one in which the share of the four
largest insurers is seventy-five percent or more of the market.
Percentages not shown in the tables are interpolated proportionately
to the percentages that are shown. If more than two insurers are
involved, exceeding the total of the two columns in the table is prima
facie evidence of violation of the competitive standard in subdivision a.
For the purpose of this paragraph, the insurer with the largest share of
the market must be deemed to be insurer A.
(2) There is a significant trend toward increased concentration when the
aggregate market share of any grouping of the largest insurers in the
market, from the two largest to the eight largest, has increased by seven
percent or more of the market over a period of time extending from any base
year five to ten years prior to the acquisition up to the time of the acquisition.
Any acquisition or merger covered under subsection 2 involving two or more
insurers competing in the same market is prima facie evidence of violation
of the competitive standard in subdivision a if:
(a) There is a significant trend toward increased concentration in the
market;
(b) One of the insurers involved is one of the insurance companies in a
grouping of large insurers showing the requisite increase in the market
share; and
(c) Another involved insurer's market is two percent or more.
(3) For the purposes of this subdivision:
(a) The term "insurer" includes any company or group of companies
under common management, ownership, or control.
(b) The term "market" means the relevant product and geographical
markets. In determining the relevant product and geographical
markets, the commissioner shall give due consideration to, among
other things, the definitions or guidelines, if any, promulgated by the
national association of insurance commissioners and to information, if
any, submitted by parties to the acquisition. In the absence of
sufficient information to the contrary, the relevant product market is
assumed to be the direct written insurance premium for a line of
business, such line being that used in the annual statement required
to be filed by insurers doing business in this state, and the relevant
geographical market is assumed to be this state.
(c) The burden of showing prima facie evidence of violation of the
competitive standard rests upon the commissioner.
(4) Even though an acquisition is not prima facie violative of the competitive
standard under paragraphs 1 and 2, the commissioner may establish the
requisite anticompetitive effect based upon other substantial evidence. Even
though an acquisition is prima facie violative of the competitive standard
under paragraphs 1 and 2, a party may establish the absence of the
requisite anticompetitive effect based upon other substantial evidence.
Relevant factors in making a determination under this paragraph include the
following: market shares, volatility of ranking of market leaders, number of
competitors, concentration, trend of concentration in the industry, and ease
of entry into and exit from the market.
c. An order may not be entered under subdivision a of subsection 5 if:

(1) The acquisition will yield substantial economies of scale or economies in
resource utilization that cannot be feasibly achieved in any other way, and
the public benefits which would arise from such economies exceed the
public benefits which would arise from not lessening competition; or
(2) The acquisition will substantially increase the availability of insurance, and
the public benefits of such increase exceed the public benefits which would
arise from not lessening competition.
5. a. If an acquisition violates the standards of this section, the commissioner may
enter an order:
(1) Requiring an involved insurer to cease and desist from doing business in
this state with respect to the line or lines of insurance involved in the
violation; or
(2) Denying the application of an acquired or acquiring insurer for a license to
do business in this state.
b. The order may not be entered unless:
(1) There is a hearing;
(2) Notice of the hearing is issued prior to the end of the waiting period and not
less than fifteen days prior to the hearing; and
(3) The hearing is concluded and the order is issued no later than sixty days
after the date of the filing of the preacquisition notification with the
commissioner. Every order must be accompanied by a written decision of
the commissioner setting forth findings of fact and conclusions of law.
c. An order pursuant to this subsection does not apply if the acquisition is not
consummated.
d. Any person who violates a cease and desist order of the commissioner under this
subsection and while the order is in effect, after notice and hearing and upon
order of the commissioner, may be subject at the discretion of the commissioner
to any one or both of the following:
(1) A monetary penalty of not more than ten thousand dollars for every day of
violation.
(2) Suspension or revocation of the person's license.
e. Any insurer or other person who fails to make any filing required by this section
and who also fails to demonstrate a good-faith effort to comply with any such
filing requirement is subject to a fine of not more than fifty thousand dollars.
f. Subsections 2 and 3 of section 26.1-10-10 and section 26.1-10-12 do not apply to
acquisitions covered under subsection 2.
### § 26.1-10-04. Registration of insurers.

1. Every insurer that is authorized to do business in this state and which is a member of
an insurance holding company system shall register with the commissioner, except a
foreign insurer subject to registration requirements and standards adopted by statute
or rule in the jurisdiction of its domicile which are substantially similar to those
contained in this section and section 26.1-10-05. Any insurer subject to registration
under this section shall register within fifteen days after it becomes subject to
registration, and annually thereafter by March first of each year for the previous
calendar year unless the commissioner for good cause shown extends the time for
registration, and then within the extended time. The commissioner may require any
insurer authorized to do business in the state which is a member of an insurance
holding company system not subject to registration under this section to furnish a copy
of the registration statement, the summary specified in subsection 10 of section
26.1-10-04, or other information filed by the insurer with the insurance regulatory
authority of the domiciliary jurisdiction.
2. Every insurer subject to registration shall file a registration statement with the
commissioner on a form approved by the commissioner, which must contain current
information about:

a. The capital structure, general financial condition, ownership, and management of
the insurer and any person in control of the insurer.
b. The identity and relationship of every member of the insurance holding company
system.
c. The following agreements in force and transactions currently outstanding or
which have occurred during the last calendar year between the insurer and its
affiliates:
(1) Loans, other investments, or purchases, sales, or exchanges of securities of
the affiliates by the insurer or of the insurer by its affiliates.
(2) Purchases, sales, or exchange of assets.
(3) Transactions not in the ordinary course of business.
(4) Guarantees or undertakings for the benefit of an affiliate which result in an
actual contingent exposure of the insurer's assets to liability, other than
insurance contracts entered into in the ordinary course of the insurer's
business.
(5) All management agreements, service contracts, and all cost-sharing
arrangements.
(6) Reinsurance agreements.
(7) Dividends and other distributions to shareholders.
(8) Consolidated tax allocation agreements.
d. Any pledge of the insurer's stock, including stock of any subsidiary or controlling
affiliate, for a loan made to any member of the insurance holding company
system.
e. If requested by the commissioner, the insurer shall include financial statements of
or within an insurance holding company system, including all affiliates. A financial
statement may include an annual audited financial statement filed with the United
States securities and exchange commission pursuant to the federal Securities Act
of 1933, as amended, [15 U.S.C. 77a et seq.] or the federal Securities Exchange
Act of 1934, as amended, [15 U.S.C. 78a et seq.] or the financial statement
pursuant to this subdivision may satisfy the request by providing the
commissioner with the most recently filed parent corporation financial statements
that have been filed with the United Sates securities and exchange commission.
f. Other matters concerning transactions between registered insurers and any
affiliates as may be included from time to time in any registration forms adopted
or approved by the commissioner.
g. Statements that the insurer's board of directors is responsible for and supervises,
relating to corporate governance and internal controls that the insurer's officers or
senior management have approved, implemented, and continue to maintain and
monitor.
h. Any other information required by the commissioner by rule.
3. No information need be disclosed on the registration statement filed pursuant to
subsection 2 if the information is not material for the purposes of this section. Unless
the commissioner by rule or order provides otherwise, sales, purchases, exchanges,
loans or extensions of credit, or investments, or guarantees involving one-half of one
percent or less of an insurer's admitted assets as of December thirty-first next
preceding are not material for purposes of this section. The definition of materiality
provided in this subsection does not apply for purposes of the group capital calculation
or the liquidity stress test framework.
4. In addition to the annual filing requirement under subsection 1, each registered insurer
shall keep current the information required to be disclosed in its registration statement
by reporting all material changes or additions on amendment forms approved by the
commissioner within fifteen days after the end of the month in which it learns of each
change or addition; provided, however, that subject to subsections 7, 8, and 9 of
section 26.1-10-05, each registered insurer shall report all dividends and other
distributions to shareholders within five business days following the declaration and no
less than ten business days prior to payment thereof.

5. The commissioner shall terminate the registration of any insurer that demonstrates it
no longer is a member of an insurance holding company system.
6. The commissioner may require or allow two or more affiliated insurers subject to
registration to file a consolidated registration statement.
7. The commissioner may allow an insurer which is authorized to do business in this
state and which is part of an insurance holding company system to register on behalf
of any affiliated insurer which is required to register under subsection 1 to file all
information and material required to be filed under this section.
8. This section does not apply to any insurer, information, or transaction if and to the
extent excepted by the commissioner by rule or order.
9. Any person may file with the commissioner a disclaimer of affiliation with any
authorized insurer or a disclaimer may be filed by the insurer or any member of an
insurance holding company system. The disclaimer must fully disclose all material
relationships and bases for affiliation between the person and the insurer as well as
the basis for disclaiming the affiliation. A disclaimer of affiliation is deemed to have
been granted unless the commissioner, within thirty days following receipt of a
complete disclaimer, notifies the filing party the disclaimer is disallowed. In the event of
disallowance, the disclaiming party may request an administrative hearing, which must
be granted. The disclaiming party is relieved of its duty to register under this section if
approval of the disclaimer has been granted by the commissioner or if the disclaimer is
deemed to have been approved.
10. All registration statements must contain a summary outlining all items in the current
registration statement representing changes from the prior registration statement.
11. Any person within an insurance holding company system subject to registration must
provide complete and accurate information to an insurer, when the information is
reasonably necessary to enable the insurer to comply with the provisions of this
chapter.
12. The ultimate controlling person of every insurer subject to registration shall file an
annual enterprise risk report. To the best of the ultimate controlling person's knowledge
and belief, the report must identify the material risks within the insurance holding
company system which could pose enterprise risk to the insurer. The report must be
filed with the lead state commissioner of the insurance holding company system as
determined by the procedures within the financial analysis handbook adopted by the
national association of insurance commissioners.
13. Except as provided in subsection 14, the ultimate controlling person of each insurer
subject to registration shall concurrently file with the registration an annual group
capital calculation as directed by the lead state commissioner. The report must be
completed in accordance with the national association of insurance commissioners
group capital calculation instructions, which may permit the lead state commissioner to
allow a controlling person that is not the ultimate controlling person to file the group
capital calculation. The report must be filed with the lead state commissioner of the
insurance holding company system as determined by the commissioner in accordance
with the financial analysis handbook procedures adopted by the national association of
insurance commissioners.
14. An insurance holding company system is exempt from filing the group capital
calculation if the insurance holding company system meets any of the criteria
described below.
a. An insurance holding company system that has only one insurer within its holding
company structure, only writes business, is only licensed in its domestic state,
and assumes no business from any other insurer.
b. If a system is required to perform a group capital calculation specified by the
United States federal reserve board, the lead state commissioner shall request
the calculation from the federal reserve board under the terms of information
sharing agreements in effect. If the federal reserve board cannot share the
calculation with the lead state commissioner, the insurance holding company
system is not exempt from the group capital calculation filing.

c. An insurance holding company system that has a non-United States groupwide
supervisor located within a reciprocal jurisdiction as set forth in subsection 7 of
section 26.1-31.2-01 which recognizes the United States state regulatory
approach to group supervision and group capital.
d. An insurance holding company system that:
(1) Provides information to the lead state that meets the requirements for
accreditation under the national association of insurance commissioners
financial standards and accreditation program, either directly or indirectly
through the groupwide supervisor, who has determined the information is
satisfactory to allow the lead state to comply with the national association of
insurance commissioners group supervision approach, as detailed in the
national association of insurance commissioners financial analysis
handbook; and
(2) Has a non-United States groupwide supervisor that is not in a reciprocal
jurisdiction which recognizes and accepts, as specified by the commissioner
by rule, the group capital calculation as the worldwide group capital
assessment for United States insurance groups that operate in that
jurisdiction.
e. Notwithstanding subdivisions c and d, a lead state commissioner shall require the
group capital calculation for United States operations of any non-United States
based insurance holding company system where, after any necessary
consultation with other supervisors or officials, it is deemed appropriate by the
lead state commissioner for prudential oversight and solvency monitoring
purposes or for ensuring the competitiveness of the insurance marketplace.
f. Notwithstanding subdivisions a through d, the lead state commissioner may
exempt the ultimate controlling person from filing the annual group capital
calculation or accept a limited group capital filing or report in accordance with
criteria as specified by the commissioner by rule.
g. If the lead state commissioner determines an insurance holding company system
no longer meets one or more of the requirements for an exemption from filing the
group capital calculation under this section, the insurance holding company
system shall file the group capital calculation at the next annual filing date, unless
an extension is provided by the lead state commissioner based on reasonable
grounds shown.
15. The ultimate controlling person of every insurer subject to registration and scoped into
the national association of insurance commissioners liquidity stress test framework
shall file the results of a specific year's liquidity stress test. The results must be filed
with the lead state insurance commissioner of the insurance holding company system
as determined by the financial analysis handbook procedures adopted by the national
association of insurance commissioners.
a. The national association of insurance commissioners liquidity stress test
framework includes scope criteria applicable to a specific data year. The scope
criteria are reviewed at least annually by the financial stability task force or its
successor. A change to the national association of insurance commissioners
liquidity stress test framework or to the data year for which the scope criteria are
to be measured is effective on January first of the year following the calendar
year when the change is adopted. An insurer that meets at least one threshold of
the scope criteria is considered scoped into the national association of insurance
commissioners liquidity stress test framework for the specified data year unless
the lead state insurance commissioner, in consultation with the national
association of insurance commissioners financial stability task force or its
successor, determines the insurer should not be scoped into the framework for
that data year. An insurer that does not trigger at least one threshold of the scope
criteria is considered scoped out of the liquidity stress test framework for the
specified data year, unless the lead state insurance commissioner, in consultation
with the national association of insurance commissioners financial stability task

force or its successor, determines the insurer should be scoped into the
framework for that data year.
b. To avoid having insurers scoped in and out of the national association of
insurance commissioners liquidity stress test framework on a frequent basis, the
lead state insurance commissioner, in consultation with the financial stability task
force or its successor, shall assess this concern as part of the determination for
an insurer.
c. The performance of, and filing of the results from, a specific year's liquidity stress
test must comply with the national association of insurance commissioners
liquidity stress test framework's instructions and reporting templates for that year
and any lead state insurance commissioner determinations, in consultation with
the financial stability task force or its successor, provided within the framework.
16. The failure to file a registration statement or any summary of the registration statement
or enterprise risk filing required by this section within the time specified for the filing is
a violation of this section.
### § 26.1-10-05. Standards and management of an insurer with an insurance holding

company system.
1. Transactions within an insurance holding company system to which an insurer subject
to registration is a party are subject to the following standards:
a. The terms must be fair and reasonable.
b. Agreements for cost-sharing services and management must include provisions
as required by rules adopted by the commissioner.
c. The books, accounts, and records of each party must clearly and accurately
disclose the precise nature and details of the transactions, including that
accounting information that is necessary to support the reasonableness of the
charges or fees to the respective parties.
d. The insurer's surplus as regards to policyholders following any dividends or
distributions to shareholder affiliates must be reasonable in relation to the
insurer's outstanding liabilities and adequate to its financial needs.
e. Charges or fees for services performed must be reasonable.
f. Expenses incurred and payment received must be allocated to the insurer in
conformity with statutory accounting practices consistently applied.
g. If an insurer subject to this chapter is deemed by the commissioner to be in a
hazardous financial condition as defined by North Dakota Administrative Code
chapter 45-03-13 or a condition that would be grounds for supervision,
conservation, or a delinquency proceeding, the commissioner may require the
insurer to secure and maintain a deposit, held by the commissioner, or a bond, as
determined by the insurer at the insurer's discretion, for the protection of the
insurer for the duration of the contracts or agreements, or the existence of the
condition for which the commissioner is required to secure and maintain the
deposit or the bond. In determining whether a deposit or a bond is required, the
commissioner must consider whether concerns exist with respect to the affiliated
person's ability to fulfill the contracts or agreements if the insurer were to be put
into liquidation. Once the insurer is deemed to be in a hazardous financial
condition or a condition that would be grounds for supervision, conservation or a
delinquency proceeding, and a deposit or bond is necessary, the commissioner
may determine the amount of the deposit or bond, not to exceed the value of the
contracts or agreements in any one year, and whether such deposit or bond
should be required for a single contract, multiple contracts, or a contract only with
specific persons.
h. All records and data of the insurer held by an affiliate are and remain the property
of the insurer, are subject to the control of the insurer, are identifiable, and are
segregated or readily capable of segregation, at no additional cost to the insurer,
from all other persons' records and data. This includes all records and data that
are otherwise the property of the insurer, in whatever form maintained, including

claims and claim files, policyholder lists, application files, litigation files, premium
records, rate books, underwriting manuals, personnel records, financial records,
or similar records within the possession, custody or control of the affiliate. At the
request of the insurer, the affiliate shall permit the receiver to obtain a complete
set of all records of any type that pertain to the insurer's business, obtain access
to the operating systems on which the data is maintained, obtain the software that
runs those systems either through assumption of licensing agreements or
otherwise, and restrict the use of the data by the affiliate if it is not operating the
insurer's business. The affiliate shall provide a waiver of any landlord lien or other
encumbrance to give the insurer access to all records and data in the event of the
affiliate's default under a lease or other agreement.
i. Premiums or other funds belonging to the insurer which are collected by or held
by an affiliate are the exclusive property of the insurer and are subject to the
control of the insurer. Any right of offset in the event an insurer is placed into
receivership shall be subject to chapter 26.1-06.1.
2. The following transactions involving a domestic insurer and any person in its insurance
holding company system, including an amendment or modification of an affiliate
agreement previously filed pursuant to this section, which is subject to any materiality
standards contained in subdivisions a through g, may not be entered unless the
insurer has notified the commissioner in writing of its intention to enter into the
transaction at least thirty days prior thereto, or a shorter period as the commissioner
may permit, and the commissioner has not disapproved it within that period. The notice
for an amendment or modification must include the reason for the change and the
financial impact on the domestic insurer. Within thirty days after a termination of a
previously filed agreement, informal notice must be reported to the commissioner for
determination of the type of filing required, if any.
a. Sales, purchases, exchanges, loans, or extensions of credit, or investments
provided the transactions are equal to or exceed:
(1) With respect to nonlife insurers, the lesser of three percent of the insurer's
admitted assets or twenty-five percent of surplus as regards policyholders
as of December thirty-first next preceding.
(2) With respect to life insurers, three percent of the insurer's admitted assets
as of December thirty-first next preceding.
b. Loans or extensions of credit to any person that is not an affiliate, if the insurer
makes loans or extensions of credit with the agreement or understanding that the
proceeds of the transactions, in whole or in substantial part, are to be used to
make loans or extensions of credit to, to purchase assets of, or to make
investments in any affiliate of the insurer making the loans or extensions of credit
provided the transactions are equal to or exceed:
(1) With respect to nonlife insurers, the lesser of three percent of the insurer's
admitted assets or twenty-five percent of surplus as regards policyholders
as of December thirty-first next preceding.
(2) With respect to life insurers, three percent of the insurer's admitted assets
as of December thirty-first next preceding.
c. Reinsurance agreements or modifications thereto, including:
(1) All reinsurance pooling agreements.
(2) Agreements in which the reinsurance premium or a change in the insurer's
liabilities, or the projected reinsurance premium or a change in the insurer's
liabilities in any of the next three years, equals or exceeds five percent of
the insurer's surplus as regards policyholders, as of December thirty-first
next preceding, including those agreements which may require as
consideration the transfer of assets from an insurer to a nonaffiliate, if an
agreement or understanding exists between the insurer and nonaffiliate that
any portion of such assets will be transferred to one or more affiliates of the
insurer.

d. All management agreements, service contracts, tax allocation agreements,
guarantees, and cost-sharing arrangements.
e. Any guarantee made by a domestic insurer; however, a guarantee that is
quantifiable as to amount is not subject to the notice requirements of this
subsection unless the guarantee exceeds the lesser of one-half of one percent of
the insurer's admitted assets or ten percent of surplus as regards policyholders
as of December thirty-first next preceding. Additionally, all guarantees that are not
quantifiable as to amount are subject to the notice requirements of this
subsection.
f. Any direct or indirect acquisition or investment in a person that controls the
insurer or in an affiliate of the insurer in an amount that, together with its present
holdings in such investments, exceeds two and one-half percent of the insurer's
surplus to policyholders. A direct or indirect acquisition or investment in a
subsidiary acquired pursuant to section 26.1-10-02, or authorized under any other
section of this chapter, or in a nonsubsidiary insurance affiliate that is subject to
this chapter, is exempt from this requirement.
g. Any material transactions, specified by rule, which the commissioner determines
may adversely affect the interests of the insurer's policyholders.
Nothing in this subsection may be deemed to authorize or permit any transactions
which, in the case of an insurer which is not a member of the same insurance holding
company system, would be otherwise contrary to law.
3. A domestic insurer may not enter transactions that are part of a plan or series of like
transactions with persons within the insurance holding company system if the purpose
of those separate transactions is to avoid the statutory threshold amount and thus
avoid the review that would occur otherwise. If the commissioner determines that the
separate transactions were entered over any twelve-month period for that purpose, the
commissioner may exercise the commissioner's authority under the penalty sections of
this chapter.
4. The commissioner, in reviewing transactions pursuant to subsection 2, shall consider
whether the transactions comply with the standards set forth in subsection 1 and
whether they may adversely affect the interests of the policyholders.
5. The commissioner must be notified within thirty days of any investment of the domestic
insurer in any one corporation if the total investment in that corporation by the
insurance holding company system exceeds ten percent of the corporation's voting
securities.
6. For purposes of this chapter, in determining whether an insurer's surplus as regards
policyholders is reasonable in relation to the insurer's outstanding liabilities and
adequate to meet its financial needs, the following factors, among others, must be
considered:
a. The size of the insurer as measured by its assets, capital and surplus, reserves,
premium writings, insurance in force, and other appropriate criteria.
b. The extent to which the insurer's business is diversified among the several lines
of insurance.
c. The number and size of risks insured in each line of business.
d. The extent of the geographical dispersion of the insurer's insured risks.
e. The nature and extent of the insurer's reinsurance program.
f. The quality, diversification, and liquidity of the insurer's investment portfolio.
g. The recent past and projected future trend in the size of the insurer's investment
portfolio.
h. The surplus as regards policyholders maintained by other comparable insurers.
i. The adequacy of the insurer's reserves.
j. The quality and liquidity of investments in affiliates. The commissioner may treat
the investment as a disallowed asset for purposes of determining the adequacy of
surplus as regards policyholders whenever in the commissioner's judgment the
investment so warrants.

7. A domestic insurer may not pay any extraordinary dividend or make any other
extraordinary distribution to its shareholders until thirty days after the commissioner
has received notice of the declaration thereof and has not within that period
disapproved the payment, or until the commissioner has approved the payment within
the thirty-day period.
8. For purposes of this section, an extraordinary dividend or distribution includes any
dividend or distribution of cash or other property, when the fair market value together
with that of other dividends or distributions made within the preceding twelve months
exceeds the lesser of:
a. Ten percent of the insurer's surplus as regards policyholders as of December
thirty-first next preceding; or
b. The net gain from operations of the insurer, if the insurer is a life insurer, or the
net income, if the company is not a life insurer, not including realized capital
gains, for the twelve-month period ending December thirty-first next preceding,
but shall not include pro rata distributions of any class of the insurer's own
securities.
9. In determining whether a dividend or distribution is extraordinary under subsection 8,
an insurer other than a life insurer may carry forward net income from the previous two
calendar years which has not already been paid out as dividends. This carry-forward
must be computed by taking the net income from the second and third preceding
calendar years, not including realized capital gains, less dividends paid in the second
and immediate preceding calendar years.
10. Notwithstanding any other provision of law, an insurer may declare an extraordinary
dividend or distribution which is conditional upon the commissioner's approval, and the
declaration confers no rights upon shareholders until:
a. The commissioner has approved the payment of the dividend or distribution; or
b. The commissioner has not disapproved the payment within the thirty-day period
referred to in subsection 7.
11. An affiliate that is a party to an agreement or contract with a domestic insurer that is
subject to subdivision d of subsection 2 shall be subject to the jurisdiction of any
supervision, seizure, conservatorship, or receivership proceedings against the insurer
and to the authority of any supervisor, conservator, rehabilitator, or liquidator for the
insurer appointed under chapters 26.1-06.1 and 26.1-06.2 for the purpose of
interpreting, enforcing, and overseeing the affiliate's obligations under the agreement
or contract to perform services for the insurer that are:
a. An integral part of the insurer's operations, such as management, administrative,
accounting, data processing, marketing, underwriting, claims handling,
investment, or any other similar functions; or
b. Essential to the insurer's ability to fulfill its obligations under insurance policies.
12. The commissioner may require that an agreement or contract under subdivision d of
subsection 2 for the provision of services in subdivision a and b specify the affiliate
consents to the jurisdiction as set forth in subsection 11.
### § 26.1-10-05.1. Dividends and other distribution.

1. The board of directors of any company subject to this chapter may declare and the
company may pay dividends and other distributions on its outstanding shares and
cash, property, or its own shares and on its treasury stock in its own shares, subject to
the following provisions:
a. No dividend or other distribution may be declared or paid at any time except out
of earned, as distinguished from contributed, surplus, nor when the surplus of the
company is less than the surplus required by law for the kind or kinds of business
authorized to be transacted by the insurer, nor when the payment of a dividend or
other distribution would reduce its surplus to less than such amount.
b. Except in the case of share dividends, surplus for determining whether dividends
or other distributions may be declared may not include surplus arising from

unrealized appreciation in value, or revaluation of assets, or from unrealized
profits upon investments.
c. No dividend or other distribution may be declared or paid contrary to any
restriction contained in the articles of incorporation.
d. No dividend or other distribution may be declared or paid contrary to section
26.1-10-05.
2. No payment may be made to policyholders by way of dividends unless the insurer
possesses admitted assets in the amount of such payment in excess of its capital,
minimum required surplus, and all liabilities.
### § 26.1-10-06. Examination.

1. Subject to the limitations contained in this section and in addition to the powers which
the commissioner has relating to the examination of insurers, the commissioner may
examine any insurer registered under section 26.1-10-04 and the insurer's affiliates to
ascertain the financial condition of the insurer, including the enterprise risk to the
insurer by the ultimate controlling party, or by any entity or combination of entities
within the insurance holding company system, or by the insurance holding company
system on a consolidated basis.
2. The commissioner may order any insurer registered under section 26.1-10-04 to
produce any record, book, or other information paper in the possession of the insurer
or its affiliates necessary to determine compliance with this chapter.
3. To determine compliance with this chapter, the commissioner may order any insurer
registered under section 26.1-10-04 to produce information not in the possession of
the insurer if the insurer can obtain access to such information pursuant to a
contractual relationship, statutory obligation, or other method. If the insurer cannot
obtain the information requested by the commissioner, the insurer shall provide the
commissioner a detailed explanation of the reason the insurer cannot obtain the
information and the identity of the holder of the information. If the commissioner
determines the detailed explanation is without merit, the commissioner may require,
after notice and hearing, the insurer to pay a penalty of one thousand dollars for each
day's delay, or may suspend or revoke the insurer's license.
4. The commissioner may retain at the registered insurer's expense any attorneys,
actuaries, accountants, and other experts, not otherwise a part of the commissioner's
staff, as are reasonably necessary to assist in the conduct of the examination under
subsection 1. Any persons so retained are under the direction and control of the
commissioner and shall act in a purely advisory capacity.
5. Each registered insurer producing any record, book, or other information paper for
examination pursuant to subsection 1 is liable for and shall pay the expense of the
examination.
6. If the insurer fails to comply with an order, the commissioner may examine the affiliates
to obtain the information. The commissioner may issue a subpoena, administer oaths,
and examine under oath any person for purposes of determining compliance with this
section. Upon the failure or refusal of any person to obey a subpoena, the
commissioner may petition a court of competent jurisdiction, and upon proper showing,
the court may enter an order compelling the witness to appear and testify or produce
documentary evidence. Failure to obey the court order is punishable as contempt of
court. When subpoenaed, a person shall attend as a witness at the place specified in
the subpoena, anywhere within the state. The witness is entitled to receive the same
fees and mileage as a witness in an administrative hearing or in district court, which
fees, mileage, and actual expense, if any, necessarily incurred in securing the
attendance of witnesses, and their testimony, must be itemized and charged against,
and be paid by, the insurer being examined.
### § 26.1-10-06.1. Supervisory colleges.

1. With respect to any insurer registered under section 26.1-10-04, and in accordance
with subsection 3, the commissioner may participate in a supervisory college for any

domestic insurer that is part of an insurance holding company system with
international operations to determine compliance by the insurer with this chapter. The
powers of the commissioner with respect to a supervisory college include:
a. Initiating the establishment of a supervisory college;
b. Clarifying the membership and participation of other supervisors in the
supervisory college;
c. Clarifying the functions of the supervisory college and the role of other regulators,
including the establishment of a groupwide supervisor;
d. Coordinating the ongoing activities of the supervisory college, including planning
meetings, supervisory activities, and establishing processes for information
sharing; and
e. Establishing a crisis management plan.
2. Each registered insurer subject to this section shall pay the reasonable expenses of
the commissioner's participation in a supervisory college in accordance with
subsection 3, including reasonable travel expenses. For purposes of this section, a
supervisory college may be convened as either a temporary or permanent forum for
communication and cooperation between the regulators charged with the supervision
of the insurer or the insurer's affiliates, and the commissioner may establish a regular
assessment to the insurer for the payment of expenses.
3. To assess the business strategy, financial position, legal and regulatory position, risk
exposure, risk management, and governance processes, and as part of the
examination of an individual insurer in accordance with section 26.1-10-06, the
commissioner may participate in a supervisory college with other regulators charged
with supervision of the insurer or the insurer's affiliates, including other state, federal,
and international regulatory agencies. The commissioner may enter an agreement in
accordance with subsection 3 of section 26.1-10-07 providing the basis for cooperation
between the commissioner and the other regulatory agencies, and the activities of the
supervisory college. This section does not delegate to the supervisory college the
authority of the commissioner to regulate or supervise the insurer or the insurer's
affiliates within the commissioner's jurisdiction.
### § 26.1-10-06.2. Groupwide supervision of internationally active insurance groups.

1. a. The commissioner may act as the groupwide supervisor for any internationally
active insurance group in accordance with this section. However, the
commissioner may otherwise acknowledge another regulatory official as the
groupwide supervisor if the internationally active insurance group:
(1) Does not have substantial insurance operations in the United States;
(2) Has substantial insurance operations in the United States but not in this
state; or
(3) Has substantial insurance operations in the United States and this state, but
the commissioner has determined under the factors set forth in
subsections 2 and 6 the other regulatory official is the appropriate
groupwide supervisor.
b. An insurance holding company system that does not otherwise qualify as an
internationally active insurance group may request the commissioner make a
determination or acknowledgment as to a groupwide supervisor under this
section.
2. In cooperation with other state, federal, and international regulatory agencies, the
commissioner shall identify a single groupwide supervisor for an internationally active
insurance group and may determine the commissioner is the appropriate groupwide
supervisor for an internationally active insurance group that conducts substantial
insurance operations concentrated in this state. However, the commissioner may
acknowledge a regulatory official from another jurisdiction is the appropriate groupwide
supervisor for the internationally active insurance group. The commissioner shall
consider the following factors when making a determination or acknowledgment under
this subsection:

a. The place of domicile of the insurers within the internationally active insurance
group which hold the largest share of the group's premiums, assets, or liabilities;
b. The place of domicile of the top-tiered insurers in the insurance holding company
system of the internationally active insurance group;
c. The location of the executive offices or largest operational offices of the
internationally active insurance group;
d. Whether another regulatory official is acting or is seeking to act as the groupwide
supervisor under a regulatory system the commissioner determines to be:
(1) Substantially similar to the system of regulation provided under the laws of
this state; or
(2) Otherwise sufficient in terms of providing for groupwide supervision,
enterprise risk analysis, and cooperation with other regulatory officials; and
e. Whether another regulatory official acting or seeking to act as the groupwide
supervisor provides the commissioner with reasonably reciprocal recognition and
cooperation. However, a commissioner identified under this section as the
groupwide supervisor may determine it is appropriate to acknowledge another
supervisor to serve as the groupwide supervisor. The acknowledgment of the
groupwide supervisor must be made after the consideration of the factors listed in
subdivisions a through e, and must be made in cooperation with and subject to
the acknowledgment of other regulatory officials involved with supervision of
members of the internationally active insurance group, and in consultation with
the internationally active insurance group.
3. a. Notwithstanding any other provision of law, when another regulatory official is
acting as the groupwide supervisor of an internationally active insurance group,
the commissioner shall acknowledge that regulatory official as the groupwide
supervisor unless the commissioner determines there has been a significant
material change in the internationally active insurance group that results in:
(1) The internationally active insurance group's insurers domiciled in this state
holding the largest share of the group's premiums, assets, or liabilities; or
(2) This state being the place of domicile of the top-tiered insurers in the
insurance holding company system of the internationally active insurance
group.
b. If such a material change has occurred, the commissioner shall make a
determination or acknowledgment as to the appropriate groupwide supervisor
under subsection 2.
4. Under section 26.1-10-06, the commissioner may collect from any insurer registered
under section 26.1-10-04 all information necessary to determine whether the
commissioner may act as the groupwide supervisor of an internationally active
insurance group or if the commissioner may acknowledge another regulatory official to
act as the groupwide supervisor. Before issuing a determination that an internationally
active insurance group is subject to groupwide supervision by the commissioner, the
commissioner shall notify the insurer registered under section 26.1-10-04 and the
ultimate controlling person within the internationally active insurance group. The
internationally active insurance group must be provided not less than thirty days to
provide the commissioner with additional information pertinent to the pending
determination. The commissioner shall publish on the commissioner's internet website
the identity of internationally active insurance groups the commissioner has
determined are subject to groupwide supervision by the commissioner.
5. If the commissioner is the groupwide supervisor for an internationally active insurance
group, the commissioner may engage in any of the following groupwide supervision
activities:
a. Assess the enterprise risks within the internationally active insurance group to
ensure:
(1) The material financial condition and liquidity risks to the members of the
internationally active insurance group which are engaged in the business of
insurance are identified by management; and

(2) Reasonable and effective mitigation measures are in place.
b. Request, from any member of an internationally active insurance group subject to
the commissioner's supervision, information necessary and appropriate to assess
enterprise risk, including information about the members of the internationally
active insurance group regarding:
(1) Governance, risk assessment, and management;
(2) Capital adequacy; and
(3) Material intercompany transactions.
c. Coordinate and, through the authority of the regulatory officials of the jurisdictions
where members of the internationally active insurance group are domiciled,
compel development and implementation of reasonable measures designed to
ensure the internationally active insurance group is able to timely recognize and
mitigate enterprise risks to members of that internationally active insurance
groups which are engaged in the business of insurance.
d. Communicate with other state, federal, and international regulatory agencies for
members within the internationally active insurance group and share relevant
information subject to the confidentiality provisions of section 26.1-10-07 through
supervisory colleges as set forth in section 26.1-10-06.1 or otherwise.
e. Enter agreements with or obtain documentation from any insurer registered under
section 26.1-10-04; any member of the internationally active insurance group;
and any other state, federal, and international regulatory agency for members of
the internationally active insurance group, providing the basis for or otherwise
clarifying the commissioner's role as groupwide supervisor, including provisions
for resolving disputes with other regulatory officials. The agreement or
documentation may not serve as evidence in any proceeding any insurer or
person within an insurance holding company system not domiciled or
incorporated in this state is doing business in this state or is otherwise subject to
jurisdiction in this state.
f. Other groupwide supervision activities, consistent with the authorities and
purposes enumerated in this section, as considered necessary by the
commissioner.
6. If the commissioner acknowledges another regulatory official from a jurisdiction that is
not accredited by the national association of insurance commissioners is the
groupwide supervisor, the commissioner may cooperate reasonably, through
supervisory colleges or otherwise, with groupwide supervision undertaken by the
groupwide supervisor, provided:
a. The commissioner's cooperation is in compliance with the laws of this state; and
b. The regulatory official acknowledged as the groupwide supervisor also
recognizes and cooperates with the commissioner's activities as a groupwide
supervisor for other internationally active insurance groups as applicable. If such
recognition and cooperation is not reasonably reciprocal, the commissioner may
refuse recognition and cooperation.
7. The commissioner may enter an agreement with or obtain documentation from any
insurer registered under section 26.1-10-04; any affiliate of the insurer; and other state,
federal, and international regulatory agency for members of the internationally active
insurance group which provide the basis for or otherwise clarify a regulatory official's
role as groupwide supervisor.
8. The commissioner may adopt rules necessary for the administration of this section.
9. A registered insurer subject to this section is liable for and shall pay the reasonable
expenses of the commissioner's participation in the administration of this section,
including the engagement of an attorney, actuary, and any other professional and all
reasonable travel expenses.
### § 26.1-10-07. Confidential treatment.

1. Any document, material, or other information in the possession or control of the North
Dakota insurance department which is obtained by or disclosed to the commissioner

or any other person in the course of an examination or investigation made pursuant to
section 26.1-10-06 and all information reported pursuant to subdivisions l and m of
subsection 2 of section 26.1-10-03 and sections 26.1-10-04 and 26.1-10-05 is
confidential and privileged, not subject to section 44-04-18, not subject to subpoena,
and not subject to discovery or admissible in evidence in any private civil action.
However, the commissioner may use the document, material, or other information in
the furtherance of any regulatory or legal action brought as a part of the
commissioner's official duties. The commissioner may not otherwise make the
document, material, or other information public without the prior written consent of the
insurer to which it pertains unless the commissioner, after giving the insurer and its
affiliates that would be affected thereby, notice and opportunity to be heard,
determines that the interests of policyholders, shareholders, or the public will be
served by the publication thereof, in which event the commissioner may publish all or
any part thereof in any manner the commissioner deems appropriate.
a. For purposes of the information reported and provided under subsections 13 and
14 of section 26.1-10-04, the commissioner shall maintain the confidentiality of
the group capital calculation and group capital ratio produced within the
calculation and any group capital information received from an insurance holding
company supervised by the federal reserve board or any United States
groupwide supervisor.
b. For purposes of the information reported and provided under subsection 15 of
section 26.1-10-04, the commissioner shall maintain the confidentiality of the
liquidity stress test results and supporting disclosures and any liquidity stress test
information received from an insurance holding company supervised by the
federal reserve board and non-United States groupwide supervisors.
2. Neither the commissioner nor any person that received any document, material, or
other information while acting under the authority of the commissioner or with whom
such document, material, or other information is shared under this chapter is permitted
or required to testify in any private civil action concerning any confidential document,
material, or information subject to subsection 1.
3. To assist in the performance of the commissioner's duties:
a. If the recipient agrees in writing to maintain the confidentiality and privileged
status of the document, material, or other information, and has verified in writing
the legal authority to maintain confidentiality, the commissioner may share any
document, material, or other information, including the confidential and privileged
document, material, or information subject to subsection 1, including proprietary
and trade secret documents and materials, with any other state, federal, and
international regulatory agency, the national association of insurance
commissioners, any third-party consultant designated by the commissioner, and
any state, federal, or international law enforcement authority, including members
of any supervisory college described in section 26.1-10-06.1;
b. Notwithstanding subdivision a, the commissioner may share a confidential and
privileged document, material, or information reported under subsection 12 of
section 26.1-10-04 only with a commissioner of a state having statutes or
regulations substantially similar to subsection 1 and who has agreed in writing not
to disclose the information;
c. The commissioner may receive any document, material, or information, including
any otherwise confidential and privileged document, material, or information,
including propriety and trade secret information, from the national association of
insurance commissioners and its affiliates and subsidiaries and from any
regulatory and law enforcement official of other foreign or domestic jurisdiction,
and shall maintain as confidential or privileged any document, material, or
information received with notice or the understanding the document, material, or
information is confidential or privileged under the laws of the jurisdiction that is
the source of the document, material, or information; and

d. The commissioner shall enter a written agreement with the national association of
insurance commissioners and any third-party consultant designated by the
commissioner governing sharing and use of information provided under this
chapter consistent with this subsection and which must:
(1) Specify procedures and protocols regarding the confidentiality and security
of information shared with the national association of insurance
commissioners or any third-party consultant designated by the
commissioner under this chapter, including procedures and protocols for
sharing by the national association of insurance commissioners with any
other state, federal, or international regulator. The written agreement must
provide the recipient agrees to maintain the confidentiality and privileged
status of the documents, materials, or other information and has verified in
writing the legal authority to maintain such confidentiality;
(2) Specify ownership of information shared with the national association of
insurance commissioners or a third-party consultant under this chapter
remains with the commissioner, and the national association of insurance
commissioner's or a third-party consultant's, as designated by the
commissioner, use of the information is subject to the direction of the
commissioner;
(3) Excluding documents, materials, or information reported under
subsections 13 and 14 of section 26.1-10-04, prohibit the national
association of insurance commissioners or a third-party consultant
designated by the commissioner from storing the information shared under
this chapter in a permanent database after the underlying analysis is
complete;
(4) Require prompt notice to be given to an insurer if the insurer's confidential
information in the possession of the national association of insurance
commissioners or a third-party consultant designated by the commissioner
under this chapter is subject to a request or subpoena to the national
association of insurance commissioners or a third-party consultant
designated by the commissioner for disclosure or production;
(5) Require the national association of insurance commissioners or third-party
consultants designated by the commissioner to consent to intervention by
an insurer in any judicial or administrative action in which the national
association of insurance commissioners or a third-party consultant
designated by the commissioner may be required to disclose confidential
information about the insurer shared with the national association of
insurance commissioners or a third-party consultant designated by the
commissioner under this chapter; and
(6) Documents, materials, or information reported under subsection 13 and 14
of section 26.1-10-04, in the case of an agreement involving a third-party
consultant, provide for notification of the identity of the consultant to the
applicable insurer.
4. The sharing of information by the commissioner under this chapter does not constitute
a delegation of regulatory authority or rulemaking, and the commissioner is solely
responsible for the administration, execution, and enforcement of this chapter.
5. Waiver of any applicable privilege or claim of confidentiality in any document, material,
or information may not occur as a result of disclosure to the commissioner under this
section or as a result of sharing as authorized in subsection 3.
6. Any document, material, or other information in the possession or control of the
national association of insurance commissioners or a third-party consultant designated
by the commissioner under this chapter is confidential and privileged, not subject to
section 44-04-18, not subject to subpoena, and not subject to discovery or admissible
in evidence in any private civil action.
7. The group capital calculation and resulting group capital ratio required under
subsections 13 and 14 of section 26.1-10-04 and the liquidity stress test along with its

results and supporting disclosures required under subsection 15 of section 26.1-10-04,
are regulatory tools for assessing group risks and capital adequacy and group liquidity
risks, respectively, and are not intended as a means to rank insurers or insurance
holding company systems generally.
8. Except as otherwise required under this chapter, the making, publishing,
disseminating, circulating or placing before the public, or causing directly or indirectly
to be made, published, disseminated, circulated or placed before the public in a
newspaper, magazine or other publication, or in the form of a notice, circular,
pamphlet, letter or poster, or over any radio or television station or any electronic
means of communication available to the public, or in any other way as an
advertisement, announcement or statement containing a representation or statement
that would be misleading is prohibited when made regarding:
a. A group capital calculation;
b. A group capital ratio;
c. Liquidity stress test results;
d. Supporting disclosures for the liquidity stress test of any insurer or any insurer
group; or
e. Any component derived in the calculation by any insurer, broker, or other person
engaged in any manner in the insurance business.
9. Notwithstanding subsection 8, if any written publication contains a materially false
statement and the insurer demonstrates to the commissioner with substantial proof the
falsity or inappropriateness of the statement, the insurer may publish announcements
in a written publication, provided the sole purpose of the announcement is to rebut the
materially false statement. For this subsection to apply, the existence of any materially
false statement in a written publication must relate to at least one of the following
subject areas:
a. A group capital calculation;
b. A resulting group capital ratio;
c. An inappropriate comparison of any amount to an insurer's or insurance group's
group capital calculation or resulting group capital ratio;
d. A liquidity stress test result;
e. Supporting disclosures for the liquidity stress test; or
f. An inappropriate comparison of any amount to an insurer's or insurance group's
liquidity stress test result or supporting disclosures.
### § 26.1-10-08. Injunctions - Prohibitions against voting securities - Sequestration of

voting securities.
1. Whenever it appears to the commissioner that any insurer or any director, officer,
employee, or agent thereof has committed or is about to commit a violation of this
chapter or of any rule or order issued by the commissioner under this chapter, the
commissioner may apply to the district court for the county in which the principal office
of the insurer is located or if the insurer has no principal office in this state then to the
district court of Burleigh County for an order enjoining the insurer or the director,
officer, employee, or agent thereof from violating or continuing to violate this chapter or
any rule or order, and for any other equitable relief as the nature of the case and the
interests of the insurer's policyholders, creditors, and shareholders or the public may
require.
2. A security which is the subject of any agreement or arrangement regarding acquisition,
or which is acquired or to be acquired, in contravention of this chapter or any rule or
order issued by the commissioner hereunder may not be voted at any shareholders'
meeting or counted for quorum purposes, and any action of shareholders requiring the
affirmative vote of a percentage of shares may be taken as though the securities were
not issued and outstanding, but any action taken at the meeting is not invalidated by
the voting of those securities, unless the action would materially affect control of the
insurer or unless the courts of this state have so ordered. If an insurer or the
commissioner has reason to believe that any security of the insurer has been or is

about to be acquired in contravention of this chapter or any rule or order issued by the
commissioner hereunder, the insurer or the commissioner may apply to the district
court of Burleigh County or to the district court of the county in which the insurer has
its principal place of business to enjoin any offer, request, invitation, agreement, or
acquisition made in contravention of section 26.1-10-03 or any rule or order issued by
the commissioner thereunder to enjoin the voting of any security so acquired, to void
any vote of the security already cast at any meeting of shareholders, and for any other
equitable relief as the nature of the case and the interests of the insurer's
policyholders, creditors, and shareholders or the public may require.
3. When a person has acquired or is proposing to acquire any voting securities in
violation of this chapter or any rule or order issued by the commissioner hereunder, the
district court of Burleigh County or the district court of the county in which the insurer
has its principal place of business may, on the notice the court deems appropriate and
upon the application of the insurer or the commissioner, seize or sequester any voting
securities of the insurer owned directly or indirectly by the person and issue any orders
with respect as may be appropriate to effectuate this chapter.
4. Notwithstanding any other provision of law, for the purpose of this chapter the site of
the ownership of the securities of domestic insurers is deemed to be in this state.
### § 26.1-10-09. Revocation, suspension, and nonrenewal of license.

Whenever it appears to the commissioner that any person has committed a violation of this
chapter which makes the continued operation of an insurer contrary to the interests of
policyholders or the public, the commissioner, after giving notice and an opportunity to be heard,
may suspend, revoke, or refuse to renew the insurer's license or authority to do business in this
state for any period the commissioner finds is required for the protection of policyholders or the
public. Any determination must be accompanied by specific findings of fact and conclusions of
law.
### § 26.1-10-10. Receivership.

Whenever it appears to the commissioner that any person has committed a violation of this
chapter which so impairs the financial condition of a domestic insurer as to threaten insolvency
or make the further transaction of business by it hazardous to its policyholders, creditors,
shareholders, or the public, then the commissioner may proceed as provided in chapter
26.1-06.1 to take possession of the property of the insurer and to carry on its business.
### § 26.1-10-10.1. Recovery.

1. If an order for liquidation or rehabilitation of a domestic insurer has been entered, the
receiver appointed under the order may recover on behalf of the insurer:
a. From any parent corporation or holding company or person or affiliate that
otherwise controlled the insurer, the amount of distributions other than
distributions of shares of the same class of stock, paid by the insurer on its capital
stock; or
b. Any payment in the form of a bonus, termination settlement, or extraordinary
lump sum salary adjustment made by the insurer or its subsidiaries to a director,
officer, or employee, if the distribution or payment under this subsection is made
at any time during the one year preceding the petition for liquidation,
conservation, or rehabilitation subject to the limitations of subsections 2, 3, and 4.
2. A distribution may not be recovered if the parent or affiliate shows that, when paid, the
distribution was lawful and reasonable, and that the insurer did not know and could not
reasonably have known that the distribution might adversely affect the ability of the
insurer to fulfill its contractual obligations.
3. Any person that was a parent corporation or holding company or a person that
otherwise controlled the insurer or affiliate at the time the distributions were paid is
liable up to the amount of distributions or payments under subsection 1 the person
received. Any person that otherwise controlled the insurer at the time the distributions

were declared is liable up to the amount of distributions the person would have
received if the person had been paid immediately. If two or more persons are liable
with respect to the same distributions, they are jointly and severally liable.
4. The maximum amount recoverable under this section is the amount needed in excess
of all other available assets of the impaired or insolvent insurer to pay the contractual
obligations of the impaired or insolvent insurer and to reimburse any guaranty funds.
5. To the extent that any person liable under subsection 3 is insolvent or otherwise fails to
pay claims due from it, its parent corporation or holding company or person that
otherwise controlled it at the time the distribution was paid must be jointly and
severally liable for any resulting deficiency in the amount recovered from the parent
corporation or holding company or person that otherwise controlled it.
### § 26.1-10-11. Penalty.

1. Any insurer failing, without just cause, to file any registration statement as required in
this chapter must be required, after notice and hearing, to pay a penalty of one
hundred dollars for each day's delay. The commissioner may reduce the penalty if the
insurer demonstrates to the commissioner that the imposition of the penalty would
constitute a financial hardship to the insurer.
2. Every director or officer of an insurance holding company system who knowingly
violates, participates in, or assents to, or who knowingly permits any of the officers or
agents of the insurer to engage in transactions or make investments which have not
been properly reported or submitted pursuant to sections 26.1-10-04 and 26.1-10-05,
or which violate this chapter, shall pay, in their individual capacity, a civil penalty of not
more than one thousand dollars per violation, after notice and hearing before the
commissioner. In determining the amount of the civil penalty, the commissioner shall
take into account the appropriateness of the penalty with respect to the gravity of the
violation, the history of previous violations, and such other matters as justice may
require.
3. Whenever it appears to the commissioner that any insurer subject to this chapter or
any director, officer, employee, or agent thereof has engaged in any transaction or
entered a contract which is subject to section 26.1-10-05 and which would not have
been approved had the approval been requested, the commissioner may order the
insurer to cease and desist immediately any further activity under that transaction or
contract. After notice and hearing, the commissioner may also order the insurer to void
any contracts and restore the status quo if it is in the best interest of the policyholders,
creditors, or the public.
4. Whenever it appears to the commissioner that any insurer or any director, officer,
employee, or agent thereof has committed a willful violation of this chapter, the
commissioner may institute criminal proceedings in the district court of the county in
which the principal office of the insurer is located or if the insurer has no principal office
in the state, then in the district court of Burleigh County against the insurer or the
responsible director, officer, employee, or agent of the company. Any insurer that
willfully violates this chapter may be fined not more than fifty thousand dollars. Any
individual who willfully violates this chapter may be fined in the individual's capacity not
more than ten thousand dollars.
5. Any officer, director, or employee of an insurance holding company system, who
willfully and knowingly subscribes to or makes or causes to be made any false
statements or false reports or false filings with the intent to deceive the commissioner
in the performance of the commissioner's duties under this chapter may be fined not
more than fifty thousand dollars. Any fines imposed must be paid by the officer,
director, or employee in the person's individual capacity.
6. If it appears to the commissioner any person has committed a violation of section
by affiliates or by the insurance holding company system, the violation may serve as
an independent basis for disapproving dividends or distributions and for placing the
insurer under an order of supervision in accordance with chapter 26.1-06.2.

### § 26.1-10-12. Rulemaking.

The commissioner may adopt rules and issue orders necessary to carry out this chapter.
### § 26.1-10-13. Judicial review - Mandamus.

1. Any person aggrieved by any act, determination, rule, order, or any other action of the
commissioner under this chapter may appeal to the district court for Burleigh County.
The court shall conduct the review without a jury and by trial de novo, except if all
parties, including the commissioner, so stipulate, the review must be confined to the
record. Portions of the record may be introduced into evidence by stipulation in a trial
de novo as to those parties so stipulating.
2. The filing of an appeal under this section stays the application of any rule, order, or
other action of the commissioner to the appealing party unless the court, after giving
the party notice and an opportunity to be heard, determines a stay would be
detrimental to the interest of policyholders, shareholders, creditors, or the public.
3. Any person aggrieved by any failure of the commissioner to act or make a
determination required by this chapter may petition the district court for Burleigh
County for a writ in the nature of a mandamus or a peremptory mandamus directing
the commissioner to act or make a determination.
