North Dakota has officially transferred oversight of its state fire and tornado fund from the insurance commissioner to the Office of Management and Budget (OMB), following the enactment of House Bill 1027. The change centralizes fund management under the OMB, which now oversees risk coverage for state agencies, political subdivisions, winter shows, and the International Peace Garden.
The legislative update significantly amends Chapter 26.1-22 of the North Dakota Century Code. The OMB is now responsible for all fund operations, including claim payments, underwriting, valuation protocols, reinsurance purchasing, and administrative contracts. It can delegate fund administration through a two-year contract - potentially to the North Dakota Insurance Reserve Fund or another qualified entity - with notice required by September 30 of even-numbered years.
Impacted entities must comply with new OMB-developed reporting standards, including replacement cost appraisals every six years and annual updates. The OMB will also handle arbitration in disputes over value or coverage under Section 26.1-22-11, a role previously held by the insurance commissioner.
The bill authorizes the OMB to procure excess loss reinsurance and appoint a licensed insurance broker of record. Producers licensed in North Dakota may still support policyholders, with commissions paid from assessments. Public entities retain the option to seek private insurance, provided certain conditions are met, especially when the OMB declines or cancels coverage.
In addition, the law permits the OMB to waive subrogation rights during building construction and allows borrowing from the Bank of North Dakota if the fund balance drops below $2 million due to catastrophic events.
Significantly, HB 1027 mandates a legislative management study during the 2025–26 interim to assess the feasibility of removing political subdivisions from the fund. This includes an analysis of statutory impacts and premium consequences, with findings to be presented to the 70th Legislative Assembly.
