This guest post was submitted by North Dakota Insurance Commissioner Jon Godfread, a Republican first elected in 2016.
It isn’t always easy to be transformative in state government due to the confines of certain laws, policies or financial structures. Change certainly happens, but often slowly. Yet, I am happy to report that with the close of the 66th Legislative Session, the North Dakota Legislature made significant progress in moving the state forward. Particularly, I want to share some big policy changes that will take place within the insurance industry. This session, the North Dakota Insurance Department proposed some significant changes – including providing a reinsurance program to reduce premiums for the more than 42,000 North Dakotans who purchase their own health insurance, a restructuring of the Insurance Department and measures ensuring we fully support North Dakota’s fire districts. These changes approved by the Legislature will benefit every North Dakotan in some way.
The Insurance Department proposed the creation of a reinsurance program that will reduce health insurance premiums for the approximately 42,000 North Dakotans who purchase their own health insurance. Though we await federal approval, we expect our farmers, ranchers and small business owners to receive some much-needed relief when selecting their 2020 health insurance plans. The Insurance Department estimates premium reductions of up to 20% on the individual market, along with the stabilization of that market. The Insurance Department will also study our health care marketplace to get a better understanding of the costs we are paying in the system; the ultimate goal being a more transparent and more affordable health care system.
Through the Insurance Department’s budget, we proposed giving the insurance premium taxes North Dakotans pay for fire protection rightfully back to our local fire departments. Working in concert with state fire chiefs and our legislators, I am happy to say we were able to allocate 100% of the taxes consumers pay for fire protection back to North Dakota fire departments. This change will result in an additional $4 million going out to our local fire districts. Fire fighters deserve our respect, our thanks and with this budget, they will also receive our full financial support.
As industry regulators, the Insurance Department should not be in the business of selling insurance. Therefore, we also proposed a budget change that would allow us to partner with the North Dakota Insurance Reserve Fund (NDIRF) to administer some of the insurance funds that cover public property in the state. The Insurance Department and the state of North Dakota will no longer compete with the private market by providing property coverage to our public entities. That duty will be turned over to NDIRF, which will leverage its network of private agents to provide enhanced service to our governmental entities.
The budget would also propose a restructure of our agency. The primary mission of the Insurance Department is consumer protection and regulation of the insurance industry. The budget the Legislature approved allows us to focus on that mission. Moving forward, we will no longer oversee boiler inspections, nor will we operate a fund for underground petroleum storage tanks. These functions are moving to the Department of Environmental Quality, a more natural home for these important functions
With these changes to the Insurance Department, we can better focus on helping move the insurance industry in North Dakota forward. The budget the Legislature approved gives the Insurance Department the resources needed to enhance our mission, while still reducing our overall budget by approximately 7.5%. We have trimmed our budget, focused our scope of work, protected the taxpayers, supported our local fire departments and advocated for North Dakota consumers. While the Insurance Department is not an agency that generally makes headlines, this session was transformative for us and for the citizens of our great state. I want to applaud the Legislature and Governor Burgum for being bold on behalf of North Dakotans.