North Dakota is taking proactive steps to strengthen its property insurance market with a new incentive program aimed at attracting private insurers. During a recent Senate Appropriations meeting, lawmakers discussed a proposal that would provide matching funds to insurance companies willing to invest in writing property insurance in the state.

The program would offer grants ranging from $2 million to $10 million, matched dollar-for-dollar by insurers over five years. Insurers must meet strict eligibility criteria, including maintaining a capital surplus of at least $10 million and demonstrating financial stability. The goal is to ensure that funds are allocated to financially sound companies capable of benefiting North Dakota consumers.

Once approved, insurers are required to generate at least $2 in new premiums for every $1 received in grants and capital investment. This approach aims to enhance competition in the market, which has been hindered by rising premiums and limited coverage options, particularly in rural areas.

Concerns were raised about the potential impact on domestic insurers, but the program mandates that at least 20% of the funding must go to in-state companies. Currently, domestic insurers account for only about 8.5% of the premiums written in North Dakota, making this requirement a significant boost for local providers.

Funding for the initiative is proposed to come from premium taxes paid by consumers, with additional support from excess funds in the insurance regulatory trust fund. This strategy ensures that insurance dollars are reinvested back into the market, ultimately benefiting North Dakota residents.

The North Dakota Insurance Incentive Program is designed to prevent a potential crisis in the property insurance market by fostering competition and stabilizing premiums before they escalate further. By encouraging private investment and innovative insurance products, the program aims to provide affordable coverage options and safeguard consumers against the risks of market failure.