1.Upon a showing by a preponderance of evidence that a violation of this chapter
occurred, and with the consent of the county state's attorney, the commissioner may
impose an administrative penalty not to exceed ten thousand dollars for each
fraudulent insurance act. Assessment of the administrative penalty must be
determined by the nature, circumstances, extent, and gravity of the fraudulent
insurance act or acts, any prior history of such act or acts, the degree of culpability,
and such other matters as justice may require. The commissioner shall determine the
administrative penalty, such as fines, restitution, or both.
2.In the event of nonpayment of the administrative penalty after all rights of appeal have
been waived or exhausted, the commissioner may bring a civil action in distri
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1. Upon a showing by a preponderance of evidence that a violation of this chapter
occurred, and with the consent of the county state's attorney, the commissioner may
impose an administrative penalty not to exceed ten thousand dollars for each
fraudulent insurance act. Assessment of the administrative penalty must be
determined by the nature, circumstances, extent, and gravity of the fraudulent
insurance act or acts, any prior history of such act or acts, the degree of culpability,
and such other matters as justice may require. The commissioner shall determine the
administrative penalty, such as fines, restitution, or both.
2. In the event of nonpayment of the administrative penalty after all rights of appeal have
been waived or exhausted, the commissioner may bring a civil action in district court
for the collection of the administrative penalty and any other expenses incurred,
including interest, attorney's fees, and costs, in the following manner:
a. A summons and complaint must be filed in the district court of Burleigh County
setting forth that administrative action was taken against the defendant in
accordance with this chapter, that the defendant either voluntarily entered a
consent order that called for the payment of a specified monetary penalty, or in
the alternative, that after proper notice and hearing, the defendant was
determined to be in violation of this chapter and that by order of the commissioner
a specified monetary penalty had been assessed against the defendant, that all
rights of appeal have been waived or exhausted, and that payment in full has not
been made in accordance with the terms of the consent order or other order of
the commissioner. The insurance department shall attach to the complaint a
certified copy of that consent order or other order of the commissioner.
b. The court shall enter judgment in favor of the department for the amount specified
in the complaint if the department establishes:
(1) The defendant is the same person against which the consent order or other
order of the commissioner applies; and
(2) Payment in full has not been made by or on behalf of the defendant
according to the terms of the consent or other order of the commissioner.
c. Except as otherwise provided in this section the North Dakota Rules of Civil
Procedure govern the civil proceedings.
3. A person that is found to have committed a fraudulent insurance act and assessed an
administrative penalty or a person that violated an order of the commissioner pursuant
to a hearing or consent order in relation to an administrative penalty associated with a
fraudulent insurance act, may be liable for expenses incurred by the insurance
department at the discretion of the commissioner. The assessment for costs may not
exceed fifteen percent of each penalty assessed under this section.
4. The commissioner may order restitution to the insurer or self-insured employer of any
insurance proceeds paid pursuant to a fraudulent insurance act. Restitution ordered
must be paid by the owing party to the insurance regulatory trust fund under section
26.1-01-07.1 and from that fund be paid to the victim insurer or self-insured employee.
5. The expenses or administrative penalties collected by the commissioner under this
chapter are appropriated to the insurance department in accordance with this section
and section 26.1-01-07.1. All such moneys that are deposited in the insurance
regulatory trust fund under this chapter may be appropriated for use in the education
and enforcement of insurance fraud, except funds ordered as restitution to a victim.
Restitution funds must be reallocated to the victim. In the discretion of the department,
the department may pay a reward drawn from the assessed administrative penalty to
an individual who reports to the insurance department an incident of fraudulent
insurance act that results in either an admission or finding of fraud. The reward may
not exceed the lesser of the assessed administrative penalty or twenty-five thousand
dollars. In order to be eligible to receive a reward under this subsection, a reporting
individual shall sign a written complaint that subjects the person to the sanctions of
section 26.1-02.1. Persons required to report fraudulent insurance acts under
subsection 1 of section 26.1-02.1-06 are not eligible to receive a reward pursuant to
this subsection.
6. The insurance department may collect moneys for use by the department for fraud
education and enforcement purposes.
a. The following amounts must be deposited in the insurance regulatory trust fund
for use by the department for fraud education and enforcement purposes, all
sums received from:
(1) Fines assessed in accordance with this chapter; and
(2) Assessment of department costs under subsection 3.
b. The moneys received under this subsection are reserved for the use by the
insurance department to defray the expenses of the department in the
performance of the various functions and duties associated with fraud
enforcement, fund specialized training of department personnel tasked with
working within fraud enforcement, and provide the funding for specialized
equipment, specialized technology, and insurance fraud public service and
prevention campaigns and rewards.
c. The moneys deposited for this purpose are subject to the provisions of section
26.1-01-07.1.