Surplus Lines Compliance in North Dakota: Filing Requirements, Tax Rates & Document Automation

Surplus Lines in North Dakota: The Essentials

North Dakota (ND) maintains a self-reporting model for surplus lines compliance. The state levies a 2.25% surplus lines premium tax on all non-admitted placements, collected and remitted directly to the North Dakota Insurance Department.

The primary regulator is the North Dakota Insurance Department. Eligible surplus lines insurers must appear on the state's approved list, maintained at https://www.nd.gov/ndins. All North Dakota surplus lines brokers must hold a valid state surplus lines license.

Diligent Search Requirements

Before placing coverage in the non-admitted market, North Dakota brokers must conduct a diligent search of the admitted market. Specifically, documented effort with admitted market required. These declinations must be documented and retained as evidence of compliance with the diligent search requirement.

The Nonadmitted and Reinsurance Reform Act (NRRA) of 2010 streamlines multi-state placements for US-domiciled risks. Under NRRA, only the home state of the insured — North Dakota in this case — receives surplus lines tax, eliminating the need to file in every state where exposure exists. This simplification applies to non-commercial risks and most commercial risks that are not Large-Risk Exempt placements.

North Dakota Surplus Lines Filing Requirements

North Dakota Century Code § 26.1-44 governs surplus lines. At 2.25%, North Dakota has the lowest surplus lines premium tax in the nation. The Bakken oil formation drives substantial energy liability and well control surplus lines activity, while large-scale agricultural operations generate crop and equipment insurance placements.

Self-Reporting to the North Dakota Insurance Department

North Dakota does not use a dedicated stamping organization. Instead, surplus lines brokers file reports directly with the North Dakota Insurance Department. Filing intervals and required data elements are specified in North Dakota's surplus lines statutes. Brokers must maintain complete records of each placement, including diligent search documentation, for at least five years.

Premium Tax Calculation and Remittance

The North Dakota surplus lines premium tax rate is 2.25% of gross premium. This applies to the entire premium charged, including endorsements and policy fees where applicable. Brokers are responsible for collecting the tax from the insured and remitting to the North Dakota Insurance Department.

For multi-state risks, the NRRA home state rule means North Dakota collects 100% of the surplus lines tax for policies where the primary insured is domiciled in North Dakota — regardless of where the exposures are located. Conversely, North Dakota brokers placing risks for policyholders domiciled in other states owe those states' tax rates.

North Dakota Insurance Market Profile

North Dakota has the lowest surplus lines tax rate (2.25%) in the US and a significant oil and agricultural sector.

The non-admitted market serves a critical function in North Dakota's insurance ecosystem, providing capacity for risks that admitted carriers decline — whether due to unusual risk characteristics, market capacity constraints, or specialized coverage requirements not available in standard forms. A healthy surplus lines market ensures that North Dakota businesses and individuals can obtain coverage even for the most challenging risks.

Document Compliance Requirements for North Dakota Surplus Lines

North Dakota surplus lines operations must maintain comprehensive records for each placement, including:

• Signed declinations from admitted insurers (or documented evidence of unavailability)
• The placement slip or binder showing the insurer, premium, and coverage terms
• The diligent search affidavit (required in most states)
• The premium tax calculation worksheet
• Filing confirmation from the North Dakota Insurance Department
• The surplus lines disclosure provided to the insured (required by statute)
• All policy endorsements and amendments during the policy period

These records must be retained for a minimum of five years (some states require longer) and must be available for regulatory examination on request.

How Regure Automates North Dakota Surplus Lines Compliance

Regure provides insurance operations teams with automated document management built for North Dakota's regulatory requirements:

• Filing deadline tracking: Automated alerts for North Dakota Insurance Department filing deadlines, preventing late filing penalties
• Document completeness checking: Validates that all required documents are present before filing submission, flagging missing declinations or unsigned affidavits
• Premium tax calculation: Applies 2.25% rate automatically to gross premium, including endorsements and fee adjustments
• Audit trail generation: Creates immutable records of every document received, action taken, and filing submitted — ready for North Dakota Insurance Department examination
• Retention management: Enforces retention schedules appropriate for North Dakota requirements, with litigation hold capabilities for disputed placements

Ready to bring North Dakota surplus lines operations into automated compliance? Book a demonstration to see Regure's compliance automation in action, or explore our full US state compliance guide for all 50 states.