CHAPTER 26.1-11FOREIGN INSURANCE COMPANIES26.1-11-01. Conditions to be complied with by foreign company before transactinginsurance business in state. A foreign insurance company may not take any risk or transact<br>insurance business in this state, either directly or indirectly, until it has:1.Deposited with the commissioner a certified copy of its articles of incorporation.2.Deposited with the commissioner a statement of its financial condition and business<br>in the form and detail the commissioner requires, signed and sworn to by its<br>president and secretary or other similar officers.3.Satisfied the commissioner that it is fully and legally organized under the laws of its<br>state or government to do the business which it proposes to transact.4.Satisfied the commissioner, if it is a stock company, that it has a fully paid-up capital<br>stock and surplus at least equal to the stock and surplus required of domestic<br>companies transacting the same classes of insurance.5.Satisfied the commissioner, if it is a mutual company, that it has complied with<br>subsection 7 of section 26.1-12-27.6.Satisfied the commissioner that its assets are well invested and immediately<br>available for the payment of losses in this state and in making this determination the<br>commissioner may rely upon the provisions pertaining to authorized investments of<br>domestic insurance companies.7.Satisfied the commissioner that it does not insure any single hazard for a sum larger<br>than one-tenth of its net assets.8.Appointed the commissioner and the commissioner's successors, by a duly<br>executed instrument filed in the commissioner's office, its attorney upon whom all<br>process in any action or proceeding against it may be served and has agreed in the<br>instrument that any process that may be served upon its attorney is of the same<br>force and validity as if the process were served on the company and that the<br>authority thereof continues in force irrevocable so long as any liability of the<br>company remains outstanding in this state.9.Agreed to appoint, and will appoint, as its insurance producers in this state only<br>residents of this state except as otherwise provided in chapter 26.1-26.10.Adopted a name which is not so similar to a name already in use by an existing<br>company organized or licensed in this state as to be confusing or misleading.26.1-11-02. Liability of officers, agents, and stockholders of noncomplying foreigncompany - Penalty. Any failure to comply with section 26.1-11-01 renders each officer, agent,<br>and stockholder of any foreign insurance company failing to comply therewith jointly and<br>severally liable on all contracts of the company made within this state during the time the<br>company is in default. Each officer and agent of the noncomplying company is guilty of a class A<br>misdemeanor.26.1-11-03. Failure to comply with conditions renders contracts void on behalf ofcompany - Enforcement against company. A contract made by or on behalf of any foreign<br>insurance company doing business in this state without first complying with section 26.1-11-01 or<br>26.1-11-04 is void and unenforceable on behalf of the company and its assigns, but the contract<br>may be enforced against the company.Page No. 126.1-11-04.Foreign life company required to maintain funds or stop writingbusiness - Penalty. When the actual funds of any foreign life insurance company authorized to<br>do business in this state are not of a net value equal to the net value of its policies according to<br>the combined experience or actuaries' rate of mortality, with interest at four percent per annum,<br>or by such higher standard as the company may have adopted, the commissioner shall give<br>notice to the company and its agents to discontinue the issuance of new policies in this state until<br>its funds have become equal to its liabilities when its policies are valued as provided in this<br>section. Any officer or agent who, after notice has been given, issues or delivers a new policy<br>from and in behalf of the company before its funds have become equal to its liabilities as<br>provided by this section is guilty of a class A misdemeanor. This section does not apply to a<br>cooperative or assessment life association licensed to transact business in this state.26.1-11-05. Deposit required of foreign accident and health insurance companydoing business on assessment plan. Each foreign accident and health insurance company<br>doing business on the assessment plan in this state shall keep deposited at all times with the<br>commissioner one regular assessment sufficient in amount to pay the average loss or losses<br>occurring among its members in this state during the time allowed by it for the collection of<br>assessments and payment of losses. No such company may be licensed by the commissioner<br>unless it keeps and maintains with the commissioner for the protection of persons to whom it<br>may become obligated at least ten thousand dollars in bonds of the United States, of the state of<br>North Dakota, or of political subdivisions within this state, or in mortgages on improved and<br>unencumbered real estate within this state worth double the sum loaned thereon and approved<br>by the commissioner.26.1-11-06. Reciprocal penalties - Retaliatory charges. Whenever the laws of anyother state, or of any foreign country, or of any province or territory thereof, or when the rules of<br>the insurance department of that state, country, province, or territory, require any insurance<br>company, corporation, limited liability company, association, or society organized under the laws<br>of this state to deposit securities in that state, country, province, or territory for the protection of<br>policyholders or others, or any payment for taxes, fines, penalties, certificates of authority,<br>licenses, or fees, or the performance of any duties or acts other than and exceeding those<br>required by the laws of this state of a like insurance company, corporation, limited liability<br>company, association, or society organized under the laws of that state, country, territory, or<br>province, while transacting business in this state, then and in every such case, an insurance<br>company, corporation, limited liability company, association, or society organized in that state,<br>country, province, or territory which establishes an agency or transacts business in this state, is<br>required to make deposits and to pay to the commissioner charges, licenses, fees, taxes, fines,<br>or penalties in the amounts respectively, and to do all other acts which that other state, country,<br>province, or territory, by the laws or the rules of the insurance department thereof, requires of a<br>like insurance company, corporation, limited liability company, or society organized under the<br>laws of this state when doing business in that other state, country, province, or territory. This<br>section applies regardless of the plan of assessment or collection of premiums, contributions, or<br>assessments adopted by the foreign company, corporation, limited liability company, association,<br>or society.26.1-11-07.Countersignaturerequirement-Commissions-Reciprocity.Notwithstanding any other provision of this title or policy forms to the contrary, there may not be<br>any requirement that an insurance producer resident in this state sign or countersign an<br>insurance policy covering a subject of insurance resident, located, or to be performed in this<br>state. However, if the laws or rules of another state require a signature or countersignature by an<br>insurance producer resident in that state on an insurance policy written by a nonresident<br>insurance producer of that state, then any insurance policy written by an insurance producer<br>resident of that state licensed as a nonresident insurance producer in this state covering a<br>subject of insurance resident, located, or to be performed in this state must be signed or<br>countersigned in writing by an insurance producer resident in this state. An insurance policy may<br>not be deemed invalid because of the absence of the required signature or countersignature. If<br>the laws or rules of another state require an insurance producer resident in that state to retain a<br>portion of the commission paid on a like insurance policy written, countersigned, or delivered by<br>the insurance producer in that state at the request of a nonresident insurance producer of thatPage No. 2state, then the insurance producer resident in this state who signed or countersigned an<br>insurance policy written by a resident of that state licensed as a nonresident insurance producer<br>in this state covering a subject of insurance resident, located, or to be performed in this state<br>shall retain an equal pro rata portion of any commission on the insurance policy.26.1-11-08.Grounds for revocation of authority of foreign company.Thecommissioner shall revoke or suspend all certificates of authority granted to a foreign insurance<br>company or to its agents if, upon examination or other evidence, the commissioner is of the<br>opinion that:1.The company is in an unsound condition.2.The company has failed to comply with any provision of the applicable laws of this<br>state.3.The company, or any officer or agent thereof, has refused to submit to examination<br>or to perform any other legal obligation.26.1-11-09. Procedure for suspension or revocation of foreign company's authority- Effect. Whenever it appears to the commissioner, either upon complaint or otherwise, that any<br>foreign insurance company is in violation of section 26.1-02-23 or 26.1-11-08, the commissioner<br>may issue a temporary order suspending the certificate of authority granted to a foreign<br>insurance company if the commissioner deems it necessary or appropriate to the public interest<br>to do so.Any company aggrieved by a temporary order may request a hearing before thecommissioner within ten days after the company receives the order. If the commissioner revokes<br>the certificate of authority granted to a foreign insurance company, the commissioner shall<br>publish a notice of revocation once each week for three successive weeks in a newspaper<br>published at the state capital. Thereafter, no new business may be done by the company, or by<br>its agents, in this state until its certificate of authority is restored by the commissioner. The<br>commissioner, after a hearing and for good cause, may cancel the revocation and restore the<br>certificate.26.1-11-10. Consent to service of process. Service of process upon the commissioneras attorney for a foreign insurance company doing business in this state is sufficient service upon<br>the company.26.1-11-11. Consent to service of process - Unauthorized insurance company. Anyof the following acts in this state, effected by mail or otherwise, by any unauthorized foreign or<br>alien insurance company is equivalent to and constitutes an appointment by the company of the<br>commissioner as its attorney upon whom may be served all lawful process in any action, suit, or<br>proceeding instituted by or on behalf of an insured or beneficiary arising out of any insurance<br>contract, and any such act signifies its agreement that the service of process is of the same legal<br>force and validity as personal service in this state, upon such insurer:1.The issuance or delivery of insurance contracts to residents of this state or to<br>corporations or limited liability companies authorized to do business in this state.2.The solicitation of applications for such contracts.3.The collection of premiums, membership fees, assessments, or other considerations<br>for such contracts.4.Any other transaction of insurance business.26.1-11-12. Additional means of service.1.Service in any action, suit, or proceeding is, in addition to the manner provided in<br>section 26.1-01-04, valid if served upon any person within this state who on behalf of<br>the insurance company is:Page No. 3a.Soliciting insurance;b.Making, issuing, or delivering any insurance contract; orc.Collecting or receiving any premium membership fee, assessment, or other<br>consideration for insurance.2.A copy of the process must be sent within ten days thereafter by registered mail by<br>the plaintiff or the plaintiff's attorney, to the defendant at the defendant's last-known<br>principal place of business.3.The defendant's receipt, or the receipt issued by the post office with which the letter<br>is registered or certified, showing the name of the sender of the letter, the name and<br>address of the person to whom the letter is addressed, and the affidavit of the<br>person mailing the letter showing a compliance herewith must be filed with the clerk<br>of the court in which the action is pending on or before the date the defendant is<br>required to appear or within such further time as the court allows.26.1-11-13. Right of service not abridged. This chapter does not limit or abridge theright to serve any process, notice, or demand upon any insurance company in any other manner<br>permitted by law.26.1-11-14. Judgment by default - Time of entry. A judgment by default under thischapter may not be entered until the expiration of thirty days from the date of the filing of the<br>affidavit of compliance.26.1-11-15. Defense of action by unauthorized company. Before any unauthorizedforeign or alien insurance company may file or cause to be filed any pleading in any action, suit,<br>or proceeding instituted against it, the company shall deposit with the clerk of the court in which<br>the action, suit, or proceeding is pending, cash or securities, or file with the clerk a bond with<br>good and sufficient sureties approved by the court in an amount fixed by the court sufficient to<br>secure the payment of any final judgment which may be rendered in the action. The court may,<br>in its discretion, dispense with the deposit or bond if the company makes a showing satisfactory<br>to the court that it maintains in the United States funds or securities, in trust or otherwise,<br>sufficient and available to satisfy any final judgment which may be entered in the action, suit, or<br>proceeding, and that the company will pay any final judgment rendered without requiring suit to<br>be brought on the judgment in the state where the securities are located, or procure a certificate<br>of authority to transact insurance business in this state.26.1-11-16.Court may order postponement.The court, in any action, suit, orproceeding in which service is made in the manner provided in section 26.1-01-04 or 26.1-11-12,<br>may order any postponement necessary to afford the defendant reasonable opportunity to<br>comply with this chapter and to defend the action.26.1-11-17. Construction. Section 26.1-11-16 does not prevent an unauthorized foreignor alien insurance company from filing a motion to quash a writ or to set aside service thereof<br>made in the manner provided in this chapter on the ground that the company has not done any of<br>the acts enumerated in this chapter or that the person on whom service was made pursuant to<br>section 26.1-11-12 was not doing any of the acts therein enumerated.26.1-11-18. Attorney's fees. In any action against an unauthorized foreign or alieninsurance company upon an insurance contract issued or delivered in this state to a resident of<br>this state or to a corporation or limited liability company authorized to do business in this state, if<br>the insurance company has failed for thirty days after demand prior to the commencement of the<br>action to make payment in accordance with the terms of the contract, and it appears to the court<br>that refusal was vexatious and without reasonable cause, the court may allow to the plaintiff a<br>reasonable attorney's fee and include the fee in any judgment that may be rendered in the action.<br>The fee may not exceed twelve and one-half percent of the amount which the court or jury finds<br>the plaintiff is entitled to recover against the insurance company, but the fee awarded may not bePage No. 4less than twenty-five dollars. Failure of an insurance company to defend any action is prima<br>facie evidence that its failure to make payment was vexatious and without reasonable cause.26.1-11-19. Application. This chapter does not apply to any action, suit, or proceedingagainst any unauthorized foreign or alien insurance company arising out of any reinsurance,<br>ocean marine, aircraft, or railway insurance contract, insurance against legal liability arising out of<br>the ownership, operation, or maintenance of any property having a permanent situs outside this<br>state, or insurance against loss of or damage to any property having a permanent situs outside<br>this state, when the insurance contract designates the commissioner or a bona fide resident of<br>this state the attorney of the unauthorized insurance company upon whom may be served all<br>lawful process in any action, suit, or proceeding instituted by or on behalf of an insured or<br>beneficiary arising out of the contract or when the insurance company enters a general<br>appearance in the suit, action, or proceeding.Page No. 5Document Outlinechapter 26.1-11 foreign insurance companies
CHAPTER 26.1-11FOREIGN INSURANCE COMPANIES26.1-11-01. Conditions to be complied with by foreign company before transactinginsurance business in state. A foreign insurance company may not take any risk or transact<br>insurance business in this state, either directly or indirectly, until it has:1.Deposited with the commissioner a certified copy of its articles of incorporation.2.Deposited with the commissioner a statement of its financial condition and business<br>in the form and detail the commissioner requires, signed and sworn to by its<br>president and secretary or other similar officers.3.Satisfied the commissioner that it is fully and legally organized under the laws of its<br>state or government to do the business which it proposes to transact.4.Satisfied the commissioner, if it is a stock company, that it has a fully paid-up capital<br>stock and surplus at least equal to the stock and surplus required of domestic<br>companies transacting the same classes of insurance.5.Satisfied the commissioner, if it is a mutual company, that it has complied with<br>subsection 7 of section 26.1-12-27.6.Satisfied the commissioner that its assets are well invested and immediately<br>available for the payment of losses in this state and in making this determination the<br>commissioner may rely upon the provisions pertaining to authorized investments of<br>domestic insurance companies.7.Satisfied the commissioner that it does not insure any single hazard for a sum larger<br>than one-tenth of its net assets.8.Appointed the commissioner and the commissioner's successors, by a duly<br>executed instrument filed in the commissioner's office, its attorney upon whom all<br>process in any action or proceeding against it may be served and has agreed in the<br>instrument that any process that may be served upon its attorney is of the same<br>force and validity as if the process were served on the company and that the<br>authority thereof continues in force irrevocable so long as any liability of the<br>company remains outstanding in this state.9.Agreed to appoint, and will appoint, as its insurance producers in this state only<br>residents of this state except as otherwise provided in chapter 26.1-26.10.Adopted a name which is not so similar to a name already in use by an existing<br>company organized or licensed in this state as to be confusing or misleading.26.1-11-02. Liability of officers, agents, and stockholders of noncomplying foreigncompany - Penalty. Any failure to comply with section 26.1-11-01 renders each officer, agent,<br>and stockholder of any foreign insurance company failing to comply therewith jointly and<br>severally liable on all contracts of the company made within this state during the time the<br>company is in default. Each officer and agent of the noncomplying company is guilty of a class A<br>misdemeanor.26.1-11-03. Failure to comply with conditions renders contracts void on behalf ofcompany - Enforcement against company. A contract made by or on behalf of any foreign<br>insurance company doing business in this state without first complying with section 26.1-11-01 or<br>26.1-11-04 is void and unenforceable on behalf of the company and its assigns, but the contract<br>may be enforced against the company.Page No. 126.1-11-04.Foreign life company required to maintain funds or stop writingbusiness - Penalty. When the actual funds of any foreign life insurance company authorized to<br>do business in this state are not of a net value equal to the net value of its policies according to<br>the combined experience or actuaries' rate of mortality, with interest at four percent per annum,<br>or by such higher standard as the company may have adopted, the commissioner shall give<br>notice to the company and its agents to discontinue the issuance of new policies in this state until<br>its funds have become equal to its liabilities when its policies are valued as provided in this<br>section. Any officer or agent who, after notice has been given, issues or delivers a new policy<br>from and in behalf of the company before its funds have become equal to its liabilities as<br>provided by this section is guilty of a class A misdemeanor. This section does not apply to a<br>cooperative or assessment life association licensed to transact business in this state.26.1-11-05. Deposit required of foreign accident and health insurance companydoing business on assessment plan. Each foreign accident and health insurance company<br>doing business on the assessment plan in this state shall keep deposited at all times with the<br>commissioner one regular assessment sufficient in amount to pay the average loss or losses<br>occurring among its members in this state during the time allowed by it for the collection of<br>assessments and payment of losses. No such company may be licensed by the commissioner<br>unless it keeps and maintains with the commissioner for the protection of persons to whom it<br>may become obligated at least ten thousand dollars in bonds of the United States, of the state of<br>North Dakota, or of political subdivisions within this state, or in mortgages on improved and<br>unencumbered real estate within this state worth double the sum loaned thereon and approved<br>by the commissioner.26.1-11-06. Reciprocal penalties - Retaliatory charges. Whenever the laws of anyother state, or of any foreign country, or of any province or territory thereof, or when the rules of<br>the insurance department of that state, country, province, or territory, require any insurance<br>company, corporation, limited liability company, association, or society organized under the laws<br>of this state to deposit securities in that state, country, province, or territory for the protection of<br>policyholders or others, or any payment for taxes, fines, penalties, certificates of authority,<br>licenses, or fees, or the performance of any duties or acts other than and exceeding those<br>required by the laws of this state of a like insurance company, corporation, limited liability<br>company, association, or society organized under the laws of that state, country, territory, or<br>province, while transacting business in this state, then and in every such case, an insurance<br>company, corporation, limited liability company, association, or society organized in that state,<br>country, province, or territory which establishes an agency or transacts business in this state, is<br>required to make deposits and to pay to the commissioner charges, licenses, fees, taxes, fines,<br>or penalties in the amounts respectively, and to do all other acts which that other state, country,<br>province, or territory, by the laws or the rules of the insurance department thereof, requires of a<br>like insurance company, corporation, limited liability company, or society organized under the<br>laws of this state when doing business in that other state, country, province, or territory. This<br>section applies regardless of the plan of assessment or collection of premiums, contributions, or<br>assessments adopted by the foreign company, corporation, limited liability company, association,<br>or society.26.1-11-07.Countersignaturerequirement-Commissions-Reciprocity.Notwithstanding any other provision of this title or policy forms to the contrary, there may not be<br>any requirement that an insurance producer resident in this state sign or countersign an<br>insurance policy covering a subject of insurance resident, located, or to be performed in this<br>state. However, if the laws or rules of another state require a signature or countersignature by an<br>insurance producer resident in that state on an insurance policy written by a nonresident<br>insurance producer of that state, then any insurance policy written by an insurance producer<br>resident of that state licensed as a nonresident insurance producer in this state covering a<br>subject of insurance resident, located, or to be performed in this state must be signed or<br>countersigned in writing by an insurance producer resident in this state. An insurance policy may<br>not be deemed invalid because of the absence of the required signature or countersignature. If<br>the laws or rules of another state require an insurance producer resident in that state to retain a<br>portion of the commission paid on a like insurance policy written, countersigned, or delivered by<br>the insurance producer in that state at the request of a nonresident insurance producer of thatPage No. 2state, then the insurance producer resident in this state who signed or countersigned an<br>insurance policy written by a resident of that state licensed as a nonresident insurance producer<br>in this state covering a subject of insurance resident, located, or to be performed in this state<br>shall retain an equal pro rata portion of any commission on the insurance policy.26.1-11-08.Grounds for revocation of authority of foreign company.Thecommissioner shall revoke or suspend all certificates of authority granted to a foreign insurance<br>company or to its agents if, upon examination or other evidence, the commissioner is of the<br>opinion that:1.The company is in an unsound condition.2.The company has failed to comply with any provision of the applicable laws of this<br>state.3.The company, or any officer or agent thereof, has refused to submit to examination<br>or to perform any other legal obligation.26.1-11-09. Procedure for suspension or revocation of foreign company's authority- Effect. Whenever it appears to the commissioner, either upon complaint or otherwise, that any<br>foreign insurance company is in violation of section 26.1-02-23 or 26.1-11-08, the commissioner<br>may issue a temporary order suspending the certificate of authority granted to a foreign<br>insurance company if the commissioner deems it necessary or appropriate to the public interest<br>to do so.Any company aggrieved by a temporary order may request a hearing before thecommissioner within ten days after the company receives the order. If the commissioner revokes<br>the certificate of authority granted to a foreign insurance company, the commissioner shall<br>publish a notice of revocation once each week for three successive weeks in a newspaper<br>published at the state capital. Thereafter, no new business may be done by the company, or by<br>its agents, in this state until its certificate of authority is restored by the commissioner. The<br>commissioner, after a hearing and for good cause, may cancel the revocation and restore the<br>certificate.26.1-11-10. Consent to service of process. Service of process upon the commissioneras attorney for a foreign insurance company doing business in this state is sufficient service upon<br>the company.26.1-11-11. Consent to service of process - Unauthorized insurance company. Anyof the following acts in this state, effected by mail or otherwise, by any unauthorized foreign or<br>alien insurance company is equivalent to and constitutes an appointment by the company of the<br>commissioner as its attorney upon whom may be served all lawful process in any action, suit, or<br>proceeding instituted by or on behalf of an insured or beneficiary arising out of any insurance<br>contract, and any such act signifies its agreement that the service of process is of the same legal<br>force and validity as personal service in this state, upon such insurer:1.The issuance or delivery of insurance contracts to residents of this state or to<br>corporations or limited liability companies authorized to do business in this state.2.The solicitation of applications for such contracts.3.The collection of premiums, membership fees, assessments, or other considerations<br>for such contracts.4.Any other transaction of insurance business.26.1-11-12. Additional means of service.1.Service in any action, suit, or proceeding is, in addition to the manner provided in<br>section 26.1-01-04, valid if served upon any person within this state who on behalf of<br>the insurance company is:Page No. 3a.Soliciting insurance;b.Making, issuing, or delivering any insurance contract; orc.Collecting or receiving any premium membership fee, assessment, or other<br>consideration for insurance.2.A copy of the process must be sent within ten days thereafter by registered mail by<br>the plaintiff or the plaintiff's attorney, to the defendant at the defendant's last-known<br>principal place of business.3.The defendant's receipt, or the receipt issued by the post office with which the letter<br>is registered or certified, showing the name of the sender of the letter, the name and<br>address of the person to whom the letter is addressed, and the affidavit of the<br>person mailing the letter showing a compliance herewith must be filed with the clerk<br>of the court in which the action is pending on or before the date the defendant is<br>required to appear or within such further time as the court allows.26.1-11-13. Right of service not abridged. This chapter does not limit or abridge theright to serve any process, notice, or demand upon any insurance company in any other manner<br>permitted by law.26.1-11-14. Judgment by default - Time of entry. A judgment by default under thischapter may not be entered until the expiration of thirty days from the date of the filing of the<br>affidavit of compliance.26.1-11-15. Defense of action by unauthorized company. Before any unauthorizedforeign or alien insurance company may file or cause to be filed any pleading in any action, suit,<br>or proceeding instituted against it, the company shall deposit with the clerk of the court in which<br>the action, suit, or proceeding is pending, cash or securities, or file with the clerk a bond with<br>good and sufficient sureties approved by the court in an amount fixed by the court sufficient to<br>secure the payment of any final judgment which may be rendered in the action. The court may,<br>in its discretion, dispense with the deposit or bond if the company makes a showing satisfactory<br>to the court that it maintains in the United States funds or securities, in trust or otherwise,<br>sufficient and available to satisfy any final judgment which may be entered in the action, suit, or<br>proceeding, and that the company will pay any final judgment rendered without requiring suit to<br>be brought on the judgment in the state where the securities are located, or procure a certificate<br>of authority to transact insurance business in this state.26.1-11-16.Court may order postponement.The court, in any action, suit, orproceeding in which service is made in the manner provided in section 26.1-01-04 or 26.1-11-12,<br>may order any postponement necessary to afford the defendant reasonable opportunity to<br>comply with this chapter and to defend the action.26.1-11-17. Construction. Section 26.1-11-16 does not prevent an unauthorized foreignor alien insurance company from filing a motion to quash a writ or to set aside service thereof<br>made in the manner provided in this chapter on the ground that the company has not done any of<br>the acts enumerated in this chapter or that the person on whom service was made pursuant to<br>section 26.1-11-12 was not doing any of the acts therein enumerated.26.1-11-18. Attorney's fees. In any action against an unauthorized foreign or alieninsurance company upon an insurance contract issued or delivered in this state to a resident of<br>this state or to a corporation or limited liability company authorized to do business in this state, if<br>the insurance company has failed for thirty days after demand prior to the commencement of the<br>action to make payment in accordance with the terms of the contract, and it appears to the court<br>that refusal was vexatious and without reasonable cause, the court may allow to the plaintiff a<br>reasonable attorney's fee and include the fee in any judgment that may be rendered in the action.<br>The fee may not exceed twelve and one-half percent of the amount which the court or jury finds<br>the plaintiff is entitled to recover against the insurance company, but the fee awarded may not bePage No. 4less than twenty-five dollars. Failure of an insurance company to defend any action is prima<br>facie evidence that its failure to make payment was vexatious and without reasonable cause.26.1-11-19. Application. This chapter does not apply to any action, suit, or proceedingagainst any unauthorized foreign or alien insurance company arising out of any reinsurance,<br>ocean marine, aircraft, or railway insurance contract, insurance against legal liability arising out of<br>the ownership, operation, or maintenance of any property having a permanent situs outside this<br>state, or insurance against loss of or damage to any property having a permanent situs outside<br>this state, when the insurance contract designates the commissioner or a bona fide resident of<br>this state the attorney of the unauthorized insurance company upon whom may be served all<br>lawful process in any action, suit, or proceeding instituted by or on behalf of an insured or<br>beneficiary arising out of the contract or when the insurance company enters a general<br>appearance in the suit, action, or proceeding.Page No. 5Document Outlinechapter 26.1-11 foreign insurance companies
CHAPTER 26.1-11FOREIGN INSURANCE COMPANIES26.1-11-01. Conditions to be complied with by foreign company before transactinginsurance business in state. A foreign insurance company may not take any risk or transact<br>insurance business in this state, either directly or indirectly, until it has:1.Deposited with the commissioner a certified copy of its articles of incorporation.2.Deposited with the commissioner a statement of its financial condition and business<br>in the form and detail the commissioner requires, signed and sworn to by its<br>president and secretary or other similar officers.3.Satisfied the commissioner that it is fully and legally organized under the laws of its<br>state or government to do the business which it proposes to transact.4.Satisfied the commissioner, if it is a stock company, that it has a fully paid-up capital<br>stock and surplus at least equal to the stock and surplus required of domestic<br>companies transacting the same classes of insurance.5.Satisfied the commissioner, if it is a mutual company, that it has complied with<br>subsection 7 of section 26.1-12-27.6.Satisfied the commissioner that its assets are well invested and immediately<br>available for the payment of losses in this state and in making this determination the<br>commissioner may rely upon the provisions pertaining to authorized investments of<br>domestic insurance companies.7.Satisfied the commissioner that it does not insure any single hazard for a sum larger<br>than one-tenth of its net assets.8.Appointed the commissioner and the commissioner's successors, by a duly<br>executed instrument filed in the commissioner's office, its attorney upon whom all<br>process in any action or proceeding against it may be served and has agreed in the<br>instrument that any process that may be served upon its attorney is of the same<br>force and validity as if the process were served on the company and that the<br>authority thereof continues in force irrevocable so long as any liability of the<br>company remains outstanding in this state.9.Agreed to appoint, and will appoint, as its insurance producers in this state only<br>residents of this state except as otherwise provided in chapter 26.1-26.10.Adopted a name which is not so similar to a name already in use by an existing<br>company organized or licensed in this state as to be confusing or misleading.26.1-11-02. Liability of officers, agents, and stockholders of noncomplying foreigncompany - Penalty. Any failure to comply with section 26.1-11-01 renders each officer, agent,<br>and stockholder of any foreign insurance company failing to comply therewith jointly and<br>severally liable on all contracts of the company made within this state during the time the<br>company is in default. Each officer and agent of the noncomplying company is guilty of a class A<br>misdemeanor.26.1-11-03. Failure to comply with conditions renders contracts void on behalf ofcompany - Enforcement against company. A contract made by or on behalf of any foreign<br>insurance company doing business in this state without first complying with section 26.1-11-01 or<br>26.1-11-04 is void and unenforceable on behalf of the company and its assigns, but the contract<br>may be enforced against the company.Page No. 126.1-11-04.Foreign life company required to maintain funds or stop writingbusiness - Penalty. When the actual funds of any foreign life insurance company authorized to<br>do business in this state are not of a net value equal to the net value of its policies according to<br>the combined experience or actuaries' rate of mortality, with interest at four percent per annum,<br>or by such higher standard as the company may have adopted, the commissioner shall give<br>notice to the company and its agents to discontinue the issuance of new policies in this state until<br>its funds have become equal to its liabilities when its policies are valued as provided in this<br>section. Any officer or agent who, after notice has been given, issues or delivers a new policy<br>from and in behalf of the company before its funds have become equal to its liabilities as<br>provided by this section is guilty of a class A misdemeanor. This section does not apply to a<br>cooperative or assessment life association licensed to transact business in this state.26.1-11-05. Deposit required of foreign accident and health insurance companydoing business on assessment plan. Each foreign accident and health insurance company<br>doing business on the assessment plan in this state shall keep deposited at all times with the<br>commissioner one regular assessment sufficient in amount to pay the average loss or losses<br>occurring among its members in this state during the time allowed by it for the collection of<br>assessments and payment of losses. No such company may be licensed by the commissioner<br>unless it keeps and maintains with the commissioner for the protection of persons to whom it<br>may become obligated at least ten thousand dollars in bonds of the United States, of the state of<br>North Dakota, or of political subdivisions within this state, or in mortgages on improved and<br>unencumbered real estate within this state worth double the sum loaned thereon and approved<br>by the commissioner.26.1-11-06. Reciprocal penalties - Retaliatory charges. Whenever the laws of anyother state, or of any foreign country, or of any province or territory thereof, or when the rules of<br>the insurance department of that state, country, province, or territory, require any insurance<br>company, corporation, limited liability company, association, or society organized under the laws<br>of this state to deposit securities in that state, country, province, or territory for the protection of<br>policyholders or others, or any payment for taxes, fines, penalties, certificates of authority,<br>licenses, or fees, or the performance of any duties or acts other than and exceeding those<br>required by the laws of this state of a like insurance company, corporation, limited liability<br>company, association, or society organized under the laws of that state, country, territory, or<br>province, while transacting business in this state, then and in every such case, an insurance<br>company, corporation, limited liability company, association, or society organized in that state,<br>country, province, or territory which establishes an agency or transacts business in this state, is<br>required to make deposits and to pay to the commissioner charges, licenses, fees, taxes, fines,<br>or penalties in the amounts respectively, and to do all other acts which that other state, country,<br>province, or territory, by the laws or the rules of the insurance department thereof, requires of a<br>like insurance company, corporation, limited liability company, or society organized under the<br>laws of this state when doing business in that other state, country, province, or territory. This<br>section applies regardless of the plan of assessment or collection of premiums, contributions, or<br>assessments adopted by the foreign company, corporation, limited liability company, association,<br>or society.26.1-11-07.Countersignaturerequirement-Commissions-Reciprocity.Notwithstanding any other provision of this title or policy forms to the contrary, there may not be<br>any requirement that an insurance producer resident in this state sign or countersign an<br>insurance policy covering a subject of insurance resident, located, or to be performed in this<br>state. However, if the laws or rules of another state require a signature or countersignature by an<br>insurance producer resident in that state on an insurance policy written by a nonresident<br>insurance producer of that state, then any insurance policy written by an insurance producer<br>resident of that state licensed as a nonresident insurance producer in this state covering a<br>subject of insurance resident, located, or to be performed in this state must be signed or<br>countersigned in writing by an insurance producer resident in this state. An insurance policy may<br>not be deemed invalid because of the absence of the required signature or countersignature. If<br>the laws or rules of another state require an insurance producer resident in that state to retain a<br>portion of the commission paid on a like insurance policy written, countersigned, or delivered by<br>the insurance producer in that state at the request of a nonresident insurance producer of thatPage No. 2state, then the insurance producer resident in this state who signed or countersigned an<br>insurance policy written by a resident of that state licensed as a nonresident insurance producer<br>in this state covering a subject of insurance resident, located, or to be performed in this state<br>shall retain an equal pro rata portion of any commission on the insurance policy.26.1-11-08.Grounds for revocation of authority of foreign company.Thecommissioner shall revoke or suspend all certificates of authority granted to a foreign insurance<br>company or to its agents if, upon examination or other evidence, the commissioner is of the<br>opinion that:1.The company is in an unsound condition.2.The company has failed to comply with any provision of the applicable laws of this<br>state.3.The company, or any officer or agent thereof, has refused to submit to examination<br>or to perform any other legal obligation.26.1-11-09. Procedure for suspension or revocation of foreign company's authority- Effect. Whenever it appears to the commissioner, either upon complaint or otherwise, that any<br>foreign insurance company is in violation of section 26.1-02-23 or 26.1-11-08, the commissioner<br>may issue a temporary order suspending the certificate of authority granted to a foreign<br>insurance company if the commissioner deems it necessary or appropriate to the public interest<br>to do so.Any company aggrieved by a temporary order may request a hearing before thecommissioner within ten days after the company receives the order. If the commissioner revokes<br>the certificate of authority granted to a foreign insurance company, the commissioner shall<br>publish a notice of revocation once each week for three successive weeks in a newspaper<br>published at the state capital. Thereafter, no new business may be done by the company, or by<br>its agents, in this state until its certificate of authority is restored by the commissioner. The<br>commissioner, after a hearing and for good cause, may cancel the revocation and restore the<br>certificate.26.1-11-10. Consent to service of process. Service of process upon the commissioneras attorney for a foreign insurance company doing business in this state is sufficient service upon<br>the company.26.1-11-11. Consent to service of process - Unauthorized insurance company. Anyof the following acts in this state, effected by mail or otherwise, by any unauthorized foreign or<br>alien insurance company is equivalent to and constitutes an appointment by the company of the<br>commissioner as its attorney upon whom may be served all lawful process in any action, suit, or<br>proceeding instituted by or on behalf of an insured or beneficiary arising out of any insurance<br>contract, and any such act signifies its agreement that the service of process is of the same legal<br>force and validity as personal service in this state, upon such insurer:1.The issuance or delivery of insurance contracts to residents of this state or to<br>corporations or limited liability companies authorized to do business in this state.2.The solicitation of applications for such contracts.3.The collection of premiums, membership fees, assessments, or other considerations<br>for such contracts.4.Any other transaction of insurance business.26.1-11-12. Additional means of service.1.Service in any action, suit, or proceeding is, in addition to the manner provided in<br>section 26.1-01-04, valid if served upon any person within this state who on behalf of<br>the insurance company is:Page No. 3a.Soliciting insurance;b.Making, issuing, or delivering any insurance contract; orc.Collecting or receiving any premium membership fee, assessment, or other<br>consideration for insurance.2.A copy of the process must be sent within ten days thereafter by registered mail by<br>the plaintiff or the plaintiff's attorney, to the defendant at the defendant's last-known<br>principal place of business.3.The defendant's receipt, or the receipt issued by the post office with which the letter<br>is registered or certified, showing the name of the sender of the letter, the name and<br>address of the person to whom the letter is addressed, and the affidavit of the<br>person mailing the letter showing a compliance herewith must be filed with the clerk<br>of the court in which the action is pending on or before the date the defendant is<br>required to appear or within such further time as the court allows.26.1-11-13. Right of service not abridged. This chapter does not limit or abridge theright to serve any process, notice, or demand upon any insurance company in any other manner<br>permitted by law.26.1-11-14. Judgment by default - Time of entry. A judgment by default under thischapter may not be entered until the expiration of thirty days from the date of the filing of the<br>affidavit of compliance.26.1-11-15. Defense of action by unauthorized company. Before any unauthorizedforeign or alien insurance company may file or cause to be filed any pleading in any action, suit,<br>or proceeding instituted against it, the company shall deposit with the clerk of the court in which<br>the action, suit, or proceeding is pending, cash or securities, or file with the clerk a bond with<br>good and sufficient sureties approved by the court in an amount fixed by the court sufficient to<br>secure the payment of any final judgment which may be rendered in the action. The court may,<br>in its discretion, dispense with the deposit or bond if the company makes a showing satisfactory<br>to the court that it maintains in the United States funds or securities, in trust or otherwise,<br>sufficient and available to satisfy any final judgment which may be entered in the action, suit, or<br>proceeding, and that the company will pay any final judgment rendered without requiring suit to<br>be brought on the judgment in the state where the securities are located, or procure a certificate<br>of authority to transact insurance business in this state.26.1-11-16.Court may order postponement.The court, in any action, suit, orproceeding in which service is made in the manner provided in section 26.1-01-04 or 26.1-11-12,<br>may order any postponement necessary to afford the defendant reasonable opportunity to<br>comply with this chapter and to defend the action.26.1-11-17. Construction. Section 26.1-11-16 does not prevent an unauthorized foreignor alien insurance company from filing a motion to quash a writ or to set aside service thereof<br>made in the manner provided in this chapter on the ground that the company has not done any of<br>the acts enumerated in this chapter or that the person on whom service was made pursuant to<br>section 26.1-11-12 was not doing any of the acts therein enumerated.26.1-11-18. Attorney's fees. In any action against an unauthorized foreign or alieninsurance company upon an insurance contract issued or delivered in this state to a resident of<br>this state or to a corporation or limited liability company authorized to do business in this state, if<br>the insurance company has failed for thirty days after demand prior to the commencement of the<br>action to make payment in accordance with the terms of the contract, and it appears to the court<br>that refusal was vexatious and without reasonable cause, the court may allow to the plaintiff a<br>reasonable attorney's fee and include the fee in any judgment that may be rendered in the action.<br>The fee may not exceed twelve and one-half percent of the amount which the court or jury finds<br>the plaintiff is entitled to recover against the insurance company, but the fee awarded may not bePage No. 4less than twenty-five dollars. Failure of an insurance company to defend any action is prima<br>facie evidence that its failure to make payment was vexatious and without reasonable cause.26.1-11-19. Application. This chapter does not apply to any action, suit, or proceedingagainst any unauthorized foreign or alien insurance company arising out of any reinsurance,<br>ocean marine, aircraft, or railway insurance contract, insurance against legal liability arising out of<br>the ownership, operation, or maintenance of any property having a permanent situs outside this<br>state, or insurance against loss of or damage to any property having a permanent situs outside<br>this state, when the insurance contract designates the commissioner or a bona fide resident of<br>this state the attorney of the unauthorized insurance company upon whom may be served all<br>lawful process in any action, suit, or proceeding instituted by or on behalf of an insured or<br>beneficiary arising out of the contract or when the insurance company enters a general<br>appearance in the suit, action, or proceeding.Page No. 5Document Outlinechapter 26.1-11 foreign insurance companies
