26.1-52-03. Board
1. A board of directors consisting of seven members shall direct the operations of the
property insurance placement facility. The seven members are comprised of five
directors from the insurance industry and two public directors as follows:
a. Two of the five industry representatives must come from domestic insurance
companies, one must come from county mutual insurance companies, one from
foreign stock companies, and one from foreign mutual companies. The
commissioner shall appoint the first board on a staggered basis. Subsequent
board members are to be elected by facility members.
b. The public directors must be appointed by the commissioner. Public directors
may include licensed insurance agents.
c. The term of each director is three years beginning on January first of the year the
director is elected or appointed, except as staggered in the initial appointment
process. A vacancy must be filled by election by the other directors for the
remainder of the term. A vacancy to a public directorship must be filled by
appointment by the commissioner for the remainder of the term. If the board fails
to elect a replacement for an industry vacancy within thirty days, the
commissioner shall appoint a replacement for the remainder of the term.
2. The board shall prepare and maintain a plan of operation which provides for the
management of the facility, including the hiring of employees or contracting services to
carry out the plan of operation, establishment of necessary facilities within the state,
assessment of members to defray losses and expenses, negotiating commission
agreements, establishing reasonable underwriting standards, developing reasonable
cancellation and nonrenewal standards, acceptance and cession of reinsurance,
adopting procedures for determining amounts of insurance to be provided, procedures
for payment of claims, procedures for appealing adverse actions, procedures for
reporting the plan experience to a statistical agent, and procedures for contracting
facility functions to the private sector. The board has ninety days to submit the initial
plan of operation to the commissioner for approval. All subsequent amendments to the
plan of operation must be submitted to the commissioner for approval. The
commissioner may require the board to waive the assessment requirement for an
insurer if the assessment would cause a significant financial impairment to the insurer
or would jeopardize the solvency of the insurer.
