Company: NODK
Filing Date: 2025-03-07
Form Type: 10-K
Source: 0001174947-25-000304
Chunk: 15

Company: NI Holdings, Inc.
Filing Date: 2025-03-07
Form: 10-K
Item: Item 1
Chunk 15
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 insurance. In the states in which our insurance company subsidiaries write insurance, premium rates for the various lines
of insurance are subject to either prior approval or limited review upon implementation. The premium rates for multi-peril crop insurance
are established by the RMA. For additional information, see Part I, Item 1, “Crop Insurance.”

Many jurisdictions have laws and regulations that
limit an insurer’s ability to withdraw from a particular market. For example, states may limit an insurer’s ability to cancel
or non-renew policies. Laws and regulations that limit cancellation and non-renewal may restrict our ability to exit unprofitable marketplaces
in a timely manner.

Crop Insurance

The multi-peril crop insurance business is overseen
by the federal government through the RMA. The RMA outlines policy language, establishes premium rates, and develops loss adjustment procedures
for insurance programs under the federal crop insurance program. In addition, through the Federal Crop Insurance Corporation (“FCIC”),
the RMA provides premium subsidies to farmers and sets the commission percentages that can be paid to agents. All participating insurance
carriers are subject to the same Standard Reinsurance Agreement (“SRA”), which outlines items such as reporting requirements
and claims handling procedures, proportional and non-proportional reinsurance terms, and the level of administrative and operating reimbursement
paid to insurers. The RMA also provides oversight to the approved insurance providers (“AIPs”). The AIPs are required to use
the policies, premium rates, and loss adjustment procedures set by the RMA without modification and are required to issue a policy to
any eligible applicant regardless of risk or profitability. The RMA conducts audits of AIPs with respect to claims and loss adjustment
procedures.

American Agricultural Insurance Company is the
AIP through which we issue multi-peril crop insurance policies and is the holder of the SRA with the FCIC.

NAIC Risk-Based Capital Requirements

North Dakota and most other states have adopted
the NAIC system of risk-based capital requirements that require insurance companies to calculate and report information under a risk-based
formula. These risk-based capital requirements attempt to measure statutory capital and surplus needs based on the risks in a company’s
mix of products and investment portfolio. Under the formula, a company first determines its “authorized control level” risk-based
capital. This authorized control level takes into account (i) the risk with respect to the insurer’s assets; (ii) the risk of adverse
insurance experience with respect to the insurer’s liabilities