Company: NODK
Filing Date: 2025-03-07
Form Type: 10-K
Source: 0001174947-25-000304
Chunk: 9

Company: NI Holdings, Inc.
Filing Date: 2025-03-07
Form: 10-K
Item: Item 1
Chunk 9
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 against declines
in the price of the particular crop. Most of the multi-peril crop insurance policies written today combine both yield and revenue protection,
with the revenue component providing the policyholder with the option to calculate price-based losses on the higher of the prevailing
price when the crop is planted or the price at harvest.

Beginning in 1980, the U.S. Congress expanded
the federal crop insurance program to cover more crops and regions of the country. More importantly, Congress permitted private sector
insurers to market and administer federal insurance policies in exchange for an opportunity to earn a profit while bearing a portion of
the insurance risk. Congress also authorized a premium subsidy for the farmers and ranchers. As a result, there was a rapid increase in
the acres insured from approximately 26 million acres in 1980 to 100 million acres in 1990. The Federal Crop Insurance Reform Act of 1994
made participation in the crop insurance program mandatory for farmers to be eligible to participate in other government support programs
and provided a minimum level of free catastrophic risk coverage for insured and noninsured crops.

American Farm Bureau Insurance Services (“AFBIS”)
underwrites all of our, as well as several other state Farm Bureau affiliated insurers, multi-peril crop and crop hail insurance policies.
AFBIS also processes and administers all claims made by policyholders under such policies. We reimburse AFBIS for its actual loss adjustment
expense with respect to the policies issued by us and pay AFBIS a percentage of the premiums we receive with respect to such policies.

Marketing and Distribution

Our marketing philosophy is to sell profitable
business using a focused, cost-effective distribution system. Nodak Insurance distributes its insurance products through exclusive agents
in North Dakota, while American West, Battle Creek, Primero, and Direct Auto rely on independent agents.

We review our agents with respect to both premium
volume and profitability. Our captive agents for Nodak Insurance are hired and trained by our sales staff in North Dakota, while the independent
agents for our other companies are appointed by the underwriting or marketing staff for each respective company. We hold regular training
sessions when we introduce new products or product changes, and we identify specific topics that may help our agents more effectively
market our products.

For the year ended December 31, 2024, no individual
agent was responsible for more than 5% of the Company’s direct premiums written.

Agents are compensated through a fixed base commission
structure. Agents receive commission as a