Company: NODK
Filing Date: 2025-03-07
Form Type: 10-K
Source: 0001174947-25-000304
Chunk: 1042

Company: NI Holdings, Inc.
Filing Date: 2025-03-07
Form: 10-K
Item: Item 2
Chunk 1042
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 December
31, 2024. This audit report appears in Part II, Item 8 “Financial Statements and Supplementary Data” of this 2024 Annual Report.

Material Weakness in Internal Control Over Financial Reporting

A material weakness is a deficiency, or a combination of deficiencies,
in internal control over financial reporting (“ICFR”), such that there is a reasonable possibility that a material misstatement
of the Company's annual or interim financial statements will not be prevented or detected on a timely basis.

As previously disclosed in our Quarterly Report on Form 10-Q/A for
the quarter ended June 30, 2024, the Company did not design and maintain effective controls over its accounting for intercompany reinsurance
pooling activity. Specifically, it lacked an effectively designed internal control related to the evaluation of pooling payable/receivable
balances, including when a pool member is sold. This material weakness resulted in a material error and the restatement of the Company's
consolidated financial statements for the three- and six-month periods ended June 30, 2024. Additionally, this material weakness could
result in misstatements of the aforementioned accounts or disclosures that would result in a material misstatement to the annual or interim
consolidated financial statements that would not be prevented or detected.

Remediation Plan for Material Weakness

Upon identification of the material weakness, management developed
a remediation plan, which included designing and implementing a new quarterly intercompany pooling reconciliation and review process to
fully evaluate pooling payable/receivable balances in support of financial reporting for GAAP purposes. The material weakness is considered
remediated as of the end of the period covered by this report as the remediation plan has been implemented and there has been sufficient
time for the Company to conclude through testing that the controls are operating effectively. As the Company's management, under the oversight
of the Audit Committee, continues to evaluate and improve the Company's ICFR, management may decide to take additional measures to address

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control deficiencies or determine to modify, or in appropriate circumstances not to complete, certain of the remediation measures identified.
We can offer no assurance that these initiatives will ultimately have the intended effects.

Changes in Internal Control over Financial Reporting

In the ordinary course of business, we periodically
review our system of internal control over financial reporting to identify opportunities to improve our controls and increase efficiency,
while ensuring that we maintain an effective internal control environment. Except for the identified material weakness above, there have
not been any changes in