Key Takeaways
- North Dakota producers must act in the best interest of clients
- Producers must disclose compensation arrangements and conflicts of interest
- Trust funds and premiums must be handled according to strict requirements
- Producers must maintain accurate records
- Continuing education includes ethics requirements
Last updated: January 2026
Producer Conduct and Fiduciary Duties
North Dakota insurance producers have legal and ethical obligations to their clients and the public.
Producer Duties
Insurance producers owe duties to their clients:
Key Duties
| Duty | Description |
|---|---|
| Loyalty | Put client's interests first |
| Disclosure | Reveal all material information |
| Competence | Maintain professional knowledge |
| Confidentiality | Protect client information |
| Good Faith | Act honestly in all dealings |
Disclosure Requirements
North Dakota producers must disclose:
Compensation Disclosures
- Method of compensation (commission, fee, both)
- Material conflicts of interest
- Ownership interests in recommending insurers
- Referral arrangements
Product Disclosures
- All material terms and conditions
- Limitations and exclusions
- Premium and cost information
- Comparison with alternatives when replacing
Handling of Funds
Producers must handle premiums and client funds according to strict rules:
Premium Collection
| Requirement | Rule |
|---|---|
| Deposit | Promptly to insurer or trust account |
| Commingling | Cannot mix with personal funds |
| Trust Account | Required for holding premiums |
| Records | Must maintain detailed records |
Consequences of Mishandling
| Consequence | Detail |
|---|---|
| License Suspension | Immediate suspension pending investigation |
| License Revocation | Permanent loss of license |
| Restitution | Must repay all misappropriated funds |
| Civil Liability | Subject to lawsuits from harmed parties |
| Criminal Charges | Potential felony prosecution |
| NIPR Reporting | Reported to NIPR and other states |
Record Keeping Requirements
North Dakota requires producers to maintain records:
| Record Type | Retention Period |
|---|---|
| Applications | As required by law |
| Policy Documents | As required |
| Correspondence | As required |
| Replacement Documents | Per replacement regulations |
| Commission Records | As required |
Insurance Fraud
North Dakota prosecutes insurance fraud:
Types of Insurance Fraud
| Type | Description |
|---|---|
| Application Fraud | False statements on applications |
| Claims Fraud | Exaggerated or fabricated claims |
| Premium Fraud | Non-payment or diversion of premiums |
| Agent Fraud | Misappropriation, forgery, unauthorized policies |
Fraud Reporting
| Obligation | Requirement |
|---|---|
| Insurers | Must report suspected fraud |
| Producers | Should report suspected fraud |
| Immunity | Good faith reporters have civil immunity |
Exam Tip: Insurance fraud is taken seriously in North Dakota. Producers have an obligation to report suspected fraud and receive immunity for good faith reporting.
Continuing Education
North Dakota requires producers to complete continuing education:
- 24 hours every 2 years
- 3 hours of ethics required
- Up to 12 hours can be carried forward
- Specific LTC training required
Test Your Knowledge
What is the consequence of a North Dakota producer commingling client funds with personal funds?
A
B
C
D