nd.gov - The Official Portal for North Dakota State Government
North Dakota: Legendary. Follow the trail of legends
   
 
North Dakota Insurance Department
Jon Godfread, Commissioner
Twitter Flickr YouTube RSS
communications prescription shic healthcare enforcement compliance forms special
consumers producers companies
Frequently Asked Questions
 
What is a conversion?
A conversion, also called demutualization, is the process by which a mutual insurance company, such as Nodak Mutual Insurance Company, which is owned by its members, becomes a stock insurance company owned by shareholders.
 
What is the process Nodak will need to follow to convert?
On January 21, 2016, Nodak’s Board of Directors approved a Plan of Conversion which calls for Nodak to convert from a mutual company to a stock company. By April 20, 2016, Nodak must file the Plan with the Insurance Department which must approve or disapprove the Plan. If the Plan is approved, eligible members will be given the opportunity to vote on the Plan. If the members approve the plan, the conversion will take place. If either the Department or the members disapprove the plan, Nodak will remain a mutual company.
 
What is the Department’s role?
The Department will review Nodak Mutual’s Plan of Conversion and, utilizing experts as needed, will determine whether the plan complies with the law, whether it is fair and equitable to the members and whether the company would be in a position to remain in good condition for the future.
 
Who are eligible members?  
If you are a member who had a policy in force as of January 21, 2016, and that policy remains in force, you are an eligible member.
 
Will this affect my insurance policy?
No, your insurance policy remains the same.
 
Do I need to do anything?
Nodak is required to provide you a Notice when it files the Plan with the Insurance Department. This Notice will provide further details that you will want to read carefully. You will have the opportunity to provide comments to the Insurance Department, Nodak Mutual or both by March 14, 2016. This information will also be available on the North Dakota Insurance Department’s website.

If the Department approves the Plan, eligible members will be provided the opportunity to vote. Nodak is required to provide you notice of this vote. You can vote either for or against the conversion.
 
What happens if the Plan of Conversion is approved?
If the Plan is approved, Nodak Mutual will convert to a stock company called Nodak Insurance Company. 
 
Will I automatically receive stock?
No, you will receive subscription rights which will provide you the opportunity to buy shares of stock for a price that is not known at this time. These subscription rights give you the first right to buy stock before anybody else.
 
Do I have to buy stock?
No. If you don’t choose to buy stock your subscription rights you will be sent their value in the form of a check. However, you cannot choose to buy some stock and receive some cash, you must either choose one or the other.
 
How much money will I get?
The amount of the cash you would receive if you do not buy the stock will depend on the fair market value of those rights. That value is being determined by an independent expert. At a later time, you will receive documents from the company explaining the process for purchasing stock and describing the payment you would receive if you do not buy stock.
.
What if I don’t make a choice?
If you do not make an active choice between buying stock or cash before the stated date you will automatically be sent cash. You will not receive a chance to change your mind.
 
If the conversion is approved, when will it be completed?
The effective date is unknown at this time. However, eligible members will be given 30 days from the date of the Notice to Members in which to provide comments. If the Department approves the Plan, Nodak will have a meeting for members to vote. Nodak must give at least 45 days’ notice prior to this meeting.
 
If the conversion happens, who is my insurance company?
The new insurance company will be called Nodak Insurance Company. Of course, consumers can choose to change insurance companies whenever they want to under any applicable laws.
 
What happens if the Plan is not approved?
If the Plan of Conversion is not approved, Nodak Mutual Insurance Company will remain a mutual company and nothing will change for you.
 
Who can I talk to with my questions?
You may contact Nodak directly at 1-877-814-5011 or email comments@nodakmutual.com.

Or

You may contact the North Dakota Insurance Department directly at 1-800-247-0560 or email insurance@nd.gov.
 

North Dakota Insurance Department
600 E. Boulevard Ave.
Bismarck, ND 58505-0320
Phone 701.328.2440
Toll free 800.247.0560
Fax 701.328.4880

Copyright © 2017 North Dakota Insurance Department
Contact us
About us
RSS feeds
Site map
Privacy policy
Security policy
Disclaimer