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September 20, 2019


Audit Shows Opportunity for Cost Savings to North Dakota Taxpayers

Contact information: Brianna Ludwig, North Dakota State Auditor’s Office, 701-328-2453, bsludwig@nd.gov

State Auditor Joshua Gallion today released an audit of the North Dakota Insurance Department highlighting the fire insurance premium tax which is paid for by citizens through their premiums. The audit shows that over the last eight years, $13.4 million was put into the general fund rather than going back to the fire districts because of a limit set by the state legislature.

Annually, the Insurance Department distributes the fire insurance tax money back out to certified city fire districts, certified rural fire departments, or certified fire protection districts. These funds can be used to update or improve fire equipment, training, buildings, services, etc.

The total amount that can be allocated back out each year is limited to an amount set by the state legislature. Any amount collected exceeding the limit is required to be transferred to the general fund. During our audit, we found that over $3.6 million or 20% of the amount collected during the biennium ended June 30, 2019, was put into the general fund.

If these fire districts were to get an increase in funding, there is potential for their Public Protection Classification (PPC) rating to go down which would result in lower premiums and cost savings for citizens in the fire district.

"Increasing the funding to these fire districts would allow for better equipment, more training, and cost savings to citizens through lower insurance premiums,” Auditor Gallion said. “The fact that 83% of our communities fall in the bottom half of the PPC ratings means there is a great need for improved resources to our local fire districts.”  

This audit is a result of the State Auditor’s Office statutory responsibility to audit or review each state agency once every two years. The complete audit report can be found on our website, http://bit.ly/NDInsurance19.  


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