Coverage Terms Defined: What is a Risk Pool?

Our name is the North Dakota Insurance Reserve Fund (NDIRF), so sometimes people refer to us as an insurance company.

But we’re not an insurance company. We’re a risk pool to which North Dakota political subdivision members pay contributions.

Your contributions are pooled together, and we manage the pooled funds to administer liability, auto, and public assets coverages, pay claims, generate investment income, and provide risk management training and education. Each year, any surplus funds are returned to members through our Conferment of Benefits program.

As a member-owned risk pool, NDIRF coverages are designed to meet the specific needs of North Dakota political subdivisions. But don’t think “specific needs” means our coverages are watered-down. Instead, it means our coverages are fortified to meet your specific needs.

North Dakota political subdivisions deliver critical services every day and, as a result, have unique risk exposures. We have been reviewing and updating our coverages since 1986 to build coverages that best support the broad and complex services you provide.

As a member-owned risk pool, NDIRF coverage rates are determined solely by our pool’s activity (i.e. member claim and loss activity). This control has enabled us to maintain stable rates rather than rates that dramatically fluctuate due to national and even international loss trends.

The annual investments we make in member training are also designed to help reduce member claim and loss activity, further supporting the health and longevity of our risk pool.

Risk Pool History

Risk pools like the NDIRF rose to popularity in the late 1980s when the commercial liability insurance market was in crisis, resulting in providers’ abrupt exit or exorbitant pricing within the government liability market.

The crisis’ devastation captured headlines. Notably the March 24, 1986, Times Magazine cover, “Sorry, America. Your Insurance Has Been Cancelled.”