Statement from the North Dakota Insurance Reserve Fund
Bismarck, ND – The North Dakota Insurance Reserve Fund (NDIRF) recognizes the pain and frustration experienced by those affected by serious accidents, including the Hatton‑Northwood school bus accident that occurred in September of 2023. Injuries, especially those involving children, have lasting impacts on families, and we do not take those experiences lightly.
It is important to clarify how NDIRF operates, the responsibilities it carries as a public entity risk pool, and the factors that influence complex claims involving multiple injured parties and limited coverage. Recent public discussion of this matter has included some misunderstanding of NDIRF’s role, the structure of coverage involved, and the legal framework governing these claims, and we appreciate the opportunity to provide additional context.
Claims Handling and Timelines
NDIRF does not dispute that claim resolution following the September 2023 bus accident has been lengthy. The timeline, however, was largely driven by factors beyond any single party’s control. These included the number of potential claimants, the severity and evolving nature of injuries, ongoing medical treatment stretching well into 2025, and the need to first allow primary insurance coverage to be fully evaluated before underinsured motorist coverage could be assessed.
Underinsured motorist coverage is secondary coverage that applies only after the at-fault driver’s primary insurance has been evaluated. This means NDIRF cannot properly determine whether those funds are available until the primary coverage process is complete.
The potential claimants to the underinsured funds include not only those injured in the accident, but also healthcare providers who provided treatment after the incident and health insurers that may have an interest in those funds.
In claims involving limited available funds and multiple potentially competing claims, NDIRF must act in a manner that ensures equitable treatment of all parties. In this instance, once it became clear that individual settlements could prejudice others, NDIRF sought court assistance through an interpleader action, not to avoid payment, but to ensure that available funds are allocated fairly, consistently, and transparently. Court‑supervised allocation is a recognized mechanism in such circumstances involving multiple claimants and limited coverage and is intended to protect claimants collectively, not disadvantage them individually. It also helps ensure that no individual claimant is disadvantaged by competing claims to the same limited pool of funds.
As the Hatton-Northwood case has progressed, additional claims and counterclaims have been filed that have expanded the scope of the litigation beyond the original purpose of the interpleader action. As noted, the interpleader action was intended to allow the court to allocate the available underinsured motorist coverage efficiently among all potential claimants. Once additional claims were asserted against the NDIRF, however, the proceeding became broader in scope thereby holding up the distribution of funds and creating additional costs and burden on the rest of the families.
Separately, recent public discussion has also raised questions about governmental liability standards and immunities applicable to political subdivisions in North Dakota. Political subdivisions in North Dakota operate within a statutory liability framework established by the Legislature and North Dakota courts, including limits on liability and certain immunities that apply to public entities. NDIRF does not create those legal standards and does not have the authority to waive them. Instead, NDIRF applies the law as written while administering coverage consistently and fairly. In the Hatton-Northwood matter, the issue before the court involves the allocation of limited underinsured motorist coverage among multiple potential claimants, rather than a determination of liability by NDIRF itself.
Public Claimants and Member Political Subdivisions
NDIRF was created by North Dakota’s political subdivisions in response to a lack of coverage options for political subdivisions in order to ensure that they could continue delivering essential services to North Dakotans. The NDIRF manages public resources and is obligated to apply coverage terms consistently, whether a claim involves a member or a third-party claimant.
Claims are evaluated based on the individual facts, documentation, and policy language, not on who the claimant is. Some claims involving member entities may be resolved more quickly because documentation is more readily available and fewer external parties are involved, while third‑party claims often require additional investigation, coordination with outside stakeholders, and legal review. These differences reflect claim complexity, not preferential treatment.
NDIRF has made operational improvements in response to regulatory examination findings in 2024. The examination focused on documentation and process consistency rather than determinations about legal liability in individual claims. The NDIRF remains committed to treating every claimant with respect, supporting our members, and upholding the trust placed in us by North Dakota communities.
Governance, Oversight, and Financial Stewardship
NDIRF is a member‑owned public entity risk pool, a governance model used nationwide among public entity risk pools serving local governments. Its Board of Directors is composed of representatives from participating local governments to ensure that those funding the pool, and accountable to taxpayers, maintain oversight of its operations.
Any return of surplus funds to members occurs only after actuarial review confirms that adequate reserves remain to meet current and future obligations. These decisions are separate from individual claim outcomes and are made to maintain long‑term financial stability for public entities and, ultimately, taxpayers. While $17.5 million has been returned to members in the conferment of benefits program since 2019, the NDIRF has incurred $71 million in claims during the same period.
The NDIRF recognizes the importance of public confidence. Steps have been taken to enhance governance, including the addition of an at‑large board position representing the general public. NDIRF will continue to evaluate additional measures that strengthen transparency and accountability.
Moving Forward
NDIRF’s core responsibility is to manage risk responsibly using public dollars, paying valid claims, safeguarding long‑term solvency, and applying coverage fairly and consistently. While no system handling complex, high‑impact claims is perfect, NDIRF remains committed to learning, improving, and engaging constructively with regulators, policymakers, members, and the public.
We acknowledge areas for growth and are addressing them, but we are also proud of the critical role we play in protecting North Dakota’s communities.
We encourage any stakeholders, whether members, claimants, or community partners, to reach out with questions or suggestions as we continue to strengthen our processes.
