State Bonding Fund

What is the North Dakota State Bonding Fund?

The NDIRF has administered the North Dakota State Bonding Fund (Bonding Fund) since July 2019 on behalf of the North Dakota Insurance Department (Insurance Department).

9370158. NDCC Section 26.1-21-06, the Bonding Fund provides “fidelity bond” (ndlegis.gov/cencode/t26-1c21, accessed 3 Jan. 2024) coverage for North Dakota state agencies and political subdivisions. “Black’s Law Dictionary, 6^th Edition, defines a fidelity bond as a bond covering an employer for loss due to embezzlement, larceny, or gross negligence by employees” (Prepared by the North Dakota Legislative Council, Surety Bonds – Background Memorandum, 2003).

Each “state agency and each political subdivision shall apply to be bonded in the fund no less often than on a biennial basis or when a change in coverage is requested, whichever occurs first” (ndlegis.gov/cencode/t26-1c21, accessed 2 Jan. 2024). A political subdivision is a “county, township, park district, school district, city, and any other unit of local government which is created either by statute or by the Constitution of North Dakota for local government or other public purposes” (ndlegis.gov/cencode/t26-1c21, accessed 2 Jan. 2024).

Currently, state agencies and political subs don’t pay a premium for Bonding Fund coverage; however, if the Bonding Fund’s reserves are less than $2 million, the Insurance Department Commissioner can assess a premium of $2.50 per state agency or political subdivision employee. This premium fee is currently waived because the Bonding Fund’s reserves are more than $2 million.

If your entity needs to report a Bonding Fund claim, it has only 60 days from the date “after the discovery of any default or wrongful act on the part of any public employee or public official for which the fund is or may become liable” (ndlegis.gov/cencode/t26-1c21-11, accessed 3 Jan. 2024). “If a claim is not filed within the time limited by this section, the claim is waived” (ndlegis.gov/cencode/t26-1c21-11, accessed 3 Jan. 2024).

“Any person injured by a default or wrongful act may present the claim to the commissioner within sixty days after the discovery of such default or wrongful act. If a claim is not filed within the time limited by this section, the claim is waived” (ndlegis.gov/cencode/t26-1c21-11, accessed 3 Jan. 2024).

“A claim filed under this section must contain an abstract of the facts upon which the claim is based and must be verified by the claimant or by someone in the claimant's behalf” (ndlegis.gov/cencode/t26-1c21-11, accessed 3 Jan. 2024).

Your entity can first report its claim to the NDIRF Underwriting Department at (701) 224-988 or BondingFund@ndirf.com. Our Underwriting Team will then notify the North Dakota State Auditor’s Office (Auditor’s Office). The Auditor’s Office is responsible for completing an investigation and sharing its findings with the Insurance Department.

If your entity has further questions about the Bonding Fund, including renewals and filing a claim, contact the NDIRF Underwriting Department at (701) 224-1988 or BondingFund@ndirf.com.