Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)

- Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion is intended to provide a more comprehensive review of our operating results and financial condition than can be obtained from reading the unaudited consolidated financial statements alone. Unless otherwise noted, the information in the following discussion is being presented for our continuing operations. This discussion should be read in conjunction with the unaudited consolidated financial statements and the notes thereto included in Part I, Item 1, "Financial Statements." Some of the information contained in this discussion and analysis or set forth elsewhere in this Form 10-Q constitutes forward-looking statements that involve risks and uncertainties. Please see "Forward-Looking Statements" included elsewhere in this Form 10-Q. Part I, Item 1A, "Risk Factors" included in our 2024 Annual Report and Part II, Item 1A "Risk Factors" included in this Form 10-Q, should also be reviewed for a discussion of important factors that could cause actual results to differ materially from the results described, or implied by, the forward-looking statements contained herein.

All dollar amounts included in Item 2 herein, except per share data, are in thousands.

Financial Highlights

2025 Third Quarter Consolidated Results of Operations

●

Net loss of $1,666, or ($0.08) per share basic and ($0.08) per share diluted

●

Net premiums earned of $71,905

●

Net investment income of $3,040

●

Net unfavorable prior year reserve development of $8,554

●

Underwriting loss of $6,521

●

Combined ratio of 109.1%

●

Operating cash flows of ($28,511)

2025 Third Quarter Consolidated Financial Condition

●

Total cash and investments of $365,238

●

Total assets of $543,815

●

Unpaid losses and loss adjustment expenses of $157,383

●

Total liabilities of $300,015

●

Shareholders' equity of $243,800

Results of Continuing Operations

Our consolidated net loss from continuing operations was $1,666 for the three months ended September 30, 2025, compared to net loss from continuing operations of $2,705 for the three months ended September 30, 2024. Our consolidated net loss from continuing operations was $7,257 for the nine months ended September 30, 2025, compared to net loss from continuing operations of $3,248 for the nine months ended September 30, 2024.

The major components of our revenues and net loss are shown below:

		Three Months Ended September 30,								Nine Months Ended September 30,
		2025				2024				2025				2024
Revenues:
Net premiums earned		$	71,905			$	83,270			$	212,407			$	238,323
Fee and other income			261				491				807				1,590
Net investment income			3,040				2,811				9,024				8,089
Net investment gains			1,362				2,412				1,821				3,288
Total revenues			76,568				88,984				224,059				251,290
Components of net loss:
Net premiums earned			71,905				83,270				212,407				238,323
Losses and loss adjustment expenses			56,197				65,100				161,329				174,602
Amortization of deferred policy acquisition costs and other underwriting and general expenses			22,229				27,340				72,163				80,381
Underwriting loss			(6,521	)			(9,170	)			(21,085	)			(16,660	)
Fee and other income			261				491				807				1,590
Net investment income			3,040				2,811				9,024				8,089
Net investment gains			1,362				2,412				1,821				3,288
Loss from continuing operations before income taxes			(1,858	)			(3,456	)			(9,433	)			(3,693	)
Income tax benefit			(192	)			(751	)			(2,176	)			(445	)
Net loss from continuing operations		$	(1,666	)		$	(2,705	)		$	(7,257	)		$	(3,248	)

Net Premiums Earned

		Three Months Ended September 30,								Nine Months Ended September 30,
		2025				2024				2025				2024
Net premiums earned:
Direct premium		$	81,819			$	90,125			$	236,523			$	257,024
Assumed premium			1,741				1,880				2,476				2,684
Ceded premium			(11,655	)			(8,735	)			(26,592	)			(21,385	)
Total net premiums earned		$	71,905			$	83,270			$	212,407			$	238,323

Net premiums earned for the three months ended September 30, 2025, decreased $11,365, or 13.6%, compared to the three months ended September 30, 2024. Net premiums earned for the nine months ended September 30, 2025, decreased 25,916, or 10.9%, compared to the nine months ended September 30, 2024.

		Three Months Ended September 30,								Nine Months Ended September 30,
		2025				2024				2025				2024
Net premiums earned:
Private Passenger Auto		$	23,206			$	22,612			$	68,787			$	67,185
Non-Standard Auto			10,859				23,001				43,617				74,733
Home and Farm			23,642				23,479				68,673				66,817
Crop			10,364				10,885				20,697				20,315
All Other			3,834				3,293				10,633				9,273
Total net premiums earned		$	71,905			$	83,270			$	212,407			$	238,323

Below are comments regarding significant changes in net premiums earned by business segment:

Private Passenger Auto - Net premiums earned for the third quarter of 2025 increased $594, or 2.6%, compared to the same period in 2024. Net premiums earned for the first nine months of 2025 increased $1,602, or 2.4% from the first nine months of 2024. Results were driven by new business growth in North Dakota as well as significant rate increases in South Dakota and Nebraska, partially offset by lower new business and retention levels in South Dakota and Nebraska as a result of underwriting actions taken.

Non-Standard Auto - Net premiums earned for the third quarter of 2025 decreased $12,142, or 52.8%, compared to the same period in 2024. Net premiums earned for the first nine months of 2025 decreased $31,116, or 41.6% from the first nine months of 2024. These decreases were driven by strategic decisions to exit Nevada and significantly reduce written premium in the Chicago market. During the third quarter we also made the strategic decision to stop writing non-standard auto business in Illinois, Arizona, and South Dakota, and existing policies will be non-renewed. We anticipate further reductions in net earned premiums over the next twelve months as a result of the decisions to run off these non-standard auto operations.

Home and Farm - Net premiums earned for the third quarter of 2025 increased $163, or 0.7%, compared to the same period in 2024. Net premiums earned for the first nine months of 2025 increased $1,856, or 2.8% from the first nine months of 2024. Results were driven by new business growth in North Dakota, rate increases, and increased insured property values, partially offset by lower retention rates and new business levels in Nebraska as a result of underwriting actions taken to improve profitability. In addition, net premiums earned for the second and third quarter of 2025 were impacted by the recognition of higher ceded premiums earned as a result of a significant catastrophe event in North Dakota during the second quarter of 2025.

Crop - Net premiums earned for the third quarter of 2025, decreased $521, or 4.8%, compared to the same period in 2024. Net premiums earned for the first nine months of 2025 increased $382, or 1.9% from the first nine months of 2024. The decrease in the third quarter of 2025 was driven by lower commodity prices compared to the prior year. The year-to-date increase was driven by the recognition of more favorable premium adjustments, related to the settlement of prior crop year claims, in the first quarter of 2025 compared to the first quarter of 2024.

All Other - Net premiums earned for the third quarter of 2025, increased $541, or 16.4%, compared to the same period in 2024. Net premiums earned for the first nine months of 2025 increased $1,360, or 14.7%, from the first nine months of 2024. Results were driven by rate increases for the North Dakota commercial and excess lines of business.

Losses and Loss Adjustment Expenses

		Three Months Ended September 30,								Nine Months Ended September 30,
		2025				2024				2025				2024
Net losses and loss adjustment expenses:
Direct losses and loss adjustment expenses		$	57,828			$	69,692			$	207,589			$	184,561
Assumed losses and loss adjustment expenses			523				617				574				886
Ceded losses and loss adjustment expenses			(2,154	)			(5,209	)			(46,834	)			(10,845	)
Total net losses and loss adjustment expenses		$	56,197			$	65,100			$	161,329			$	174,602

Our net losses and loss adjustment expenses for the three months ended September 30, 2025, decreased $8,903, or 13.7%, compared to the three months ended September 30, 2024. Our net losses and loss adjustment expenses for the nine months ended September 30, 2025, decreased $13,273, or 7.6%, compared to the nine months ended September 30, 2024.

		Three Months Ended September 30,								Nine Months Ended September 30,
		2025				2024				2025				2024
Net losses and loss adjustment expenses:
Private Passenger Auto		$	14,114			$	14,070			$	41,309			$	45,292
Non-Standard Auto			15,380				20,504				46,777				56,687
Home and Farm			18,556				22,023				55,355				56,230
Crop			5,339				6,190				13,306				11,944
All Other			2,808				2,313				4,582				4,449
Total net losses and loss adjustment expenses		$	56,197			$	65,100			$	161,329			$	174,602

		Three Months Ended September 30,								Nine Months Ended September 30,
		2025				2024				2025				2024
Loss and loss adjustment expense ratio:
Private Passenger Auto			60.8%				62.2%				60.1%				67.4%
Non-Standard Auto			141.6%				89.1%				107.2%				75.9%
Home and Farm			78.5%				93.8%				80.6%				84.2%
Crop			51.5%				56.9%				64.3%				58.8%
All Other			73.2%				70.2%				43.1%				48.0%
Total loss and loss adjustment expense ratio			78.2%				78.2%				76.0%				73.3%

Below are comments regarding significant changes in the net losses and loss adjustment expenses, and the net loss and loss adjustment expense ratios, by business segment:

Private Passenger Auto - The net loss and loss adjustment expense ratio decreased 1.4 percentage points and 7.3 percentage points in the three- and nine-month periods ended September 30, 2025, respectively, compared to the same periods in 2024. These decreases in the current year were driven by improved loss severity on physical damage claims and rate increases impacting net premiums earned.

Non-Standard Auto - The net loss and loss adjustment expense ratio increased 52.5 percentage points and 31.3 percentage points in the three- and nine-month periods ended September 30, 2025, respectively, compared to the same period in 2024. These increases were driven by higher unfavorable prior year development on liability loss reserves due to higher loss frequency and severity.

Home and Farm - The net loss and loss adjustment expense ratio decreased 15.3 percentage points and 3.6 percentage points in the three- and nine-month periods ended September 30, 2025, respectively, compared to the same periods in 2024. The elevated 2025 net loss and loss adjustment expense ratios were driven by losses from a significant catastrophe event in North Dakota during the second quarter of 2025 that exceeded the Company's $20,000 retention as well as the related ceded premiums earned. Although there were no catastrophes during 2024, the net loss and loss adjustment expense ratios for the three- and nine-month periods ended September 30, 2024, were impacted by elevated non-catastrophe weather losses in North Dakota and Nebraska. Catastrophe losses, net of reinsurance, for the Home and Farm segment accounted for 29.0 percentage points of the net loss and loss adjustment expense ratio for the nine-month period ended September 30, 2025, and did not have a negative impact for the same periods in 2024.

Crop - The net loss and loss adjustment expense ratio decreased 5.4 percentage points and increased 5.5 percentage points in the three- and nine-month periods ended September 30, 2025, respectively, compared to the same periods in 2024. The current quarter decrease was driven by the recognition of a reduction to the anticipated loss ratio for the current crop year compared to the anticipated loss ratio remaining relatively flat in the prior year. The year-to-date increase was driven by higher crop hail losses in the current year compared to the prior year.

All Other - The net loss and loss adjustment expense ratio increased 3.0 percentage points and decreased 4.9 percentage points in the three- and nine-month period ended September 30, 2025, compared to the same period in 2024. The current quarter increase was driven by unfavorable development for commercial property losses related to the significant catastrophe event in North Dakota during the second quarter of 2025. The year-to-date decrease was driven by favorable loss development related to the continued run-off of our participation in an assumed domestic and international reinsurance pool of business.

Underwriting and General Expenses and Expense Ratio

		Three Months Ended September 30,								Nine Months Ended September 30,
		2025				2024				2025				2024
Underwriting and general expenses:
Amortization of deferred policy acquisition costs		$	13,725			$	17,616			$	46,627			$	53,723
Other underwriting and general expenses			8,504				9,724				25,536				26,658
Total underwriting and general expenses			22,229				27,340				72,163				80,381
Expense Ratio			30.9%				32.8%				34.0%				33.7%

The expense ratio is calculated by dividing other underwriting and general expenses and amortization of deferred policy acquisition costs by net premiums earned. The expense ratio measures a company's operational efficiency in producing, underwriting, and administering its insurance business. The overall expense ratio decreased 1.9 percentage points and increased 0.3 percentage points in the three-and nine-month periods ended September 30, 2025, respectively, compared to the same periods in 2024. The decrease in the amortization of deferred policy acquisition costs is due to lower deferrable costs resulting from the strategic reduction in premium for the Non-Standard Auto segment, which generally pays higher agent commissions than our other segments. Other underwriting and general expenses are generally consistent year-over-year, with the elevated expenses during the third quarter of 2024 being the result of the costs associated with the execution of an executive separation agreement.

Underwriting Gain (Loss) and Combined Ratio

		Three Months Ended September 30,								Nine Months Ended September 30,
		2025				2024				2025				2024
Underwriting gain (loss):
Private Passenger Auto		$	2,527			$	1,072			$	6,144			$	566
Non-Standard Auto			(9,464	)			(7,830	)			(22,828	)			(12,846	)
Home and Farm			(2,751	)			(6,162	)			(10,814	)			(10,974	)
Crop			3,287				2,912				4,013				4,877
All Other			(120	)			838				2,400				1,717
Total underwriting loss		$	(6,521	)		$	(9,170	)		$	(21,085	)		$	(16,660	)

		Three Months Ended September 30,								Nine Months Ended September 30,
		2025				2024				2025				2024
Combined ratio:
Private Passenger Auto			89.1%				95.2%				91.1%				99.1%
Non-Standard Auto			187.1%				134.0%				152.3%				117.2%
Home and Farm			111.6%				126.2%				115.7%				116.5%
Crop			68.3%				73.3%				80.6%				76.0%
All Other			103.1%				74.5%				77.4%				81.5%
Combined ratio			109.1%				111.0%				110.0%				107.0%

Underwriting gain (loss) measures the pre-tax profitability of our insurance operations. It is derived by subtracting losses and loss adjustment expenses, amortization of deferred policy acquisition costs, and other underwriting and general expenses from net premiums earned. The combined ratio represents the sum of these losses and expenses as a percentage of net premiums earned and measures our overall underwriting profit.

The total underwriting loss decreased $2,649 for the three-month period ended September 30, 2025, compared to the same period in 2024. The total underwriting loss increased $4,425 for the nine-month period ended September 30, 2025, compared to the same period in 2024. These results were driven by the factors discussed in the Loss and Loss Adjustment Expenses as well as the Underwriting and General Expenses and Expense Ratio sections above.

The overall combined ratio decreased 1.9 percentage points in the three-month period ended September 30, 2025, compared to the same period in 2024. The overall combined ratio increased 3.0 percentage points in the nine-month period ended September 30, 2025, compared to the same period in 2024. These results were driven by the factors discussed in the Loss and Loss Adjustment Expenses as well as the Underwriting and General Expenses and Expense Ratio sections above.

Fee and Other Income

We had fee and other income of $261 and $807 for the three and nine months ended September 30, 2025, respectively, compared to $491 and $1,590 for the three and nine months ended September 30, 2024, respectively. These decreases were driven by strategic reductions in the premiums that generate fee income and write-offs of uncollectable premiums receivable.

Net Investment Income

The following table shows our average cash and invested assets, net investment income, and return on average cash and invested assets for the reported periods for continuing operations:

		Three Months Ended September 30,								Nine Months Ended September 30,
		2025				2024				2025				2024
Average cash and invested assets		$	385,668			$	376,594			$	388,833			$	367,614
Net investment income		$	3,040			$	2,811			$	9,024			$	8,089
Gross return on average cash and invested assets			4.0%				3.9%				4.0%				3.9%
Net return on average cash and invested assets			3.2%				3.0%				3.1%				2.9%

Net investment income increased $229 for the three months ended September 30, 2025, compared to the three months ended September 30, 2024. Net investment income increased $935 for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024. These increases were primarily driven by the higher interest rate environment which resulted in higher reinvestment rates in our fixed income portfolio.

Gross and net return on average cash and invested assets increased year-over-year, primarily driven by the favorable interest rate environment that resulted in higher net investment income on an increased average fixed income securities balance (measured at fair value), partially offset by lower interest rates in the current year periods for cash and cash equivalents. The increase in average cash and invested assets was driven by changes in the fair value of fixed income securities due to the interest rate environment as well as positive operating cash flows during the first six months of 2025.

Net Investment Gains

Net investment gains consisted of the following:

		Three Months Ended September 30,								Nine Months Ended September 30,
		2025				2024				2025				2024
Gross realized gains		$	1,151			$	272			$	1,900			$	662
Gross realized losses, excluding credit impairment losses			(340	)			(227	)			(656	)			(699	)
Net realized gains (losses)			811				45				1,244				(37	)
Change in net unrealized gains on equity securities			551				2,367				577				3,325
Net investment gains		$	1,362			$	2,412			$	1,821			$	3,288

We had net realized gains of $811 and $1,244 for the three and nine months ended September 30, 2025, respectively, compared to net realized gains of $45 and losses of $37 for the three and nine months ended September 30, 2024, respectively. The elevated net realized gains in the nine months ended September 30, 2025, were driven by sales of equity securities that were executed as part of the strategic management of our investment portfolio. No credit impairment losses were reported during any of the periods presented.

We experienced an increase of $551 and $577 in net unrealized gains on equity securities during the three and nine months ended September 30, 2025, respectively. We experienced an increase in net unrealized gains on equity securities of $2,367 and $3,325 during the three and nine months ended September 30, 2024, respectively. These results were driven by the impact of changes in fair value attributable to overall favorable equity markets during those periods.

Our fixed income securities are classified as available for sale because we will, from time to time, execute sales of securities that are not impaired, consistent with our investment goals and policies. The fixed income portion of the portfolio experienced net unrealized gains of $3,895 and $8,677 during the three and nine months ended September 30, 2025, respectively, compared to net unrealized gains of $11,138 and $8,848 during the three and nine months ended September 30, 2024, respectively. The changes were primarily the result of changes in U.S. interest rates. The change in the fair value of fixed income securities is not reflected in net income; rather it is reflected as a separate component (net of income taxes) of other comprehensive income.

Income (Loss) before Income Taxes

For the three months ended September 30, 2025, we had a pre-tax loss of $1,858 compared to a pre-tax loss of $3,456 for the three months ended September 30, 2024. The year-over-year change was largely attributable to lower levels of non-catastrophe weather losses, improved loss experience for Private Passenger Auto, and higher net investment income in the current year, partially offset by lower net investment gains and higher unfavorable prior year loss reserve development for Non-Standard Auto.

For the nine months ended September 30, 2025, we had a pre-tax loss of $9,433 compared to pre-tax loss of $3,693 for the nine months ended September 30, 2024. The year-over-year change was largely attributable to the catastrophe losses for Home and Farm in North Dakota, lower net investment gains, and unfavorable prior year loss reserve development for Non-Standard Auto, partially offset by lower levels of non-catastrophe weather losses, improved loss experience for Private Passenger Auto, and higher net investment income.

Income Tax Expense (Benefit)

We recorded an income tax benefit of $192 for the three months ended September 30, 2025, compared to an income tax benefit of $751 for the three months ended September 30, 2024. Our effective tax rate for the third quarter of 2025 was 10.3% compared to an effective tax rate of 21.7% for the third quarter of 2024.

We recorded an income tax benefit of $2,176 for the nine months ended September 30, 2025, compared to income tax benefit of $445 for the nine months ended September 30, 2024. Our effective tax rate for the first nine months of 2025 was 23.1% compared to an effective tax rate (excluding tax effects relates to the loss on sale of Westminster) of 12.0% for the first nine months of 2024. The effective tax rate for the first nine months of 2025 and 2024 were impacted by changes in our valuation allowances against deferred income tax assets.

Net Income (Loss)

For the three months ended September 30, 2025, we had a net loss of $1,666 compared to net loss of $2,705 for the three months ended September 30, 2024. The year-over-year change was largely attributable to lower levels of non-catastrophe weather losses, improved loss experience for Private Passenger Auto, and higher net investment income in the current year, partially offset by lower net investment gains and higher unfavorable prior year loss reserve development for Non-Standard Auto.

For the nine months ended September 30, 2025, we had a net loss of $7,257 compared to net loss of $3,248 for the nine months ended September 30, 2024. The year-over-year change was largely attributable to the catastrophe losses for Home and Farm in North Dakota, lower net investment gains, and unfavorable prior year loss reserve development for Non-Standard Auto, partially offset by lower levels of non-catastrophe weather losses, improved loss experience for Private Passenger Auto, and higher net investment income.

Return on Average Equity

For the three months ended September 30, 2025, we had annualized return on average equity of (2.7)% compared to (4.5)% for the three months ended September 30, 2024.

For the nine months ended September 30, 2025, we had annualized return on average equity of (4.0)% compared to (1.9)% for the nine months ended September 30, 2024.

Average equity is calculated as the average between beginning and ending equity for the period.

Critical Accounting Policies

The preparation of financial statements in accordance with GAAP requires both the use of estimates and judgment relative to the application of appropriate accounting policies. We are required to make estimates and assumptions in certain circumstances that affect amounts reported in the unaudited consolidated financial statements and related footnotes. We evaluate these estimates and assumptions on an ongoing basis based on historical developments, market conditions, industry trends, and other information that we believe to be reasonable under the circumstances. There can be no assurance that actual results will conform to these estimates and assumptions or that reported results of operations will not be materially and adversely affected by the need to make accounting adjustments to reflect changes in these estimates and assumptions from time to time. Our critical accounting policies are more fully described in Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" presented in our 2024 Annual Report. There have been no changes in our critical accounting policies from December 31, 2024.

Liquidity and Capital Resources

We expect to generate sufficient funds from our operations and maintain a high degree of liquidity in our investment portfolio to meet the demands of claim settlements and operating expenses for the foreseeable future. Our primary sources of funds are premium collections, investment earnings, and fixed income maturities.

We also have a $3,000 line of credit with Wells Fargo Bank, N.A. The terms of the line of credit include a floating interest rate of 2.50% above the daily simple secured overnight financing rate. There were no outstanding amounts during the nine months ended September 30, 2025, or the year ended December 31, 2024. This line of credit is scheduled to expire on December 13, 2025.

The change in cash and cash equivalents for continuing and discontinued operations for the nine months ended September 30, 2025 and 2024, were as follows:

		Nine Months Ended September 30,
		2025				2024
Net cash flows from operating activities		$	(28,511	)		$	16,780
Net cash flows from investing activities			3,621				5,327
Net cash flows from financing activities			(1,387	)			(3,613	)
Net change in cash and cash equivalents		$	(26,277	)		$	18,494

For the nine months ended September 30, 2025, net cash used by operating activities totaled $28,511 compared to net cash provided of $16,780 a year ago. This change was primarily driven by lower levels of premium collections in the current year, partially offset by lower levels of loss and loss adjustment payments in the current year.

For the nine months ended September 30, 2025, net cash provided by investing activities totaled $3,621 compared to $5,327 a year ago. The net cash provided in the current year was driven by cash inflows from net sales of equity and fixed income securities. The net cash provided in the prior year was attributable to the proceeds from the sale of Westminster and Westminster's net cash provided by investing activities, partially offset by cash outflows for net purchases of fixed income securities.

For the nine months ended September 30, 2025, net cash used by financing activities totaled $1,387 compared to $3,613 a year ago. The net cash used in the current year was driven by cash outflows for share repurchases. The net cash used in the prior year was attributable to pooling payments, partially offset by Westminster's net cash provided by financing activities.

As a holding company, a principal source of long-term liquidity will be dividend payments from our directly-owned subsidiaries.

Nodak Insurance is restricted by the insurance laws of North Dakota as to the amount of dividends or other distributions it may pay to NI Holdings. North Dakota law sets the maximum amount of dividends that may be paid by Nodak Insurance during any twelve-month period after notice to, but without prior approval of, the North Dakota Insurance Department. This amount cannot exceed the lesser of (i) 10% of the Company's surplus as regards policyholders as of the preceding December 31, or (ii) the Company's statutory net income for the preceding calendar year (excluding realized investment gains), less any prior dividends paid during such twelve-month period. In addition, any insurance company other than a life insurance company may carry forward net income from the preceding two calendar years, not including realized investment gains, less any dividends actually paid during those two calendar years. Dividends in excess of this amount are considered "extraordinary" and are subject to the approval of the North Dakota Insurance Department.

The amount available for payment of dividends from Nodak Insurance to NI Holdings during 2025 without the prior approval of the North Dakota Insurance Department is approximately $8,273 as of December 31, 2024. No dividends were declared or paid by Nodak Insurance during the nine months ended September 30, 2025, or the year ended December 31, 2024.

The amount available for payment of dividends from Direct Auto to NI Holdings during 2025 without the prior approval of the North Dakota Insurance Department is approximately $3,146 as of December 31, 2024. No dividends were declared or paid by Direct Auto during the nine months ended September 30, 2025, or the year ended December 31, 2024.

Prior to the payment of any dividend, we will be required to provide notice of the dividend to the North Dakota Insurance Department. This notice must be provided to the North Dakota Insurance Department 30 days prior to the payment of an extraordinary dividend and 10 days prior to the payment of an ordinary dividend. The North Dakota Insurance Department has the power to limit or prohibit dividend payments if an insurance company is in violation of any law or regulation. These restrictions or any subsequently imposed restrictions may affect our future liquidity.

Westminster was sold on June 30, 2024, and therefore no dividends are available to be paid to NI Holdings subsequent to that date. No dividends were declared or paid by Westminster during the year ended December 31, 2024. See Part I, Item 1, Note 19 "Discontinued Operations" of this Form 10-Q for additional information.