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Item 9A. Controls and Procedures

2024-03-15 compared with 2023-03-08 · 131 added, 78 removed, 195 unchanged (52% of the section changed)

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Evaluation of Disclosure Controls and Procedures

The Company’s Chief Executive Officer and

Chief Financial Officer have reviewed and evaluated the effectiveness of the Company’s disclosure controls and procedures (as required

The Company’s Chief Executive Officer and Chief

Financial Officer have reviewed and evaluated the effectiveness of the Company’s disclosure controls and procedures (as required

by Rules 13a-15(b) and 15d-15(b) under the Exchange Act) as of December 31, 2023.

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controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected.

Management’s Report on Internal Control over Financial

Our management is responsible for establishing

and maintaining adequate internal control over financial reporting.

Management’s Report on Internal Control over Financial Reporting

Our management is responsible for establishing and

maintaining adequate internal control over financial reporting.

Under the supervision and with the participation of our Chief Executive

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accounting firm, has issued an audit report on the effectiveness of our internal control over financial reporting as of December 31, 2023.

This audit report appears in Part II, Item 8.

Financial Statements and Supplementary Data, of this 2022 Annual Report.

This audit report appears in Part II, Item 8 “Financial Statements and Supplementary Data” of this 2023 Annual Report.

Changes in Internal Control over Financial Reporting

In the ordinary course of business, we periodically review our system of internal control over financial reporting

to identify opportunities to improve our controls and increase efficiency, while ensuring that we maintain an effective internal control

We continued this initiative during the annual period ending December 31, 2022, in support of the first audit of our internal

control over financial reporting, as required by Section 404 of the Sarbanes-Oxley Act of 2002, which resulted in various enhancements

to our internal control over financial reporting.

In the ordinary course of business, we periodically

review our system of internal control over financial reporting to identify opportunities to improve our controls and increase efficiency,

while ensuring that we maintain an effective internal control environment.

We continued this initiative during the annual period ending

December 31, 2023, in support of the audit of our internal control over financial reporting, as required by Section 404 of the Sarbanes-Oxley

Act of 2002, which resulted in various enhancements to our internal control over financial reporting.

Other Information

10b5-1 Trading Plans

During the fourth quarter of

2023, none of our directors or executive officers (as defined in Rule 16a-1(f) under the Exchange Act) adopted or terminated any

“Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement” (as each term is defined in Item 408(a)

of Regulation S-K).

Adoption of 2024

Short-Term Cash Incentive Plan

On February 29, 2024, the Company’s

Board of Directors approved the 2024 Short-Term Cash Incentive Plan (the “STIP”).

Certain key employees, including employees

who are employed to serve as executive officers, participate in the STIP as determined by the

Compensation Committee.

The STIP will be

administered by the Compensation Committee as authorized by the Board.

Participants are eligible to receive cash bonuses based on the

achievement of certain specified metrics, including based on the Company’s combined ratio, direct written premium growth, and a

measurable goal set by the Chief Executive Officer, depending on the individual participant.

The foregoing summary of the STIP does not

purport to be complete and is subject to, and qualified in its entirety by, the full text of the STIP, which is attached as Exhibit 10.18

to this report and is incorporated by reference herein.

Performance Share Unit Agreement

On February 29, 2024, the Company’s

Board of Directors adopted a form of Adjusted Return on Equity Performance Share Unit Agreement (the “PSU Agreement”) for

PSU awards granted under the 2020 Stock and Incentive Plan.

Each PSU Agreement will set forth the maximum number of PSUs to be earned,

assuming achievement of the relevant adjusted return on equity over the measurement period commencing on January 1, 2024 and ending on

December 31, 2026.

of the Company’s objectives relating to adjusted return on equity during the measurement period will determine the actual number

of PSUs to be earned.

The target number of PSUs will be divided into thirds, with one third assigned to each of the three fiscal years

in the measurement period.

The number of PSUs that will be earned for a fiscal year in the measurement period will be determined based

on the Company’s achievement of adjusted return on equity goals for the applicable fiscal year.

A PSU earned for a given fiscal

year shall vest if the participant remains in service to the Company through the end of the measurement period (subject to the exceptions

described below).

Each PSU earned and vested will be settled in one share of the Company’s common stock.

The Compensation Committee

will certify performance following the measurement period no later than March 15, 2027.

participant dies while in service with the Company prior to the last day of the measurement period, then the number of PSUs earned for

completed fiscal years at the time of death, together with one-third of the target number of PSUs for each fiscal year not completed at

the time of death, shall vest and become immediately payable.

If the participant’s service with the Company is terminated due to

the participant’s disability, retirement, or involuntary termination due to a position elimination or reorganization (each a “qualifying

termination”), before the last day of the measurement period, the PSUs will remain outstanding until the last day of the measurement

period and the participant will have a fully vested interest in a pro rata number of the earned PSUs as of the last day of the measurement

If a change in control occurs after a qualifying termination but prior to the end of the measurement period, the measurement period

shall end upon the change in control, and the participant will have a vested interest in a pro rata number of the earned PSUs as of the

last day of the measurement period (using the target number of PSUs for any fiscal year not completed as of the change in control).

a change in control occurs while the participant is in service to the Company, the PSUs earned for fiscal years completed as of the change

in control, together with one-third of the target number of PSUs for each fiscal year not completed as of the change in control, will

be earned and converted into time-based RSUs.

If such RSUs are assumed in connection with the change in control, then the RSUs will become

fully vested if the participant remains in service with the Company until December 31, 2026, dies while in service, resigns at retirement

age, or terminates their employment due to disability or involuntary termination due to position elimination or reorganization.

participant’s service with the Company is involuntarily terminated without cause or if the participant resigns for good reason within

24 months following a change in control but prior to December 31, 2026, any RSUs that remain unvested will vest in full and become non-forfeitable

as of the date of such termination.

The foregoing summary does not purport to

be complete and is subject to, and qualified in its entirety by, the full text of the PSU Agreement, which is attached as Exhibit 10.17

to this report and is incorporated by reference herein.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

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Directors, Executive Officers and Corporate Governance

We incorporate the response to this Item 10 by

reference to our proxy statement we will file with the SEC on or about April 11, 2023 relating to our Annual Meeting of Shareholders that

we will hold on May 23, 2023 (our “Proxy Statement”).

We have posted a copy of our Code of Ethics and

Business Conduct on the Governance Highlights page of the Corporate Governance section of our website, www.niholdingsinc.com ,

We incorporate the response to this Item 10 by reference

to our proxy statement we will file with the SEC on or about April 10, 2024 relating to our Annual Meeting of Shareholders that we will

hold on May 21, 2024 (our “Proxy Statement”).

We have posted a copy of our Code of Ethics and Business

Conduct on the Governance Highlights page of the Corporate Governance section of our website, www.niholdingsinc.com,

which you can access free of charge.

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Executive Compensation

We incorporate the response to this Item 11 by

reference to our Proxy Statement.

We incorporate the response to this Item 11 by reference

to our Proxy Statement.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

We incorporate the response to this Item 12 by

reference to our Proxy Statement.

We incorporate the response to this Item 12 by reference

to our Proxy Statement.

Certain Relationships and Related Transactions, and Director Independence

We incorporate the response to this Item 13 by

reference to our Proxy Statement.

We incorporate the response to this Item 13 by reference

to our Proxy Statement.

Principal Accountant Fees and Services

We incorporate the response to this Item 14 by

reference to our Proxy Statement.

We incorporate the response to this Item 14 by reference

to our Proxy Statement.

Exhibits and Financial Statement Schedules

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of registrant – NI Holdings, Inc.

All other financial schedules are not required under the related

instructions, as they are inapplicable or the information has been included in the consolidated financial statements, and therefore have

been omitted.

All other financial schedules are not required under the

related instructions, as they are inapplicable or the information has been included in the consolidated financial statements, and therefore

have been omitted.

(3) The following exhibits are required by Item 601 of Regulation S-K and are included as part of this Form 10-K:

2.1 Plan of Mutual Property and Casualty Insurance Company Conversion and Minority Offering of Nodak Mutual Insurance Company, dated

as of January 21, 2016 (1)

Plan of Mutual Property and Casualty Insurance Company Conversion and Minority Offering of Nodak Mutual Insurance Company, dated as of January 21, 2016 (1)

Articles of Incorporation of NI Holdings, Inc.

3.2 Bylaws of NI Holdings, Inc.

3.3 Amendment to the Bylaws of NI Holdings, Inc.

3.4 Amendment No.

2 to the Bylaws of NI Holdings, Inc.

Articles of Amendment to the Articles of Incorporation, dated May 24, 2023.

Amended and Restated Bylaws of NI Holdings, Inc., dated May 24, 2023.

Form of certificate evidencing shares of common stock of NI Holdings, Inc.

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Alexander and Nodak Mutual Insurance Company and NI Holdings, Inc.

10.4# Employment Agreement dated as of March 15, 2022, between Seth C.

Amended and Restated Employment Agreement dated as of August 8, 2023, between

Daggett and Nodak Insurance Company and NI Holdings, Inc.

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Multiple Peril Crop/Livestock Insurance Full Service Agency Agreement among American Farm Bureau Insurance Services, Inc.

and Nodak Mutual

Insurance Company, American West Insurance Company and Battle Creek Mutual Insurance Company for Crop Year 2016 (1)

and Nodak Mutual Insurance Company, American West Insurance Company and Battle Creek Mutual Insurance Company for Crop Year 2016 (1)

Crop Hail Insurance Full Service Agency Agreement among American Farm Bureau Insurance Services, Inc.

and Nodak Mutual Insurance Company,

American West Insurance Company and Battle Creek Mutual Insurance Company for Crop Year 2016 (1)

and Nodak Mutual Insurance Company, American West Insurance Company and Battle Creek Mutual Insurance Company for Crop Year 2016 (1)

Nodak Mutual Insurance Company Cash Incentive Bonus Plan (3)

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Short-Term Incentive Bonus (9)

Form of NI Holdings, Inc.

Adjusted Return on Equity Performance Share Unit Agreement

2024 NI Holdings, Inc.

Short-Term Incentive Bonus

Subsidiaries of NI Holdings, Inc.

Consent of Mazars USA LLP, Fort Washington, PA, PCAOB ID 339

31.1* Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934,

as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2* Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934,

as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Certification of Principal Executive Officer and Principal Financial Officer Pursuant to 18 U.S.C.

Section 1350, as Adopted Pursuant

to Section 906 of the Sarbanes-Oxley Act of 2002.

Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

NI Holdings, Inc.

Incentive Compensation Recovery Policy, adopted December 1, 2023.

101.INS** Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are

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Act of 1934, as amended, and otherwise is not subject to liability under these sections.

# Management contract or

compensatory plan or arrangement.

(1) Filed as an exhibit

to the Company’s Registration Statement on Form S-1 (File No.

# Management contract or compensatory

plan or arrangement.

(1) Filed as an exhibit to

the Company’s Registration Statement on Form S-1 (File No.

333-214057) filed with the SEC on October 11, 2016, and incorporated

herein by reference.

(2) Filed as an exhibit

to Amendment No.

(2) Filed as an exhibit to

Amendment No.

1 to the Company’s Registration Statement on Form S-1 (File No.

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and incorporated herein by reference.

(3) Filed as an exhibit

to Amendment No.

(3) Filed as an exhibit to

Amendment No.

4 to the Company’s Registration Statement on Form S-1 (File No.

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to the Company’s Form 8-K (File No.

001-37973) filed with the SEC on March 2, 2020, and incorporated herein by reference.

(5) Filed as Exhibit 10.1

to the Company’s Form 8-K (File No.

001-37973) filed with the SEC on September 18, 2017, and incorporated herein by reference.

(6) Filed as Exhibit 3.1

to the Company’s Form 8-K (File No.

001-37973) filed with the SEC on April 22, 2020, and incorporated herein by reference.

(7) Filed as an Exhibit

to the Company’s Form 8-K (File No.

(5) Filed as an exhibit to

the Company’s Form 8-K (File No.

001-37973) filed with the SEC on May 29, 2020, and incorporated herein by reference.

(8) Filed as an Exhibit

to the Company’s Form 10-K (File No.

(6) Filed as an exhibit to

the Company’s Form 10-K (File No.

001-37973) filed with the SEC on March 10, 2021, and incorporated herein by reference.

(7) Filed as Exhibit 10.1

to the Company’s Form 10-Q (File No.

001-37973) filed with the SEC on August 8, 2023, and incorporated herein by reference.

(8) Filed as an exhibit

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001-37973) filed with the SEC on March 9, 2022, and incorporated herein by reference.

(10) Filed as Exhibit to

the Company’s Form 10-K (File No.

001-37973) filed with the SEC on March 9, 2022, and incorporated herein by reference.

(11) Filed as Exhibit

(9) Filed as an exhibit

to the Company’s Form 10-Q (File No.

001-37973) filed with the SEC on May 6, 2022, and incorporated herein by reference.

(10) Filed as an exhibit to the

Company’s Form 8-K (File No.

001-37973) filed with the SEC on May 25, 2023, and incorporated herein by reference.

Form 10-K Summary

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Cash and cash equivalents

Fixed income securities, at fair value

Fixed income securities, at fair value (net of allowance for expected credit losses of $0 at December 31, 2023 and $0 at December 31, 2022)

Equity securities, at fair value

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Deferred income taxes

Westminster consideration payable

Accrued expenses and other liabilities

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Shareholders’ equity

Total liabilities and equity

Total liabilities and shareholders’ equity

Condensed Statements of Operations

Year Ended December 31,

Fee and other income

Net investment income

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Total expenses

Income (loss) before income taxes and equity in undistributed net income of subsidiaries

Income tax (benefit) expense

Income (loss) before equity in undistributed net income of subsidiaries

Income (loss) before income taxes and equity in undistributed net income (loss) of subsidiaries

Income tax expense (benefit)

Income (loss) before equity in undistributed net income (loss) of subsidiaries

Equity in undistributed net income (loss) of subsidiaries

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Purchases of equity securities

Acquisition of Westminster American Insurance Company

Net cash flows from investing activities

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Note B – Dividends from Subsidiaries

The Company received cash dividends of $3,000 and $6,000 from Nodak

Insurance during the years ended December 31, 2022 and 2020.

No dividends from its subsidiaries were received during the year ended December

The Company received no cash dividends from its subsidiaries during

the years ended December 31, 2023 and 2021.

A cash dividend of $3,000 was received from Nodak Insurance during the year ended December

Pursuant to the requirements of Section 13 or 15(d) of the Securities

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures