NAIC Expresses Concerns with AI Executive Order
Like many state officials across the country, the National Association of Insurance Commissioners (NAIC) is expressing concern with President Trump’s executive order addressing state AI regulations. The NAIC points out the state insurance regulatory structure fosters consumer-focused regulation hat adapt to new technologies as they emerge.
The NAIC contends the President’s executive order could be read to extend to routine analytical tools insurers regulatory use, potentially preventing regulators from addressing risks in areas such as ratemaking setting, underwriting, and claims handling. In the NAIC’s view, the executive order introduces legal uncertainty that might weaken states’ regulatory authority and lead to delays in both investments in insurance markets and in modernizing consumer protections.
The NAIC also points out that state regulators have been proactive in taking steps to address emerging AI issues. For example, as far back as 2023, the NAIC adopted a Model Bulletin calling for insurers to implement written AI governance programs emphasizing transparency, fairness, and risk management. Meanwhile, at the federal level, the NAIC points out that during this time neither Congress nor the executive branch has established applicable guidelines.
In its recent response to the President’s executive order, the NAIC urges the Trump administration to affirm the states’ authority to regulate AI in the business of insurance to limit uncertainty. The NAIC also seeks collaboration between federal and state regulators to balance AI innovation with protection for consumers and maintaining a stable, competitive insurance marketplace.
Several states have expressed concerns similar to those of the NAIC as they have adopted or are considering AI regulations. This issue is likely to remain at the forefront in Florida as the annual legislative session begins this week. Governor Ron DeSantis has announced his intent to pursue an “AI Bill of Rights” covering several topics, including use of AI in claims determinations. Even prior to the session, legislative committees have been considering a requirement for humans to be responsible for claims decisions.