Insurers Urged to Focus on State Regulations Amid AI Guidance Uncertainty

Legal and insurance experts predict that federal regulations for AI in the insurance sector are unlikely to be established soon, advising insurers to rely on state laws and the National Association of Insurance Commissioners (NAIC) Model Bulletin to guide their governance frameworks. While previous federal attempts have been rolled back, the current discourse suggests that any regulation introduced at the federal level could be beneficial for insurance companies, particularly under a business-friendly administration.

Some states have already started to enact specific legislation regarding AI in insurance, but many others follow the NAIC's loose guidelines. Experts warn that without coherent federal regulation, there could be significant diversity in state legislation, complicating compliance for insurers. Insurers are encouraged to focus on state regulations for the time being, while being prepared for potential federal guidelines to emerge.

Additionally, the urgency for insurers to implement robust governance frameworks around AI is highlighted, as many companies rush into proofs of concept without the necessary regulatory structure. As the landscape evolves, insurance companies must remain vigilant and adaptable to changes both at state and federal levels.