The National Council of Insurance Legislators calls on states to lead the charge in AI insurance regulation, pushing back against federal efforts.
The National Council of Insurance Legislators (NCOIL) adopted a resolution raising concerns that federal policies could limit states’ ability to regulate the use of AI in insurance.
The resolution states that, historically, insurance regulation has rested at the state level and warns against federal efforts that could preempt or restrict that authority. It references recent federal proposals and executive actions related to AI governance that could centralize oversight or limit state-level legislation.
The resolution encourages states to continue developing their own laws governing AI use in insurance.
NCOIL wrote that “it is vital that state legislators have the ability to develop policy and laws that protect their constituents,” and cautioned that federal intervention could disrupt established regulatory structures under which states oversee insurer conduct, pricing, and consumer protections.
For the insurance industry, there are two primary concerns:
- Consistency. Historically, the insurance industry has worked with regulators at the state level, adapting to the needs of local markets. NCOIL stated that AI systems “should be subject to the same regulatory standards as traditional insurance practices,” calling for consistency in regulatory practice.
- AI evolves rapidly. States are more adept at creating and/or tweaking legislation to meet local needs.
The resolution was not voted on in the recent March 12th meeting. NCOIL will review it in April.
