The National Association of Insurance Commissioners' (NAIC) model bulletin governing the use of artificial intelligence (AI) by insurers provides guidance on the legal and ethical use of AI within the insurance industry, stressing the principles of transparency, fairness and accountability. Since the NAIC published the model bulletin at the end of 2023, 24 states have adopted it, and other states have enacted regulations or promulgated other guidance addressing similar topics.
Model Bulletin Guidance
The model bulletin states that insurers must adopt, implement and maintain a documented AI program (an AIS Program) to support the responsible use of AI and mitigate the potential risk of inaccurate or discriminatory decisions, particularly when AI is used in regulated processes. The model bulletin provides guidelines for developing an AIS Program and requires auditing processes, clear and transparent governance frameworks, robust risk management and internal controls, and third-party vendor management and oversight.
As outlined in the model bulletin, an insurer's AIS Program should be designed to prevent violations of relevant insurance laws, regulations and guidance, including laws addressing unfair trade practices and unfair discrimination, and be adequate given the degree and nature of risk posed by the AI to consumers. The model bulletin also recommends that insurers adopt verification and testing methods to identify errors, bias and unfair discrimination in AI models and systems.
Additionally, the model bulletin outlines anticipated regulatory oversight and considerations for regulators when auditing or investigating insurers' use of AI. Insurers are advised to anticipate regulatory inquiries into their governance frameworks, risk management systems and internal controls, including their AIS Programs. Insurers are also encouraged to maintain strong documentation of their policies, protocols and procedures surrounding their use of AI.
Governance and Enforcement
As noted above, 24 states have adopted the model bulletin since the NAIC published it at the end of 2023, and an additional four states have enacted related regulations or promulgated other guidance materials addressing similar topics. The NAIC has published a resource that tracks which states have adopted the bulletin and includes citations. (See "Implementation of NAIC Model Bulletin: Use of Artificial Intelligence Systems by Insurers," last updated April 7, 2025.)
There does not yet appear to be significant enforcement of these requirements in the states that have adopted the model bulletin or promulgated their own related guidance. However, insurers must continue to anticipate regulatory oversight and be prepared to provide documentation related to their development, use and oversight of AI.
Holland & Knight continues to closely monitor this space.
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