The 10-year moratorium proposal for state regulation of artificial intelligence has attracted the attention of many people, including people within the insurance industry.
The 10-year ban on AI regulations is included in the “one big beautiful bill,” the Cleaning Tax Bill, which precedes the laws and regulations already in place in dozens of states.
The National Occupational Insurance Agency (PIA) wrote to Senate leaders on Tuesday in a letter saying, “We express our important concerns.”
“The PIA urges the Senate to eliminate the settlement language that enforces a 10-year moratorium on state AI laws and regulations, or to explicitly exempt state regulations in the AI insurance industry as the industry is already properly regulated by the state.”
The PIA referenced a model already employed by the National Insurance Commission (NAIC), which requires insurers to implement AI governance programs in accordance with all existing state and federal laws. Approximately 30 states have adopted NAIC’s model of AI use by insurers.
Earlier this month, the NAIC sent a letter to lawmakers after the House bill passed. The committee member said state regulations are effective against evolving market conditions.
“The system not only protected consumers and encouraged innovation, but also allowed for the flexibility and experimentation essential in a rapidly changing world,” says the NAIC leadership in the letter. “By enabling states to develop and implement a well-coordinated regulatory framework, the system ensures that monitoring is robust and adaptable.
“State insurance regulators understand that AI is a transformative technology that can be used to benefit policyholders by creating new product offerings, improving the efficiency of the insurance business and changing the consumer experience.”
Related: Republican tax bans state AI regulations falling into fiscal bill
The definition of language, and more specifically, AI in legal guidance, is also a concern. NAIC called it “overly broad,” and not only applied to machine learning, it also “suggested existing analytical tools and software that insurers rely on every day, such as calculations, simulations, and probabilistic predictions.
To that end, the American Insurance Council (AITC) said it is “strongly opposed” to suspension of AI state regulations, and that it “creates dangerous vacuums during monitoring during rapid technological changes.”
“Such bans undermine the fundamental principles of US insurance regulations and put consumer protection at stake at a time when AI is rapidly changing the way insurance is developed, priced, sold, undertaken and delivered,” AITC said in a statement.
In May, the 40 state attorney general urged Congress to remove the moratorium proposal for the law guide.
On Monday, the National Insurance Congressman (NCOIL) in the statement said the state’s ban on regulations would “disrupt the overall market that we oversee (NCOIL)” and “mistakes” the ability of state legislators to create policies. The group said its members are “still in search of protection against the current unknown surrounding AI and cannot wait 10 years for a state-based policy response.”
topic
Insurtech Law-Driven Artificial Intelligence Market
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