STATEMENT FROM THE NATIONAL ASSOCIATION OF INSURANCE COMMISSIONERS (NAIC) ON AI EXECUTIVE ORDER

The following information was released by the National Association of Insurance Commissioners (NAIC):

TheNational Association of Insurance Commissioners(NAIC), representing chief insurance regulators in all 50 states, the District of Columbia, and U.S. territories, expresses deep concern over the recently signedExecutive Orderon state legislative and regulatory authority related to artificial intelligence (AI).

For more than 150 years, state insurance regulators have ensured a stable, fair, and consumer-focused insurance marketplaceadapting to new risks and technologies as they emerge. This state-based system works because it is responsive to local needs and evolving market conditions. It has protected consumers, fostered innovation, and allowed flexibility essential in a rapidly changing world.

While AI offers transformative opportunities for insurers and policyholderssuch as improving efficiency and enhancing customer experiencesthe sweeping Executive Order creates significant unintended consequences. This could implicate routine analytical tools insurers use every dayand prevent regulators from addressing risks in areas like rate setting, underwriting, and claims processingeven when no true AI is involved.

The Executive Order could disrupt well-established processes that ensure fairness and transparency in insurance markets and safeguard consumers from unfair or discriminatory practices. It introduces legal uncertainty, which may weaken the insurance market by delaying business decisions, deterring investment, and postponing essential consumer protections.

State regulators, through the NAIC, have already taken proactive steps to address AI challenges. In 2023, the NAIC adopted aModel Bulletinrequiring insurers to implement written AI governance programs emphasizing transparency, fairness, and risk management. Over half of all states have adopted this or similar guidance, and more are following suit.

We urge the Administration to reconsider this Executive Order and, at a minimum, affirm state regulation of AI in the business of insurance to avoid damaging uncertainty. The NAIC remains committed to supporting state regulators as they oversee the use of AI by insurers and serving as a resource for policymakers. We call for renewed collaboration between federal and state regulators to foster responsible AI innovation while protecting consumers and maintaining a stable, competitive insurance marketplace.

See the NAIC'sDecember 4andJune 4letters to Congress regarding this topic.

About the National Association of Insurance Commissioners

As part of our state-based system of insurance regulation in the United States, the National Association of Insurance Commissioners (NAIC) provides expertise, data, and analysis for insurance commissioners to effectively regulate the industry and protect consumers. The U.S. standard-setting organization is governed by the chief insurance regulators from the 50 states, the District of Columbia and five U.S. territories. Through the NAIC, state insurance regulators establish standards and best practices, conduct peer reviews, and coordinate regulatory oversight. NAIC staff supports these efforts and represents the collective views of state regulators domestically and internationally.