Recently, proposals to suspend state-level regulation of artificial intelligence (AI) in the United States have attracted widespread attention, especially within the insurance industry. This proposal was included in a large tax bill called "One Big Beautiful Bill," which includes a ten-year ban on existing state laws and regulations, potentially affecting related regulations already implemented in multiple states.
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The Professional Insurance Agents Association (PIA) sent a letter to Senate leaders on June 16 expressing "serious concerns" about this proposal. The letter stated that PIA strongly recommended the Senate cancel the ten-year suspension of state-level AI legislation and regulation or explicitly exclude state-level AI regulation in the insurance industry, as the insurance industry is already under appropriate state-level regulation. The letter was signed by PIA's CEO, Mike Skiados.
PIA also cited a model adopted by the National Association of Insurance Commissioners (NAIC), which requires insurers to implement AI governance plans according to existing state and federal laws. So far, nearly 30 states have adopted NAIC's model regarding the use of AI by insurers.
In early June, the NAIC also sent a letter to federal legislators emphasizing that state-level regulation is effective in responding to market changes. The NAIC leadership stated in the letter: "This system not only protects consumers and promotes innovation but also allows for flexible experimentation in a rapidly changing environment."
The NAIC expressed concerns about the definition of AI in the bill, calling it "too broad," and questioned whether it applies not only to machine learning but also to existing analytical tools and software used by insurers in their daily operations, such as computation, simulation, and various analytical systems provided by insurance technology for pricing, underwriting, and claims processing.
The American Insurance Technology Council (AITC) also expressed "strong opposition" to the regulatory pause proposal, arguing that it would create a "dangerous regulatory vacuum" during a period of rapid technological change. In a statement, AITC pointed out that this ban would undermine the fundamental principles of U.S. insurance regulation and jeopardize consumer protection at a time when AI is rapidly transforming the way insurance is developed, priced, marketed, underwritten, and delivered.
Additionally, in May, the attorneys general of 40 states jointly urged Congress to repeal this suspension proposal. The National Council of Insurance Legislators (NCOIL) stated in a statement on June 16 that prohibiting state-level regulation would "disrupt the overall market we oversee" and "wrongly limit" the ability of state legislators to make policies. The organization noted that voters have shown strong demands for protection against the uncertainties brought by AI and cannot wait ten years for a state-level policy response.
Key points:
🛡️ The Professional Insurance Agents Association opposes the proposal to suspend state-level AI regulation for ten years.
📜 Nearly 30 states have adopted the NAIC's regulatory model regarding AI.
⚖️ Attorneys general from 40 states have called on Congress to withdraw this proposal to protect consumer rights.