NAIC Advances Insurance Regulation with Big Data and AI Working Group

Published Date : 31/08/2025 

During the Summer 2025 National Meeting, the NAIC's Big Data and AI Working Group gathered feedback on the potential development of a model law for AI use in insurance, emphasizing the need for uniformity and consumer protection. 

During the Summer 2025 National Meeting of the US National Association of Insurance Commissioners (NAIC) in Minneapolis, Minnesota, the Big Data and Artificial Intelligence (H) Working Group (BDAI WG) convened on August 12, 2025. The primary focus of the meeting was to gather feedback from various stakeholders on the potential development of a NAIC model law addressing the use of artificial intelligence (AI) in the insurance industry.

On May 12, 2025, the BDAI WG issued a request for information (RFI) to public stakeholders, seeking their input on the potential development of a model law. This initiative followed the adoption of the NAIC Principles of Artificial Intelligence in 2020 and the Model Bulletin on the Use of AI Systems by Insurers in 2023, reflecting a continued effort to establish clear regulatory expectations for AI use in insurance.

Key Areas of Inquiry in the RFI

The RFI sought feedback on several critical issues, including:

- Stakeholders’ reactions to a potential NAIC AI model law.

- The potential goals for a model law and the sufficiency of existing laws and regulations in addressing risks associated with AI use.

- Reactions to the three primary pillars that would be expected to be the core of a model law – governance, transparency, and accountability.

- Potential features of a model law, such as its scope (e.g., whether it should address all lines of insurance or be adopted on a line-of-business basis), whether AI systems provided by third-party vendors should be covered, and how company size should be taken into account (if at all).

Summary of Stakeholder Responses

The BDAI WG heard from a panel of interested stakeholders, including regulators, healthcare provider groups, insurance companies, trade organizations, insurtech organizations, and advisory organizations/consultants. The feedback revealed a range of views:

- Support : Some organizations expressed strong support, emphasizing the need for regulatory uniformity across states, stronger consumer protections, and oversight. Consumer representatives on the panel supported the development of a model law to create a regulatory floor and enhance transparency in AI use by insurers. They also advocated for the inclusion of a fourth pillar specifically addressing consumer protection.

- Concerns : Many stakeholders expressed concern that a model law may be premature and that regulators and industry representatives should identify problems clearly before preparing a model law to address them. Some noted that a model law might be unnecessary given the NAIC Model Bulletin and existing regulatory frameworks. They also highlighted the difficulty of “future-proofing” a model law considering the rapid evolution of AI and suggested that guidance and bulletins might be more appropriate.

- Common Themes : There was broad support for a principles-based and proportional risk-based approach, allowing for flexible governance based on the size of the risk. Presenting stakeholders stressed the importance of transparency, disclosures, governance, robust internal oversight, and third-party accountability as safeguards to protect consumers. Certain insurance companies, trade organizations, and insurtech organizations encouraged leveraging existing regulatory frameworks that already address issues such as unfair trade practices as a means of AI regulation. Many stakeholders noted that the BDAI WG has limited bandwidth and should focus on understanding how AI is being used to better identify potential gaps in regulation. As such, several stakeholders encouraged the BDAI WG to focus on developing the AI Systems Evaluation Tool instead.

AI Systems Evaluation Tool

After hearing comments on the RFI, the BDAI WG discussed the next steps for the development of the AI Systems Evaluation Tool. An initial draft of this tool, designed to enable regulators to evaluate AI governance, testing protocols, high-risk models, data sources, and financial implications, is currently exposed for a public comment period ending on September 5, 2025. The various exhibits of the tool can be used by regulators to:

- Identify reputational risk and consumer complaints.

- Assess the company’s financial risk.

- Identify adverse consumer outcomes.

- Evaluate actions taken against the use of high-risk AI systems, as defined by the company.

- Evaluate the robustness of AI controls.

- Determine the types of data being used.

Next Steps

The BDAI WG will continue working on the development of the AI Systems Evaluation Tool and will schedule an interim meeting to hear comments from interested parties on the tool. Separately, the BDAI WG will consider in a follow-up meeting whether the development of a model law specifically focusing on the use of AI in the insurance industry is necessary.

To view additional updates from the US NAIC Summer 2025 National Meeting, visit our meeting highlights page. 

Frequently Asked Questions (FAQS): 

Q: What is the Big Data and Artificial Intelligence (H) Working Group (BDAI WG)?

A: The BDAI WG is a working group within the US National Association of Insurance Commissioners (NAIC) focused on developing regulatory standards for the use of big data and artificial intelligence in the insurance industry.

Q: What was the main focus of the BDAI WG meeting during the Summer 2025 National Meeting?

A: The main focus of the BDAI WG meeting was to gather feedback from stakeholders on the potential development of a NAIC model law addressing the use of AI in insurance.

Q: What are the three primary pillars expected to be the core of the AI model law?

A: The three primary pillars expected to be the core of the AI model law are governance, transparency, and accountability.

Q: What is the AI Systems Evaluation Tool, and what is its purpose?

A: The AI Systems Evaluation Tool is a draft tool designed to enable regulators to evaluate AI governance, testing protocols, high-risk models, data sources, and financial implications in the insurance industry.

Q: What are the next steps for the BDAI WG after the Summer 2025 National Meeting?

A: The BDAI WG will continue working on the development of the AI Systems Evaluation Tool and will schedule an interim meeting to hear comments from interested parties on the tool. They will also consider whether to develop a model law specifically focusing on the use of AI in insurance. 

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