What's Happening?
President Trump has issued an executive order titled 'Ensuring a National Policy Framework for Artificial Intelligence,' which aims to preempt state laws and regulations concerning AI. This move has been met with significant concern from state lawmakers
and regulators, particularly those involved with the National Association of Insurance Commissioners (NAIC) and the National Council of Insurance Legislators (NCOIL). These organizations argue that the executive order could disrupt established processes that ensure fairness and transparency in insurance markets, potentially leading to legal uncertainty and weakening the insurance market. The order also directs the Attorney General to establish an AI Litigation Task Force to challenge state AI laws, which has been criticized for potentially undermining state authority.
Why It's Important?
The executive order represents a significant shift in the regulatory landscape for AI, particularly in the insurance industry. By attempting to centralize AI oversight at the federal level, the order could undermine state-level regulations designed to protect consumers from unfair practices. This has raised concerns about the potential for increased legal uncertainty, which could deter investment and delay essential consumer protections. The move is seen as part of a broader deregulatory stance by the federal government, which could impact the balance of power between state and federal authorities in regulating emerging technologies.
What's Next?
State organizations like the NAIC and NCOIL are continuing to develop their own model rules for AI regulation, despite the federal executive order. The NAIC has already adopted a Model Bulletin on the use of AI by insurers, and NCOIL is working on a Model Act regarding insurers' use of AI. These efforts indicate that state legislators are committed to maintaining their regulatory authority and providing guidance on AI policy, even as federal challenges loom. The outcome of these efforts will likely shape the future of AI regulation in the U.S., particularly in industries like insurance where state oversight has traditionally been strong.
