NAIC regulators debate the scope of AI guardrails

The National Association of Insurance Commissioners (NAIC) is, as of this week, 'working on implementing new AI guidance,' which is rather like announcing you're composing a lullaby for a room that's already on fire. According to InsuranceNewsNet, about half of US states have adopted the NAIC's Model Bulletin on AI use by insurers. Half. After months of committee. The remaining states are 'reviewing and consider adoption.' Excellent — precisely the sort of energetic guardrail you want for an industry that can algorithmically raise your premiums faster than your car's telemetry pings a sudden hard brake.

The bulletin itself doesn't actually ban anything concrete — no, that would be impolite. Instead, it asks insurers to 'govern, validate, and audit' their AI models, which sounds marvellous until you realise that the industry's idea of 'validation' has historically meant 'ask a contractor to eye-ball the spreadsheet.' There's also the small matter that state by state adoption creates a patchwork regulation

which, as any cynic will note, is exactly how we ended up with the American financial derivatives market being guided by laminated handshake protocols before. If the mid-2020s micro-chip shortage taught us insurance is rolling out algorithms to deny cobra-cycle claims faster than ever, the AI revolution won't be stopped—only covered by you paying for decades-long compliance form.

Oh, and in what might be termed the Regulation Tango's latest round, we have our executive order missing dates as *last week's editorial noted*, leaving a vacuum that certainly the NAIC speed will fill about three fiscal quarters after software decides everyone in a flood zone also shows 'prior cancer scare.'