On December 16, 2025, the National Association of Insurance Commissioners (NAIC) issued a statement (the NAIC Statement), on the December 11 Executive Order Ensuring a National Policy Framework for Artificial Intelligence (the Executive Order). The Executive Order urges Congress to act that “there is a minimally burdensome national standard – not 50 discordant State ones.” The Executive Order then calls out “the most onerous and excessive laws emerging from the States that threaten to stymie innovation.” It also calls for a Task Force to “at a minimum, identify laws that require AI models to alter their truthful outputs, or that may compel AI developers or deployers to disclose or report information in a manner that would violate the First Amendment or any other provision of the Constitution.” The Executive Order then goes on to indicate that state funding under the Broadband Equity Access and Deployment (BEAD) Program and other sources of funding could be reduced or eliminated based on continued state regulation of AI that is in contravention with the AI policy enunciated in the Executive Order. The Executive Order also calls for the preparation of a legislative recommendation “establishing a uniform Federal policy framework for AI that preempts State AI laws that conflict with the policy set forth in this order.” That Section 8 of the Executive Order goes on to list areas that would not be preempted, including “(i) child safety protections; (ii) AI compute and data center infrastructure, other than generally applicable permitting reforms; (iii) State government procurement and use of AI; and (iv) other topics as shall be determined,” but does not specifically reference the regulation of the use of AI in insurance.
The NAIC Statement responds to the Executive Order in the following ways:
- Historical Overview of State-Based Regulation of Insurance: The NAIC Statement describes the 150-year history of state-based regulation, and the basis for local regulation in the insurance industry, including protection of consumers in the context of rapidly changing technologies. The NAIC Statement also discusses state insurance commissioners’ recent steps “to address AI challenges,” including states’ adoption of the NAIC’s Model Bulletin on the Use of Artificial Intelligence Systems by Insurers.
- Calling Out Potential Unintended Consequences: The NAIC states that “the sweeping Executive Order creates significant unintended consequences” that “could implicate routine analytical tools insurers use every day and prevent regulators from addressing risks in areas like rate setting, underwriting, and claims processing – even when no true AI is involved.”
- Highlighting the Potential for Legal Uncertainty: The NAIC postulates that the Executive Order, if not clarified in relation to state-based regulation of the insurance industry, “introduces legal uncertainty, which may weaken the insurance market by delaying business decisions, deterring investment, and postponing essential consumer protections.”
- Requests Reconsideration: In the Statement, the NAIC urges “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 also calls for “renewed collaboration between federal and state regulators” on AI innovation.
