OCI Issues NAIC AI Bulletin
On March 18th, 2025, the Wisconsin Office of the Commissioner of Insurance (OCI) issued a bulletin addressing the use of Artificial Intelligence (AI) within the insurance industry. This bulletin was drafted from and largely mirrors the NAIC Model Bulletin that was published in December of 2023.
The bulletin has so far been similarly adopted by twenty-three other states and outlines expectations for insurers to ensure that use of AI complies with existing laws and regulations, especially concerning unfair trade practices and discrimination.
What Should Agents Know:
- Any decisions or actions influenced by AI must follow all applicable federal and state insurance laws, including statutes related to unfair marketing practices and claim settlement procedures.
- Insurers are expected to establish a written Artificial Intelligence Systems (AIS) Program that controls the responsible use of AI technologies and includes:
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- A governance framework prioritizing transparency, fairness and accountability
- Risk management controls that address overall oversight & data practices
- Policies to protect data including consumer data and other non-public information such as predictive models
- Procedures for the oversight of the use of third-party AI systems and data
- The AIS Program should be designed to mitigate the risks associated with AI, such as inaccuracy, unfair discrimination, data vulnerability, and lack of transparency
- Insurers must use due diligence when acquiring AI systems or data from third parties. Any contracts should include terms that allow for audits and ensure compliance with any regulatory requirements.
- OCI may request documentation related to an insurer's AIS Program during investigations or market conduct actions. This includes information on governance structures, risk management practices, and details about any AI or predictive models that may be in use.
Though these requirements are targeted towards the use of AI by insurers, insurance agents should be aware of these expectations from OCI as the industry use of AI continues to develop. Any AI technologies put into use in the future must adhere to state and federal insurance law to maintain transparency and ensure fair treatment of consumers.