Insurance Sector Opposes Proposed Moratorium on State Regulation of AI

A proposed 10-year moratorium on state regulation of artificial intelligence (AI) is included in the tax bill “One Big Beautiful Bill,” stirring concern within the insurance industry. The National Association of Professional Insurance Agents (PIA) has urged Senate leaders to remove this provision or exempt the insurance sector, citing existing state regulations as effective. The National Association of Insurance Commissioners (NAIC) supports state oversight, arguing it promotes consumer protection and innovation. They criticized the bill’s broad AI definition, which could encompass tools currently used by insurers. The American InsurTech Council also opposes the moratorium, warning it would create regulatory gaps during rapid advancements in technology. Furthermore, 40 state attorneys general have advocated against the proposal, emphasizing the need for timely regulatory responses to the evolving challenges posed by AI. The National Council of Insurance Legislators warns that such a ban could disrupt market dynamics and hinder lawmakers’ capacity to address consumer safety concerns.

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