Insurers Urge NAIC to Exempt Linear Models from AI Rules
Insurance industry groups are requesting that state regulators exclude generalized linear models from upcoming AI oversight protocols.
Updated on Oct. 15, 2026 in Artificial Intelligence
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The National Association of Insurance Commissioners is currently reviewing its AI Systems Evaluation Tool. Insurance industry trade groups are pushing for the removal of generalized linear models, arguing that these established tools do not qualify as novel artificial intelligence.
Why it matters
Insurers contend that including these long-regulated models would create redundant oversight and hinder the effectiveness of the tool in identifying actual AI risks. Meanwhile, consumer advocates have called for more specific definitions to ensure regulators can adequately monitor insurance technologies.
The AI Systems Evaluation Tool serves as a questionnaire designed to help regulators assess insurer AI applications. Industry proposals specifically target the removal of sections C and D to omit generalized linear models from oversight criteria.
The players
National Association of Insurance Commissioners
This is a voluntary organization composed of chief insurance regulators from all 50 states, the District of Columbia, and five U.S. territories.
American Property Casualty Insurance Association
This is a leading national trade organization for the home, auto, and business insurance industry in the United States.
National Association of Mutual Insurance Companies
This is an industry trade group representing hundreds of property and casualty insurance companies across the United States.
The details
Industry associations including the American Property Casualty Insurance Association and the National Association of Mutual Insurance Companies argue that generalized linear models are transparent, deterministic, and already subject to decades of regulation. Regulators are currently refining the questionnaire to balance these industry concerns against the need for rigorous oversight of evolving insurance technologies.
Timeline
March 2026: The National Association of Insurance Commissioners initiated the AI Systems Evaluation Tool pilot program.
October 8, 2026: The National Association of Insurance Commissioners hosted a virtual meeting to gather stakeholder feedback.
November 14-17, 2026: The National Association of Insurance Commissioners is scheduled to finalize the AI evaluation tool.
The Tech Race
The National Association of Insurance Commissioners' AI Systems Evaluation Tool is the central regulatory mechanism being negotiated to standardize how state insurance departments monitor technology usage. The debate over whether to include legacy statistical models highlights the challenge of defining AI within traditional regulatory frameworks.
This regulatory debate will influence how insurance companies use algorithms to determine policy pricing and coverage eligibility for consumers. A clearer evaluation framework could eventually lead to more transparent decision-making processes for policyholders.
The takeaway
The definition of artificial intelligence remains a point of friction as regulators and insurers navigate the intersection of traditional statistical models and modern machine learning. Industry participants emphasize that regulatory focus should remain on identifying novel AI risks rather than re-evaluating long-standing, explainable methods.
What happens next
The National Association of Insurance Commissioners is scheduled to finalize its AI Systems Evaluation Tool during the fall meeting, which takes place between November 14 and November 17, 2026.
Further reading
Learn more about evolving industry standards at the Artificial Intelligence section.
Source note: This article includes information reported by Digital Insurance.
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