Navarro Issues Insurer use of AI Bulletin

Joins coalition of states enhancing regulation of artificial intelligence

Insurance Commissioner Trinidad Navarro announced Delaware has issued a bulletin to all insurance carriers doing business in the state regarding the use of Artificial Intelligence (AI). AI may facilitate the development of innovative insurance products, improve consumer interface and service, simplify and automate processes, and promote efficiency and accuracy. However, its use may also present risks to consumers, including the potential for inaccuracy, unfair discrimination, data vulnerability, and lack of transparency and explainability. Insurance carriers must take actions to minimize these risks, and use of such systems must comply with all applicable federal and state laws and regulations, including those that address unfair trade practices, unfair claims settlement practices, anti-discrimination provisions, and rules related to rate making.

“AI is transforming the insurance industry and is increasingly deployed across all stages of the insurance lifecycle, presenting both opportunities and risks. By issuing this bulletin, we’re putting insurers on notice that these systems may not circumvent our existing regulatory standards, and that they must take all possible steps to ensure no consumer harm is created,” shared Insurance Commissioner Trinidad Navarro. “While we issue guidance to carriers regularly, we’re highlighting this effort to the public to ensure that policyholders are aware that AI may be used in their insurance products, the marketing they receive, the pricing and claims management they experience, in insurance fraud detection, and in other areas that may impact their consumer experience – and that they have all the same rights as it relates these activities. Consumer protection remains our top priority.”

The robust regulatory guidance is state-specific, adapted from the National Association of Insurance Commissioners’ (NAIC) Model Bulletin which was developed over several years and adopted in late 2023. Delaware joins 21 jurisdictions who adopted guidance similar to the Model Bulletin in 2024, and 4 additional jurisdictions have otherwise issued guidance or regulation.

In addition to other detailed guidance, Bulletin No. 148 also reiterates the Delaware Department of Insurance’s authority to request and obtain information and documentation including those relevant to AI systems during market conduct investigations and examinations.

View Bulletin No. 148