North Dakota encourages what South Carolina expects

The NAIC’s map for its model AI bulletin, stamped October 8, now lists new bulletins from South Carolina and North Dakota under “Adopted States.” According to its own note, the map “does not reflect a determination as to whether the pending or enacted legislation contains all elements of the model.” South Carolina’s bulletin, dated September 24, has the model’s verb: insurers authorized in the state “are expected” to have a written AI program. North Dakota’s bulletin, dated October 5, says insurers authorized there “are encouraged” to have one.

This week’s story: two new bulletins read against the NAIC model

The model reaches an insurer only through a state’s own version, so the wording that counts is the state’s. The bulletins differ from the model elsewhere; we take the passages on how much room each verb leaves the insurer.

Where the model has only a heading, South Carolina’s Bulletin 2026-07 has a sentence: “Set forth below are the AIS Program Guidelines with which insurers must comply.” The guidelines that follow are still shoulds, and the bulletin calls itself guidance. Read literally, an insurer must comply with a list of things its program should do.

Among the records North Dakota’s Bulletin 2026-2 says will make an investigation easier, the first is “The written AIS Program or any decision by the Insurer not to develop and adopt a written AIS Program.” The model and South Carolina’s bulletin have “The written AIS Program.” Beside “encouraged,” North Dakota’s item implies a choice the bulletin never states outright, and counts the decision as a record.

Our October 13 report found both the longer item and “encouraged” in the NAIC’s July 17, 2023 exposure draft, an earlier version of the model that was not adopted. North Dakota’s bulletin names no source text, so the match shows only that the wording predates it.

The model and both bulletins say that, “Regardless of the existence or scope of a written AIS Program,” an insurer can expect questions during an investigation or market conduct action. A company with no program can expect the questions under either verb.

What to do this week

• A program built to the NAIC model may rest on a sentence that South Carolina’s bulletin does not have. The model and North Dakota’s bulletin have it: insurers may show they comply with the laws that regulate their conduct by other means, including practices that differ from the bulletin’s own. South Carolina’s bulletin does say its goal is not to prescribe specific practices. Our suggestion: where your program departs from a guideline, write the reason beside it, and ask counsel how “must comply” reads next to the shoulds.

• In North Dakota, a company with no written AIS Program can put that decision on paper now: who made it, when, and on what assessment of the risk. Nothing in the bulletin asks for such a memo; the case for one rests on the first item of its list and on the questions an insurer can expect with or without a program.

• Add each bulletin’s verb for the written program to your state chart. The NAIC map gives both states one label, and our state tracker uses that label for both. Add the issue date as well, since neither bulletin gives an effective date or a transition period. North Dakota’s bulletin says it is in effect until rescinded, and South Carolina’s says it may be amended.

On the Docket

• October 16, 2026: Senators Elizabeth Warren and Josh Hawley ask six home and auto insurers to answer their letters by this date. One question is how each company uses AI in claims. Letter to Allstate

• October 26, 2026: Colorado’s Attorney General opens its hearing on proposed automated decision-making and chatbot rules at 10:00 AM, in Denver and online. Written comments on the August 11 draft and on the October 6 interim draft close at 11:59 PM MT that day. If the hearing continues past October 26, they close on its last day. The interim draft’s cover page says the laws behind the rules, SB 26-189 and the Chatbot Safety Act, take effect January 1, 2027. The same page answers stakeholders who asked for a grace period: the Attorney General “will exercise appropriate discretion in enforcement of the laws.” Anyone working toward January 1 should keep working toward it. Rulemaking page

• November 2, 2026: The NAIC’s Big Data and Artificial Intelligence working group holds its next public Webex at 10:00 AM CT to continue discussing the AI Risk Evaluation Supplement, its draft add-on to market conduct and financial reviews. For its October 8 session the group’s page has an agenda packet and, so far, no minutes. Version 5.0 was still the newest draft there on October 13, so that is the text to prepare against for now. NAIC working group page

This week in brief

Governance

Colorado’s Attorney General released an interim draft of its proposed rules on October 6, and the cover page says the draft reflects “significant, substantive changes” and is not final. A search of the draft’s 75 pages turns up one passage about insurance, unchanged from the August 11 draft: an example in which “an insurance provider that is subject to Section 6-1-1701” (the automated decision-making law, as rewritten by SB 26-189) must provide an adverse outcome disclosure after its claims administrator’s automated system alone denies a home claim. Interim draft

Business Lines

Senators Warren and Hawley put seven questions to Allstate, American Family, Farmers, Liberty Mutual, State Farm and USAA in letters dated October 2, and the sixth asks each to describe its “use of artificial intelligence, predictive analytics, or other automated tools” in home and auto claims, and the safeguards around it. The letters are about a rising share of claims closed without payment; nothing in them attributes the rise to AI, and no subpoena comes with them. Letter to Allstate

From the Guides

The NAIC model, for comparison. Our guide covers what the model asks a written AIS Program to contain and what Section 4 says a department may request, the two parts this week’s story draws on: Inside the NAIC AI Model Bulletin.

When a new state bulletin arrives, who at your company reads it against the NAIC model, and how long does that take? Send your answer in a reply to the email this issue arrived in.

– The Editor, InsureAI Wire