Introduction
The state of New Jersey has taken a significant step in regulating the use of artificial intelligence systems within the insurance sector, aligning with a broader national movement towards responsible AI governance.
Description
On February 11 [2], New Jersey’s Banking and Insurance Commissioner [2], Justin Zimmerman [1], issued Bulletin 25-03 [1] [2], which addresses the use of artificial intelligence systems (AIS) in the insurance sector [2]. This directive emphasizes the state’s commitment to fair insurance practices and mandates that all insurers authorized or admitted in New Jersey implement governance frameworks to ensure that AI systems are accountable, unbiased [1] [2], and explainable [1]. The bulletin also highlights that decisions made by AI may be subject to regulatory scrutiny. This marks New Jersey’s adoption of regulations based on the NAIC Model Act concerning the use of AIS by insurers [2], making it the 23rd state to implement such guidelines [2]. With 21 jurisdictions across the country adopting similar AI oversight measures, the movement towards responsible AI use in the insurance sector is gaining significant traction [1].
Conclusion
The implementation of Bulletin 25-03 signifies New Jersey’s proactive approach to ensuring ethical AI practices in insurance, potentially setting a precedent for other states. By aligning with the NAIC Model Act, New Jersey not only enhances consumer protection but also contributes to a growing national framework that seeks to balance innovation with accountability in AI applications.
References
[1] https://insurancefraud.org/publications/fraud-news-weekly-february-14-2025/
[2] https://www.jdsupra.com/legalnews/new-jersey-adopts-bulletin-on-ai-use-in-7761083/
