AI governance for Illinois insurers
The Illinois Department of Insurance issued Company Bulletin 2024-08 on March 13, 2024, adopting the NAIC Model Bulletin on the Use of AI Systems by Insurers. It reminds every insurer holding a certificate of authority in Illinois that decisions affecting consumers must comply with applicable insurance law, including the unfair trade practices and unfair discrimination statutes, regardless of whether an AI system produced them. The Department expects each insurer to develop, implement, and maintain a written AIS Program sized to the degree of potential harm a model could cause, and it recognizes the NAIC's 2020 Principles on Artificial Intelligence as an appropriate source of guidance. The bulletin reaches the full insurance life cycle, from product development and underwriting through claims and fraud detection.
What Illinois expects from your AIS Program
Illinois adopted the NAIC model verbatim, so the program expectations match the national framework.
Governance
A written program with clear ownership. Senior management is accountable to the board, and a cross-functional body oversees AI across its whole life cycle.
Risk Management & Internal Controls
Controls at every stage of the model life cycle, from data sourcing through retirement, sized to the potential harm to consumers.
Third-Party AI Systems & Data
The insurer stays responsible for AI it did not build. Vendor relationships need diligence, contract rights, and the ability to produce evidence.
Documentation & Audit-Readiness
Section 4 spells out what an examiner can ask for. Treating that list as a standing requirement is what keeps a program defensible.
Legal authority
The Illinois Department of Insurance grounds the bulletin in laws it already enforces:
- Unfair Methods of Competition and Unfair and Deceptive Acts and Practices215 ILCS 5/421 et seq.
- Property and Casualty Rating (unfair rate discrimination)215 ILCS 5/424
- Corporate Governance Annual Disclosure215 ILCS 5/130.1-130.7
Who it applies to
The bulletin reaches every entity holding a Illinois certificate of authority, including:
- Property and casualty insurers
- Life and annuity insurers
- Health insurers and HMOs
- All other entities holding an Illinois certificate of authority
State-specific changes: Illinois adopted the NAIC model with no notable changes, so the substance tracks the national framework section by section. An insurer building to the NAIC model is building to Illinois's expectations.
Resources for Illinois insurers
Start with these plain-language explainers and field guides.
What is the NAIC Model Bulletin on AI?
The NAIC Model Bulletin on the Use of AI Systems by Insurers is the template most states use to set AI governance expectations. Here is what it says and why it matters.
GuideWhat is an AIS Program?
An AI Systems Program (AIS Program) is the written program the NAIC Model Bulletin expects every insurer to maintain. Here are its four pillars and what each one requires.
GuideWhat are the NAIC AI Principles?
The NAIC AI Principles, adopted in 2020, are the foundation beneath every state AI bulletin. The five principles spell FACTS: Fair, Accountable, Compliant, Transparent, and Secure.
GuideAI in Insurance: Key Regulatory Definitions
The NAIC Model Bulletin defines the terms that carry legal weight, from AI System to Adverse Consumer Outcome to Model Drift. Here is what each one means for insurers.
ArticleInsurance Regulators Are Forcing AI Governance. Most Carriers Aren't Ready.
State insurance regulators and bar associations are sounding the alarm on AI in insurance. Legal and regulatory pressure is forcing insurers to operationalize AI governance, not just document it.
ArticleThe NAIC Bulletin Is the Floor Your Reinsurer Will Hold You To
Twenty-four jurisdictions have adopted the NAIC Model Bulletin on AI. Most carrier compliance teams are working to the regulatory text. Their reinsurers will use the same document as an evidentiary baseline at the next placement, and the cedent that meets the floor and stops there is preparing for the wrong audience.
Illinois AI governance FAQs
What is Illinois Company Bulletin 2024-08?
Which companies have to comply in Illinois?
Does the bulletin reference the NAIC AI Principles?
How will Illinois enforce it?
How does an Illinois insurer get ready?
Sources
- Illinois DOI: Company Bulletin 2024-08 (March 13, 2024)
- NAIC Model Bulletin on the Use of AI Systems by Insurers (Dec 4, 2023)
- NAIC Big Data and AI (H) Working Group: model bulletin implementation map
- 215 ILCS 5/421 (Illinois Insurance Code, Article XXVI: Unfair Methods of Competition and Unfair and Deceptive Acts and Practices)
- 215 ILCS 5/424 (Illinois Insurance Code, Article XXVI: unfair methods of competition and unfair discrimination defined)
- 215 ILCS 5/130.1 to 130.7 (Illinois Insurance Code, Corporate Governance Annual Disclosure Law)
Get audit-ready for Illinois Company Bulletin 2024-08
Swept AI supervises your models and produces the AIS Program evidence Illinois examiners can request.