AI governance for Kentucky insurers
The Kentucky Department of Insurance issued Bulletin No. 2024-02 on April 16, 2024, adopting the NAIC Model Bulletin on the Use of AI Systems by Insurers and addressing it to all insurers licensed to do business in Kentucky. It reminds insurers that any decision or action affecting consumers must comply with Kentucky insurance law, including the laws on unfair trade practices and unfair discrimination, whether or not an AI system supported the decision. The Department expects each insurer to maintain a written AIS Program and 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 pricing through claims and fraud detection.
What Kentucky expects from your AIS Program
Kentucky 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 Kentucky Department of Insurance grounds the bulletin in laws it already enforces:
- Unfair Trade Practices (Trade Practices and Frauds)KRS 304.12-010 et seq.
- Rates and Rating OrganizationsKRS 304.13-011 et seq.
- Corporate Governance Annual DisclosureKRS 304.3-235
Who it applies to
The bulletin reaches every entity holding a Kentucky certificate of authority, including:
- Property and casualty insurers
- Life and annuity insurers
- Health insurers and HMOs
- All other insurers licensed to do business in Kentucky
State-specific changes: Kentucky adopted the model with little or no customization, so the substance tracks the NAIC framework. An insurer building to the national framework is building to Kentucky's expectations.
Resources for Kentucky 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.
Kentucky AI governance FAQs
What is Kentucky Bulletin No. 2024-02?
Which companies have to comply in Kentucky?
Does the bulletin reference the NAIC AI Principles?
How will Kentucky enforce it?
How does a Kentucky insurer get ready?
Sources
- Kentucky DOI - Bulletin No. 2024-02 (April 16, 2024)
- NAIC Model Bulletin on the Use of AI Systems by Insurers (Dec 4, 2023)
- NAIC Big Data and AI (H) Working Group - implementation map of the AI model bulletin
- KRS 304.12-010 et seq. (Unfair Trade Practices: Trade Practices and Frauds)
- KRS 304.13-011 et seq. (Rates and Rating Organizations)
- KRS 304.3-235 (Corporate Governance Annual Disclosure)
Get audit-ready for Kentucky Bulletin 2024-02
Swept AI supervises your models and produces the AIS Program evidence Kentucky examiners can request.