AI governance for New Jersey insurers
The New Jersey Department of Banking and Insurance issued Bulletin No. 25-03 on February 11, 2025, adopting the NAIC Model Bulletin on the Use of AI Systems by Insurers. It reminds every insurer holding a certificate of authority that decisions touching consumers must comply with New Jersey insurance law, including its unfair trade practice and unfair discrimination standards, regardless of whether an AI system made or supported the decision. The Department expects each insurer to develop and maintain a written AIS Program covering governance, risk management controls, and internal audit, sized to the harm a model could cause a consumer. The bulletin recognizes the NAIC's 2020 Principles of Artificial Intelligence as an appropriate source of guidance and reaches the full insurance life cycle, from product development through claim administration and fraud detection.
What New Jersey expects from your AIS Program
New Jersey adopted the NAIC model with some changes. The four pillars below are the shared foundation.
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
New Jersey DOBI grounds the bulletin in laws it already enforces:
- Unfair Trade Practices ActN.J.S.A. 17:29B-1 et seq.
- Unfair Claims Settlement Practices ActN.J.S.A. 17B:30-13.1 et seq.
- Corporate Governance Annual Disclosure ActN.J.S.A. 17:23-38 et seq.
- Property and Casualty Rating LawsN.J.S.A. 17:29A-1 et seq. and N.J.S.A. 17:29AA-1 et seq.
- Market Conduct SurveillanceN.J.S.A. 17:23-20 et seq.
Who it applies to
The bulletin reaches every entity holding a New Jersey certificate of authority, including:
- All insurers authorized or admitted in New Jersey
- Holders of a New Jersey certificate of authority
- Property and casualty, life, and health lines
- Insurers using third-party AI systems, models, or data
State-specific changes: New Jersey tracks the NAIC model but expressly lets an insurer's AIS Program adopt, incorporate, or rely on a third-party framework such as the NIST Artificial Intelligence Risk Management Framework, Version 1.0. The core program expectations match the national framework.
Resources for New Jersey 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.
New Jersey AI governance FAQs
What is New Jersey Bulletin No. 25-03?
Which companies have to comply in New Jersey?
Can a New Jersey insurer use the NIST AI Risk Management Framework?
How will New Jersey enforce it?
How does a New Jersey insurer get ready?
Sources
- New Jersey DOBI Bulletin No. 25-03 (February 11, 2025)
- NAIC Model Bulletin on the Use of AI Systems by Insurers (Dec 4, 2023)
- N.J.S.A. 17:29B-1 et seq. (Unfair Trade Practices Act)
- N.J.S.A. 17:23-38 et seq. (Corporate Governance Annual Disclosure Act)
- N.J.S.A. 17:29A-1 et seq. (motor vehicle property and casualty rating law)
Get audit-ready for New Jersey Bulletin 25-03
Swept AI supervises your models and produces the AIS Program evidence New Jersey examiners can request.