AI governance for Virginia insurers
The Virginia Bureau of Insurance issued Administrative Letter 2024-01 on July 22, 2024, adopting the NAIC Model Bulletin on the Use of AI Systems by Insurers. It reminds insurers that any decision, conduct, or action affecting consumers must comply with Virginia insurance law, including the unfair trade practices, unfair claim settlement, and unfair discrimination statutes, regardless of the methods used to reach it. The Bureau recognizes the NAIC's 2020 Principles on Artificial Intelligence as an appropriate source of guidance and expects each insurer to maintain a written AIS Program reaching the full insurance life cycle. Virginia strengthened the model in places, directing that the AIS Program be designed to eliminate the risk of adverse consumer outcomes.
What Virginia expects from your AIS Program
Virginia 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
The Virginia Bureau of Insurance grounds the bulletin in laws it already enforces:
- Unfair Trade PracticesVa. Code Ann. § 38.2-500 et seq. (Title 38.2, Chapter 5)
- Regulation of Rates GenerallyVa. Code Ann. § 38.2-1900 et seq. (Title 38.2, Chapter 19)
- Corporate Governance Annual DisclosuresVa. Code Ann. § 38.2-1334.11 et seq. (Title 38.2, Chapter 13, Article 5.2)
Who it applies to
The bulletin reaches every entity holding a Virginia certificate of authority, including:
- Property and casualty insurers
- Life and annuity insurers
- Health insurers and HMOs
- All companies licensed to conduct the business of insurance in Virginia
State-specific changes: Virginia tracks the NAIC model but sharpens the language: the AIS Program should be designed to eliminate the risk of adverse consumer outcomes (the model says mitigate), and the Bureau strongly encourages verification and testing methods to identify errors and bias.
Resources for Virginia 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.
Virginia AI governance FAQs
What is Virginia Administrative Letter 2024-01?
Which companies have to comply in Virginia?
How does Virginia's letter differ from the NAIC model?
How will Virginia enforce it?
How does a Virginia insurer get ready?
Sources
- Virginia Bureau of Insurance: Administrative Letter 2024-01 (July 22, 2024)
- Virginia SCC: Insurance Administrative Letters
- NAIC Model Bulletin on the Use of AI Systems by Insurers (Dec 4, 2023)
- Va. Code Ann. § 38.2-500 et seq. (Unfair Trade Practices)
- Va. Code Ann. § 38.2-1900 et seq. (Regulation of Rates Generally)
- Va. Code Ann. § 38.2-1334.11 et seq. (Corporate Governance Annual Disclosures)
Get audit-ready for Virginia Administrative Letter 2024-01
Swept AI supervises your models and produces the AIS Program evidence Virginia examiners can request.