Administrative Letter 2024-01Adopted

AI governance for Virginia carriers

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 carriers 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 carrier 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.

BulletinAdministrative Letter 2024-01

IssuedJuly 22, 2024

EffectiveUpon issuance

BasisNAIC model bulletin

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 carrier 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 carriers
Life and annuity carriers
Health carriers 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.

Learn the basics

Resources for Virginia carriers

Start with these plain-language explainers and field guides.

Guide

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.

Guide

What is an AIS Program?

An AI Systems Program (AIS Program) is the written program the NAIC Model Bulletin expects every carrier to maintain. Here are its four pillars and what each one requires.

Guide

What 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.

Guide

AI 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 carriers.

Article

AI Governance for Insurance Carriers: Where AI Runs Across the Value Chain and What Regulators Expect

Insurance AI governance across underwriting, claims, catastrophe modeling, distribution, and cyber: where AI runs today, how its failures reach the loss ratio, and the evidence state regulators now expect carriers to produce.

Article

Reinsurance AI: How Reinsurers and Rating Agencies Are Underwriting Your AI

Reinsurers and rating agencies are already forming a view of the AI in your rating and claims stack. The treaty clauses, rating methodology, case history, and renewal evidence every carrier should understand.

Virginia AI governance FAQs

What is Virginia Administrative Letter 2024-01?

It is the letter the Virginia Bureau of Insurance issued on July 22, 2024 adopting the NAIC Model Bulletin on the Use of AI Systems by Insurers. It tells carriers that existing Virginia insurance laws apply to any decision an AI system touches and expects each carrier to maintain a written AIS Program.

Which companies have to comply in Virginia?

All companies licensed to conduct the business of insurance in Virginia, across property and casualty, life, and health lines. The letter is not limited to a single line of business.

How does Virginia's letter differ from the NAIC model?

Virginia follows the model closely but tightens the wording. The AIS Program should be designed to eliminate the risk of adverse consumer outcomes, where the model says mitigate, and the Bureau strongly encourages verification and testing to identify errors and bias in predictive models and AI systems.

How will Virginia enforce it?

Through existing authority. The letter ties AI use to the unfair trade practices statutes in Chapter 5 of Title 38.2, the rating laws in Chapter 19, and the corporate governance annual disclosure requirements in Article 5.2 of Chapter 13. The Bureau can request AIS Program documentation during investigations and market conduct examinations.

How does a Virginia carrier get ready?

Stand up a written AIS Program covering governance, risk management and internal controls, and third-party oversight, then keep model inventories, validation records, and a clear data-to-decision trail examination-ready.

Sources

Get audit-ready for Virginia Administrative Letter 2024-01

Swept AI supervises your models and produces the AIS Program evidence Virginia examiners can request.