NAIC Modernizes Market Conduct Regulation for AI and New Models

NAIC Newsroom

Published March 25th, 2026

Detected March 26th, 2026

Summary

The NAIC has established a new Working Group to modernize market conduct regulation, focusing on the impact of artificial intelligence and new distribution models. This initiative aims to ensure the regulatory framework remains effective in protecting policyholders while adapting to technological advancements in the insurance industry.

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What changed

The National Association of Insurance Commissioners (NAIC) announced the formation of a Market Conduct Regulation Modernization (D) Working Group during its 2026 Spring National Meeting. This group will conduct a comprehensive assessment of the current market regulatory framework to identify opportunities for enhancement, particularly in light of technological changes such as artificial intelligence and new distribution models. The initiative seeks to ensure policyholder protection, improve efficiency for regulators and companies, and adapt to evolving insurer business models.

The NAIC plans to gather broad input throughout 2026 and aims to deliver actionable recommendations by the end of the year. This forward-looking approach indicates a proactive effort by state insurance regulators to update their oversight capabilities to address the complexities of the modern insurance landscape. Companies should anticipate potential changes to market conduct expectations and supervisory approaches as the working group progresses.

What to do next

Monitor NAIC communications regarding the Market Conduct Regulation Modernization Working Group's progress and recommendations.
Prepare to provide input or feedback to NAIC initiatives as opportunities arise.
Assess internal market conduct practices in light of emerging technologies like AI.

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National Meeting News

SAN DIEGO, Calif. (March 25, 2026)

State Insurance Regulators Look to the Future of Market Conduct Regulation

Solvency regulation and market regulation represent the two main pillars of insurance regulation, and states have directed considerable attention and energy to solvency regulation since the Great Financial Crisis.

Recognizing the need, however, for an up-to-date, holistic assessment of the market regulatory framework, the National Association of Insurance Commissioners’ (NAIC) Market Regulation and Consumer Affairs (D) Committee appointed a new Market Conduct Regulation Modernization (D) Working Group during the NAIC’s 2026 Spring National Meeting.

“Artificial intelligence, new distribution models, national scale vendors, and other technological advances are significantly changing both consumers’ expectations and insurers’ business models and practices,” said Illinois Department of Insurance Director and (D) Committee Chair Ann Gillespie. “State insurance regulators focus on leading, not just responding. That means undertaking a comprehensive assessment of the current market regulatory framework and identifying opportunities to enhance policyholder protection, while creating efficiencies for regulators and companies.”

NAIC Members’ aim is to develop a strategic, forward-looking roadmap to determine if today’s market conduct regulatory framework has the data, systems, tools, and supervisory approaches needed to oversee a rapidly evolving insurance business model. The work will also help ensure the framework is efficient, collaborative, and risk-focused.

The NAIC will take an inclusive and deliberate approach to collect broad input throughout 2026, aiming to deliver actionable recommendations by the end of the year.

About the National Association of Insurance Commissioners

As part of our state-based system of insurance regulation in the United States, the National Association of Insurance Commissioners (NAIC) provides expertise, data, and analysis for insurance commissioners to effectively regulate the industry and protect consumers. The U.S. standard-setting organization is governed by the chief insurance regulators from the 50 states, the District of Columbia and five U.S. territories. Through the NAIC, state insurance regulators establish standards and best practices, conduct peer reviews, and coordinate regulatory oversight. NAIC staff supports these efforts and represents the collective views of state regulators domestically and internationally.