The National Association of Professional Insurance Agents (PIA) has urged Senate leaders to reject language in the “One Big Beautiful Bill” that would place a sweeping 10-year moratorium on state-level legislative or regulatory action related to artificial intelligence (AI).
In a letter dated June 16, the trade association argued that such a federal freeze would jeopardize the insurance industry’s ability to respond effectively to fast-moving technological developments, leaving both consumers and insurers at risk.
PIA contends that state-based regulation of the insurance industry, established and reaffirmed under the McCarran-Ferguson Act of 1945, has long served as a successful model for ensuring fair, efficient, and responsive oversight.
According to Corey Weeks (pictured), manager of government relations and press secretary at PIA National, state regulators have been key to managing technological shifts in the insurance industry, including the rise of AI tools.
“The local expertise of state insurance regulators has proven effective for consumers, insurers, and the industry at large, given states’ ability to quickly respond to emerging insurance risks associated with changing technologies,” Weeks said.
“The McCarran-Ferguson Act makes clear that federal laws do not supersede state insurance regulation unless explicitly stated.”
The “One Big Beautiful Bill” (officially H.R. 1), currently being advanced in Congress, proposes that all existing state AI laws become unenforceable for a decade and that no new state AI legislation or regulations can be enacted or enforced during that period. This moratorium would cover all AI models, systems, or automated decision tools.
Tech giants, including Amazon, Google, Microsoft, and Meta, have lobbied for a unified federal approach to AI regulation, over concerns that a patchwork of state rules could stifle innovation and hinder competition with China.
However, critics have warned that a moratorium would create a regulatory vacuum and that a ban might leave states unable to act on emerging threats such as deepfakes, child safety, bias, and leave consumers and businesses unprotected.
PIA is particularly concerned about the uncertainty that could arise if states are barred from legislating or regulating AI over the next decade. This uncertain legal landscape could lead to regulatory fragmentation and confusion, halting progress on critical consumer protections and industry standards.
In the June 16 letter, PIA CEO Mike Skiados also rejected the language in the “One Big Beautiful Bill” that could apply not just to advanced machine learning systems, but also a wide range of processes using analytical tools and software that insurers already rely on for claims and underwriting.
“This overly broad definition could prevent state legislators and regulators from conducting appropriate oversight of insurers, whether the risk is related to AI or not,” Skiados said. “It would also increase costs and regulatory uncertainty for the targeted entities and states and potentially delay the implementation of needed consumer protections.”
Contrary to the idea that AI regulation is lagging, PIA noted that state insurance regulators are already moving ahead with thoughtful governance standards.
Nearly 30 states have adopted the National Association of Insurance Commissioners (NAIC) Model Bulletin, which requires insurers to establish AI governance programs and comply with all applicable laws. The bulletin serves as a roadmap for insurance departments to communicate their expectations and assess the risks and benefits of AI use by insurers.
Agents and carriers operating in multiple states are advised to familiarize themselves with whether their state has adopted the bulletin and ensure compliance with local requirements.
PIA called on senators to remove the moratorium clause or to specifically exempt insurance-related state oversight.
Without clear and enforceable rules, insurers may hesitate to invest in AI technologies while consumers could be left without essential safeguards around fairness, transparency, and accountability in how AI is applied to pricing, underwriting, and claims.
“The risks can be significant for both the consumer and insurer,” said Weeks. “There is no comprehensive federal legislation regulating its use, and it’s unclear whether future federal actions would even apply to insurance.”
AI is already reshaping the insurance marketplace. Weeks highlighted how AI has enhanced efficiency in customer service, claims processing, and market analysis, helping agencies streamline operations and unlock new growth potential. However, the technology also presents significant challenges for independent agents.
“Agents are consumers’ most valuable resource for navigating a complex insurance market, and while AI has enabled agents to better serve customers, it has also given rise to direct-to-consumer platforms which don’t always provide enough guidance,” Weeks said.
Any regulatory framework, Weeks said, should promote transparency and ensure that AI tools used in insurance are safe, accountable, and fair.
