Trump signs order supporting national AI framework, attacks excessive state laws
President Donald Trump has signed an executive order that pushes for a national AI standard and criticizes any state law that takes “excessive” oversteps.
“My Administration must act with the Congress to ensure that there is a minimally burdensome national standard — not 50 discordant state ones,” the order says. “The resulting framework must forbid state laws that conflict with the policy set forth in this order.”
U.S. leadership in AI will promote national and economic security and dominance across many domains, the order says.
“To win, United States AI companies must be free to innovate without cumbersome regulation. But excessive State regulation thwarts this imperative,” the order says. “First, state-by-state regulation by definition creates a patchwork of 50 different regulatory regimes that makes compliance more challenging, particularly for start-ups. Second, state laws are increasingly responsible for requiring entities to embed ideological bias within models.”
The order gives a new Colorado law that bans “algorithmic discrimination.” It says the law could force AI models to produce false results to avoid differential treatment or impact on protected groups.
“Third, state laws sometimes impermissibly regulate beyond State borders, impinging on interstate commerce,” the order says.
The order says that until national standards exist, the Trump administration will take action to check the most onerous and excessive laws emerging from the states.
Within 30 days of the order, an AI litigation Task Force will be created to challenge state AI laws inconsistent with a national policy framework, it says. It also gives specific federal positions the authority to evaluate state AI laws.
The order calls for the restriction of state funding through the Broadband Equity Access and Deployment program for states in which AI law is deemed onerous.
The National Council of Insurance Legislators (NCOIL) released a statement Monday about the order, saying, “as state insurance legislators, we are greatly disturbed.”
“As NCOIL said in May when a proposed 10-year moratorium on state legislative and regulatory authority was being considered by Congress, it’s vital that state legislators have the ability to develop policy that protects our constituents,” a press release says. “Those constituents have been steadfast in asking for safeguards against the current unknowns surrounding AI, and it’s important that they not be deprived of state-based policy solutions, particularly during a time of such polarization and gridlock in Washington, D.C.”
NCOIL goes on to say that states should be allowed to continue serving as the laboratories of democracy.
“We believe the executive order is not the final word on this and that the Administration will likely be hearing from the Judicial system on this questionable order,” the release says. “NCOIL will continue to work on developing public policy surrounding AI and insurance for States to use as guidance in trying to protect consumers while not hindering innovation.”
Out of 193 auto insurance companies surveyed by the National Association of Insurance Commissioners (NAIC) from December 2022 to December 2023, 88% said they plan to use or plan to explore AI models in their operations.
Chubb recently announced plans for a 20% headcount reduction in the next three to four years as it plans to move 85% of its major underwriting and claims processes to automated systems.
In 2023, NAIC approved a model bulletin on the use of AI by insurance companies. It outlines the need for processes and controls to prevent possible AI inaccuracies, discriminatory biases, and data vulnerabilities.
The bulletin reminds insurers of established regulatory laws, such as the Unfair Trade Practices Model Act, that regulate unfair methods of competition or unfair or deceptive acts. It states that governance and controls on AI systems are needed to comply with these laws.
Florida also just filed new legislation that would place parameters on AI insurance claims handling, requiring mandatory human reviews of claim denials.
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