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Technology Replacement Clause Requires Actual Replacement

Client Alert | less than 1 min read | 09.28.10

Some technology contracts have included "replacement" clauses which put limits on the agency's use of its termination for convenience power to flip to another vendor simply to get a better price. The Federal Circuit in McHugh v. DLT Solutions, Inc. (Sept. 23, 2010), held that, when the agency in such a clause had only agreed not to "replace" the leased software with "functionally similar equipment and/or software" for one year after termination or expiration of the lease, it did not breach when it did not install the leased software and continued to use its prior software.

Insights

Client Alert | 4 min read | 03.25.26

NAIC Intensifies AI Regulatory Focus: What Health Insurance Payors Need to Know

The National Association of Insurance Commissioners (NAIC) is intensifying its oversight of how insurers use AI — and the pace of regulatory activity shows no signs of slowing. Over the past several months, the NAIC has published a formal Issue Brief staking out its position on federal AI legislation, launched a multistate AI Evaluation Tool pilot aimed at examining insurers’ AI governance programs, and continued to expand adoption of its AI Model Bulletin across state lines. These developments continue a trend towards enhancing regulation; the NAIC adopted AI Principles in 2020 and a Model Bulletin in 2023 clarifying that existing insurance laws apply to AI systems and establishing expectations for governance, documentation, testing, and third-party oversight. That Model Bulletin has now been adopted in approximately 24 states....