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NAIC Task Force Considers Insurtech Rules

Client Alert | 1 min read | 03.27.18

The Innovation and Technology Task Force of the National Association of Insurance Commissioners met on March 26 to discuss a range of Insurtech topics—how insurers use algorithms and predictive modeling to set rates, how many states will soon adopt the NAIC Model Law on Data Security, and whether states should enact “regulatory sandbox” laws specifically allowing regulators to waive rules that could hinder insurance innovation. The Task Force decided:

  • It would ask for technical assistance from NAIC staff to better understand how insurers are using algorithms and predictive models to set rates, particularly for personal auto and homeowners policies.
  • It would seek legal advice from NAIC counsel on the applicable procedures for maintaining confidentiality of any proprietary algorithms and models involved in staff’s analysis.
  • It would work with the NAIC Actuarial and Statistical Task Force in considering model legislation governing the use of those algorithms and models in required rate filings.

The Task Force also heard a report that in South Carolina and Rhode Island legislation has been introduced and could pass this year to enact the Data Security model act with more states to follow. Currently, this model act is not yet an NAIC accreditation standard, although that may change if Congress threatens to impose a preemptive federal law on the states. The Task Force will be considering how best to develop a central electronic mechanism for insurance companies to report data breaches as required by the model law and the regulations already issued by the New York Department of Financial Services.

Concerning the concept of “regulatory sandboxes,” legislation has been introduced in Hawaii, Illinois, and Massachusetts to authorize limited waivers of insurance laws. However, several Commissioners stated that they already had the power to waive or vary rules which could hinder insurance innovations and did not consider a specific new waiver law to be necessary. NAIC staff will survey Task Force members—some 40 states—to gauge how many regulators also believe they have sufficient flexibility under current law to allow for such innovations as electronic delivery of auto insurance identification cards and cancellation/non-renewal notices, assuming the policyholder explicitly consented to such electronic delivery.

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Client Alert | 5 min read | 12.12.25

Eleventh Circuit Hears Argument on False Claims Act Qui Tam Constitutionality

On the morning of December 12, 2025, the Eleventh Circuit heard argument in United States ex rel. Zafirov v. Florida Medical Associates, LLC, et al., No. 24-13581 (11th Cir. 2025). This case concerns the constitutionality of the False Claims Act (FCA) qui tam provisions and a groundbreaking September 2024 opinion in which the United States District Court for the Middle District of Florida held that the FCA’s qui tam provisions were unconstitutional under Article II. See United States ex rel. Zafirov v. Fla. Med. Assocs., LLC, 751 F. Supp. 3d 1293 (M.D. Fla. 2024). That decision, penned by District Judge Kathryn Kimball Mizelle, was the first success story for a legal theory that has been gaining steam ever since Justices Thomas, Barrett, and Kavanaugh indicated they would be willing to consider arguments about the constitutionality of the qui tam provisions in U.S. ex rel. Polansky v. Exec. Health Res., 599 U.S. 419 (2023). In her opinion, Judge Mizelle held (1) qui tam relators are officers of the U.S. who must be appointed under the Appointments Clause; and (2) historical practice treating qui tam and similar relators as less than “officers” for constitutional purposes was not enough to save the qui tam provisions from the fundamental Article II infirmity the court identified. That ruling was appealed and, after full briefing, including by the government and a bevy of amici, the litigants stepped up to the plate this morning for oral argument....

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