What happened
On May 14, 2026, Colorado Governor Jared Polis signed SB 26-189. It repeals and replaces the state’s 2024 Artificial Intelligence Act (SB 24-205). The new law takes effect January 1, 2027, instead of June 30, 2026.
According to two law firm summaries, the rewrite removes the biggest obligations in the original act:
- the duty of reasonable care to prevent algorithmic discrimination
- deployer risk management programs and annual impact assessments
- self-reporting of discrimination risks to the Attorney General
What remains is a disclosure and transparency regime for automated decision-making technology (ADMT) used in consequential decisions. Eckert Seamans lists insurance among the covered decision types. Its summary says deployers must:
- publish notice that a covered ADMT is in use
- within 30 days of an adverse decision that AI materially contributed to, explain the decision, the tool’s role and how to seek reconsideration
- honor consumer rights to access and correct their data and to request meaningful human review
- keep records of covered ADMT use for three years
Developers must give deployers documentation on intended uses, training data categories, known limits and human oversight. There is no private right of action. The Attorney General enforces, and a 60-day cure period generally applies until January 1, 2030. Eckert Seamans also notes that AG rulemaking had not formally begun. It adds that a federal court stayed enforcement of the prior law on April 27, 2026, and says that stay extends to the successor law, which makes enforcement before late 2027 unlikely.
Why it matters for agencies
Most of the AI agencies buy today handles data entry, document extraction, quoting workflows and policy checking. In our view, that work probably doesn’t count as a “consequential decision” about a consumer. Whether a tool is covered depends on whether it materially influences the decision, and Eckert Seamans calls that a fact-specific question.
The risk is at the edges. An agency or MGA with binding authority in Colorado that uses AI to screen eligibility, decline applicants or set pricing tiers could be a deployer. So could an agency that uses an AI tool to decide which consumers to offer coverage to. The law also reaches AI built into third-party products, not just tools you build.
This is a state law, not an insurance regulation. Agencies should watch it alongside insurance department guidance on AI.
What to do
- Agencies with Colorado clients: list every AI tool you use and note whether any of them screens, declines or prices risks without a person deciding.
- Ask your AI vendors whether they will give you developer documentation under SB 26-189 if your use is covered.
- Agencies with binding authority or MGA operations in Colorado: talk to counsel before January 2027, and watch for AG rulemaking.
- Everyone else: no action is needed now. Keep a person in the loop on any decline or coverage decision.