When it comes to technology, state insurance regulators are definitely of two minds, depending on who’s implementing it.

Regulators willingly embrace technology to enhance their own operations, according to the Deloitte Center for Financial Services. But the regulators remain guarded about how carriers employ new technology.

“In a time of rapidly increasing technology adoption, a growing number of regulators are likely to use the latest technology to enable the kind of deep, broad, and real-time oversight of the insurance market that could not have been dreamt of even a decade or two ago,” says the 2017 Insurance Regulator Technology Adoption Survey. However despite those predictions, the survey found regulators are implementing new technologies in their departments mainly to automate manual processes and replace or integrate legacy systems. The fact that 69% of them cited legacy systems as a driver could indicate they still need to modernize current systems before considering more advanced technology. Not surprisingly, nearly three quarters of the respondents cited budgetary constraints as the main roadblock to adopting technology.

“Generally speaking, everybody sees technology will change the interaction between the regulators and the industry,” says Rich Godfrey, principal and U.S. insurance advisory leader at Deloitte & Touche.

But the survey also found regulators "seem unlikely to give insurers the benefit of the doubt regarding new technology uses, so insurers would need to display greater transparency in their relationships with bold customers and regulators.”

Nearly half the respondents said new technologies create more need for regulatory oversight. Among the chief concerns are data security and fair market conduct. Regulators also seemed somewhat cool to the idea of insurtech sandboxes.

“While most agree engaging with different stakeholders—insurtech start- ups, insurers, consumer-protection groups, and other regulators—to pursue innovation would be a positive step, more than four in 10 only somewhat agree,” the survey says. “So if sandboxes are to be a useful tool, state insurance regulatory leaders may need to educate their colleagues on their potential.”