There is an increasing trend in the United States where state regulators are becoming more aggressive in scrutinizing how predictive Artificial Intelligence (AI) models could potentially lead to discrimination in insurance carriers’ underwriting practices.
Colorado is leading the charge by being the first state to adopt a formal regulation set specifically for insurance algorithms. However, regulators in other politically blue states such as New York, California, and Connecticut, and even the district of Columbia— Washington, D.C.—are not far behind. They’ve all issued respective warnings and guidelines that are aimed towards insurance carriers to demonstrate that their decision-making algorithm models and datasets don’t perpetuate bias.
Furthermore, New Jersey has joined ranks of the several states currently formulating similar legislation.
These actions taken by state regulators have been triggered amidst a backdrop where insurance titans—such as State Farm Mutual Automobile Insurance—are making active use of AI in various operational capacities.
As these developments considerably impact the operations of law firms and corporations at large scale, legal professionals should pay close attention to stay aligned with evolving regulatory landscape in the insurance industry.
For more information, please refer to the original article on Bloomberg Law.