Regulator highlights potential dangers which will include its alternatives
The Michigan Division of Insurance coverage and Monetary Companies (DIFS) has issued a bulletin outlining its expectations for insurance coverage carriers relating to the event, acquisition, and use of synthetic intelligence (AI) programs.
The bulletin additionally clarifies the forms of info the division might request when investigating or inspecting a service’s use of AI, in keeping with DIFS Director Anita Fox.
In an AM Best report, Fox emphasised the significance of compliance, stating that whereas AI is remodeling numerous industries, together with insurance coverage, all choices made by insurers utilizing these programs should adhere to relevant federal and state legal guidelines and rules.
This steerage from Michigan follows comparable measures not too long ago issued by New York, which targeted on stopping unintended discrimination in using AI by insurers.
Whereas AI has pushed product innovation and streamlined many insurance coverage processes, DIFS highlighted potential dangers related to AI, together with inaccuracies, discrimination, and challenges in explaining inside processes.
To mitigate these dangers, the regulator suggested that carriers set up AI governance frameworks emphasizing transparency, equity, and accountability whereas defending commerce secrets and techniques and proprietary info.
The bulletin recommends that carriers doc AI system validation, auditing, and testing procedures, together with evaluations of the reliability of AI outputs that might impression decision-making.
Moreover, when utilizing third-party AI programs and knowledge, carriers are suggested to carry out due diligence on potential companions and their knowledge, fashions, and programs, with documentation of those processes being important for regulatory investigations.
DIFS famous that whereas the bulletin offers steerage on AI use and the investigative course of, it isn’t exhaustive. Carriers are allowed to current various strategies to reveal compliance, and the bulletin will not be supposed to prescribe or endorse any particular follow or system.
What are your ideas on this story? Please be at liberty to share your feedback beneath.
Associated Tales
Sustain with the newest information and occasions
Be part of our mailing record, it’s free!
