Recent NAIC Model Bulletin on Use of Artificial Intelligence Systems by Insurers: Guiding Principles, Required Practices and Documentation, Enforcement, Impact on Bad Faith or Coverage Litigation

Organizer: Strafford
Date: November 12, 2024
Time: 01:00 PM-02:30 PM

Register: https://www.straffordpub.com/products/recent-naic-model-bulletin-on-use-of-artificial-intelligence-systems-by-insurers-2024-11-12

On Dec. 23, 2023, the NAIC issued its Model Bulletin: Use of Artificial Intelligence Systems by Insurers. Seventeen states have adopted it, and four other states have issued their own regulations and guidance. Significantly, New York’s Department of Financial Services issued its Insurance Circular Letter No. 7 on “Use of Artificial Intelligence Systems and External Consumer Data and Information Sources in Insurance Underwriting and Pricing.”The NAIC principles are becoming best practices in the industry and in law. The Bulletin states that insurers are expected to “develop, implement, and maintain a written program for the responsible use of AI Systems” to mitigate specified risks and provides numerous guidelines regarding what a compliant program would look like. The Bulletin also outlines what information and documents insurers would be expected to maintain and make available to regulators. What a compliant AIS program would look like remains uncertain, but insurers will no doubt be developing these with an eye toward its impact on insurance litigation.Listen as our esteemed panel discusses the NAIC Bulletin, NYDFS Insurance Circular, various approaches by other states, and their impact on underwriting, coverage, and litigation issues.

Outline

Defining AI as used in the Bulletin: automation and big data versus true AI
Guiding principles of NAIC Bulletin
1. Fairness and ethical use of AI
2. Accountability
3. Compliance with state laws and regulations
4. Transparency
Key provisions
1. Written program
2. Governance principles
3. Risk management and internal controls
4. Third-party vendor management
State guidance
1. NYDFS
2. California
3. Colorado
4. Texas
5. Connecticut
Potential Impact on insurance litigation