The New York State Department of Financial Services (NYSDFS) issued a final circular letter outlining requirements for insurers using artificial intelligence (AI) and external consumer data in underwriting and pricing, emphasizing the need to prevent bias and unlawful discrimination. Click here for article.
Insurers must conduct proxy assessments to ensure that AI and external data sources do not serve as proxies for protected classes, potentially leading to unfair discrimination.
Quantitative and qualitative assessments are required to identify and mitigate any discriminatory effects in the use of AI and external data, particularly against protected classes.
Insurers are responsible for understanding and managing the risks associated with AI tools, including those provided by third-party vendors, ensuring compliance with all relevant laws.
The NYSDFS circular reinforces that the responsibility for preventing unfair discrimination lies with the insurer, even as the use of AI in underwriting becomes more widespread.
Comments