A conservative AI approach guarantees fair premium prices and claims processing and safeguards insurers from future liability as regulations reshape the Wild Wild West of AI in insurance. (Credit: Epic Photos/Adobe Stock)
Businesses of any type have an ethical responsibility to conduct their affairs with care, respect, accountability, honesty and respect for the law. Ethics is especially essential in the insurance industry where moral obligations collide with government regulations. The rise of artificial intelligence (AI) in insurance has brought business ethics to the forefront, with many insurers weighing the benefits of AI against the potential for liability when regulations catch up to technological advancements.
No universal AI regulations
As of May 2, 2024, 10 U.S. states have adopted the recommended AI regulations from the National Association of Insurance Commissioners (NAIC), with Oklahoma being the latest. These laws have various requirements, which include submitting AI-based algorithms and training data sets and disclosing if AI-based algorithms are used in the review process. Other countries, including members of the European Union, China, Canada and Australia, have enacted similar regulations. The Organization for Economic Co-operation and Development and the United Nations are working on global guidelines for AI.
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