The Pennsylvania Insurance Department (PID) announced guidance for insurers licensed to do business in Pennsylvania on the use of artificial intelligence (AI).
On April 6, the department issued Notice 2024-04, which includes recommended best practices for how insurers obtain, develop and use certain AI technologies and systems, and advises insurers on what information PID may request during an investigation or examination. Notice 2024-04 is based upon the model bulletin adopted by the National Association of Insurance Commissioners on Dec. 4, 2023. Pennsylvania is the eighth state to adopt the bulletin.
“Technology is always evolving and is a great tool to help streamline processes. That said, PID always aims to make certain that insurers are informed on pertinent considerations for using technological advances in a manner that is fair to consumers and is in compliance with current law,” Pennsylvania Insurance Commissioner Michael Humphreys said . “AI is no exception. This notice provides insurers with the guidance to help ensure accurate and fair outcomes for Pennsylvanians when using AI.”
The guidance:
- Reminds insurers that decisions supported by AI systems must comply with all applicable insurance laws and regulations;
- Encourages innovation while recognizing potential risks such as inaccuracies, unfair discrimination, data vulnerability, and lack of transparency;
- Sets forth the ’department’s expectations regarding the kinds of information and documents about an insurers’ AI systems that the department would expect to be produced upon request; and
- Outlines specific guidelines for governance structures, accountability, monitoring, audit protocols, and training within the AIS program.
In its announcement, PID urged Pennsylvania licensed insurers to thoroughly review the bulletin to make informed decisions on the use of AI in a manner that does not conflict with the Commonwealth’s laws and regulations currently in place.