As technologies like generative artificial intelligence and agentic AI become more prevalent in the insurance sector, U.S. state regulators are joining forces to understand the complexities behind the algorithms involved. This move aims to identify potential issues related to unfair discrimination and questionable marketing practices, according to Jared Kosky, the deputy commissioner of the Connecticut Insurance Department.
State regulators are increasingly concerned about how these advanced technologies are employed within insurance workflows. Their collaboration seeks to shed light on the so-called algorithmic "black box," which can obscure how decisions are made, affecting customers across the board.
Regulators emphasize the importance of ensuring that AI applications in insurance do not promote bias or discrimination in pricing and risk assessment. As insurers turn towards automated tools and data analytics, there's a growing need for transparency to protect consumers and maintain trust in the industry.
This regulatory initiative could lead to more stringent guidelines for insurers that utilize AI in their operations. If successful, it could harmonize practices across states and encourage companies to adopt fairer strategies. In the long run, the emphasis on responsible technology use may also enhance the industry's reputation among consumers.
As this situation develops, it will be crucial for insurance professionals to stay informed about regulatory changes and consider the ethical implications of their technological adoption.
Original Source: https://www.theinsurer.com/ti/news/regulators-scrutinizing-insurtech-for-unfair-discrimination-connecticut-2025-04-17/