Takeaways:
- 12 states are conducting the pilot AI questionnaires
- Pilot seeks understanding of how insurers are using AI
- Pilot will last six months, then be adjusted for adoption by the association
The National Association of Insurance Commissioners (NAIC) AI Systems Evaluation Tool pilot began this month, according to Nathan Houdek, chair of the NAIC Big Data and Artificial Intelligence Working Group, and insurance commissioner of Wisconsin. Houdek spoke during the group's session at the spring meeting of the association of state regulators in San Diego on March 24.
Twelve states are participating in the pilot: California, Colorado, Connecticut, Florida, Iowa, Louisiana, Maryland, Pennsylvania, Rhode Island, Vermont, Virginia and Wisconsin.
The tool's questions are designed to first get the scope of AI use at an insurer, and then based on that answer, go deeper to get a better understanding of the insurer's use of AI, added Michael Humphreys, Pennsylvania's insurance commissioner, who is also a member of the NAIC working group.
Information collected in the pilot will be kept confidential, according to Humphreys.
States participating in the pilot are choosing anywhere from one to more than 10 insurers to test the tool on, according to Houdek.
"The decision on which companies to include in the pilot was really the decision of each domestic regulator based on factors they chose. It could be market share, line of business, how much the company is expected to leverage new technology, or some other factor," he said. "Where a company is part of a group, the pilot state regulators are attempting to coordinate their efforts, including reaching out to non-pilot states to ensure awareness of a company being included in the pilot."
NAIC will not disclose what insurers are being questioned in the pilot, Houdek added, but said the insurers chosen are from a variety of product lines, but mostly P&C and life insurance.
The pilot will run through September, with participating states meeting monthly to share their progress. In September and October, NAIC will update the tool based on feedback from the pilot. NAIC aims to seek adoption of the tool at its fall meeting in November.
