Michigan DIFS outlines expectations for accountable AI use

The Michigan Division of Insurance coverage and Monetary Providers (DIFS) has issued a bulletin outlining its expectations for insurance coverage carriers relating to the event, acquisition, and use of synthetic intelligence (AI) techniques.

The bulletin additionally clarifies the sorts of info the division might request when investigating or analyzing a provider’s use of AI, in response to DIFS Director Anita Fox.

In an AM Greatest report, Fox emphasised the significance of compliance, stating that whereas AI is remodeling numerous industries, together with insurance coverage, all choices made by insurers utilizing these techniques should adhere to relevant federal and state legal guidelines and laws.

This steering from Michigan follows comparable measures just lately issued by New York, which centered on stopping unintended discrimination in using AI by insurers.

Whereas AI has pushed product innovation and streamlined many insurance coverage processes, DIFS highlighted potential dangers related to AI, together with inaccuracies, discrimination, and challenges in explaining inner processes.

To mitigate these dangers, the regulator suggested that carriers set up AI governance frameworks emphasizing transparency, equity, and accountability whereas defending commerce secrets and techniques and proprietary info.

The bulletin recommends that carriers doc AI system validation, auditing, and testing procedures, together with evaluations of the reliability of AI outputs that would affect decision-making.

Moreover, when utilizing third-party AI techniques and information, carriers are suggested to carry out due diligence on potential companions and their information, fashions, and techniques, with documentation of those processes being important for regulatory investigations.

DIFS famous that whereas the bulletin offers steering on AI use and the investigative course of, it isn’t exhaustive. Carriers are allowed to current different strategies to display compliance, and the bulletin is just not meant to prescribe or endorse any particular observe or system.

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