AITC Testifies Before NAIC Big Data and AI Committee Regarding Data Collection Security Risks

For Immediate Release 

CONTACT: Tom Gibson
GIBSON Communications
PHONE: (201) 476-0322
tom.gibsoncommunications@gmail.com 

American InsurTech Addresses Big Data and AI Working Group  

March 22, 2023 – Scott Harrison, Co-Founder of The American InsurTech Council (AITC) testified before the National Association of Insurance Commissioners (NAIC) Big Data and Artificial Intelligence (H) Working Group this morning regarding a  draft proposed Regulator Questionnaire from regulators that is focused on insurer use of AI in their insurance operations.  Harrison raised concerns to Working Group members  about the serious data security risks associated with regulators requiring carriers to provide highly sensitive IP and other information abouthow models work, how data is collected and used.  

The AITC was founded in 2021 with the goal of providing a strong, independent voice on InsurTech issues in the public interest.  AITC strongly supports the efforts of state insurance regulators and the National Association of Insurance Commissioners (NAIC) to develop appropriate regulatory frameworks and standards governing the use of artificial intelligence (AI), machine learning and predictive analytics (collectively, “AI”) by insurance carriers and other licensed entities engaged in the business of insurance in the U.S. 

AITC believes that a regulatory framework should be balanced and risk-based, marked by key principles, including:

1.      Employs clear principles and expectations related to governance, testing and ongoing monitoring of AI.
2.      Promotes ethical use of AI that addresses the following priorities for consumer protection:

         a.      Consumer privacy.
         b.      Surveillance
         c.      Transparency
         d.      Bias
         e.      Automation 
3.     Utilizes a risk-based approach to AI governance.
4.     An insurer’s governance and risk management framework should take into account how the company is utilizing AI and for what purposes, and the risk(s) posed by each specific use case.
5.      Regulatory standards, disclosure requirements and regulatory oversight should be calibrated to the risk associated with a particular use case.
6.      Highly confidential and proprietary intellectual property should be protected.
7.      The framework must be durable, meaning that is capable of being adapted to new developments in digital technology as they occur. 

“We have a deep appreciation of the complexities associated with developing a governance framework and regulatory standards for insurer use of AI and other emerging technologies.,” said Harrison.  “We understand regulators’ legitimate interest in understanding how insurers are using AI.  We also appreciate regulators’ commitment to manintaining the confidentiality of highly sensitive IP that may be shared with regulators.   Transferring possession of highly valuable IP to regulators or others in the course of regulatory oversight , however, also raises highly significant data security risks that we believe should be taken into account in the development of a framework for regulatory oversight of AI.  We appreciate the considerable work and effort that has already taken place and look forward to working with the Big Data and Artificial Intelligence (H) Working Group and the NAIC on the development of an appropriate regulatory framework concerning the use of AI in insurance.” 

For more information about the American InsurTech Council, contact Teri Hernandez at thernandez@americaninsurtech.com or visit www.americaninsurtech.com.

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