Oklahoma Insurance Department Issues Guidelines For Ethical AI Use In Industry

Oklahoma’s Insurance Department released a bulletin informing agencies on how to best comply with state regulations using AI in their operations. The agency’s goal is to provide insurers with clear regulatory guidance on the ethical use of AI. Below are some questions to help consumers or those working in the insurance industry seeking guidance on this issue.

Q: What are some of the main points emphasized in the Oklahoma Insurance Department’s AI Bulletin?

A: The bulletin highlights several key expectations for insurers using AI:

1. Fairness & Compliance: AI-driven decisions must comply with all applicable insurance laws and regulations.
2. Encouraging Innovation: The department supports the use of AI to improve efficiencies in the insurance industry but also acknowledges the potential risks, such as inaccuracies or unfair discrimination.
3. Transparency & Accountability: Insurers must ensure that AI systems are transparent, with clear governance structures, monitoring, and accountability.
4. Data Protection: The bulletin also emphasizes the need to protect consumer data, acknowledging the potential vulnerabilities associated with AI.

Q: What does Oklahoma Insurance Commissioner Glen Mulready say about the balance between innovation and consumer protection?

A: Commissioner Mulready emphasizes that while the adoption of AI can help improve efficiency and overall consumer experiences, it’s important to balance this innovation with strong consumer protection.

"With new technologies comes the responsibility to ensure Oklahoma’s industry innovates while maintaining consumer protection," Mulready said.

Q: How does the bulletin guide insurers in managing AI within their organizations?

A: The bulletin provides detailed guidance on how insurers should implement AI systems responsibly. This includes expectations for governance structures, accountability, and ongoing training for staff. Additionally, insurers are advised to maintain proper monitoring and audit protocols for AI systems to ensure they are operating ethically and with regulations.

Q: What information will the Oklahoma Insurance Department expect insurers to provide regarding their AI systems?

A: Insurers will need to be prepared to provide detailed information about their AI systems upon request. This includes documentation about how AI is being used, how it is being monitored for fairness, and the steps taken to ensure that the technology adheres to state laws and regulations. The department aims to maintain transparency and ensure that AI does not lead to discriminatory or unfair practices.

Q: Are there specific risks associated with the use of AI in insurance?

A: Yes, the bulletin acknowledges several risks associated with AI, including potential inaccuracies in decision-making, the risk of unfair discrimination, and data vulnerability. The Oklahoma Insurance Department stresses the importance of using AI responsibly to mitigate these risks and protect consumer interests.

Q: Will AI lead to lower insurance premiums for consumers in Oklahoma?

A: While Commissioner Mulready doesn’t foresee a major reduction in premiums due to AI, he believes the technology could help mitigate rising costs, primarily driven by inflation. By improving efficiency in operations, AI could help insurance companies manage their costs more effectively, which could have a positive impact on pricing in the long term.

Q: What can insurance companies do to ensure they are in compliance with the new AI guidelines?

A: Insurance companies are encouraged to carefully review the new bulletin and ensure that their AI systems comply with all relevant laws and regulations. The Oklahoma Insurance Department is available to answer any questions insurers may have about the bulletin and its implementation, providing guidance on how to align their AI use with the outlined expectations.

Q: Where can people find more information about the bulletin and its guidelines?

A: The complete Bulletin 2024-11, along with all the guidelines and expectations for AI use in the insurance industry, is available on the Oklahoma Insurance Department’s website at oid.ok.gov/bulletins.