The news: Colorado has pioneered a law that will be effective November 14th of this year, mandating that life insurance companies establish discrimination-curbing protocols for AI use. This legislation precedes similar measures emerging across the US.
What the law says: Colorado’s leading a seismic shift in how AI is regulated within the insurance industry—setting the tone for a growing discussion.
Can AI be discriminatory? AI’s only as good as the data it’s trained on. That means if the data contains bias, AI will snowball it into the results on which its users base their decisions.
How it impacts the insurance industry: When used responsibly, AI can help insurers process large amounts of data—speeding up and simplifying risk analysis, fraud prevention, and claims processing. However, when used irresponsibly, it can have grave consequences.
What insurers can do to prevent bias from AI: When older programs or data are used to train AI, there’s a risk of incorporating bias.
Key takeaways: AI’s not going anywhere, but neither is the fear about its impact on insurance—or our society in general. While Colorado’s the only state to pass AI laws impacting the insurance industry, it’s just a matter of time until other states, and potentially whole countries, follow suit.
Insurers outside of Colorado should get ahead of future regulation—and do their part in combating discrimination—by developing bias-reducing frameworks.
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