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Connecticut Insurance Department Addresses AI

The integration of Artificial Intelligence (“AI”) systems has become a forefront of potential innovation and efficiency, for insurers and insureds alike.  Recognizing that AI systems may permeate all stages of the insurance life cycle, the Connecticut Insurance Department has issued a detailed Bulletin providing a comprehensive overview of the regulatory framework and expectations for insurers’ use of AI, at least in The Constitution State.

The Bulletin addresses ‘predictive modeling’ and the relation to pricing and assessing risks, e.g., risks of flooding or other catastrophe events in certain geographic areas based on past loss experience, along with the ability to enhance the red-flagging of fraud indicators in property, liability and worker’s compensation.  With the Connecticut-mandated completion of a Artificial Intelligence Certification by September 1, 2024, Connecticut insurers are required to demonstrate compliance with applicable laws, underscoring the importance of transparency, accountability, and the ethical use of AI.  The Connecticut Bulletin also addresses the identification and management of fraud through AI systems, pointing out the significant role AI may play in fraud detection capabilities.

You can read the Bulletin here.