MA| The Massachusetts Division of Insurance Bulletin 2024-10 outlines regulatory expectations for insurers using Artificial Intelligence (AI) systems in Massachusetts. It emphasizes compliance with existing laws, fairness, transparency, and accountability to mitigate risks such as unfair discrimination, inaccuracies, and adverse consumer outcomes. Insurers are required to establish a formal AI Systems (AIS) Program addressing governance, risk management, and oversight across the AI lifecycle, including third-party systems. The Division also provides guidance on regulatory examinations and documentation requirements to ensure adherence to legal standards.
Key Points:
- AIS Program Requirements: Insurers must develop written programs addressing governance, risk controls, and internal audits for AI systems used in regulated insurance practices. Programs should mitigate risks of adverse consumer outcomes and ensure compliance with state laws.
- Transparency and Accountability: Insurers must prioritize fairness, explainability, and consumer notice regarding AI usage while maintaining robust documentation of processes, predictive models, and third-party systems.
- Regulatory Oversight: The Division may request detailed documentation during investigations or market conduct examinations, including governance frameworks, risk management protocols, validation methods, and third-party agreements.