b'TABLE OF CONTENTSHaving spent much of their time on resolvingThe use of AI and ML by the insurance industry was issues related to the ongoing COVID-19 pandemicalso addressed by some of the states separately during its early stages, state insurance regulatorsfrom these NAIC initiatives. In June 2021, Colorado were able to re-focus their attention in 2021 onpassed Senate Bill 169, which is intended to restrict more strategic issues related to innovation andinsurers use of external consumer data. The new technology. Two areas of particular focus for stateColorado law prohibits insurers from using any insurance regulators in 2021 were: (1) the use ofexternal consumer data and information sources, artificial intelligence (AI), including machineas well as any algorithms or predictive models that learning (ML), in the insurance industry, and (2)use external consumer data and information consumer data privacy and data ownership. [Seesources, in a way that unfairly discriminates based Cybersecurity and Data Privacy for discussion onon race, color, national or ethnic origin, religion, consumer data privacy]. sex, sexual orientation, disability, gender identity or gender expression. Insurers will be required to Use of AI/ML test, and to demonstrate, that their use of external In 2021, a small group of states, consisting ofconsumer data and information sources, as well as Connecticut, Illinois, Iowa, Louisiana, Nevada, Northany algorithms or predictive models that use Dakota, Pennsylvania, Rhode Island and Wisconsin,external consumer data and information sources, conducted a survey on insurers use and governanceare not unfairly discriminatory. The Colorado of AI/ML with respect to private passenger autoInsurance Commissioner will hold hearings with insurance. The survey was distributed to insurersstakeholders to inform the adoption of rules with writing private passenger auto insurance that alsoregard to this prohibition and how insurers could had national premium greater than $75 million. Ademonstrate compliance. total of 192 insurers responded to the survey.On May 24, 2021, the Connecticut Insurance While analysis of the survey results is still ongoing,Department (CID) issued a press release stating the NAICs Big Data and Artificial Intelligence (EX)that it is diligently reviewing insurer practices with Working Group presented some preliminaryregard to the use of AI and big data to protect findings at the 2021 NAIC Fall National Meetingconsumers from their possible misuse andnamely, that out of the 192 responses, 168resulting discrimination. The CID further indicated insurers reported that they were using orthat its work was based on the guiding principles contemplating to use AI/ML. The Big Data andon AI established by the NAIC in 2020. The press Artificial Intelligence (EX) Working Group alsorelease included a reminder that the insurance indicated that further surveys were to come andindustry is expected to take proactive steps to contemplated which lines of business should beavoid proxy discrimination against protected surveyed next. Homeowners insurance and lifeclasses when using AI platforms.insurance were identified as possibilities.MAYER BROWN |125'