New York State Department of Financial Services sets out supervisory approach to AI in insurance underwriting and pricing

New York State Department of Financial Services Acting Superintendent Kaitlin Asrow delivered a statement to a New York State Assembly hearing on the use of artificial intelligence (AI) in insurance underwriting and pricing, outlining DFS’s approach to overseeing AI use across regulated entities. The statement emphasised that DFS generally applies technology-agnostic legal and regulatory obligations to AI-driven processes, while using guidance and supervisory reviews to address AI-specific risks such as bias, discrimination, data privacy, and cybersecurity. Asrow highlighted DFS’s 2024 Circular Letter on AI, which addresses both the use of AI systems and the use of external consumer data and information sources. She also referenced DFS guidance covering the expected approach when AI is used to interact with customers in virtual currency customer service and complaints processing, and DFS’s October 2024 guidance on cybersecurity risks arising from AI. Internally, DFS has established an AI Steering Committee focused on AI’s policy implications and an AI Governance Committee to oversee the Department’s own use of AI.