Compliance Alerts

    Artificial Intelligence is Modernizing Regulatory Compliance

    Jan 18, 2022 / by Robin Westcott

    Risks are continually evolving and emerging, requiring updates to insurance policies in order for carriers to keep pace with market need. Whether you’re a regulator or an underwriter, reviewing new policy language in a timely fashion can be a challenge, and can negatively impact speed-to-market.Recently, AAIS and the Connecticut Department of Insurance joined forces on a proof of concept surrounding artificial intelligence technology developed by AAIS to help automate regulatory compliance checklists. AAIS has developed an innovative approach for clause filing reviews utilizing Kira’s patented machine-learning software, taking a lengthy manual process, and expediting it.

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    The Problem

    Often, regulatory filings are submitted by carriers with incomplete information, missing important compliance language, which requires extensive review by the state regulator. In response to overlooked compliance requirements, state regulators across the nation have developed extensive checklists to assist carriers developing policy language to ensure that state regulations are not overlooked.

    The Use Case

    The use case being tested in Connecticut seeks to automate compliance of the state’s Claims-Made Checklist, required on all claims-made filings. By training the Kira machine-learning tool to identify and extract language pertinent to items contained on the state’sViewpoint Masthead Graphic checklist, regulators can take what has increasingly become an audit exercise and review the compliance requirements at intake. The efficiencies gained will allow critical ‘staff’ resources to focus on bigger issues at hand, while also clearing out audit backlogs. Similarly, insurers will be able to leverage the A.I. tool to compare policy language and ensure they are meeting baseline regulatory requirements, even before submitting for approval. With regulators and carriers viewing policy language as data, a traditionally tedious function becomes a simple quality check.

    The Future

    Automating the review of ‘checklist’ items is just the beginning in the evolution of leveraging artificial intelligence and machine learning in the insurance industry. As more organizations begin to identify use cases specific to their operation, it will become increasingly important to communicate and align with other stakeholders, even policyholders. Working together with open lines of communication to establish logical standards and best practices will go a long way in changing the way policies are developed, reviewed, and consumed.

    Tags: openIDL, Community, Machine Learning/AI, Issues & Trends, Data & Technology, Tech News, Regulatory/Compliance, Legislation & Regulation, AAIS News & Views, AAIS Insights, Data/Tech, Connecticut

    Robin Westcott

    Written by Robin Westcott

    VP of Government Affairs, Legal & Compliance - Robin S. Westcott, J.D. is Vice President of Government Affairs, Legal & Compliance (GLC) at AAIS. She is an attorney who spent more than 20 years in insurance-related regulatory positions in Florida. Robin oversees product compliance operations, consults with state insurance departments about the practical implications of regulatory initiatives and acts as the general counsel. She has helped to lead critical AAIS initiatives, including CannaBOP cannabis coverage and openIDL. Robin has a BS and JD from Florida State University.

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