The ethical use of AI: A summary of Colorado’s draft AI regulation for insurance companies

What’s next?

Once finalized and put into effect, the Colorado Department of Insurance’s AI regulation will likely provide specific enforceable requirements for life insurance companies using ECDIS and AI models using ECDIS in Colorado. CDOI has leveraged high-level principles, found in places like the federal regulatory guidelines, and attempted to turn them into reporting requirements for governance, documentation, and reporting. While it is expected to apply only to life insurance companies doing business in Colorado, the draft regulation may set the tone for industry leading practices and other regulators looking to implement similar requirements. Additionally, CDOI has also suggested that similar rules may be applied to other insurance lines or other AI or algorithmic uses.

As we wait for the final regulation to be issued, below are three steps that can help life insurance companies prepare to adhere to the regulatory requirements.

1. Assess AI usage by taking an inventory of use cases, purpose, and governance processes.
2. Create an AI governance plan with defined compliance goals, timelines, and required resources.
3. Train employees to understand the new regulations, and identify necessary policy/procedure changes for ECDIS and AI models.

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