Insurance Department Notice 2024-04: Use of Artificial Intelligence Systems by Insurers (Pennsylvania adoption of the NAIC Model Bulletin)

Summary

Pennsylvania's Insurance Department, adopting the NAIC Model Bulletin of December 2023, reminds every insurer authorized in the Commonwealth that consumer-affecting decisions made or supported by AI systems must comply with insurance law, including the Unfair Insurance Practices Act and the unfair claims settlement practices regulations. Insurers using AI systems are expected to develop, implement and maintain a written AI systems (AIS) program for decisions in regulated insurance practices, designed to mitigate adverse consumer outcomes, covering governance, risk management controls and internal audit, with senior management accountable to the board, proportionate to the risk, and spanning the insurance life cycle from product design, underwriting and pricing to claims and fraud detection. The program may rely on frameworks such as the NIST AI Risk Management Framework. The guidelines are stated not to be binding, but the notice describes the information and documents the Department may request in an investigation or market conduct examination, including about third-party data and models.

Key dates

1. 2024-04-06 (date of publication)Takes effect
2. October 16, 2026Checked against sources
3. October 21, 2026Checked against sources

Developments are added when the record is reviewed. Next review: January 15, 2027.

Evidence

Each passage is quoted from its source. The quoted passages are re-checked against the live pages every month.

1. Use of Artificial Intelligence Systems by Insurers; Notice 2024-04 [54 Pa.B. 1910] [Saturday, April 6, 2024]

   Supports: Notice number, citation and date

   decisions or actions impacting consumers that are made or supported by advanced analytical and computational technologies, including Artificial Intelligence (AI) systems (as defined as follows), must comply with all applicable insurance laws and regulations.

   Supports: Core expectation

   all insurers authorized to do business in this Commonwealth that use AI systems are expected to develop, implement and maintain a written program

   Supports: Written AIS program

   The AIS program should address governance, risk management controls and internal audit functions.

   Supports: Program content

   Use of Artificial Intelligence Systems by Insurers; Notice 2024-04 (54 Pa.B. 1910) Pennsylvania Bulletin (Insurance Department notice) Primary source

2. Notice 2024-04 is based upon the model bulletin adopted by the National Association of Insurance Commissioners on December 4, 2023.

   Supports: Basis in the NAIC Model Bulletin

   Shapiro Administration Issues Guidance on Insurers' Use of Artificial Intelligence (AI) Pennsylvania Insurance Department Primary source