India regulator probes insurance AI risks with working group

The seven-member group will be chaired by IIIT Hyderabad director Sandeep K. Shukla.

The Insurance Regulatory and Development Authority of India (IRDAI) has set up a working group on artificial intelligence (AI) to develop governance frameworks, best practices and safeguards for the insurance sector as insurers increase their use of the technology whilst protecting policyholder data, as reported by The Hindu.

The seven-member group will be chaired by Sandeep K. Shukla, director of IIIT Hyderabad. 

It has been tasked with examining the impact of AI on the insurance industry, including potential risks and challenges, and assessing the implications for insurers, policyholders and the wider insurance ecosystem.

According to the regulator, the group will study the impact of frontier AI tools and recommend security measures to address risks from AI-driven automated attacks.

It will also examine whether industry-wide stress testing is needed to assess the resilience of insurers using AI systems.

The working group will review the current level of AI adoption, usage, maturity and deployment across the insurance sector, as well as existing governance practices. 

It will also conduct a structural assessment of AI systems being used by regulated entities.

Based on its findings, the group will recommend an AI governance framework to support the ethical, transparent and explainable use of AI tools and models. 

The framework is expected to cover areas including claims management and fraud prevention.