WASHINGTON – The American Council of Life Insurers (ACLI) supports the National Association of Insurance Commissioners’ (NAIC) proposed artificial intelligence principles, ACLI Senior Vice President, Policy Development Paul Graham said at an NAIC Innovation and Technology task force meeting today.
The use of artificial intelligence is an outgrowth of the industry’s commitment to bringing financial protection to more families, Graham said at the task force meeting. He also expressed life insurers’ readiness to work with all stakeholders “to prevent underwriting decisions that would be otherwise prohibited by regulation or law.”
“We embrace our responsibility to create opportunities for more Americans,” he said.
“Life insurers use artificial intelligence in the underwriting process as a way to enhance the consumer buying experience. It is less invasive. It speeds up the process of issuing a policy which is imperative today in our instant-delivery marketplace,” he said.
His remarks reflect a comment letter submitted to the NAIC by ACLI President and CEO Susan Neely earlier this week and copied here:
July 20, 2020
Innovation and Technology Task Force
National Association of Insurance Commissioners
444 North Capitol Street NW, Suite 700
Washington, D.C. 20001
Dear Task Force Members:
The American Council of Life Insurers (ACLI) appreciates the opportunity to comment on proposed principles regarding Artificial Intelligence (AI), as approved by the NAIC AI (EX) Working Group on June 30.
We also welcome a conversation with regulators, consumer groups and other industry stakeholders regarding proxy discrimination: what it means, and how systems, processes and oversight can be put in place to prevent AI from resulting in underwriting decisions that would otherwise be prohibited.
ACLI’s endorsement of the AI Working Group’s decision to advance its principles to the Innovation and Technology Task Force is based on the commitment we share with regulators to fair treatment of all life insurance industry customers.
The dialogue regarding these principles comes at a pivotal moment in our nation’s history. Life insurers stand against racial discrimination. We are focusing our collective knowledge on identifying public policies and sustained partnerships to provide greater security to more people, especially financially vulnerable communities.
ACLI recognizes that AI is used across insurance sectors in vastly different ways to assess risk and determine fair prices for insurance coverage. This makes the regulators’ task of developing comprehensive AI principles challenging. In life insurance, use of AI in the underwriting process began many years ago with the promise of enhancing the consumer experience with buying life insurance. It makes it less invasive and speeds up the process of issuing a policy in today’s instant-delivery marketplace.
With the onset of the COVID-19 pandemic, we witnessed a significant and increased interest in life insurance as many consumers began to realize how financially stressed their families could become upon death or disability of a key family member. Yet emergency shelter in place orders issued by public authorities significantly limited life insurers’ ability to obtain medical information directly from applicants. To meet this consumer demand, many insurers began to rely more heavily on alternative ways to gather information needed to appropriately assess risk and issue policies online. If nothing else, the pandemic clearly demonstrated that innovation and technology are key to sustained consumer access to guarantees and financial protection that only insurers have to offer.
Today, our industry pays out an average of $2.1 billion each day for products that protect Americans at all stages of life. Comparatively, Social Security pays out $2.7 billion each day. These are impressive numbers, but we want to do even more. As we look at whether we are reaching Americans across the socioeconomic spectrum, AI can bring efficiencies that will help us reach underserved markets in ways never before possible. At a time when life insurance ownership is on the decline and the social safety net is increasingly strained, the need is great for public policies that expand viable private market opportunities for financial protection and security.
Life insurers fully embrace our responsibility to create opportunities for more Americans and strive to meet great societal need. We are committed to closing gaps and broadening financial wellbeing in meaningful ways. Again, we appreciate the opportunity for continued dialogue with regulators, consumer groups and other industry stakeholders.
Sincerely,
Susan K. Neely
The American Council of Life Insurers (ACLI) is the leading trade association driving public policy and advocacy on behalf of the life insurance industry. 90 million American families rely on the life insurance industry for financial protection and retirement security. ACLI’s member companies are dedicated to protecting consumers’ financial wellbeing through life insurance, annuities, retirement plans, long-term care insurance, disability income insurance, reinsurance, and dental, vision and other supplemental benefits. ACLI’s 280 member companies represent 94 percent of industry assets in the United States.
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