Like most financial services industries, insurance companies and regulators have in recent years increasingly utilized algorithms, machine learning and artificial intelligence in their day-to-day operations. Indeed, a 2019 study showed that more than half of property/casualty insurers and nearly forty percent of life carriers had adopted predictive analytics programs that were integrated with the companies' core systems, while another forty percent of life insurers had plans to develop such programs. Some carriers use machine learning techniques to analyze a wider array of information about their insureds and prospective insureds, including social media posts, online reviews and government filings. With these AI-assisted risk assessments, insurers may be more able to customize insurance policies to better meet an insured's needs and/or improve the insurers' ability to assess the risk of a particular applicant. Insurance companies have also begun using algorithms to detect patterns of fraudulent behavior that cannot be detected by devices such as wearable technologies alone.

Members of the National Association of Insurance Commissioners (NAIC) have agreed unanimously to adopt an Artificial Intelligence Guiding Principles. The NAIC's AI Working Group based the document on a set of AI principles developed by the Organisation for Economic Co-operation and Development (OECD). The United States is one of the 42 countries that has adopted the OECD AI principles. The NAIC is a Kansas City, Missouri-based group for the top insurance regulators in the states, the District of Columbia and U.S. territories. At the NAIC, regulators and representatives for consumer groups have said careful oversight of AI-based systems is important, because of concerns that insurers or other entities could use AI systems to hide illegal forms of discrimination, such as race-based discrimination.

On June 30, the National Association of Insurance Commissioners' (NAIC) Artificial Intelligence Working Group approved principles that call on insurers and others using artificial intelligence (AI) to take proactive steps to avoid proxy discrimination against protected classes. In the run-up to the vote, Commissioner Jon Godfread (Chair – ND) delivered a passionate statement indicating that the nation's insurance regulators are committed to addressing discriminatory practices while preserving the industry's ability to engage in appropriate underwriting. After extensive discussion, 15 of the states participating in the call voted in favor of the principles, and one abstained. The AI principles will be considered by the NAIC's Innovation and Technology Task Force on July 23 and, if approved, by the full NAIC membership during the virtual summer national meeting. While the principles will not have the effect of law, they are expected to serve as a road map for future regulatory workstreams.