DE| The Delaware Department of Insurance issued Bulletin No. 148 to establish regulatory expectations for insurers using AI systems in consumer-impacting decisions, effective immediately. This bulletin mandates compliance with existing laws prohibiting unfair discrimination and trade practices while outlining governance requirements for AI implementation.
Key sections:
- Compliance obligations: AI-driven decisions must adhere to Delaware’s Unfair Trade Practices Act, Unfair Claims Settlement Practices Act, and rate-making laws prohibiting excessive/inadequate pricing and unfair discrimination.
- AIS Program requirement: Insurers must develop a written AI governance program addressing risk management, model validation, and consumer outcome mitigation across all insurance lifecycle stages.
- Governance structures: Requires board-level accountability, documented policies for AI lifecycle management, and cross-disciplinary oversight committees.
- Third-party AI management: Mandates due diligence for external AI systems/vendors, including contractual audit rights and compliance verification.
- Regulatory oversight protocols: Authorizes the Department to request detailed documentation on AI models, training data, bias testing, and validation processes during investigations.
The framework emphasizes proportionality – controls must match the potential consumer harm risk of each AI application. Insurers retain ultimate responsibility for AI compliance regardless of whether systems are developed internally or by third parties.
