IRDAI sets up working group to govern AI in insurance sector

It matters to citizens as it aims to ensure that AI adoption in insurance is ethical, transparent, and secure, specifically to protect policyholders' data and interests.

Who it concerns: The order concerns the IRDAI, Regulated Entities (insurers) in the insurance sector, policyholders, and the specific members of the constituted Working Group (including representatives from IIIT Hyderabad, CERT-In, SBI Life, Star Health, ICICI Lombard, and IRDAI).

What the regulator ordered

• IRDAI constituted a Working Group on Artificial Intelligence (WG-AI) to guide regulated entities on the adoption, governance, and oversight of AI technologies.
• The Working Group is chaired by Prof. Sandeep K Shukla (Director, IIIT Hyderabad) and includes members from CERT-In, SBI Life, Star Health, ICICI Lombard, and IRDAI.
• The terms of reference include studying the impact of AI on the insurance sector, assessing current AI governance maturity, and reviewing global regulatory approaches.
• The group is directed to suggest an AI Governance Framework for ethical and explainable AI use, including for claims and fraud prevention.
• The group must assess the impact of frontier AI tools and suggest security controls to mitigate risks from AI-driven automated attacks.
• The group is tasked with examining the need for sector-wide stress tests focused on AI-related risks and proposing compliance requirements.
• The group must suggest an AI Audit Framework covering pre- and post-deployment requirements and identify skill gaps for stakeholders.
• The Working Group is required to submit its recommendations to the Member (Finance & Investment) within 3 months of its constitution.

Also in the document

• The order explicitly cites the need to safeguard policyholders' interests and protect their data at all times amidst increasing AI adoption.
• The Working Group may invite other subject experts if required to carry out its functions effectively.
• The order was issued with the approval of the Competent Authority and signed by G R Surya Kumar, Executive Director.