Scott Kosnoff Provides Insight on NAIC’s AI Governance Pilot Program for Law360 Insurance Authority Q&A Feature

Insurance partner and leader of Faegre Drinker’s AI-X team Scott Kosnoff was featured in Law360 Insurance Authority Q&A series to offer insight on the National Association of Insurance Commissioners’ (NAIC) AI Evaluation Tool pilot program, which is being launched in 12 states. 

“The biggest goal [of the pilot] is for insurance regulators to get a better idea of how companies are using AI and what they're doing to try to mitigate the downside risk,” Kosnoff explained.

He stated that “AI governance practices are designed to allow companies — in this case, insurance companies — to get the benefits of AI while also doing so responsibly, by putting in appropriate internal policies and procedures and guardrails that are intended to keep the company out of hot water.”

The NAIC is trying to achieve a level of consistency, Kosnoff added. “A lot of folks have observed that AI is the sort of thing that shouldn't be subject to significant state-by-state differences in the law or in regulation, and to the extent we can have a single standard that companies can follow across the country, that would be a positive for just about everybody.”

Kosnoff concluded that the NAIC’s approach to evaluating AI could be applied to other sectors as well, emphasizing that governance and risk management are not “insurance-specific” concepts.