Insurance Industry Calls for Clarity on AI Regulations
Insurance Europe has responded to the European Insurance and Occupational Pensions Authority (EIOPA)’s draft opinion on artificial intelligence (AI) governance and risk management, warning that the guidance may inadvertently create new compliance burdens for insurers. While the opinion aims to clarify how existing rules apply to AI, Insurance Europe points out that the wording could be interpreted by supervisors as establishing de facto obligations.
Concerns Over Regulatory Interpretation
The industry body emphasizes that such interpretations may lead to expectations that exceed the scope of current legislation. Insurance Europe is calling for a stronger application of proportionality within the opinion, highlighting the need to account for differences in how AI is used across the industry. This includes distinctions between internal processes and customer-facing tools, as well as between those who develop AI systems and those who deploy them.
AI Adoption in the Insurance Sector
Recent data shows that 50% of non-life insurers and 24% of life insurers in Europe are currently using AI, with a further 30% and 39%, respectively, planning to adopt such technologies within three years. The growing adoption of AI is creating new efficiencies for insurers, such as enabling customization of policy documents and automation of regulatory reporting. However, these developments also come with novel risks that require careful regulatory alignment.
Challenges of Dual Supervision
Another area of concern is the potential for dual supervision, where oversight of AI compliance may be split between multiple authorities. Insurance Europe has asked EIOPA to explicitly address how such overlaps should be handled to avoid regulatory uncertainty. The organization also emphasizes the importance of maintaining a focus on existing frameworks, noting that current sectoral regulations already provide mechanisms for governance, risk management, and consumer protection in relation to AI use.
Balancing Innovation and Regulatory Compliance
The insurance industry is navigating the complex challenge of leveraging AI for innovation while ensuring regulatory compliance. As the sector continues to adopt AI technologies, the need for clear and proportionate regulatory guidance becomes increasingly important. Insurance Europe’s response to EIOPA’s draft opinion highlights the industry’s concerns and the ongoing efforts to strike a balance between protecting innovation and maintaining legal certainty.
