Delaware Issues Guidelines on AI Use in Insurance to Protect Consumers

February 6, 2025/Joe Ciccanti

Delaware Insurance Commissioner Trinidad Navarro has issued a bulletin to all insurance companies in the state about the use of Artificial Intelligence (AI). While AI can help create innovative insurance products, improve customer service, and streamline processes, it also comes with risks like inaccuracies, unfair discrimination, and data security concerns. Insurance carriers are required to take steps to minimize these risks and ensure their AI systems comply with all federal and state laws, including those on fair trade, claims practices, and anti-discrimination. Delaware joins 21 jurisdictions who adopted guidance similar to the Model Bulletin in 2024, and 4 additional jurisdictions have otherwise issued guidance or regulation.

 
 
Additional Information from the Delaware Department of Insurance:
“AI is transforming the insurance industry and is increasingly deployed across all stages of the insurance lifecycle, presenting both opportunities and risks. By issuing this bulletin, we’re putting insurers on notice that these systems may not circumvent our existing regulatory standards, and that they must take all possible steps to ensure no consumer harm is created,” shared Insurance Commissioner Trinidad Navarro. “While we issue guidance to carriers regularly, we’re highlighting this effort to the public to ensure that policyholders are aware that AI may be used in their insurance products, the marketing they receive, the pricing and claims management they experience, in insurance fraud detection, and in other areas that may impact their consumer experience – and that they have all the same rights as it relates these activities. Consumer protection remains our top priority.”
 
The robust regulatory guidance is state-specific, adapted from the National Association of Insurance Commissioners’ (NAIC) Model Bulletin which was developed over several years and adopted in late 2023.
 
In addition to other detailed guidance, Bulletin No. 148 also reiterates the Delaware Department of Insurance’s authority to request and obtain information and documentation including those relevant to AI systems during market conduct investigations and examinations.
 
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