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The impact of the AI Draft Regulation on the insurance industry

10th Jun, 2021

Our Senior Data Protection Consultant, Kaveh Cope-Lahooti takes us through the impacts that the Draft Regulation will have on insurance companies and what they need to consider.

Extract

The EU’s Proposal for a Regulation on Artificial Intelligence (‘Draft Regulation’) proposes cutting-edge changes that will require whole-scale assessments of the costs and benefits of using AI systems. The insurance sector, in particular is one that will be affected by at least two of the requirements in the Draft Regulation.

The Draft Regulation will regulate an organisations involved in the development, manufacturing, importation, distribution, servicing, and use of AI – encompassing both developers (such as Palantir, Deepmind, etc.) and organisations using AI (such as banks and social media platforms). Whilst the regulation is industry agnostic, its provisions will affect different companies in separate ways.

It takes a precautionary approach to controlling the deployment of AI, in that it requires risk assessments to be conducted on machine-learning systems before being used in the market.

Within this, the majority of its provisions fall upon ‘high risk’ systems, which exist as part of a list maintained by the EU under the Draft Regulation, which is updated from time to time based on the potential effects and harm to individuals on their usage.

  • Any large employers (typically multinationals) which will be caught by the requirements applicable to using tools like Hirevue to score and filter candidates during recruitment;
  • Insurance companies and banks, who will be affected by the obligations on organisations deploying “AI systems intended to be used to evaluate the creditworthiness of natural persons or establish their credit score”;
  • Manufacturers of a variety of goods, which will come under the requirements that apply to AI used as a product or component in safety devices used in toys, machinery, radio equipment or medical devices, among others; and
  • Law enforcement, likely to be caught by the obligations on organisations using systems for the prevention, investigation, detection or prosecution of crime, such as PredPol or Palantir.

 

To read the full thought leadership paper please click the link below.

 

Authors

Kaveh Cope-Lahooti

Senior Data Protection Consultant

Read Bio