Insurance AI and underwriting governance
Working draft · Version 1 · Research date 2026-09-14
1. Purpose and scope
NYDFS describes governance, documentation, validation and unfair-discrimination expectations for AI and external consumer data used in insurance underwriting and pricing. The circular explains supervision under existing law. State adoption of NAIC model guidance must be checked separately.
Confirm the insurer and use case. The circular states supervisory expectations under existing law; it is not a standalone federal AI statute. Other states require separate review.
2. Adoption and accountability
The accountable policy owner must confirm the legal entity, products, customer locations, applicable laws and exemptions before adoption. Maintain an applicability register and obtain management approval of procedures, owners, retention and deadlines. This template does not claim legal review or complete compliance coverage. An industry selection is a suggestion, not evidence of a legal duty.
3. Operating controls
3.1 Inventory systems and accountable owners
Owner: Model governance lead. Trigger: Before deploying or materially changing a covered model or data source.
Record the underwriting or pricing use, model version, data provenance, responsible business owner and governance approval. Include third-party systems and document scope limitations.
Evidence: AI inventory and governance approval.
3.2 Validate discrimination risk and performance
Owner: Model risk reviewer. Trigger: Before deployment and at risk-based monitoring intervals.
Have qualified reviewers evaluate predictive and actuarial support, prohibited discrimination risks, data quality and model limitations. Document methods, results, unresolved issues and release conditions.
Evidence: Validation report and issue resolution.
3.3 Oversee third-party models and data
Owner: Third-party model owner. Trigger: Before contracting and at material provider changes.
Obtain enough information to evaluate vendor data, methods and performance. Establish oversight, change notification and audit rights appropriate to the risk; escalate unavailable evidence before reliance.
Evidence: Vendor assessment and oversight agreement.
3.4 Explain decisions and monitor changes
Owner: Underwriting governance lead. Trigger: During covered underwriting or pricing use.
Monitor drift, complaints and material changes. Keep decision explanations and notices accurate, route challenges to qualified reviewers and suspend unsupported uses when necessary.
Evidence: Monitoring record, decision explanations and change log.
4. Exceptions, review and records
Log deviations with the affected control, risk, interim action, owner and resolution date. Escalate missed statutory duties immediately to the responsible compliance lead; internal exceptions cannot waive law. Keep versioned approvals and follow the confirmed retention schedule and any legal hold. Review after material legal, product or operating changes.
5. Authorities and limitations
- NYDFS Insurance Circular Letter No. 7 (2024): Use of AI systems and external consumer data in underwriting and pricing.
- Research as of 2026-09-14; confirm the current operative requirements.
- Template status: draft, awaiting organization-specific and legal review.
- Company review cadences, operational steps and evidence examples are proposed implementation controls, not quotations from law.