AI Presents Risk To Insurers And Policyholders, Panelists Say

AI Presents Risk To Insurers And Policyholders, Panelists Say

March 21, 2024, Law360

Marialuisa Gallozzi’s commentary was included a Law360 article exploring risks posed by artificial intelligence in the insurance space. Marialuisa discusses the challenges she sees for both insurers and policyholders with the rise of AI.

Marialuisa flagged common claims against insurers stemming from their use of AI include discrimination, negligence, and negligent misrepresentation as a point of concern and gave the example of a proposed class action launched by Illinois homeowner Jacqueline Huskey in December 2022, alleging that State Farm Fire & Casualty Co.'s automated claims processing tools disproportionately impact Black policyholders.

She also highlighted concerns that policyholders who use AI tools may face liability exposure and insurance disputes, saying “it's clear that policyholders rely on AI for similar reasons to insurers: to be more efficient, to get powerful decision-making insight.” She added that it will be interesting to see how courts and state bars across the country deal with the issue of AI in law practice.

According to Marialuisa, the California bar in 2023 and the Florida bar in 2024 issued advisories saying lawyers are responsible for their work product, including errors because of AI use, and that they must disclose AI use to clients. And in New York, a federal judge sanctioned two attorneys for submitting a brief written by AI with several fictitious case citations, while another federal judge in Montana granted an out-of-state attorney's pro hac admission on the condition that the attorney not use any AI drafting programs, she said.