Key U.S. Insurance Developments: AI Use, Wildfire Risks, Data Security, and Environmental Challenges

The use of actuarially sound data in risk-based pricing by insurers remains a key principle, ensuring compliance with insurance laws that prohibit the use of protected class attributes. NAMIC highlights that any assertion of bias from AI or algorithms in underwriting challenges the foundational risk assessment models already regulated to prevent unfair discrimination.

California's introduction of advanced wildfire risk maps identifies approximately 3.7 million residents living in high or very high hazard areas. This initiative aims to align community development with specific wildfire mitigation strategies, enhancing resilience against wildfires based on comprehensive modeling and environmental data.

Data security in the auto insurance sector is under scrutiny following a multi-state settlement where companies including Root, GEICO, and Travelers faced penalties for failures leading to exposure of sensitive consumer information. New York's Attorney General emphasizes the critical need for robust cybersecurity measures to protect personally identifiable information against fraud and identity theft.

Controversy surrounds the agricultural use of human waste biosolids due to potential health risks linked to toxic PFAS substances. This concern has prompted regulatory discussions in states like Oklahoma, where community members report adverse effects correlated with biosolid applications on farmland.

Florida's property insurer, Universal Property & Casualty Insurance Co., faced fines for mishandling catastrophe fund claims related to Hurricane Irma, underscoring challenges in claim classification and regulatory compliance in post-disaster insurance operations.

Lastly, the proposed Summit Carbon Solutions pipeline project highlights industry debates on carbon sequestration's role in supporting ethanol producers. Delays attributed to state legislation in South Dakota could impact the competitive landscape for regional biofuel plants, reflecting the intersection of environmental policy and energy sector insurance considerations.