Pennsylvania AG and GEICO Announce AI Process Enhancements

Pennsylvania's Attorney General, Dave Sunday, has reached an agreement with GEICO to revise its use of an AI-driven process concerning the cancellation of auto insurance policies. This move comes after concerns were raised by a Philadelphia policyholder whose insurance was canceled due to an additional review triggered during GEICO's standard 60-day evaluation for new clients. Facilitated by artificial intelligence, this process required the policyholder to furnish additional documentation under the risk of policy cancellation.

The customer believed she complied with the documentation request but was unaware that her submissions were insufficient, which inadvertently led to her driving without coverage. The state highlighted issues regarding the fairness and potential customer confusion associated with the underwriting review process. It was noted that GEICO failed to properly inform this customer about the inadequacy of her documents, contributing to the risk of policy cancellation.

As part of the agreement, GEICO will align with Pennsylvania Insurance Department's guidelines on the use of AI in insurance operations. The insurer agreed to extend the documentation period by an additional week for clients under review. Furthermore, GEICO will now accept a single form of residency verification and permit a consumer’s current driver’s license to serve as such proof, as long as the license address matches the policy address.

Dave Sunday remarked, “This agreement secures meaningful improvements that will help protect policyholders and ensures that the company’s use of new technology is done within industry standards.” GEICO, part of the Berkshire Hathaway Group, ranks as the third-largest player in Pennsylvania's private passenger auto insurance market, following State Farm and Progressive.