Four other states have developed independent AI policies: California, Colorado, New York, and Texas. New York released Insurance Circular Letter No. 7, which reflects comments received in response to its previously released proposal on the use of AI in insurance underwriting and pricing. Though the comments did not result in any substantive changes to the state’s initial proposal, the finalized letter did provide clarifications in several key areas, such as its application to AI systems and models regardless of whether those AI systems and models use external consumer data and information sources, definitions of certain key terms, the proposed governance and risk management standards, oversight over senior management and thirdparty vendors, and the incorporation of disclosure and transparency obligations detailed in the initial proposal. Click here for a more detailed summary of New York’s guidance on using AI and external consumer data. On December 6, 2024, Colorado released a draft proposed amendment to Regulation 10-1-1. If enacted, this amendment would revise existing governance and risk management requirements for life insurers and apply those amended obligations to private passenger automobile insurers and health benefit plan insurers. Comments to the proposal were due December 13, 2024. n Privacy / AI 12 Sidebar – Did you know? 13 How to Spot a “Nuclear” Juror “Nuclear verdict” is a term businesses and insurers are using to describe civil awards of $10 million or more. Experts say nuclear verdicts are increasing due to a sense of dissatisfaction held by jurors as a result of a number of factors. In April, Illinois State University published a report identifying the aggravating factors that cause a juror to go nuclear, looking specifically at Cook County, Illinois, and Gwinnett County, Georgia. The study identified the following factors that make a jury more likely to award a nuclear verdict: • Age. While the median age for jurors is getting older, younger generations are entering the jury pool. Millennials and Gen Z are more likely to favor a plaintiff and give higher awards. • Race. Mostly white counties tended to award fewer nuclear verdicts, while more racially diverse counties tended to return more nuclear verdicts. • Politics. Using data from the University of Georgia on voting patterns in the 2020 presidential election, the study concluded that “nuclear” counties favored Joe Biden, while non-nuclear counties voted for Donald Trump. • Anticorporate Sentiment. Distrust of corporations is on the rise after the COVID-19 pandemic, and survey results indicate that a majority of respondents found that it is the function of the jury to send messages to corporations to improve their behavior. Anticorporate sentiment nearly doubled from 27% pre-pandemic to 45% in 2023. • Pro-litigation Sentiment. With the rise of anticorporate sentiment comes an equivalent rise in a pro-litigation sentiment, with 58% of respondents in the same survey having a positive view of plaintiffs’ lawyers and 77% having a neutral or negative view of lawyers for corporate defendants. • Lack of Economic Opportunity. Higher nuclear verdicts occur in counties with higher economic inequality, greater unemployment rates, and higher percentages of low-wage workers. The greater rates of mental and physical injuries experienced by lowwage workers can create a sense of bitterness. The jury pool is important to consider when deciding whether to go to trial. While there are exceptions to every rule, the demographics of a county may make the risk of a nuclear verdict too great. n GILLIAN CLOW Senior Associate
RkJQdWJsaXNoZXIy Njk5MDg5