Opinion: Has EU left UK behind on AI regulation?

First things first, hello again dear readers! I have returned from the wilds of maternity leave to resume my post at Insurance Times and it is brilliant to be back.

Since waddling off on leave last April, there have been a number of market developments that have caught my eye – a prominent one being the scrutiny around how artificial intelligence (AI) is being used in the insurance sector and how this work should be regulated.

To this end, a working group of industry professionals published a new voluntary code of conduct on 31 January 2024, sharing the three key principles that AI usage in the claims sector should be based upon: fairness, accountability and transparency.

While this is progress in terms of building best practice regulation to help steer the usage of AI in our sector, it appears that the European Union (EU) is one step ahead with a much more formal legal framework being established.

According to a report by Global Insurance Law Connect, a global alliance of insurance law firms, the European Commission, Council and Parliament agreed on the creation of a risk-based Artificial Intelligence Act in December 2023 – the final text of this regulation is being reviewed now.

The Artificial intelligence and the future of insurance report, published on 29 February 2024, noted: “The EU AI Act is likely to be passed later this year, with member states then having two years to enact it into their national law.

“The EU AI Act aims to ensure that AI systems are safe and respect existing law on the fundamental rights of individuals and uphold EU values, while also encouraging AI innovation and facilitating investment in AI.

“It is intended to create a single market for lawful and trustworthy AI applications – and prevent market fragmentation.”

The EU’s decisive action to introduce watertight AI regulation does raise the question of whether the UK would be further ahead in its own AI regulatory journey if we’d stayed a member state. Although one would hope that a key advantage of the recently launched code of conduct would be that any resultant regulation would be tailored for the UK insurance market specifically.

Technology editor Clare Ruel explores the UK’s new code of conduct in more detail here. It will be interesting to see which firms adopt the voluntary measure before the powers that be decree a mandatory version.