Pennsylvania Attorney General Dave Sunday announced an agreement with GEICO that should modify an artificial intelligence (AI) initiated auto insurance policy cancellation process the state alleged was unfair and confusing,
The agreement stems from a complaint from a new GEICO policyholder in West Philadelphia who lost her insurance as a result of the company’s standard 60-day policy review for new customers. The company utilized a tool with artificial intelligence to select the customer for further review and underwriting, leading to cancellation without adequate notice and the customer unknowingly driving uninsured.
GEICO required the policyholder to submit additional documentation under threat of cancellation. The policyholder believed she had submitted the requested documents and was not informed she had not. Her policy was cancelled without her realizing it, resulting in her driving uninsured.
According to Sunday, the state was concerned about the overall fairness of the process and its likelihood of confusing new policyholders selected for underwriting review. The state also alleged that GEICO did not make it clear to the consumer that her document submission was inadequate to prevent cancellation.
Without admitting any violation of the law, GEICO has agreed to follow the Pennsylvania Insurance Department’s guidance on the use of artificial intelligence systems by insurers. The insurer also agreed to add a week to the period for new policyholders selected for review to submit requested documents.
Additionally, GEICO agreed to allow consumers to provide one form of verification of residency rather than two and to permit a copy of a consumer’s current driver’s license to serve as proof of residency, so long as the address on the license matches the policy. The company will also train customer service representatives regarding the updated requirements and the need for clarity throughout the process.
“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,” said Sunday.
GEICO (operating as Berkshire Hathaway Group) ranks third in the Pennsylvania private passenger auto market, trailinng only State Farm and Progressive.
Topics
InsurTech
Data Driven
Artificial Intelligence
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