Key Takeaways
• The CII is urging the UK government to adopt clear accountability rules for AI use in insurance.
• It recommends mandatory AI training for all staff in regulated financial firms.
• The CII calls for public validation of AI algorithms to prevent discrimination.
• These proposals align with broader EU and UK regulatory discussions on responsible AI deployment.
The Chartered Insurance Institute (CII) has submitted a formal recommendation to the UK Treasury Select Committee (TSC) advocating for stronger governance of artificial intelligence (AI) within financial services.
With AI increasingly influencing underwriting, claims, and customer service, the CII’s guidance seeks to ensure that innovation in the insurance sector aligns with consumer trust and ethical accountability.
Representing a professional community of over 120,000 members, the CII stresses that now is the time to establish a clear and enforceable framework for responsible AI use.
Establishing Accountability in AI Decision-Making
The centerpiece of the CII’s proposal is a call for accountability at both the individual and institutional level.
The Institute maintains that AI applications should not operate in a regulatory vacuum, especially when they impact financial inclusion, pricing, and claims outcomes.
• Professionals must remain answerable for decisions made using AI, whether through direct involvement or oversight.
• Institutions should validate and test AI systems for discriminatory outcomes and publish those results.
• Algorithmic complexity should not exempt firms from responsibility or transparency.
The CII argues that public trust in insurance depends on clearly defined ethical standards—standards that must be integrated into every level of AI adoption, from design to implementation.
Enhancing Industry Readiness Through Training and Education
Beyond regulation, the CII is also advocating for sector-wide upskilling to ensure AI tools are deployed with full awareness of their benefits and risks.
The Institute’s recommendation includes a mandate for company-wide AI literacy training across all regulated financial entities.
This proposal aligns with broader concern from the UK Financial Conduct Authority (FCA), which has flagged the risk of AI-driven hyper-personalization leading to discriminatory exclusions, potentially making some individuals “uninsurable.”
International Context: Echoing the EU’s AI Risk Framework
The CII’s proposals reflect a growing global consensus on the need for AI regulation. Notably, the European Union’s AI Act, effective since August 2024, classifies AI systems by risk levels and imposes strict requirements on “high-risk” applications.
While the UK is still developing its national AI regulatory approach, the CII’s submission presents a clear model tailored to the insurance sector, one that supports technological growth without compromising consumer protection.
Supportive Tools and Resources Already in Place
The CII’s recommendations are backed by a range of existing resources designed to promote ethical AI use. These include structured educational content and frameworks that help firms adopt AI responsibly.
• Guidance is available to address gender bias and ensure fairness in automated systems.
• AI learning modules, including a data science introduction and CPD-compliant content, aid staff development.
With its submission to the Treasury Select Committee, the CII is signaling a proactive, values-based approach to AI integration in insurance.
Its recommendations aim to balance efficiency and innovation with public accountability and fairness, offering a blueprint that could help shape the broader UK AI regulatory landscape.
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