Michigan Issues Bulletin Regarding AI Compliance Practices

The Michigan Department of Insurance and Financial Services (DIFS) recently issued a bulletin reminding financial service providers that decisions or actions taken with the use of AI systems, that may impact consumers, must comply with all laws and regulations. 

The bulletin details DIFS’ expectations on how financial service providers will govern the development, acquisition, and use of AI technologies, and advises financial service providers of the information and documentation DIFS may request during investigations and examinations.

The bulletin highlights that the use of AI has the potential to increase the risk of inaccurate, arbitrary, capricious, or unfairly discriminatory outcomes for consumers and that financial service providers should take steps to mitigate these risks.  To that end, DIFS calls for financial service providers to develop, implement, and maintain a written AI systems program, and for those not formally engaged in the use of AI systems to establish an employee acceptable use policy.