Can Insurance Fraud Teams Handle Regulatory Scrutiny of AI?

State regulators are demanding that insurers clearly explain their use of AI, validate data accuracy and maintain compliance. Meanwhile, technical teams must translate AI processes into simple terms to build trust, while fraud investigators need training to interpret AI insights more effectively, warned a panel of experts.

See Also: Why Cloud Security Needs an AI-Powered Firewall

Insurers that can’t articulate the data they’re using could face market conduct exams, sanctions or damage to their reputation, Michelle Rafeld said, executive director at the Coalition Against Insurance Fraud. “It is important that they adhere to that guidance from the regulators and know and ask questions as to what data is being used, where is it coming from and can they lawfully use it?” she said.

Mike Renda, customer success manager for enterprise accounts at Shift Technology, which provides insurance fraud tools, says the industry must also address the challenge of making AI understandable. “Trying to explain how AI actually works, especially to people that might not be familiar with the technology is a challenge,” Renda said. “There is some level of trust that has to be established between the technical side and a consumer of that information.”

Renee Moussa, senior product marketing manager at Shift Technology, said despite advancement in AI technology, human investigators still play a critical role in fraud investigation. “AI is there to support human investigators, not to replace them, not to make the decisions for them. What we are seeing is that fraud teams are actually becoming almost interpreters of AI alerts.”

In this video interview with Information Security Media Group, the panelists also discussed:

• Why insurance regulators are scrutinizing AI practices;
• How insurers can simplify technical processes for compliance and trust;
• Why training fraud investigators remains essential with evolving AI tools.

Rafeld, who leads the Coalition Against Insurance Fraud, previously served as assistant director with the Ohio Department of Insurance. She has more than 30 years of experience in the insurance field.

Renda has worked with dozens of U.S. and Canadian property and casualty insurance carriers to significantly improve business outcomes using AI technologies. Prior to joining Shift, he spent 26 years at State Farm and The Hartford as an SIU investigator, SIU analyst and major case program manager.

Moussa, who leads product marketing manager at Shift Technology, oversees the firm’s flagship Claims Fraud Detection product and other key capabilities. With a focus on using AI to enhance fraud detection, she is dedicated to delivering impactful solutions to the insurance industry.