The Insurance Regulatory and Development Authority of India (IRDAI) has formed a seven-member working group to build governance frameworks and safeguards for artificial intelligence in the insurance sector. The group, chaired by IIIT Hyderabad director Sandeep K. Shukla, will examine risks, recommend security measures, and lay out best practices as insurers deepen their use of AI tools while handling sensitive policyholder data.
The regulator wants the group to assess the impact of AI on insurers, policyholders, and the broader insurance ecosystem. It will study the effects of frontier AI tools and recommend security measures to counter threats from AI-driven automated attacks. The group will also consider whether industry-wide stress testing is needed to gauge the resilience of AI systems used by insurers.
Scope of the review
The working group will map the current state of AI for Insurance adoption, usage, maturity, and deployment across the sector. It will review governance practices already in place and conduct a structural assessment of AI systems used by regulated entities. The findings will inform a proposed AI governance framework that covers claims management, fraud prevention, and the ethical, transparent, and explainable use of AI models.
What the framework will target
According to the IRDAI, the framework aims to support the responsible use of AI tools and models. It will address areas where AI is already reshaping operations, such as claims processing and fraud detection. The group's recommendations are expected to help insurers manage emerging risks while maintaining compliance with data protection requirements.
Why this matters for insurance professionals
For underwriters, claims handlers, and compliance officers, the working group's output will likely shape the guardrails for AI deployment in Indian insurance. The framework could introduce new obligations around explainability and stress testing, directly affecting how teams build, validate, and monitor AI-driven decisions. Waiting for the final recommendations rather than getting ahead of them could prove costly to insurers operating without clear internal governance.
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