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Course Details

Course Information
  • smart_display Format

    On-Demand

  • signal_cellular_alt Difficulty Level

    Intermediate

  • work Practice Area

    Insurance

Date & Time
  • event Date

    Thursday, March 21, 2024

  • schedule Time

    1:00 p.m. ET./10:00 a.m. PT

  • timer Program Length

    90 minutes

Credit Information

  • This 90-minute webinar is eligible in most states for 1.5 CLE credits.

$297.00
CLE
ALL

This CLE course will discuss claims for insurer bad faith liability from the use of artificial intelligence in underwriting and claims investigation, adjusting, denial, and settlement. The program will discuss the basis for bad faith claims, novel legal issues, and current cases.

Faculty

Robert M. Horkovich
Managing Shareholder
Anderson Kill

Mr. Horkovich has obtained over $8 billion in settlements and judgments from insurance companies for his clients. He is a trial lawyer with substantial experience in trying complex insurance coverage actions on behalf of corporate policyholders and governmental entities. Mr. Horkovic’s victories include one of the top 10 jury verdicts in the United States, the top insurance recovery jury verdict in the United States, seven landmark state Supreme Court decisions, eight jury verdicts and nine bench trial decisions in favor of the policyholder including engaging on several significant projects by the United Nations as its general insurance counsel and the state of California where Anderson Kill served as lead trial in the state's suit against dozens of insurance companies over coverage for cleanup of the Stringfellow Acid Pits (what a federal court described as the most complex environmental clean-up in the world). Mr. Horkovich is a frequent author and lecturer on insurance recovery topics.

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Tim Ryles
Owner and President
Tim Ryles Consulting

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Marialuisa S. Gallozzi
Partner
Covington & Burling

Ms. Gallozzi has helped for-profit and nonprofit policyholders develop and execute efficient and practical insurance recovery strategies. As lead counsel, she has helped secure over half a billion dollars for high-value first-party losses and third-party liabilities. In addition to representing policyholders in insurance claims, Ms. Gallozzi also advises policyholders in placing and tailoring insurance coverages for unique risks, transferring risk in contracts and transactions, and preparing for and managing crises.

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Description

Insurers are eagerly adopting predictive analytics and even generative AI for underwriting, premium calculation, claims adjustment, and other functions previously done in-house. This shift is raising novel substantive, procedural, evidentiary, and discovery issues, not the least of which is the need for computer experts to explain everything from how algorithms work to attempting to justify their accuracy and reliability.

Policyholders assert that using software expressly designed to favor the insurance company is irreconcilable with the duty of utmost good faith and have filed the suits to show it.

These cases assert that AI fails to fairly and honestly investigate claims, uses formulas that artificially and unfairly lower settlement amounts, and is based on historically biased and inaccurate claims payment data incorporating decades of stereotypes and artificially suppressed values. Insurance companies and brokers are facing lawsuits for breach of contract, unjust enrichment, bad faith, RICO, conspiracy, negligence, professional malpractice, and in some states, violation of consumer protection laws.

Listen as this experienced panel discusses liability arising from the use of AI by insurers.

Outline

  1. Introduction to terminology: insurtech, AI, generative AI, and more
  2. Automated adjustment software and programs explained
  3. Increase in the use of AI and its impact on first- and third-party claim analysis
  4. Contractual and extracontractual claims
    1. Breach of contract
    2. Bad faith
    3. RICO
    4. Conspiracy
    5. Negligence/malpractice
    6. Consumer protection law
    7. Civil rights violations
  5. Evidentiary questions
    1. Use of experts
    2. Access to the underlying algorithms and training materials used to develop the AI
  6. Pending cases

Benefits

The panel will review these and other pivotal issues:

  • What kind of due diligence should insurance companies undertake before adopting AI, and for what claim should it be applied?
  • What is responsible use of AI in insurance?
  • Is insurtech reliable and what experts are needed to demonstrate that?
  • Where does the data supporting AI come from, and is it market-specific?
  • Is personalization of insurance classifications changing the nature of insurance?