The integration of artificial intelligence (AI) into financial services and healthcare is leading to increased regulatory scrutiny in the United States.
The NYDFS has issued guidance to mitigate AI-related cybersecurity risks for financial institutions. This guidance, released on October 16, 2024, provides strategies to combat AI-facilitated social engineering and cyberattacks, as well as vulnerabilities linked to third-party dependencies. It is important to note that this guidance does not impose additional requirements on firms but serves as a framework for best practices in cybersecurity.
Legislation has been passed in California to govern the use of AI tools by health insurers. This legislation, signed into law on September 28, 2024, mandates that AI cannot deny, delay, or modify healthcare services based on medical necessity without the evaluation of a qualified healthcare professional. This reflects the recognition of the need for human oversight in critical healthcare decisions as AI technologies become more prevalent. However, the implementation of two additional California laws aimed at combating AI-related misinformation has been temporarily suspended by a federal judge due to concerns over potential First Amendment violations, highlighting the complex relationship between regulation and free speech.
The Federal Trade Commission (FTC) has launched "Operation AI Comply" to target misleading claims related to AI in consumer products. The FTC has filed lawsuits against companies that have made exaggerated claims about their AI capabilities, demonstrating their commitment to protecting consumers from deceptive practices. Additionally, the Office of Management and Budget (OMB) has issued guidance to federal agencies regarding responsible AI acquisition, emphasizing the importance of risk and performance management and fostering collaboration among agencies during the procurement process. The U.S. Department of Justice (DOJ) has also updated its assessment of corporate compliance programs to include AI, recognizing the growing significance of AI in corporate governance and regulatory compliance.
In Colorado, life insurers using external consumer data are facing new reporting requirements, although the state has temporarily waived testing for unfair discrimination. This reflects the evolving insurance regulations in response to the increasing use of data analytics and AI in underwriting and risk assessment. Insurers are still required to comply with other reporting obligations, highlighting the need for transparency and accountability in AI-driven decision-making processes.
The recent findings published by the OECD and the Financial Stability Board (FSB) emphasize the importance of promoting the safe use of AI in the financial sector. These organizations advocate for a balanced approach that considers both the potential benefits and risks associated with AI technologies. As financial institutions continue to adopt AI for various applications, including risk management and customer service, the need for robust regulatory frameworks becomes increasingly urgent.
The establishment of the Congressional Staff Association on AI (CSA.ai) is another significant development in the regulatory landscape. This group, composed of congressional staffers, aims to explore the implications of AI technologies and the progress of the Biden administration's Executive Order on AI. By fostering dialogue among policymakers, the CSA.ai seeks to ensure that legislative measures keep pace with the rapid advancements in AI, ultimately shaping a regulatory environment that supports innovation while safeguarding public interests.
As the regulatory landscape for AI continues to evolve, stakeholders in the financial and healthcare sectors must remain vigilant. The interplay between innovation and regulation will be crucial in determining how AI technologies are integrated into existing frameworks, ensuring consumer rights are protected while fostering an environment conducive to responsible innovation. Ongoing collaboration between government agencies and private sector entities will play a pivotal role in addressing the challenges and opportunities presented by AI, paving the way for a more secure and efficient future in both industries.