Public consultation on draft Application Paper on the supervision of artificial intelligence

This consultation is now closed and the Application Paper has been published. 

Background information 

The adoption of artificial intelligence (AI) systems is accelerating globally with increased use cases and new developments such as agentic AI. For insurers these developments offer substantial commercial benefits across the insurance value chain. However, with these advances come notable risks that could detrimentally impact consumers as well as the financial soundness of insurers. For example, left unchecked, AI systems can result in unlawful discrimination and concerns around data privacy. For insurers, the opaque and complex nature of some AI systems can lead to accountability issues, where it becomes difficult to trace decisions or actions back to human operators, and uncertainty of outcomes. Addressing such concerns is paramount to maintaining trust and fairness in the industry.

In July 2025 the IAIS published the final version of the Application Paper on the supervision of artificial intelligence following a public consultation in early 2025. Previous work by the IAIS has affirmed that the current Insurance Core Principles (ICPs) continue to be appropriate and relevant in managing these risks. The objective of this Application Paper therefore is to support supervisors when applying the ICPs to promote appropriate and globally consistent oversight of the use of AI within the insurance sector.

The Application Paper includes five broad sections:

• Risk-based supervision and proportionality: consistent with the requirements set out in the ICPs and following feedback during the consultation period, the final Application Paper reflects the need for supervisors to adopt a risk-based and proportionate approach to the supervision of AI.
• Governance and accountability: this includes the importance of continued Board and senior management education, the need to integrate AI into risk management systems, provide human oversight of AI risks and considerations around the use of third parties.
• Robustness, safety and security: this considers issues related to the robustness, safety and security of AI systems.
• Transparency and explainability: this section sets out the need for AI outcomes to be explainable and tailored to the need of different stakeholders.
• Fairness, ethics and redress: this section includes the need for fairness-by-design, monitoring of outcomes and adequate redress mechanisms. It also highlights the need for supervisors and insurers to consider the broad societal impacts of granular risk pricing on the principle of risk pooling.

A public discussion session will be held via webinar between 13:00-14:30 CEST on Thursday 17 July 2025 to present the final paper and answer questions from stakeholders.  Click here for details and registration.