PAID Act, Sec. 3 (Requirements for Private Passenger Automobile Insurers)

• Authority: United States Congress
• Parent authority: Federal government
• Jurisdiction: United States
• Collections: U.S. federal laws
• Most recent activity: Defunct
• Most recent activity date: 2025-01-03

Risk subdomain coverage

Good coverage — Comprehensive governance measures or mitigations with clear procedures relating to the risk subdomain are explicitly described.

• Unfair discrimination and misrepresentation
• Unequal performance across groups

Minimal coverage — Brief mention but no specific mitigations, recommendations or governance measures relating to the risk subdomain are described.

• Governance failure
• Lack of transparency or interpretability

All other risk subdomains had no coverage in this document.

Risk Coverage Summary

The document has good coverage of approximately 3-4 subdomains, with strong focus on unfair discrimination (1.1), unequal performance across groups (1.3), and governance failure (6.5). The document addresses algorithmic fairness and disparate impact prevention in the insurance sector.

Sector coverage

Good coverage — Comprehensive governance measures or mitigations with clear procedures relating to the sector are explicitly described.

• Finance & Insurance

All other sectors had no coverage in this document.

Sectors Summary

The document exclusively governs the Finance and Insurance sector, specifically private passenger automobile insurance companies and their affiliates. It regulates algorithmic decision-making in insurance underwriting, rating, and claims handling.

Legislative Status

Hard Law

Legislative Status Summary

This is a binding legislative act from the United States Congress with mandatory requirements, enforcement mechanisms through the FTC, and explicit prohibitions with legal consequences for violations.

Actors

Proposer

• Entity Types: AI_Governance_Actor
• Entities: United States Congress
• Summary: The document is identified as legislation from the United States Congress, which is the legislative body that proposed and enacted this Act.

Target

• Entity Types: AI_Deployer
• Entities: private passenger automobile insurers; affiliate insurers
• Summary: The document explicitly targets private passenger automobile insurers and their affiliates, regulating their use of algorithms and models in insurance operations.

Enforcer

• Entity Types: AI_Governance_Actor
• Entities: Federal Trade Commission
• Summary: The FTC is explicitly designated as the enforcement body that receives submissions and has authority to require information from insurers to ensure compliance.

Monitor

• Entity Types: AI_Governance_Actor
• Entities: Federal Trade Commission; public
• Summary: The FTC monitors compliance through biennial submissions, and the public has monitoring capability through mandatory public access to underwriting rules and rate filings.

AI Lifecycle Stages

Lifecycle stages covered by the documents, as defined in the OECD Framework for the Classification of AI Systems

• Build and Use Model
• Verify and Validate
• Deploy
• Operate and Monitor

AI Lifecycle Summary

The document primarily covers the Deploy and Operate and Monitor stages, with implicit coverage of Build and Use Model through requirements for algorithmic fairness. It focuses on operational use of AI systems in insurance rather than development stages.

Technical Scope

Terms relating to technical scope that are mentioned or implicitly referenced in the document

• Predictive AI
• Task-specific AI

Technical Scope Summary

The document explicitly mentions algorithms and models used in insurance operations but does not use specific AI terminology like 'AI systems', 'AI models', or reference frontier AI, general purpose AI, or compute thresholds. The focus is on algorithmic decision-making in insurance contexts.