Professionalism Webinar Examines Unfair
Discrimination in Insurance




THE ACADEMY hosted a May 26 webinar, “What Is Unfair Discrimination in Insurance?” in which presenters explored the current regulatory infrastructure relating to unfair and unlawful discrimination in insurance and the challenges presented by the increased use of big data and artificial Intelligence (AI)-enabled systems.

Presenters were Daniel Schwarcz, an award-winning professor and scholar; former Illinois Director of Insurance Nat Shapo; and Brian Mullen, chairperson of the task force currently revising ASOP No. 12, Risk Classification ( for All Practice Areas). General Counsel and Director of Professionalism Brian Jackson moderated.

Mullen opened by providing background on ASOP No. 12. Schwarcz discussed prohibitions on “unfair discrimination”—which occurs when an insurer considers factors unrelated to actuarial risk—in rates and underwriting. He noted that machine learning AI tends to produce the same results as intentional proxy discrimination. As a result, insurance becomes less available and less affordable to individuals because of their race, sex, genetics, health, or income. He also discussed a proposed definition of proxy discrimination, practical tests for proxy discrimination, and the benefits of such a definition.

Publication Date: May 2022

Publication Site: American Academy of Actuaries