On January 17, 2024, DFS published for comment a proposed insurance circular letter on AI systems and external consumer data in underwriting and pricing, with comments due March 17, 2024. It introduced the AIS and ECDIS definitions, the requirement that insurers prove their models do not unfairly discriminate, and the expectation that adverse-action reasons include all information relied on. It was finalized with clarifications as Insurance Circular Letter No. 7 (2024) on July 11, 2024.
| Document | DFS Proposed AI Insurance Circular Letter (Jan 2024) — Proposed Insurance Circular Letter on the Use of Artificial Intelligence Systems and External Consumer Data and Information Sources in Insurance Underwriting and Pricing |
| Issued by | New York State Department of Financial Services |
| Type | Consultation |
| Status | Superseded |
| Published | Jan 17, 2024 |
| Comment deadline | Mar 17, 2024 |
| Applies to | Insurers authorized in New York using AI systems or external consumer data in underwriting or pricing |
| Superseded by | Insurance Circular Letter No. 7 (2024) |
| Official source | dfs.ny.gov ↗ |
| Use cases | Fair lending & discrimination · Credit scoring & underwriting · AI governance (general) |
What are the key points of DFS Proposed AI Insurance Circular Letter (Jan 2024)?
- Released January 17, 2024 with a 60-day comment window closing March 17, 2024.
- DFS's premise: ECDIS may reflect systemic biases and their use can reinforce inequality, so insurers must prove AI and external data do not produce unfair or unlawful discrimination.
- Proposed the disparate-impact framework, board and senior-management governance, vendor accountability, and transparency provisions that the final circular kept.
- Final version narrowed and clarified certain points in response to comments — including the ECDIS definition exclusions and the proxy-assessment expectation — but did not change the core structure.
What did DFS Proposed AI Insurance Circular Letter (Jan 2024) change for banks?
The proposal put New York's insurers on notice that DFS would treat AI fairness as a supervisory matter under existing anti-discrimination law rather than wait for legislation; the final July 2024 circular carried the approach into force. It is retained here because news coverage and comment letters from banking groups still reference the January 2024 proposal.
How did the final Circular Letter No. 7 differ from the January 2024 proposal?
The final letter kept the structure — AIS/ECDIS definitions, disparate-impact testing, governance, vendor responsibility, transparency — and added clarifications in response to comments, such as explicit exclusions from the ECDIS definition and clearer expectations on proxy analysis.
When did the comment period on the proposed AI circular letter close?
March 17, 2024, sixty days after the January 17, 2024 release.
| Date | Document | Status |
|---|---|---|
| Jul 11, 2024 | Insurance Circular Letter No. 7 (2024) — Use of Artificial Intelligence Systems and External Consumer Data and Information Sources in Insurance Underwriting and Pricing | In force |
| May 21, 2026 | DFS Frontier AI Models Industry Letter (May 2026) — Heightened Cybersecurity Risks Associated with Frontier AI Models | In force |
| May 21, 2026 | DFS Heightened Threat Environment Guidance (May 2026) — Guidance on Measures Regulated Entities Should Consider in a Heightened Cybersecurity Threat Environment | In force |
| Dec 16, 2025 | Asrow Assembly Statement on AI in Insurance (Dec 2025) — Statement by DFS Acting Superintendent Kaitlin Asrow at the NYS Assembly Hearing on the Use of Artificial Intelligence Systems in Insurance Underwriting and Pricing | Final |
| Oct 16, 2024 | DFS AI Cybersecurity Industry Letter (Oct 2024) — Cybersecurity Risks Arising from Artificial Intelligence and Strategies to Combat Related Risks | In force |
| May 30, 2024 | DFS Virtual Currency Customer Service Guidance (May 2024) — Guidance Regarding Customer Service Requests and Complaints (Virtual Currency Entities) | In force |
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