Source: Linklaters

Rebekah Ellis reports on the European Insurance and Occupational Pensions Authority’s (EIOPA) finalized opinion on AI governance and risk management. The guidance targets AI applications in insurance not classified as high-risk or prohibited under the EU AI Act but offers principles relevant across sectors.

EIOPA recommends proportional, risk-based governance integrated with existing frameworks like Solvency II, Insurance Distribution Directive, and DORA. Firms should adopt customer-centric approaches, mitigate bias, ensure data governance, maintain documentation, and provide meaningful explanations of AI decisions. oversight, transparency, and cybersecurity robustness are emphasized. EIOPA plans to evaluate supervisory practices and issue further guidance, encouraging firms globally to draw parallels in managing AI risks.