On Tuesday, April 2, 2024, the Colorado Division of Insurance (“Division”) held its second Unfair Discrimination in Insurance Practices – Health Insurance Stakeholder meeting where the Division discussed efforts to develop regulations addressing governance and risk management framework requirements for health insurers’ use of external consumer data and information sources, algorithms, and predicative models. The meeting presented an opportunity for stakeholders to provide comments and insights with respect to their positions on how the Division should proceed.

One key consideration for the Division is whether there should be a separate set of governance and framework regulations for health insurers or if the existing regulations applicable to life insurers should be revised to incorporate health insurers. Currently, the Division views the governance and risk management framework principles as transcending the lines of insurance, however, separate regulations by line of insurance may be necessary to address quantitative testing requirements. The Division will likely begin the formal rule-making process for governance and risk management framework regulations for both health insurance, and previously discussed private passenger auto insurance, sometime in April 2024.

The Division has not received many written comments from stakeholders since the last stakeholder meeting. During the April 2nd meeting, several consumer groups raised concerns about the suitability of the data that is used to train the models in health insurance. Consumer groups are concerned that the data will reflect existing fundamental disparities and inequities that will be exacerbated and prolonged when the data is used to train the models. They discussed whether only testing the out puts of the model would be sufficient or whether there needs to be more scrutiny of the data that goes into the model. We anticipate that these concerns also will be raised again when the Division moves forward with developing regulations addressing quantitative testing of health insurers’ models.

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