Insurers’ AI Use for Coverage Decisions Targeted by Blue States

States are getting more aggressive in probing how predictive artificial intelligence models may lead to discrimination in insurers’ underwriting practices.

Colorado became the first state to adopt a formal regulation specifically aimed at insurance algorithms. But regulators in other blue states—including New York, California, and Connecticut, as well as Washington, D.C.—have issued their own warnings and notices directing carriers to show their models and data aren’t discriminatory. New Jersey, meanwhile, is one of several states that have introduced similar legislation.

The state regulators’ moves come as insurance giants—including units of State Farm ...