AI evolution in life insurance: A test of compliance

A panel of insurance and legal leaders says artificial intelligence is rapidly transforming the life and annuities industry, but continued success will depend on thoughtful governance, compliance oversight and intentional use.

Panelists shared thoughts on AI use during a recent webinar sponsored by the National Association for Fixed Annuities.

AI adoption has accelerated sharply over the past year, with evolving large language models expanding what insurers, advisors and independent agencies can accomplish.

Andrew Payne, vice president and general counsel at CreativeOne, said many advisors are using AI tools for client note-taking, summarization, search functions and marketing drafts.

“We’ve been telling folks for years that it’s great to document your conversations, and great to follow up with your clients on those notes,” Payne explained. “Now we’ve got easy tools that do it for you. So, I think people are starting to come around and doing this as a real compliance helper, as opposed to this thing that could potentially run afoul of compliance.”

Develop the input

Payne cited the Geoff Woods book, The AI-Driven Leader: Harnessing AI to Make Faster, Smarter Decisions, as a good source for learning how to develop good AI inputs.

“The real thing that we should be trying to learn is how to use this tool, and really developing that input,” he said. “If I would give anyone one recommendation, it’s to start working on that as a skill. About how to use … your inputs into the model to get the best output.”

Jackie Boehm is senior vice president of project management and IT strategy at American Equity. Don’t try to start from scratch, she advised.

“I think it’s starting already approved content,” Boehm said. “What do you have that’s already content approved, marketing approved and then build upon it for your personalization.”

AI initiatives increasingly focus on identifying workflow pain points and measuring productivity gains through defined pilot programs, she explained.

For beginners, their introduction to AI is generally via use as a supercharged Google, noted Chris Fuhrer, vice president of distribution for Southwest Annuities Marketing.

“Both understanding what its capabilities are but taking the time to give it the right amount of context, that was the game changer for me,” Fuhrer said. “That’s when it started to really click for me.”

Smaller companies competing with AI

Newer insurance entrants in the life and annuity market are increasingly using artificial intelligence to streamline underwriting and compliance reviews, taking advantage of modern technology infrastructures that avoid the legacy systems common at older firms, the panel noted.

Unlike long-established insurers that often operate on decades-old technology platforms, many newer entrants have built their systems around current digital tools. That allows them to incorporate AI earlier in the process, particularly for initial underwriting reviews and suitability checks.

Compliance is more cost-effective as well, noted Trish Carreiro, chair of the Privacy, Cybersecurity and AI practice at Carlton Fields.

“I think one piece of this is to remember the role that technology can play and allowing you to do more work than you otherwise could,” she said. “You can use technology to oversee technology as well. And that is increasingly common, and I think, a definite force multiplier.”

Even with automation, however, humans remain involved in key decisions.

“We are still seeing reviews get to humans at some point,” Fuhrer said. “But there are fixed parameters that they can earmark and go from there.”

The panel also drew comparisons to earlier regulatory shifts in the industry, including the implementation of best-interest standards for annuity sales that forced insurers and intermediaries to develop new governance frameworks.

At the time, companies rushed to build compliance guardrails and oversight systems to meet regulatory expectations. Experts say AI tools today serve a similar role by embedding rules and controls that guide how financial professionals interact with technology.

Marketing concerns

Increasingly, AI is part of marketing campaigns, another area of concern for insurers – and compliance departments.

AI-generated advertising copy for annuity products must comply with existing regulatory standards, including suitability, disclosure and prohibited language rules. Panelists also cautioned against overreliance on AI-generated imagery or messaging that could erode consumer trust.

There are software programs out that will flag problematic marketing copy, Payne explained, such as showing a pot of gold, or the word “guarantee” in a misleading way.

“Those will become more and more sophisticated,” he added. “Just as you can build out marketing development, you can build in compliance to it.”

‘The most intentionally’

Despite the risks, the experts said AI adoption is inevitable — including potential future applications in product selection tools, suitability analysis and client modeling — so long as human oversight remains central.

The panel’s advice for firms just starting out: begin with education, identify business pain points, build structured evaluation frameworks and develop stronger prompt-writing skills before expanding into broader use cases.

“The firms that win won’t be the ones with the most AI,” Bone said. “They’ll be the ones using it the most intentionally.”

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