Insurance Discrimination and Fairness in the Age of Artificial Intelligence under Japanese Law

Abstract

The insurance business is changing fast integrating Artificial Intelligence into its chain of value. Despite remarkable benefits for both the industry and society, this raises significant regulatory challenges that need to be addressed. Indeed, where important parts of business functions are delegated to algorithms, technical limitations, machine errors and biases may result in unfair discriminations leading to suboptimal or socially unacceptable outcomes. Notably, Japanʼs insurance sector is going towards a technologically driven shift, which brings about concerns regarding the adequacy of the relevant legal framework. In view of the Japanese policymakersʼ intent of not enforcing new mandatory rules on AI-governance, this paper identifies the main issues concerning Artificial Intelligence usage in insurance and provides an overview of the regulatory tools to tackle algorithmic unfair discrimination currently within the Japanese law arsenal.