Artificial intelligence has been discussed in this column a few times. The term was used on the premise that most readers understood what it is and recognised the profound impact that it will have in the short and long term.
I now believe that my assumption was wrong.
What I have learned about the subject has caused me to re-evaluate my earlier approach in introducing this important topic to readers in the context of risks and insurance. I do not know how artificial intelligence will affect the operations of the local insurance industry.
AI is a rapidly growing industry. It will affect most businesses; and insurance companies are no exception. The technology is here and, I suspect, some companies and individuals have started to test how they can use it. Today’s column will be devoted to sharing some basic information about AI and a few thoughts about how Jamaican consumers can use the technology to make better decisions to protect themselves.
AI is the field of science concerned with the building of computers and machines that can reason, learn, and act in such a way that would normally require human intelligence. It also involves the analysis of data on a scale that exceeds what humans can analyse.
AI allows computers and machines to simulate human intelligence and problem-solving skills. Britannica says the term is frequently applied to the project of “developing the systems endowed with intellectual processes characteristic of humans, such as the ability to reason, discover meaning, generalise, or learn from experience”.
There are ongoing debates about AI on several key issues. One topic is AI and human augmentation. Some persons argue that AI should be used to augment human intelligence and capabilities rather than replace humans. This view emphasises collaboration between humans and AI to achieve better outcomes.
Sanya Goffe is a local attorney-at-law who is a senior partner of the legal firm Hart Muirhead Fatta. She wrote in this newspaper last Wednesday about the risks and responsibilities of pension fund trustees. I do not know whether it was the headline of the article, ‘When Prudence Isn’t Perfect’, or the fact that I once chaired the board of trustees of a pension fund, or both, that influenced my decision to read the article, but I did.
I am glad that I followed my gut. It provided me with content when I least expected. It suddenly dawned on me that what Ms Goffe wrote could have been written by AI. (This comment is not intended to disrespect Ms Goffe. Her opinion was clear, well-researched, authoritative, and free of legal jargon). This idea led me to conclude that AI can write this weekly column.
I typed the question below in the dialogue box of the AI application embedded in my browser. I wanted to test my theory that AI can help local consumers make better insurance decisions. The question was framed to find out how some insurance buyers that use brokers can make better choices and evaluate their performance. My training and work experience as an intermediary provided me with the tools to check the accuracy of the computer-generated responses.
Question: What are the legal and professional responsibilities of insurance brokers to their clients?
AI response: Insurance brokers have several legal and professional responsibilities to their clients. Here are some key ones:
A. Legal responsibilities
1. Acting in good faith: Brokers must act in the best interests of their clients and maintain a fiduciary relationship. A fiduciary relationship is a legal or ethical relationship of trust between two or more parties. In such a relationship, one party (the fiduciary) is bound to act in the best interests of the other party (the principal or beneficiary).
2. Proper advice: Brokers are required to provide accurate and relevant advice tailored to the client’s needs.
3. Obtaining coverage: Brokers must ensure that the insurance coverage meets the client’s requirements.
4. Policy explanation: Brokers need to explain the terms, conditions, and limits of their client’s policies.
5. Handling claims: Brokers must assist clients in notifying claims to insurers and offer guidance in the negotiation and settlement of claims.
B. Professional responsibilities
1. Understanding client needs: Brokers should actively listen to clients to understand their unique situations and concerns.
2. Analysing coverage: They must review existing policies to identify any gaps and recommend appropriate coverage.
3. Staying informed: Brokers must keep up-to-date with industry trends and insurance products.
4. Maintaining relationships: Building and maintaining strong relationships with insurance carriers to provide the best options for clients.
5. Regular follow-ups: Ensuring clients’ coverage remains adequate and addressing any changes in their needs.
These responsibilities help brokers provide effective support and build trust with their clients, ensuring they feel confident and secure in their insurance choices.
When a broker fails to meet these responsibilities, it can have legal consequences. This may take the form of a lawsuit for professional negligence. Brokers must act with the same level of care that a competent broker would act in similar circumstances.
I scored this AI-generated response 9.5 out of 10 points. This is even though I suspect that the information on which it is based originated exclusively from United States sources where state and federal laws apply. Our legal system is, of course, founded on English law. The response omitted to say that regulators invariably stipulate that brokers must have professional liability insurance coverage to protect clients.
When buyers have a proper understanding of the legal and professional responsibilities of intermediaries, they are empowered to make greater demands on the service provider, continuously evaluate their performance, and hold them accountable if things go wrong. Performance-based relationships create better outcomes.
Cedric E. Stephens provides independent information and advice about the management of risks and insurance. For free information or counsel, write to: aegis@flowja.com or business@gleanerjm.com
