Claims Adjudication
Reviewing, validating, and paying or denying insurance claims. AI used here is now a high-priority target for market conduct exams and litigation.
Claims adjudication is the process an insurer uses to decide whether a submitted claim is valid, how much is owed, and whether to pay or deny it. The process includes verification, policy matching, pricing, and sometimes fraud review. In health insurance, 44% of responding insurers told the NAIC they use AI or machine learning for claims adjudication.
AI can speed up routine claims, but it also introduces governance risks. A model that flags claims for denial, suggests payment amounts, or auto-approves low-complexity files is making or shaping decisions that affect consumers. Regulators increasingly expect carriers to document the decision logic, maintain human oversight, and monitor for disparate impact.
The NAIC evaluation tool treats claims AI as high-risk, especially when the system can deny or reduce payment. See our guide to agentic AI in claims and Exhibit C.