At a glance
| Jurisdiction tier | Tier A - Specified and enforced. A binding instrument that applies to insurers' own use of AI, or an issued regulator document addressed to this insurance market, addresses AI - by name or by an unambiguous description such as "predictive models" or "automated decision system" - and sets out rules or expectations that apply to it; and the regulator has a live mechanism to check or sanction them. |
| Case examined | Lemonade Insurance Co. - AI in underwriting |
| Band for this case | Elevated |
| Rules reach | Insurers: directly · Reinsurers: not stated · Intermediaries: not directly |
| Last verified | [actual date of the launch-window check] |
The New York State Department of Financial Services' Insurance Circular Letter No. 7 (July 11, 2024) defines AI systems and describes its purpose as identifying the Department's expectations for insurers using them in underwriting and pricing. Paragraph 39 says that where an insurer uses AI systems or external data, the notice of an adverse underwriting decision should disclose that use and the consumer's right to request the data relied on. The Department may audit and examine that use (paragraph 9).
Who these rules reach
- Insurers: directly. The circular is addressed "TO: All Insurers Authorized to Write Insurance in New York State, Article 43 Corporations, Health Maintenance Organizations, Licensed Fraternal Benefit Societies, and the New York State Insurance Fund".
- Reinsurers: not stated. The addressee line does not name reinsurers.
- Intermediaries: not directly. The addressee line lists insurers and similar bodies only.
This band describes how clearly the rules meet the AI use that Lemonade Insurance Co. has itself published. It is not a finding that Lemonade Insurance Co. has breached any rule.
Why Lemonade Insurance Co.: Lemonade's own shareholder letter for the second quarter of 2026 says the systems behind its claims efficiency are the same systems that run its sales, service and underwriting.
The question
In briefGiven that Lemonade's reporting says "the systems that drive our claims efficiency are the same systems that run our sales, service, and underwriting", can Lemonade confirm that every adverse underwriting decision in New York - a decline, a limitation, a rate differential - is accompanied by the notice Circular Letter No. 7 calls for at paragraph 39, disclosing the use of AI systems or external data and the consumer's right to request the specific data relied on, when (unlike claims) there is no public metric by which anyone outside Lemonade can check this is happening?
Why this band: The question points to one firm and one notice, but the circular sets out the Department's expectations in terms of what a notice "should" disclose, and the statutes it cites for the notice do not name AI.Lemonade's own words separate a publicly metered domain (claims) from one that isn't (underwriting), while NYDFS's circular calls for individual underwriting-side notices that nothing outside the company can verify at scale.
3. The same question for other firms in United States (New York)
Any insurer in New York using AI systems in underwriting faces the same point: whether every adverse underwriting decision carries the notice paragraph 39 calls for. This entry gives no band to any firm other than Lemonade Insurance Co.
4. What this entry does not establish
- Whether Lemonade's systems play any part in pricing. The question does not say so; the letter names sales, service and underwriting.
- Whether Lemonade issues the paragraph 39 notices. That is the question; this entry says nothing either way.
- No dated item is recorded for this entry.
Sources
- Lemonade, Inc., Shareholder Letter Q2 2026, Form 8-K Exhibit 99.1 ("Letter to Shareholders, dated July 29, 2026"; filed 2026-07-29), p.3. Company's own. sec.gov
- New York State Department of Financial Services, Insurance Circular Letter No. 7, July 11, 2024 (printed). Regulator. dfs.ny.gov
None share a law or regulator with this entry.
________________________________________
Commercial relationship with any party named here: None · Right of reply: indexreport.protocol@fijishi.com; with the sender's agreement, replies are published in full below the entry, dated · Cite as: Fijishi Jurisdiction Index 2026, Entry US-NY · Corrections: none.