HARRISBURG, PA — The Pennsylvania Office of Attorney General reached an agreement with GEICO requiring changes to the insurer’s policy cancellation and underwriting review practices after a state investigation found a West Philadelphia driver lost coverage following an artificial intelligence-assisted review process that regulators said risked leaving consumers unknowingly uninsured.
The agreement follows an investigation triggered by a complaint from a new GEICO customer whose policy was canceled during the insurer’s standard 60-day review process for new policyholders, according to the Attorney General’s office.
State investigators found GEICO used a tool with artificial intelligence features to flag the customer for additional underwriting review. The customer was required to submit additional residency documentation to maintain coverage but believed she had already complied with the request, the Attorney General’s office said.
According to the investigation, GEICO failed to clearly communicate that the submitted documents were insufficient, resulting in the policyholder continuing to drive after her coverage had been canceled.
The case adds to growing scrutiny from regulators over how insurers deploy artificial intelligence tools in underwriting and customer-service processes, particularly when automated or semi-automated systems affect coverage decisions.
Attorney General Dave Sunday said the agreement is intended to strengthen consumer protections and improve transparency during policy reviews.
“Consumers deserve transparency and fairness throughout the insurance process, especially when losing coverage can leave someone unknowingly uninsured and vulnerable to penalties and financial risk,” Sunday said. “This agreement secures meaningful improvements that will help protect policyholders, and ensures that the company’s use of new technology is done within industry standards.”
The Commonwealth also raised concerns about whether the process disproportionately created confusion for lower-income customers selected for underwriting review and whether GEICO’s communications adequately explained how consumers could avoid cancellation.
Under the agreement, GEICO agreed to align its practices with guidance issued by the Pennsylvania Insurance Department regarding insurers’ use of artificial intelligence systems.
The insurer also agreed to extend by one week the time new policyholders have to submit requested documents during underwriting reviews.
Additional changes include allowing customers to provide a single proof of residency document instead of two and permitting a driver’s license to serve as residency verification if the address matches the insurance policy.
GEICO also agreed to train customer-service representatives on the revised documentation standards and communication requirements tied to underwriting reviews and cancellations.
The matter was handled by the Civil Rights Enforcement Section within the Attorney General’s office.
The agreement does not constitute an admission of wrongdoing or violation of law by GEICO.
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