Insurance Europe calls for AILD withdrawal

Insurance Europe, the European insurance and reinsurance federation, has called on the European Commission (EC) to withdraw its proposed Artificial Intelligence Liability Directive (AILD), warning that the directive, in its current form, could create legal uncertainty, stifle innovation, and confuse consumers about their rights.

In a statement published on Thursday, Insurance Europe expressed its concerns, emphasising that while it acknowledges the EC’s aim to facilitate compensation for damages involving artificial intelligence (AI), the federation believes the directive’s structure could have the opposite effect.

Insurance Europe outlined three primary concerns with the AILD proposal:

1. Legal uncertainty and increased compliance burden. The federation argued that the directive’s scope and its interaction with other EU regulations, including the AI Act and the revised Product Liability Directive (PLD), remain ambiguous. This lack of clarity, it stated, could burden businesses with complex compliance requirements and leave consumers uncertain about their legal rights.
    
2. Potential hindrance to AI innovation. Insurance Europe highlighted the directive’s evidentiary standards, which it said place an undue burden on AI providers and users, increasing the likelihood of litigation. The federation argued that this risk could deter insurers from covering AI technologies, making it harder for businesses to innovate in the AI sector.
    
3. Concerns over mandatory insurance requirements. Insurance Europe raised objections to the possibility of mandatory insurance requirements under the directive, especially if these requirements are reviewed and enforced after five years. The federation asserted that mandatory insurance should only apply to mature, standardised markets, a description it contends does not apply to the current AI landscape. It called for the protection of contractual freedom as a way to support insurers and allow for continued AI innovation.

It also urged the EC to address specific “areas of the proposal that should be reconsidered, if the proposal is maintained, to preserve legal certainty, competitiveness, and encourage innovation, to the ultimate benefit of European consumers.”

The response comes amid a broader EU regulatory effort to balance innovation and consumer protection as the AI sector expands. The AI Liability Directive is part of this initiative, aimed at establishing clear liability standards and ensuring fair compensation for those impacted by AI-related harm.

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