Insurers work through long chains of people: underwriters, claims handlers, tied agents, loss adjusters and third-party administrators. Article 4 of the EU AI Act requires an insurer using AI agents to take measures so that everyone using them on its behalf has sufficient AI literacy. The hard part is the chain, because much of the work happens outside the insurer.
What does Article 4 ask of an insurer?
Article 4 applies to every provider and deployer of AI systems. In substance, they must take measures to ensure, to their best extent, a sufficient level of AI literacy among staff and other persons dealing with the operation and use of AI systems on their behalf. Sufficiency is judged against those people's knowledge, experience, education and training, the context of use, and the people the systems are used on.
AI literacy means the skills, knowledge and understanding to use AI systems in an informed way and to understand their opportunities, risks and possible harms. For insurers, the people the systems are used on are policyholders and claimants, sometimes at the worst moment of their lives. Whether Article 4 requires formal training is covered in does the EU AI Act require AI literacy training.
Risk assessment and pricing for individuals in life and health insurance is high-risk under the Act, so those teams also face Articles 14 and 26.
Who does it cover in insurance?
- Underwriters and pricing staff working with agents that assess risk or quote.
- Claims handlers working with agents that assess coverage, draft letters or settle small claims.
- Tied agents and appointed representatives who sell on the insurer's behalf using its quoting or advice agents.
- Loss adjusters and third-party administrators handling claims for the insurer with access to its agents.
- Customer service teams, in-house or outsourced.
- Actuaries and data teams who set agent bounds and monitor outcomes.
- Directors accountable for underwriting and claims outcomes.
Third-party administrators and tied agents are where Article 4 most often fails in practice. They act on the insurer's behalf, but the insurer may never have checked what they understand about its agents. Who needs literacy under the Act in general is covered in who needs AI literacy under the EU AI Act.
What does literacy mean when insurance agents act?
Underwriting and quoting. A governed quoting agent might read application data at depth 1, draft a quote at depth 2, and issue standard quotes within narrow criteria at depth 3, with anything unusual held for an underwriter. Underwriters and tied agents need to read which facts drove the quote and how strong each is: data from the insurer's own records is sealed, a medical report is signed, application answers are declared, uploaded documents are external until checked.
Claims. A claims agent might settle small, clear claims at depth 3 and hold denials and larger settlements for a handler. Handlers, adjusters and administrators need to recognise that a denial is a decision about a person's cover, not a routine output, and that an external document such as an emailed repair invoice cannot authorise a payment on its own.
Customer service. Staff need to know what the service agent may tell a policyholder about cover, and when a question needs an underwriter or handler.
Everyone. An agent's certificate lapses after 90 days, and a run that clears no depth drops it to depth 1 the same day. After a storm or flood, when claims volumes spike, a lapse turns automated small-claim settlement into manual work at the worst time. Literacy includes knowing that this can happen and what the plan is.
How does an insurer meet Article 4?
| Requirement | Control | Evidence it leaves |
|---|---|---|
| Sufficient literacy for staff | Core module plus role modules for underwriting, claims, service and data | Records by role and date |
| Tied agents and representatives | Training required before access to quoting or advice agents | Distribution agreements; completion records |
| Adjusters and administrators | Delegated authority agreements require agent training | Agreement clauses; partner evidence |
| Fitted to the people affected | Modules on claimant vulnerability and explaining decisions | Assessment results |
| Kept current | Briefings at agent recertification or criteria changes | Briefing records linked to agent changes |
A practical way to build this is in how to set up an AI literacy programme under the EU AI Act.
What will a supervisor ask?
Insurance supervisors, working within frameworks coordinated through EIOPA, and market surveillance authorities may ask: how do you know tied agents and administrators understand your agents? Show training for the handlers who denied a sample of claims. How do staff recognise vulnerable claimants? What happens when a claims agent drops to depth 1 during a surge? For life and health pricing, they will test Articles 14 and 26 too.
What does Article 4 not cover?
It does not set insurance distribution or claims handling rules, which apply in full. It does not replace Articles 14 and 26 for high-risk life and health uses. It does not prescribe course content or credentials. It does not cover policyholders' own literacy. Comparisons are in Article 4 in banking and in healthcare.
This is an explanation of the rules, not legal advice; confirm how they apply to you with counsel.
Where the Academy fits
Pryme Intelligence Academy certificates are issued through VerifyDoc.ai and can be checked at source by anyone, by number or QR code. For an insurer relying on administrators and tied agents, that means it can check a partner's people directly rather than accept a training spreadsheet. Our guide to AI literacy and certification for people who work with agents explains the levels.
Questions people ask
Are brokers covered by the insurer's Article 4 duty?
Independent brokers usually act for their clients, not the insurer, and use their own systems. Where a broker uses the insurer's agents in the insurer's process, the insurer should set training expectations in its agreements.
Do loss adjusters need training on the insurer's agents?
If they use them on the insurer's behalf, yes. Delegated authority agreements are the natural place to require it.
What literacy does a claims handler need for small automatic settlements?
Enough to monitor them: to know the limits, read the evidence behind a settlement, spot patterns of error and suspend the agent when needed.