---
title: "List AI-use risk points in claims or underwriting against CPS 230, RG 271 and Privacy Act"
url: "https://ailawframework.com/practice/insurance-law/list-ai-use-risk-points-in-the-client-s-claims-or-underwriting-process/commonwealth"
type: "task_jurisdiction_version"
site: "AI Law Framework"
id: "A22-T1-R11-CTH"
practice_area: "Insurance Law"
tier: "yellow"
lawyer_review: "required"
jurisdictions: ["CTH"]
last_reviewed: "2026-09-23"
---

# List AI-use risk points in claims or underwriting against CPS 230, RG 271 and Privacy Act

> From the client's process description, list discrimination, explainability, disclosure and claims-handling risks against CPS 230, RG 271 and the Privacy Act, with vendor questions.

Canonical page: https://ailawframework.com/practice/insurance-law/list-ai-use-risk-points-in-the-client-s-claims-or-underwriting-process/commonwealth  
Last reviewed: 2026-09-23

Site index for agents: https://ailawframework.com/llms.txt

## Key facts

| Fact | Value |
| --- | --- |
| Practice area | [Insurance Law](https://ailawframework.com/practice/insurance-law.md) |
| Human involvement | Yellow: Lawyer and AI draft together |
| How AI is used | From the client's process description, list discrimination, explainability, disclosure and claims-handling risks against CPS 230, RG 271 and the Privacy Act, with vendor questions. |
| What the lawyer must review | Check human review of each claim file; AI denials without it risk breaching ICA s.13 Note the breach risk seen in ASIC v TAL Life Limited [2021] FCA 193; the duty cannot be outsourced to an algorithm Check the privacy policy discloses AI in claims triage, underwriting and fraud flagging Apply APP 1.7 from 10 December 2026 and check OAIC guidance (expected by September 2026) Confirm AI vendors' material service provider status under the 30 April 2026 amended CPS 230 (from 1 July 2026) Apply GI Code claims duties whether a person or a system decides Check AI-set terms for unfair contract terms (ASIC v Auto & General Insurance Company Limited [2025] FCAFC 76) |
| Written for | Commonwealth |
| Applies to | [List AI-use risk points in the client's claims or underwriting process](https://ailawframework.com/practice/insurance-law/list-ai-use-risk-points-in-the-client-s-claims-or-underwriting-process.md) |

## Checking plan

**Lawyer review required**

The responsible lawyer reviews the work against the instructions, sources and intended use.

- What the AI does: Potential support includes preparing preliminary structure or wording and summarising source material. Confirm the tool’s capability and permitted scope.
- What the lawyer does: Set the scope, verify the evidence, resolve exceptions and approve the final output for its intended use.
- Who reviews: Responsible lawyer with competence in the matter
- Basis: Suggested checking approach based on the task guidance. Complete the assessment for the actual tool, information and jurisdiction.
- Why: The plan reflects the described work and review requirements. Policy colours are not used to determine permission or checking.

## Checks the lawyer makes

1. Review operative clauses in the complete document, including definitions, cross-references, schedules and inconsistencies with the instructions.
2. Confirm that the actual tool, feature and processing terms permit use of this information, including access, retention, training and disclosure conditions.
3. Verify the applicable jurisdiction and the version of each relevant law, rule or instrument in force at the material time.
4. Confirm the output against the client’s instructions and the complete relevant source material, including omissions or contradictions.
5. Resolve exceptions and record the responsible lawyer’s approval of the exact output and intended use.

## Notes

- Confirm the required checking with the responsible lawyer before work starts. The checking approach does not establish permission to use AI.

*Practice guidance for planning and review. Confirm current primary sources and the requirements of the actual matter. This is general information, not legal advice.*