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Explainable AI and Regulatory Compliance RFP

Background and Purpose

Machine learning and artificial intelligence methods are becoming a larger part of actuarial work, where they improve our ability to perform many actuarial functions like assumption setting, underwriting, and fraud detection. While AI models can improve actuaries’ work, they do not come with straightforward explanations. This presents a particular problem for actuaries, who do their work in heavily regulated and documented environments in which they must justify their decisions.

Explainable AI (XAI) is the body of practices intended to address this problem. It includes interpretable methods and post-hoc techniques to manage the difficulties around explaining and understanding models. Our profession is still growing its understanding of how XAI will satisfy regulators, auditors, validators, and reviewers, and under what circumstances.

Research Objective

The Actuarial Innovation & Technology Program Steering Committee (AITPSC) is seeking researchers to produce a report that examines the current state and future potential of explainable AI as a means of making AI methods usable in regulated actuarial work, with emphasis on regulatory reporting.

The report should consider:

  • XAI techniques most relevant to actuarial applications: what value each technique provides, what questions it cannot answer, and what audience or purpose it will satisfy.
  • Current in-use examples wherever they can be found, and assess their successfulness, whether in insurance or similarly-regulated fields like banking credit decisions or healthcare.
  • Addressing barriers to XAI
  • Practical inroads available to actuaries to adopt AI.

Proposal Requirements

To facilitate the evaluation of proposals, the following information should be submitted:

  1. Resumes of the researcher(s), including any graduate student(s) expected to participate, indicating how their background, education and experience bear on their qualifications to undertake the research. If more than one researcher is involved, a single individual should be designated as the lead researcher and primary contact. The person submitting the proposal must be authorized to speak on behalf of all the researchers as well as for the firm or institution on whose behalf the proposal is submitted.
  2. An outline of the approach to be used (e.g., literature search, model, etc.), emphasizing issues that require special consideration. Details should be given regarding the techniques to be used, collateral material to be consulted, and possible limitations of the analysis.
  3. A description of the expected deliverables and any supporting data, tools or other resources to be used.
  4. Cost estimates for the research, including computer time, salaries, report preparation, material costs, etc. Such estimates can be in the form of hourly rates, but in such cases, time estimates should also be included. Any guarantees as to total cost should be given and will be considered in the evaluation of the proposal. While cost will be a factor in the evaluation of the proposal, it will not necessarily be the decisive factor.

As a guide for developing project budgets, please review the Historical Project Cost Guide (see Appendix).

Please note that as a policy, the SOA Research Institute generally does not provide funding to cover academic institution overhead expenses.

  1. A schedule for completion of the research, identifying key dates or time frames for research completion and report submissions. The SOA is interested in completing this project in a timely manner. Suggestions in the proposal for ensuring timely delivery, such as fee adjustments, are encouraged.
  2. Other related factors that give evidence of a proposer's capabilities to perform in a superior fashion should be detailed.
  3. The proposal length, not including researcher resumes, should be no more than 5 pages in length.
  4. The proposal should not be written by AI but in the researcher’s own words.
  5. Any use of AI for any purpose in generating the proposal should be fully disclosed.

Selection Process

The SOA will appoint a Project Oversight Group (POG) to oversee the project. The POG is responsible for recommending to the Section Research Committee the proposal to be funded, if any. Input from other knowledgeable individuals also may be sought, but the Section Research Committee will make the final recommendation, subject to Society of Actuaries Research Institute (SOA) leadership approval. An SOA staff research actuary will provide staff actuarial support.

Questions

Any questions regarding this RFP should be directed to research-ait@soa.org with the subject line: Explainable AI and Regulatory Compliance.

Submission of Proposal

Please email your proposal to research-ait@soa.org with the subject: Explainable AI and Regulatory Compliance; proposals must be received no later than November 13, 2026. It is anticipated that all proposers will be informed of the status of their proposal by the end of February 2027.

Conditions

The selection of a proposal is conditioned upon and not considered final until a Letter of Agreement is executed by both the Society of Actuaries Research Institute and the researcher.

The Society of Actuaries Research Institute reserves the right to not award a contract for this research. Reasons for not awarding a contract could include, but are not limited to, a lack of acceptable proposals or a finding that insufficient funds are available. The Society of Actuaries Research Institute also reserves the right to redirect the project as is deemed advisable.

The Society of Actuaries Research Institute plans to hold the copyright to the research and to publish the results with appropriate credit given to the researcher(s).

The Society of Actuaries Research Institute may choose to seek public exposure or media attention for the research. By submitting a proposal, you agree to cooperate with the [Society of Actuaries/sponsoring entity] in publicizing or promoting the research and responding to media requests.

The Society of Actuaries may also choose to market and promote research to members, candidates and other interested parties. You agree to perform promotional communication requested by the Society of Actuaries, which may include, but is not limited to, leading a webcast on the research, presenting the research at an SOA meeting, and/or writing an article on the research for an SOA newsletter.

Conflict of Interest

You agree to disclose any of your material business, financial and organizational interests and affiliations which are or may be construed to be reasonably related to the interest, activities and programs of the Society of Actuaries or the Society of Actuaries Research Institute.

Appendix

The cost ranges below are intended as a guide for budgeting project costs for proposals in response to SOA Research Institute Request for Proposals (RFP). Please note these figures span the 33rd to 66th percentiles for all projects as well as projects that involve a specific approach (lit review, survey, etc.). They are based on historical costs over several recent years. Expected costs for some RFPs may fall outside these ranges depending on the nature of the work and resources required for completion.

All Contracted Projects

This category includes all contracted projects that the Institute has undertaken within the last several years. The 33rd – 66th percentile project costs range is $25,000 – $50,000.

Literature Reviews

This category includes projects that involved only a literature review or the cost for the portion of a larger project that included a literature review. The 33rd – 66th percentile project costs range is $15,000 – $20,000.

Surveys

This category includes all projects that had a survey as their primary component. The 33rd-66th percentile project costs range is $28,000 – $55,000.