illumend Calls for Comprehensive AI Approach to Certificate of Insurance Compliance

illumend, an AI-powered third-party insurance compliance platform, is advocating for a more comprehensive approach to evaluating Certificates of Insurance (COIs) to ensure robust third-party risk management. According to Kristen Nunery, the CEO of illumend and founder of myCOI, grounded AI alone is insufficient for reliable COI compliance. Instead, she emphasizes the need for AI systems that can reason across connected documents, produce traceable decisions, and preserve human oversight.

Nunery argues that while grounding AI in an organization's specific insurance requirements is essential, it only addresses half the problem. AI systems must also connect information across contracts, certificates of insurance, endorsements, schedules, amendments, and exceptions to evaluate the complete body of evidence. Accurate document extraction, while necessary, does not guarantee an accurate compliance decision because compliance depends on the relationships among requirements and supporting documents.

To ensure reliable COI compliance, Nunery recommends that organizations measure both false passes and false failures. A false pass occurs when a vendor is deemed compliant despite missing critical coverage, while a false failure arises when a system incorrectly flags a vendor as non-compliant. Both types of errors can have significant consequences, either leaving the organization exposed to risk or creating unnecessary work.

illumend's platform, which is backed by myCOI's institutional data foundation, evaluates submitted evidence against defined requirements. During onboarding, the platform configures each organization's insurance requirements based on standards derived from their contracts and leases. The system then evaluates the evidence, reviews endorsements, identifies specific deficiencies, manages renewals, and documents the reasoning behind each determination. A person must approve the final decision before a third party is declared compliant.

Nunery stresses that every AI-supported compliance determination should be traceable, explainable, and subject to human approval. This ensures that the decision can withstand an audit, dispute, or claim. The platform maintains a detailed record of the applicable requirement, the documents evaluated, the deficiencies identified, and the reasoning supporting each determination. This record helps organizations reconstruct how a decision was made during an audit, contractual dispute, or claim.

To implement a grounded AI system effectively, organizations should first document their insurance requirements, including differences by vendor type, project, division, and jurisdiction. They should also identify required endorsements and approved exceptions. During onboarding, illumend configures each organization's requirements so the platform evaluates evidence against its actual standards rather than assumptions generated by an AI model.

Nunery recommends that businesses ask seven key questions when evaluating grounded AI compliance vendors: 1. Who defines "compliant" in the system? 2. Are requirements configured before the system operates at scale? 3. Does the system connect certificates with contracts, endorsements, and schedules? 4. Can it distinguish missing evidence from deficient coverage? 5. Is every determination supported by documented reasoning? 6. Does a person approve the decision before a vendor is declared compliant? 7. Which capabilities are available today rather than planned for the future?

By focusing on these aspects, organizations can ensure that their AI systems provide reliable and defensible COI compliance decisions.illumend's approach aims to bridge the gap between accurate document extraction and comprehensive compliance analysis, providing a more robust solution for managing third-party insurance risks.