High-tech innovation in the insurance sector poses risks to consumers and creates novel challenges for regulators, according to a new report from the U.S. Government Accountability Office (GAO).

The GAO examined the development of so-called “insurtech,” such as insurers using social media data to help analyze policyholder risk, and relying on artificial intelligence (AI) to automate information gathering and risk assessment, enabling firms to cut costs.

The GAO found that these innovations create issues for both consumers and industry regulators.

For instance, the use of AI can make it harder to ensure that discriminatory factors, such as race, are not being used to determine premiums, it said.

“Models are often developed by data scientists who, unlike actuaries, may not fully understand insurance-specific requirements,” it noted.

Additionally, the GAO said that “how insurers collect and use consumer data raises questions about data accuracy, privacy, and ownership.”

Insurance regulators have launched a number of initiatives to address these emerging issues, but, the report noted, “Because many of these regulatory initiatives are still in development (or recently developed), the effect on innovation and consumer protection is unknown.”