ClauseLens: Clause-Grounded, CVaR-Constrained Reinforcement Learning for Trustworthy Reinsurance Pricing
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Abstract (arXiv)
Reinsurance treaty pricing must satisfy stringent regulatory standards, yet current quoting practices remain opaque and difficult to audit. We introduce ClauseLens, a clause-grounded reinforcement learning framework that produces transparent, regulation-compliant, and risk-aware treaty quotes. ClauseLens models the quoting task as a Risk-Aware Constrained Markov Decision Process (RA-CMDP). Statutory and policy clauses are retrieved from legal and underwriting corpora, embedded into the agent's observations, and used both to constrain feasible actions and to generate clause-grounded natural language justifications. Evaluated in a multi-agent treaty simulator calibrated to industry data, ClauseLens reduces solvency violations by 51%, improves tail-risk performance by 27.9% (CVaR_0.10), and achieves 88.2% accuracy in clause-grounded explanations with retrieval precision of 87.4% and recall of 91.1%. These findings demonstrate that embedding legal context into both decision and explanation pathways yields interpretable, auditable, and regulation-aligned quoting behavior consistent with Solvency II, NAIC RBC, and the EU AI Act.
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References · 12
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- 2021When Does Pretraining Help? Assessing Self-Supervised Learning for Law and the CaseHOLD Datasetcited by 199
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- 2022Retrieval-Augmented Reinforcement Learningcited by 53
- 2025Dynamic Reinsurance Treaty Bidding via Multi-Agent Reinforcement Learningcited by 1
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