This type of stuff has been happening for a long time. It just has a new name now. I saw it happen in 2008 at Boeing.

What do you mean? Diversity hiring?

They do understand this. It's typically politically infeasible to set rates appropriately - risk is often correlated with income, which is correlated with skin color. So a concentrated risk in an area makes the whole area uninsurable, unless you want to be called racist.

Less garbage in, less garbage out?

> any employees at a banks or insurance company out there that have had the clever idea to insert themselves into the training data

Yes. Yes I have thought about this. No, I have not done it. ;-)

Frankly, the reward for this is typically very low compared to cost of being caught.

See IJM for an example of groups that work on this. Anecdotally, it is common across the world.

https://en.wikipedia.org/wiki/International_Justice_Mission