TITLE: Relating to disclosure of the use of artificial intelligence in the denial of insurance claims.

SUMMARY: Relating to disclosure of the use of artificial intelligence in the denial of insurance claims.

FULL TEXT:
AN ACT relating to disclosure of the use of artificial intelligence in the denial of insurance claims. BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: SECTION 1. Subtitle B, Title 5, Insurance Code, is amended by adding Chapter 526 to read as follows: CHAPTER 526. USE OF ARTIFICIAL INTELLIGENCE Sec. 526.001. DEFINITIONS. In this chapter: (1) "Artificial intelligence" means an engineered or machine-based system that varies in autonomy and may, for explicit or implicit objectives, infer from the input the system receives how to generate outputs that can influence physical or virtual environments. (2) "Health maintenance organization" and "insurer" have the meanings assigned by Section 401.001. Sec. 526.002. DISCLOSURE REQUIRED. An insurer or health maintenance organization that denies a claim based on a determination made by artificial intelligence shall provide to the claimant with notice of the denial a written disclosure containing the following information: (1) a notification that the denial was based on a determination made by artificial intelligence; (2) the basis for the determination made by artificial intelligence; and (3) instructions on appealing the denial with the insurer or health maintenance organization. SECTION 2. Section 526.002, Insurance Code, as added by this Act, applies only to a claim submitted on or after the effective date of this Act. SECTION 3. This Act takes effect September 1, 2025.