bill requiring disclosure when AI denies an insurance claim

The text as introduced · 235 words

89R16182 SCR-D

By: Garcia Hernandez
H.B. No. 4635

A BILL TO BE ENTITLED

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.