WHAT THIS BILL REGULATES · 2 REQUIREMENT TYPES
How Is This Bill Enforced
Verbatim statutory text on the left; plain-language analysis and a per-section checklist on the right. Numbered markers cross-link to the matching checklist row.
This Act may be cited as the Artificial IntelligenceArtificial intelligence"Artificial intelligence" or "AI" means a branch of computer science that uses data processing systems that perform functions normally associated with human intelligence, such as reasoning, learning, and self-improvement, or the capability of a device to perform functions that are normally associated with human intelligence, such as reasoning, learning, and self-improvement. "Artificial intelligence" or "AI" includes machine learning.Section 5 Systems Use in Health Insurance Act.
Establishes the short title of the Act as the Artificial Intelligence Systems Use in Health Insurance Act. No compliance obligations are created by this section.
In this Act: "Adverse consumer outcomeAdverse consumer outcome"Adverse consumer outcome" means a decision by an insurer that is subject to insurance regulatory standards enforced by the Department that adversely impacts the consumer in a manner that violates those standards or any claim denial as determined by the use of an AI System.Section 5" means a decision by an insurer that is subject to insurance regulatory standards enforced by the DepartmentDepartment"Department" means the Department of Insurance.Section 5 that adversely impacts the consumer in a manner that violates those standards or any claim denial as determined by the use of an AI SystemAI system"AI system" means a machine-based system that can, with varying levels of autonomy, for a given set of objectives, generate outputs such as predictions, recommendations, content (such as text, images, videos, or sounds), or other outputs influencing decisions made in real or virtual environments.Section 5. "AI systemAI system"AI system" means a machine-based system that can, with varying levels of autonomy, for a given set of objectives, generate outputs such as predictions, recommendations, content (such as text, images, videos, or sounds), or other outputs influencing decisions made in real or virtual environments.Section 5" means a machine-based system that can, with varying levels of autonomy, for a given set of objectives, generate outputs such as predictions, recommendations, content (such as text, images, videos, or sounds), or other outputs influencing decisions made in real or virtual environments. "AI systems programAI systems program"AI systems program" means a written program for the responsible use of AI systems that makes or supports decisions related to regulated insurance practices to be developed, implemented, and maintained by all insurers authorized to do business in the State.Section 5" means a written program for the responsible use of AI systemsAI system"AI system" means a machine-based system that can, with varying levels of autonomy, for a given set of objectives, generate outputs such as predictions, recommendations, content (such as text, images, videos, or sounds), or other outputs influencing decisions made in real or virtual environments.Section 5 that makes or supports decisions related to regulated insurance practices to be developed, implemented, and maintained by all insurers authorized to do business in the State. "AlgorithmAlgorithm"Algorithm" means a clearly specified mathematical process for computation and a set of rules that, if followed, will give a prescribed result.Section 5" means a clearly specified mathematical process for computation and a set of rules that, if followed, will give a prescribed result. "Artificial intelligenceArtificial intelligence"Artificial intelligence" or "AI" means a branch of computer science that uses data processing systems that perform functions normally associated with human intelligence, such as reasoning, learning, and self-improvement, or the capability of a device to perform functions that are normally associated with human intelligence, such as reasoning, learning, and self-improvement. "Artificial intelligence" or "AI" includes machine learning.Section 5" or "AI" means a branch of computer science that uses data processing systems that perform functions normally associated with human intelligence, such as reasoning, learning, and self-improvement, or the capability of a device to perform functions that are normally associated with human intelligence, such as reasoning, learning, and self-improvement. "Artificial intelligenceArtificial intelligence"Artificial intelligence" or "AI" means a branch of computer science that uses data processing systems that perform functions normally associated with human intelligence, such as reasoning, learning, and self-improvement, or the capability of a device to perform functions that are normally associated with human intelligence, such as reasoning, learning, and self-improvement. "Artificial intelligence" or "AI" includes machine learning.Section 5" or "AI" includes machine learningMachine learning"Machine learning" means a field within artificial intelligence that focuses on the ability of computers to learn from provided data without being explicitly programmed.Section 5. "DepartmentDepartment"Department" means the Department of Insurance.Section 5" means the Department of Insurance. "Machine learningMachine learning"Machine learning" means a field within artificial intelligence that focuses on the ability of computers to learn from provided data without being explicitly programmed.Section 5" means a field within artificial intelligenceArtificial intelligence"Artificial intelligence" or "AI" means a branch of computer science that uses data processing systems that perform functions normally associated with human intelligence, such as reasoning, learning, and self-improvement, or the capability of a device to perform functions that are normally associated with human intelligence, such as reasoning, learning, and self-improvement. "Artificial intelligence" or "AI" includes machine learning.Section 5 that focuses on the ability of computers to learn from provided data without being explicitly programmed. "Predictive modelPredictive model"Predictive model" means the processing of historic data using algorithms or machine learning to identify patterns and predict outcomes that can be used to make decisions or support decision-making.Section 5" means the processing of historic data using algorithmsAlgorithm"Algorithm" means a clearly specified mathematical process for computation and a set of rules that, if followed, will give a prescribed result.Section 5 or machine learningMachine learning"Machine learning" means a field within artificial intelligence that focuses on the ability of computers to learn from provided data without being explicitly programmed.Section 5 to identify patterns and predict outcomes that can be used to make decisions or support decision-making. "Third partyThird party"Third party" means an organization other than the insurer that provides services, data, or other resources related to AI.Section 5" means an organization other than the insurer that provides services, data, or other resources related to AI.
Defines the key terms used throughout the Act, including AI system, predictive model, adverse consumer outcome, and AI systems program. The AI system definition is broad and functional, encompassing any machine-based system generating outputs that influence decisions. The adverse consumer outcome definition is tied to both regulatory-standard violations and any claim denial determined by an AI system, creating a relatively expansive trigger for the Act's substantive prohibitions.
(a) 1 The DepartmentDepartment"Department" means the Department of Insurance.Section 5's regulatory oversight of insurers includes oversight of an insurer's use of AI systemsAI system"AI system" means a machine-based system that can, with varying levels of autonomy, for a given set of objectives, generate outputs such as predictions, recommendations, content (such as text, images, videos, or sounds), or other outputs influencing decisions made in real or virtual environments.Section 5 to make or support adverse determinations that affect consumers. Any insurer authorized to operate in the State is subject to review by the DepartmentDepartment"Department" means the Department of Insurance.Section 5 in an investigation or market conduct action regarding the development, implementation, and use of AI systemsAI system"AI system" means a machine-based system that can, with varying levels of autonomy, for a given set of objectives, generate outputs such as predictions, recommendations, content (such as text, images, videos, or sounds), or other outputs influencing decisions made in real or virtual environments.Section 5 or predictive modelsPredictive model"Predictive model" means the processing of historic data using algorithms or machine learning to identify patterns and predict outcomes that can be used to make decisions or support decision-making.Section 5 and the outcomes from the use of those AI systemsAI system"AI system" means a machine-based system that can, with varying levels of autonomy, for a given set of objectives, generate outputs such as predictions, recommendations, content (such as text, images, videos, or sounds), or other outputs influencing decisions made in real or virtual environments.Section 5 or predictive modelsPredictive model"Predictive model" means the processing of historic data using algorithms or machine learning to identify patterns and predict outcomes that can be used to make decisions or support decision-making.Section 5. The DepartmentDepartment"Department" means the Department of Insurance.Section 5 may also request other information or documentation relevant to an investigation or market conduct action, and an insurer must comply with that request. The DepartmentDepartment"Department" means the Department of Insurance.Section 5's inquiries may include, but are not limited to, questions regarding any specific model, AI systemAI system"AI system" means a machine-based system that can, with varying levels of autonomy, for a given set of objectives, generate outputs such as predictions, recommendations, content (such as text, images, videos, or sounds), or other outputs influencing decisions made in real or virtual environments.Section 5, or application of a model or AI systemAI system"AI system" means a machine-based system that can, with varying levels of autonomy, for a given set of objectives, generate outputs such as predictions, recommendations, content (such as text, images, videos, or sounds), or other outputs influencing decisions made in real or virtual environments.Section 5. The DepartmentDepartment"Department" means the Department of Insurance.Section 5 may also make requests for information and documentation relating to AI systemsAI system"AI system" means a machine-based system that can, with varying levels of autonomy, for a given set of objectives, generate outputs such as predictions, recommendations, content (such as text, images, videos, or sounds), or other outputs influencing decisions made in real or virtual environments.Section 5 governance, risk management, and use protocols; information and documentation relating to the insurer's preacquisition and preutilization diligence, monitoring, and auditing of data or AI systemsAI system"AI system" means a machine-based system that can, with varying levels of autonomy, for a given set of objectives, generate outputs such as predictions, recommendations, content (such as text, images, videos, or sounds), or other outputs influencing decisions made in real or virtual environments.Section 5 developed by a third partyThird party"Third party" means an organization other than the insurer that provides services, data, or other resources related to AI.Section 5; and information and documentation relating to implementation and compliance with the insurer's AI systems programAI systems program"AI systems program" means a written program for the responsible use of AI systems that makes or supports decisions related to regulated insurance practices to be developed, implemented, and maintained by all insurers authorized to do business in the State.Section 5.
(b) 2 An insurer authorized to do business in this State shall not issue an adverse consumer outcomeAdverse consumer outcome"Adverse consumer outcome" means a decision by an insurer that is subject to insurance regulatory standards enforced by the Department that adversely impacts the consumer in a manner that violates those standards or any claim denial as determined by the use of an AI System.Section 5 with regard to the denial, reduction, or termination of insurance plans or benefits that result solely from the use or application of any AI systemAI system"AI system" means a machine-based system that can, with varying levels of autonomy, for a given set of objectives, generate outputs such as predictions, recommendations, content (such as text, images, videos, or sounds), or other outputs influencing decisions made in real or virtual environments.Section 5 or predictive modelPredictive model"Predictive model" means the processing of historic data using algorithms or machine learning to identify patterns and predict outcomes that can be used to make decisions or support decision-making.Section 5. Any decision-making process concerning the denial, reduction, or termination of insurance plans or benefits that results from the use of AI systemsAI system"AI system" means a machine-based system that can, with varying levels of autonomy, for a given set of objectives, generate outputs such as predictions, recommendations, content (such as text, images, videos, or sounds), or other outputs influencing decisions made in real or virtual environments.Section 5 or predictive modelsPredictive model"Predictive model" means the processing of historic data using algorithms or machine learning to identify patterns and predict outcomes that can be used to make decisions or support decision-making.Section 5 shall be meaningfully reviewed, in accordance with review procedures established by DepartmentDepartment"Department" means the Department of Insurance.Section 5 rules, by an individual with authority to override the AI systemsAI system"AI system" means a machine-based system that can, with varying levels of autonomy, for a given set of objectives, generate outputs such as predictions, recommendations, content (such as text, images, videos, or sounds), or other outputs influencing decisions made in real or virtual environments.Section 5 and their determinations.
This section is the operative core of the Act. Subsection (a) establishes the Department of Insurance's regulatory authority over insurers' use of AI systems in adverse consumer determinations and requires insurers to comply with Department information requests during investigations and market conduct actions. The Department may request documentation on AI governance, risk management, third-party diligence, and AI systems program compliance.
Subsection (b) creates the Act's two substantive prohibitions: first, insurers may not issue an adverse consumer outcome regarding denial, reduction, or termination of insurance plans or benefits based solely on AI or predictive model output; second, any AI-informed decision on coverage denial, reduction, or termination must be meaningfully reviewed by a human with authority to override the AI system's determination, in accordance with Department rules.
3 The Department of Insurance may adopt rules that include standards for the full and fair disclosure of an insurer's use of AI systemsAI system"AI system" means a machine-based system that can, with varying levels of autonomy, for a given set of objectives, generate outputs such as predictions, recommendations, content (such as text, images, videos, or sounds), or other outputs influencing decisions made in real or virtual environments.Section 5 that set forth the manner, content, and required disclosures.
Grants the Department of Insurance permissive rulemaking authority to adopt standards for the full and fair disclosure of insurers' use of AI systems, including the manner, content, and required disclosures. This is a delegation of future regulatory authority rather than an operative disclosure obligation on insurers — no specific disclosure duty takes effect until rules are adopted.
All insurers authorized to do business in Illinois shall comply with this Act regarding any decisions impacting consumers that are made or supported by advanced analytical and computational technologies, including AI systemsAI system"AI system" means a machine-based system that can, with varying levels of autonomy, for a given set of objectives, generate outputs such as predictions, recommendations, content (such as text, images, videos, or sounds), or other outputs influencing decisions made in real or virtual environments.Section 5 and machine learningMachine learning"Machine learning" means a field within artificial intelligence that focuses on the ability of computers to learn from provided data without being explicitly programmed.Section 5, and must comply with all applicable insurance laws and regulations, including laws addressing unfair trade practices and unfair discrimination. All decisions made and actions taken by authorized insurers using AI systemsAI system"AI system" means a machine-based system that can, with varying levels of autonomy, for a given set of objectives, generate outputs such as predictions, recommendations, content (such as text, images, videos, or sounds), or other outputs influencing decisions made in real or virtual environments.Section 5 must comply with applicable federal and State laws, regulations, and rules.
Establishes a general compliance mandate: all insurers authorized in Illinois must comply with the Act for any consumer-impacting decisions made or supported by advanced analytical and computational technologies, including AI and machine learning. The section also reaffirms that all existing insurance laws — including unfair trade practices and unfair discrimination prohibitions — apply to AI-driven decisions. This is a scope and savings clause that does not create a new independent obligation beyond those in Sections 10 and 15.
The DepartmentDepartment"Department" means the Department of Insurance.Section 5 may adopt rules, including emergency rules, to implement and administer this Act.
Grants the Department of Insurance general rulemaking authority, including emergency rulemaking authority, to implement and administer the Act. This is a standard administrative delegation provision and creates no independent compliance obligation on insurers.
The Illinois Administrative Procedure Act is amended by adding Section 5-45.65 as follows:
Makes a conforming amendment to the Illinois Administrative Procedure Act by adding Section 5-45.65, enabling the emergency rulemaking authority granted in Section 25. This is a purely procedural provision that creates no substantive obligation.