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. Creates no compliance obligations.
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, AI systems program, adverse consumer outcome, predictive model, and third party. The definition of adverse consumer outcome is notably broad — it covers both decisions that violate insurance regulatory standards and any claim denial determined by use of an AI system, regardless of whether the denial itself violates a standard.
(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.
Subsection (a) establishes Department of Insurance oversight authority over insurers' use of AI systems in adverse consumer determinations and creates a broad regulatory inspection power. Insurers must comply with Department requests for information and documentation covering AI governance, risk management, third-party AI diligence, and AI systems program compliance. This is a responsive obligation — the insurer must produce documentation on request, but no proactive filing schedule is specified in this section.
Subsection (b) contains the Act's two core substantive prohibitions: (1) an insurer may not issue an adverse consumer outcome regarding denial, reduction, or termination of insurance plans or benefits that results solely from the use of an AI system or predictive model, and (2) any AI-informed decision-making process concerning such denials, reductions, or terminations must be meaningfully reviewed by an individual with authority to override the AI system, under review procedures to be established by 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.
Authorizes — but does not require — the Department of Insurance to adopt rules establishing standards for full and fair disclosure of an insurer's use of AI systems, including the manner, content, and required disclosures. Because this is a permissive grant of rulemaking authority rather than a direct operative obligation on insurers, it creates no immediate compliance duty. The actual disclosure obligations will depend on rules the Department may or may not adopt.
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.
A general compliance provision confirming that all insurers authorized to do business in Illinois must comply with the Act regarding any consumer-affecting decisions made or supported by AI systems, machine learning, or other advanced analytical and computational technologies. Also restates the existing requirement that insurers comply with all applicable insurance laws, including unfair trade practices and unfair discrimination laws. This section does not create new obligations beyond those in other sections of the Act — it is a restatement and clarification of scope.
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 power, to implement and administer the Act. This is a standard rulemaking delegation and creates no direct compliance obligation on insurers.
To provide for the expeditious and timely implementation of 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, emergency rules implementing 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 may be adopted in accordance with Section 5-45 by the Department of Insurance. The adoption of emergency rules authorized by Section 5-45 and this Section is deemed to be necessary for the public interest, safety, and welfare. This Section is repealed one year after the effective date of this amendatory Act of the 104th General Assembly.
Amends the Illinois Administrative Procedure Act to add Section 5-45.65, which deems emergency rules implementing the Artificial Intelligence Systems Use in Health Insurance Act to be necessary for public interest, safety, and welfare. This is a conforming change that facilitates the Department's emergency rulemaking authority and includes a self-repeal provision one year after the effective date of the amendatory Act. No insurer compliance obligation is created.