WHAT THIS BILL REGULATES · 1 REQUIREMENT TYPE
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.
(1) "Artificial intelligenceArtificial intelligence"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.Ins. Code § 526.001(1)" 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 organizationHealth maintenance organization"Health maintenance organization" and "insurer" have the meanings assigned by Section 401.001.Ins. Code § 526.001(2)" and "insurerInsurer"Health maintenance organization" and "insurer" have the meanings assigned by Section 401.001.Ins. Code § 526.001(2)" have the meanings assigned by Section 401.001.
Section 526.001 establishes the definitional framework for Chapter 526. It defines artificial intelligence broadly as an engineered or machine-based system that varies in autonomy and can infer from inputs how to generate outputs influencing physical or virtual environments — language closely tracking the NIST AI definition. The section cross-references existing Insurance Code Section 401.001 for the meanings of insurer and health maintenance organization, thereby anchoring the bill's obligations to the same regulated entities already subject to Title 5 of the Insurance Code.
1 An insurerInsurer"Health maintenance organization" and "insurer" have the meanings assigned by Section 401.001.Ins. Code § 526.001(2) or health maintenance organizationHealth maintenance organization"Health maintenance organization" and "insurer" have the meanings assigned by Section 401.001.Ins. Code § 526.001(2) that denies a claim based on a determination made by artificial intelligenceArtificial intelligence"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.Ins. Code § 526.001(1) 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 intelligenceArtificial intelligence"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.Ins. Code § 526.001(1); (2) the basis for the determination made by artificial intelligenceArtificial intelligence"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.Ins. Code § 526.001(1); and (3) instructions on appealing the denial with the insurerInsurer"Health maintenance organization" and "insurer" have the meanings assigned by Section 401.001.Ins. Code § 526.001(2) or health maintenance organizationHealth maintenance organization"Health maintenance organization" and "insurer" have the meanings assigned by Section 401.001.Ins. Code § 526.001(2).
Section 526.002 is the bill's sole operative provision. It requires insurers and health maintenance organizations that deny a claim based on an AI determination to provide the claimant, alongside the denial notice, a written disclosure containing three elements: notice that AI was used, the basis for the AI's determination, and instructions for appealing the denial. This maps to healthcare AI disclosure obligations — it ensures claimants are informed when AI drives an adverse coverage decision and have a pathway to challenge it.
The provision is triggered only when the denial is based on a determination made by artificial intelligence, leaving open interpretation questions about partial AI involvement. The bill does not restrict AI use itself or mandate human review — it is purely a disclosure obligation.
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 2 of the Act is a standard applicability provision limiting the disclosure requirement to claims submitted on or after the Act's effective date. It creates no independent compliance obligation.
This Act takes effect September 1, 2025.
Section 3 sets the Act's effective date as September 1, 2025. Because the bill was left pending in committee and did not advance, this date is moot.