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.
(a) 1 An issuer of a health insurance policy or a health maintenance organization that is the issuer of a health benefit plan shall publish on a publicly accessible part of the issuer's Internet website and provide in writing to each insured or enrollee, and to any physician or health care provider contracting with the issuer or providing services to an insured or enrollee, a written disclosure regarding whether the issuer or the issuer's utilization review agent uses artificial intelligence-based algorithms in conducting utilization review.
(b)(1)–(2) 2 An issuer described by Subsection (a) or a utilization review agent for an issuer described by Subsection (a) shall ensure that any artificial intelligence-based algorithm used by the issuer or agent in conducting utilization review and the training data sets the algorithm uses: (1) have minimized the risk of bias based on an individual's race, color, religion, ancestry, age, sex, gender, national origin, or disability; and (2) comply with evidence-based clinical guidelines.
(c)(1)–(5) 3 Not later than December 31 of each year, an issuer described by Subsection (a) or a utilization review agent for an issuer described by Subsection (a) shall submit to the department for review, in the form and manner prescribed by the commissioner, an artificial intelligence compliance statement. The statement must: (1) summarize the function and scope of an artificial intelligence-based algorithm used for utilization review; (2) provide a logic or decision tree of an artificial intelligence-based algorithm used for utilization review; (3) provide a description of each training data set used by an artificial intelligence-based algorithm for utilization review, including the source of the data; (4) attest that the artificial intelligence-based algorithm and the algorithm's training data sets comply with Subsection (b); and (5) describe the issuer's or agent's process for overseeing and validating the artificial intelligence-based algorithm's performance and compliance with Subsection (b).
(d)(1)–(2) 4 If the commissioner has reason to believe that an issuer described by Subsection (a) or utilization review agent for an issuer described by Subsection (a) is not in compliance with this section, the commissioner may require additional documentation or conduct an inspection of: (1) any artificial intelligence-based algorithm used by the issuer or agent in conducting utilization review; and (2) each training data set the artificial intelligence-based algorithm uses.
(e) Information submitted to the department under this section is confidential and not subject to disclosure under Chapter 552, Government Code.
This section creates a new set of obligations for health insurance issuers and health maintenance organizations that use AI-based algorithms in utilization review. The disclosure obligation in subsection (a) is dual-channel: issuers must both publish on a public website and provide written notice to insureds, enrollees, and contracting providers about whether AI is used. Subsection (b) imposes substantive requirements on the algorithms themselves — bias minimization across enumerated protected characteristics and compliance with evidence-based clinical guidelines — extending to the training data sets as well.
Subsection (c) creates an annual regulatory reporting requirement: an artificial intelligence compliance statement submitted to the Texas Department of Insurance by December 31 each year, covering algorithm function, decision logic, training data descriptions, a bias-compliance attestation, and a description of the issuer's oversight and validation process. Subsection (d) authorizes the Commissioner to compel additional documentation or inspect algorithms and training data upon a reasonable belief of noncompliance. Subsection (e) shields all information submitted under this section from public records disclosure.
This Act takes effect September 1, 2025.
This section sets the effective date of the Act as September 1, 2025. Because the bill was left pending in committee and did not advance, this provision is moot.