No. SB 202
Filed under Insurance.
Mandatory Human Reviews of Insurance Claim Denials; Requiring that insurers’ decisions to deny a claim or any portion of a claim be made by qualified human professionals; prohibiting the use of algorithms, artificial intelligence, or machine learning systems as the sole basis for determining whether to adjust or deny a claim; authorizing the Office of Insurance Regulation to conduct market conduct examinations and investigations under certain circumstances, etc.
Plain English Summary
AI-GENERATEDEvery decision by an insurer to deny a claim, or any part of one, must now be made by a qualified human professional -- not an algorithm, artificial intelligence system, or machine learning system.
Before denying a claim, the human reviewer must independently analyze the facts and policy terms, check the accuracy of any AI-generated output, and personally conduct any later review of another professional's decision.
Insurers must keep detailed records of who denied or reviewed each claim, when, and why, and every denial letter sent to a claimant must name that person and confirm AI was not the sole basis for the decision.
The Office of Insurance Regulation may investigate compliance using any method it considers necessary, and the Financial Services Commission may, but is not required to, adopt rules to implement this new law.
AIAn insurer can no longer let a system decide to deny a claim or any part of one; that decision must be made by a qualified human professional already authorized to adjust or deny claims.
AIBefore denying a claim, the human professional must analyze the facts and policy terms independently of any AI, machine learning, or algorithmic system, not simply defer to what such a system concluded.
AIAn algorithm, artificial intelligence system, or machine learning system can inform a claim decision, but it may never be the only thing a denial or adjustment decision rests on.
AIEvery written denial sent to a claimant must clearly name the qualified human professional who made the decision and state that AI was not the sole basis for it.
AIIf a claim denial or adjustment is later reviewed internally, that review must also be conducted by a qualified human professional, not an automated system.
AIInsurers must document the basis for each denial, including any information an algorithm or AI system provided, along with the names and timing of the human decisions involved.
AIThe Office of Insurance Regulation may conduct market conduct examinations and investigations, or use any other method it considers necessary, to verify insurers are following this section.
AIAn insurer that uses AI, machine learning, or an algorithm anywhere in claims handling must explain in its claims-handling manual how those systems are used and how it complies with this section.