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California Senate Bill SB1229

California 2023-2024 Regular Session

California Senate Bill SB1229 Compare Versions

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1-Amended IN Senate April 17, 2024 CALIFORNIA LEGISLATURE 20232024 REGULAR SESSION Senate Bill No. 1229Introduced by Senator NguyenFebruary 15, 2024An act to add and repeal Chapter 4 (commencing with Section 12130) to of Part 4 of Division 2 of the Insurance Code, relating to insurance, and declaring the urgency thereof, to take effect immediately.LEGISLATIVE COUNSEL'S DIGESTSB 1229, as amended, Nguyen. Insurance disclosures.Existing law generally regulates the rules governing insurance and insurance contracts. Existing law sets minimum standards of training, experience, skill, and compensation for claims reviewers and adjusters in specified insurance fields.This bill would would, until January 1, 2030, require a property and casualty insurer to disclose to an applicant or insured when it has used if it uses artificial intelligence intelligence, as defined, to make decisions on, or make decisions that affect, applications and claims review, as specified.This bill would declare that it is to take effect immediately as an urgency statute.Digest Key Vote: 2/3 Appropriation: NO Fiscal Committee: YES Local Program: NO Bill TextThe people of the State of California do enact as follows:SECTION 1. Chapter 4 (commencing with Section 12130) is added to Part 4 of Division 2 of the Insurance Code, to read: CHAPTER 4. Use of Artificial Intelligence12130. (a) A property and casualty insurer shall disclose to an applicant or insured when it has used if it uses artificial intelligence to make decisions on, or make decisions that affect, either of the following:(a)(1) Applications for residential property insurance or automobile insurance.(b)(2) Claims review or other coverage of losses.(b) A property and casualty insurer shall provide this disclosure at the time of application for coverage or once annually in a property and casualty insurers annual disclosures.(c) For purposes of this section, the following definitions apply:(1) (A) Artificial intelligence (AI) refers to 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. This definition considers machine learning to be a subset of artificial intelligence.(B) AI includes an AI system, generative artificial intelligence, and machine learning when used by insurers to make decisions regarding consumer applications or claims.(2) AI system is a machine-based system that can, for a given set of objectives, generate outputs, such as predictions, recommendations, or content, such as text, images, videos, or sounds, or other output-influencing decisions made in real or virtual environments. AI systems are designed to operate with varying levels of autonomy.(3) Generative artificial intelligence refers to a class of AI systems that generate content in the form of data, text, images, sounds, or video that is similar to, but not a direct copy of, preexisting data or content.(4) Machine learning refers to a field within AI that focuses on the ability of computers to learn from provided data without being explicitly programmed.12131. This chapter shall become inoperative on January 1, 2030, and as of that date is repealed.SEC. 2. This act is an urgency statute necessary for the immediate preservation of the public peace, health, or safety within the meaning of Article IV of the California Constitution and shall go into immediate effect. The facts constituting the necessity are:Artificial intelligence (AI) is a rapidly developing technology for which many consumers are unaware of the potential impacts upon decisions affecting their everyday lives and purchasing decisions. To ensure consumers receive information about the use of AI in applications and claims decisions as soon as possible, it is necessary for this act to take effect immediately.
1+CALIFORNIA LEGISLATURE 20232024 REGULAR SESSION Senate Bill No. 1229Introduced by Senator NguyenFebruary 15, 2024 An act to add Chapter 4 (commencing with Section 12130) to Part 4 of Division 2 of the Insurance Code, relating to insurance, and declaring the urgency thereof, to take effect immediately.LEGISLATIVE COUNSEL'S DIGESTSB 1229, as introduced, Nguyen. Insurance disclosures.Existing law generally regulates the rules governing insurance and insurance contracts. Existing law sets minimum standards of training, experience, skill, and compensation for claims reviewers and adjusters in specified insurance fields.This bill would require a property and casualty insurer to disclose to an applicant or insured when it has used artificial intelligence to make decisions on, or make decisions that affect, applications and claims review, as specified.This bill would declare that it is to take effect immediately as an urgency statute.Digest Key Vote: 2/3 Appropriation: NO Fiscal Committee: YES Local Program: NO Bill TextThe people of the State of California do enact as follows:SECTION 1. Chapter 4 (commencing with Section 12130) is added to Part 4 of Division 2 of the Insurance Code, to read: CHAPTER 4. Use of Artificial Intelligence12130. A property and casualty insurer shall disclose to an applicant or insured when it has used artificial intelligence to make decisions on, or make decisions that affect, either of the following:(a) Applications for residential property insurance or automobile insurance.(b) Claims review or other coverage of losses.SEC. 2. This act is an urgency statute necessary for the immediate preservation of the public peace, health, or safety within the meaning of Article IV of the California Constitution and shall go into immediate effect. The facts constituting the necessity are:Artificial intelligence (AI) is a rapidly developing technology for which many consumers are unaware of the potential impacts upon decisions affecting their everyday lives and purchasing decisions. To ensure consumers receive information about the use of AI in applications and claims decisions as soon as possible, it is necessary for this act to take effect immediately.
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3- Amended IN Senate April 17, 2024 CALIFORNIA LEGISLATURE 20232024 REGULAR SESSION Senate Bill No. 1229Introduced by Senator NguyenFebruary 15, 2024An act to add and repeal Chapter 4 (commencing with Section 12130) to of Part 4 of Division 2 of the Insurance Code, relating to insurance, and declaring the urgency thereof, to take effect immediately.LEGISLATIVE COUNSEL'S DIGESTSB 1229, as amended, Nguyen. Insurance disclosures.Existing law generally regulates the rules governing insurance and insurance contracts. Existing law sets minimum standards of training, experience, skill, and compensation for claims reviewers and adjusters in specified insurance fields.This bill would would, until January 1, 2030, require a property and casualty insurer to disclose to an applicant or insured when it has used if it uses artificial intelligence intelligence, as defined, to make decisions on, or make decisions that affect, applications and claims review, as specified.This bill would declare that it is to take effect immediately as an urgency statute.Digest Key Vote: 2/3 Appropriation: NO Fiscal Committee: YES Local Program: NO
3+ CALIFORNIA LEGISLATURE 20232024 REGULAR SESSION Senate Bill No. 1229Introduced by Senator NguyenFebruary 15, 2024 An act to add Chapter 4 (commencing with Section 12130) to Part 4 of Division 2 of the Insurance Code, relating to insurance, and declaring the urgency thereof, to take effect immediately.LEGISLATIVE COUNSEL'S DIGESTSB 1229, as introduced, Nguyen. Insurance disclosures.Existing law generally regulates the rules governing insurance and insurance contracts. Existing law sets minimum standards of training, experience, skill, and compensation for claims reviewers and adjusters in specified insurance fields.This bill would require a property and casualty insurer to disclose to an applicant or insured when it has used artificial intelligence to make decisions on, or make decisions that affect, applications and claims review, as specified.This bill would declare that it is to take effect immediately as an urgency statute.Digest Key Vote: 2/3 Appropriation: NO Fiscal Committee: YES Local Program: NO
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5- Amended IN Senate April 17, 2024
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7-Amended IN Senate April 17, 2024
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99 CALIFORNIA LEGISLATURE 20232024 REGULAR SESSION
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1111 Senate Bill
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1313 No. 1229
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1515 Introduced by Senator NguyenFebruary 15, 2024
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1717 Introduced by Senator Nguyen
1818 February 15, 2024
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20-An act to add and repeal Chapter 4 (commencing with Section 12130) to of Part 4 of Division 2 of the Insurance Code, relating to insurance, and declaring the urgency thereof, to take effect immediately.
20+ An act to add Chapter 4 (commencing with Section 12130) to Part 4 of Division 2 of the Insurance Code, relating to insurance, and declaring the urgency thereof, to take effect immediately.
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2222 LEGISLATIVE COUNSEL'S DIGEST
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2424 ## LEGISLATIVE COUNSEL'S DIGEST
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26-SB 1229, as amended, Nguyen. Insurance disclosures.
26+SB 1229, as introduced, Nguyen. Insurance disclosures.
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28-Existing law generally regulates the rules governing insurance and insurance contracts. Existing law sets minimum standards of training, experience, skill, and compensation for claims reviewers and adjusters in specified insurance fields.This bill would would, until January 1, 2030, require a property and casualty insurer to disclose to an applicant or insured when it has used if it uses artificial intelligence intelligence, as defined, to make decisions on, or make decisions that affect, applications and claims review, as specified.This bill would declare that it is to take effect immediately as an urgency statute.
28+Existing law generally regulates the rules governing insurance and insurance contracts. Existing law sets minimum standards of training, experience, skill, and compensation for claims reviewers and adjusters in specified insurance fields.This bill would require a property and casualty insurer to disclose to an applicant or insured when it has used artificial intelligence to make decisions on, or make decisions that affect, applications and claims review, as specified.This bill would declare that it is to take effect immediately as an urgency statute.
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3030 Existing law generally regulates the rules governing insurance and insurance contracts. Existing law sets minimum standards of training, experience, skill, and compensation for claims reviewers and adjusters in specified insurance fields.
3131
32-This bill would would, until January 1, 2030, require a property and casualty insurer to disclose to an applicant or insured when it has used if it uses artificial intelligence intelligence, as defined, to make decisions on, or make decisions that affect, applications and claims review, as specified.
32+This bill would require a property and casualty insurer to disclose to an applicant or insured when it has used artificial intelligence to make decisions on, or make decisions that affect, applications and claims review, as specified.
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3434 This bill would declare that it is to take effect immediately as an urgency statute.
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3636 ## Digest Key
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3838 ## Bill Text
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40-The people of the State of California do enact as follows:SECTION 1. Chapter 4 (commencing with Section 12130) is added to Part 4 of Division 2 of the Insurance Code, to read: CHAPTER 4. Use of Artificial Intelligence12130. (a) A property and casualty insurer shall disclose to an applicant or insured when it has used if it uses artificial intelligence to make decisions on, or make decisions that affect, either of the following:(a)(1) Applications for residential property insurance or automobile insurance.(b)(2) Claims review or other coverage of losses.(b) A property and casualty insurer shall provide this disclosure at the time of application for coverage or once annually in a property and casualty insurers annual disclosures.(c) For purposes of this section, the following definitions apply:(1) (A) Artificial intelligence (AI) refers to 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. This definition considers machine learning to be a subset of artificial intelligence.(B) AI includes an AI system, generative artificial intelligence, and machine learning when used by insurers to make decisions regarding consumer applications or claims.(2) AI system is a machine-based system that can, for a given set of objectives, generate outputs, such as predictions, recommendations, or content, such as text, images, videos, or sounds, or other output-influencing decisions made in real or virtual environments. AI systems are designed to operate with varying levels of autonomy.(3) Generative artificial intelligence refers to a class of AI systems that generate content in the form of data, text, images, sounds, or video that is similar to, but not a direct copy of, preexisting data or content.(4) Machine learning refers to a field within AI that focuses on the ability of computers to learn from provided data without being explicitly programmed.12131. This chapter shall become inoperative on January 1, 2030, and as of that date is repealed.SEC. 2. This act is an urgency statute necessary for the immediate preservation of the public peace, health, or safety within the meaning of Article IV of the California Constitution and shall go into immediate effect. The facts constituting the necessity are:Artificial intelligence (AI) is a rapidly developing technology for which many consumers are unaware of the potential impacts upon decisions affecting their everyday lives and purchasing decisions. To ensure consumers receive information about the use of AI in applications and claims decisions as soon as possible, it is necessary for this act to take effect immediately.
40+The people of the State of California do enact as follows:SECTION 1. Chapter 4 (commencing with Section 12130) is added to Part 4 of Division 2 of the Insurance Code, to read: CHAPTER 4. Use of Artificial Intelligence12130. A property and casualty insurer shall disclose to an applicant or insured when it has used artificial intelligence to make decisions on, or make decisions that affect, either of the following:(a) Applications for residential property insurance or automobile insurance.(b) Claims review or other coverage of losses.SEC. 2. This act is an urgency statute necessary for the immediate preservation of the public peace, health, or safety within the meaning of Article IV of the California Constitution and shall go into immediate effect. The facts constituting the necessity are:Artificial intelligence (AI) is a rapidly developing technology for which many consumers are unaware of the potential impacts upon decisions affecting their everyday lives and purchasing decisions. To ensure consumers receive information about the use of AI in applications and claims decisions as soon as possible, it is necessary for this act to take effect immediately.
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4242 The people of the State of California do enact as follows:
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4444 ## The people of the State of California do enact as follows:
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46-SECTION 1. Chapter 4 (commencing with Section 12130) is added to Part 4 of Division 2 of the Insurance Code, to read: CHAPTER 4. Use of Artificial Intelligence12130. (a) A property and casualty insurer shall disclose to an applicant or insured when it has used if it uses artificial intelligence to make decisions on, or make decisions that affect, either of the following:(a)(1) Applications for residential property insurance or automobile insurance.(b)(2) Claims review or other coverage of losses.(b) A property and casualty insurer shall provide this disclosure at the time of application for coverage or once annually in a property and casualty insurers annual disclosures.(c) For purposes of this section, the following definitions apply:(1) (A) Artificial intelligence (AI) refers to 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. This definition considers machine learning to be a subset of artificial intelligence.(B) AI includes an AI system, generative artificial intelligence, and machine learning when used by insurers to make decisions regarding consumer applications or claims.(2) AI system is a machine-based system that can, for a given set of objectives, generate outputs, such as predictions, recommendations, or content, such as text, images, videos, or sounds, or other output-influencing decisions made in real or virtual environments. AI systems are designed to operate with varying levels of autonomy.(3) Generative artificial intelligence refers to a class of AI systems that generate content in the form of data, text, images, sounds, or video that is similar to, but not a direct copy of, preexisting data or content.(4) Machine learning refers to a field within AI that focuses on the ability of computers to learn from provided data without being explicitly programmed.12131. This chapter shall become inoperative on January 1, 2030, and as of that date is repealed.
46+SECTION 1. Chapter 4 (commencing with Section 12130) is added to Part 4 of Division 2 of the Insurance Code, to read: CHAPTER 4. Use of Artificial Intelligence12130. A property and casualty insurer shall disclose to an applicant or insured when it has used artificial intelligence to make decisions on, or make decisions that affect, either of the following:(a) Applications for residential property insurance or automobile insurance.(b) Claims review or other coverage of losses.
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4848 SECTION 1. Chapter 4 (commencing with Section 12130) is added to Part 4 of Division 2 of the Insurance Code, to read:
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5050 ### SECTION 1.
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52- CHAPTER 4. Use of Artificial Intelligence12130. (a) A property and casualty insurer shall disclose to an applicant or insured when it has used if it uses artificial intelligence to make decisions on, or make decisions that affect, either of the following:(a)(1) Applications for residential property insurance or automobile insurance.(b)(2) Claims review or other coverage of losses.(b) A property and casualty insurer shall provide this disclosure at the time of application for coverage or once annually in a property and casualty insurers annual disclosures.(c) For purposes of this section, the following definitions apply:(1) (A) Artificial intelligence (AI) refers to 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. This definition considers machine learning to be a subset of artificial intelligence.(B) AI includes an AI system, generative artificial intelligence, and machine learning when used by insurers to make decisions regarding consumer applications or claims.(2) AI system is a machine-based system that can, for a given set of objectives, generate outputs, such as predictions, recommendations, or content, such as text, images, videos, or sounds, or other output-influencing decisions made in real or virtual environments. AI systems are designed to operate with varying levels of autonomy.(3) Generative artificial intelligence refers to a class of AI systems that generate content in the form of data, text, images, sounds, or video that is similar to, but not a direct copy of, preexisting data or content.(4) Machine learning refers to a field within AI that focuses on the ability of computers to learn from provided data without being explicitly programmed.12131. This chapter shall become inoperative on January 1, 2030, and as of that date is repealed.
52+ CHAPTER 4. Use of Artificial Intelligence12130. A property and casualty insurer shall disclose to an applicant or insured when it has used artificial intelligence to make decisions on, or make decisions that affect, either of the following:(a) Applications for residential property insurance or automobile insurance.(b) Claims review or other coverage of losses.
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54- CHAPTER 4. Use of Artificial Intelligence12130. (a) A property and casualty insurer shall disclose to an applicant or insured when it has used if it uses artificial intelligence to make decisions on, or make decisions that affect, either of the following:(a)(1) Applications for residential property insurance or automobile insurance.(b)(2) Claims review or other coverage of losses.(b) A property and casualty insurer shall provide this disclosure at the time of application for coverage or once annually in a property and casualty insurers annual disclosures.(c) For purposes of this section, the following definitions apply:(1) (A) Artificial intelligence (AI) refers to 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. This definition considers machine learning to be a subset of artificial intelligence.(B) AI includes an AI system, generative artificial intelligence, and machine learning when used by insurers to make decisions regarding consumer applications or claims.(2) AI system is a machine-based system that can, for a given set of objectives, generate outputs, such as predictions, recommendations, or content, such as text, images, videos, or sounds, or other output-influencing decisions made in real or virtual environments. AI systems are designed to operate with varying levels of autonomy.(3) Generative artificial intelligence refers to a class of AI systems that generate content in the form of data, text, images, sounds, or video that is similar to, but not a direct copy of, preexisting data or content.(4) Machine learning refers to a field within AI that focuses on the ability of computers to learn from provided data without being explicitly programmed.12131. This chapter shall become inoperative on January 1, 2030, and as of that date is repealed.
54+ CHAPTER 4. Use of Artificial Intelligence12130. A property and casualty insurer shall disclose to an applicant or insured when it has used artificial intelligence to make decisions on, or make decisions that affect, either of the following:(a) Applications for residential property insurance or automobile insurance.(b) Claims review or other coverage of losses.
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5656 CHAPTER 4. Use of Artificial Intelligence
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5858 CHAPTER 4. Use of Artificial Intelligence
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60-12130. (a) A property and casualty insurer shall disclose to an applicant or insured when it has used if it uses artificial intelligence to make decisions on, or make decisions that affect, either of the following:(a)(1) Applications for residential property insurance or automobile insurance.(b)(2) Claims review or other coverage of losses.(b) A property and casualty insurer shall provide this disclosure at the time of application for coverage or once annually in a property and casualty insurers annual disclosures.(c) For purposes of this section, the following definitions apply:(1) (A) Artificial intelligence (AI) refers to 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. This definition considers machine learning to be a subset of artificial intelligence.(B) AI includes an AI system, generative artificial intelligence, and machine learning when used by insurers to make decisions regarding consumer applications or claims.(2) AI system is a machine-based system that can, for a given set of objectives, generate outputs, such as predictions, recommendations, or content, such as text, images, videos, or sounds, or other output-influencing decisions made in real or virtual environments. AI systems are designed to operate with varying levels of autonomy.(3) Generative artificial intelligence refers to a class of AI systems that generate content in the form of data, text, images, sounds, or video that is similar to, but not a direct copy of, preexisting data or content.(4) Machine learning refers to a field within AI that focuses on the ability of computers to learn from provided data without being explicitly programmed.
60+12130. A property and casualty insurer shall disclose to an applicant or insured when it has used artificial intelligence to make decisions on, or make decisions that affect, either of the following:(a) Applications for residential property insurance or automobile insurance.(b) Claims review or other coverage of losses.
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64-12130. (a) A property and casualty insurer shall disclose to an applicant or insured when it has used if it uses artificial intelligence to make decisions on, or make decisions that affect, either of the following:
64+12130. A property and casualty insurer shall disclose to an applicant or insured when it has used artificial intelligence to make decisions on, or make decisions that affect, either of the following:
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66+(a) Applications for residential property insurance or automobile insurance.
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70-(1) Applications for residential property insurance or automobile insurance.
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72-(b)
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76-(2) Claims review or other coverage of losses.
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78-(b) A property and casualty insurer shall provide this disclosure at the time of application for coverage or once annually in a property and casualty insurers annual disclosures.
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80-(c) For purposes of this section, the following definitions apply:
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82-(1) (A) Artificial intelligence (AI) refers to 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. This definition considers machine learning to be a subset of artificial intelligence.
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84-(B) AI includes an AI system, generative artificial intelligence, and machine learning when used by insurers to make decisions regarding consumer applications or claims.
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86-(2) AI system is a machine-based system that can, for a given set of objectives, generate outputs, such as predictions, recommendations, or content, such as text, images, videos, or sounds, or other output-influencing decisions made in real or virtual environments. AI systems are designed to operate with varying levels of autonomy.
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88-(3) Generative artificial intelligence refers to a class of AI systems that generate content in the form of data, text, images, sounds, or video that is similar to, but not a direct copy of, preexisting data or content.
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90-(4) Machine learning refers to a field within AI that focuses on the ability of computers to learn from provided data without being explicitly programmed.
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92-12131. This chapter shall become inoperative on January 1, 2030, and as of that date is repealed.
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96-12131. This chapter shall become inoperative on January 1, 2030, and as of that date is repealed.
68+(b) Claims review or other coverage of losses.
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9870 SEC. 2. This act is an urgency statute necessary for the immediate preservation of the public peace, health, or safety within the meaning of Article IV of the California Constitution and shall go into immediate effect. The facts constituting the necessity are:Artificial intelligence (AI) is a rapidly developing technology for which many consumers are unaware of the potential impacts upon decisions affecting their everyday lives and purchasing decisions. To ensure consumers receive information about the use of AI in applications and claims decisions as soon as possible, it is necessary for this act to take effect immediately.
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10072 SEC. 2. This act is an urgency statute necessary for the immediate preservation of the public peace, health, or safety within the meaning of Article IV of the California Constitution and shall go into immediate effect. The facts constituting the necessity are:Artificial intelligence (AI) is a rapidly developing technology for which many consumers are unaware of the potential impacts upon decisions affecting their everyday lives and purchasing decisions. To ensure consumers receive information about the use of AI in applications and claims decisions as soon as possible, it is necessary for this act to take effect immediately.
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10274 SEC. 2. This act is an urgency statute necessary for the immediate preservation of the public peace, health, or safety within the meaning of Article IV of the California Constitution and shall go into immediate effect. The facts constituting the necessity are:
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10476 ### SEC. 2.
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10678 Artificial intelligence (AI) is a rapidly developing technology for which many consumers are unaware of the potential impacts upon decisions affecting their everyday lives and purchasing decisions. To ensure consumers receive information about the use of AI in applications and claims decisions as soon as possible, it is necessary for this act to take effect immediately.