Texas House Bill HB4635

Texas 2025 - 89th Regular

• Filed: 3/12/25

Caption

Relating to disclosure of the use of artificial intelligence in the denial of insurance claims.

Impact

The introduction of HB 4635 is significant as it addresses the growing concern of transparency and accountability in the use of AI in the insurance sector. By requiring insurers to provide detailed disclosures about AI-based claim denials, the bill seeks to empower consumers and enhance their understanding of the processes involved in claim evaluations. This is particularly important as AI systems become more prevalent, and there are rising apprehensions about their decision-making quality and potential biases.

Summary

House Bill 4635 aims to establish regulations around the use of artificial intelligence in the insurance industry, specifically concerning the denial of insurance claims. Under this bill, if an insurer or health maintenance organization denies a claim due to a decision made by an AI system, they are mandated to notify the claimant. The notification must include key information, such as an acknowledgment that the claim was denied based on an AI determination, the reasons behind that determination, and guidance on how to appeal the denial.

Contention

Despite its well-intentioned provisions, the bill may face opposition from insurance companies that may view these requirements as burdensome. Critics could argue that the mandated disclosures could lead to increased costs for insurers, which might ultimately result in higher premiums for consumers. Furthermore, there might be concerns regarding how the insurance industry interprets and implements these disclosures, particularly in terms of clarity and accessibility for claimants.