AI insurance laws by state
AI Laws USA tracks 50 U.S. AI rules on insurance AI across federal, state, county, and city government. Each entry links to its official source.
Federal insurance AI rules (4)
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Blocked / in litigation
Huskey v. State Farm
N.D. Ill. · Effective December 14, 2022 · Huskey v. State Farm Fire & Cas. Co., No. 1:22-cv-07014 (N.D. Ill.)
Black homeowners sued State Farm in 2022, alleging the insurer's claims-handling AI subjected them to greater scrutiny — more documentation requests, more delays, and higher denial rates — than white homeowners. One of the leading insurance-AI disparate-treatment cases.
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Proposed / pending
NAIC AI Evaluation Tool Pilot (12 states, 2026)
United States · Effective March 2, 2026 · NAIC Big Data and AI (H) Working Group — AI Systems Evaluation Tool Pilot (launched March 2, 2026)
The National Association of Insurance Commissioners launched a 12-state pilot program in March 2026 to test a new 'AI Systems Evaluation Tool' — a standardized framework giving insurance examiners a structured method to assess how insurance companies govern their AI systems during market conduct and financial examinations. The 12 participating states are California, Colorado, Connecticut, Florida, Iowa, Louisiana, Maryland, Pennsylvania, Rhode Island, Vermont, Virginia, and Wisconsin. The tool requires insurers to complete four exhibits: one quantifying AI usage, one assessing governance risk, one detailing high-risk AI systems, and one documenting AI data practices. The pilot runs through September 2026, with tool updates through October 2026 and formal NAIC adoption expected at the Fall National Meeting in November 2026.
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In effect
NAIC AI Model Bulletin (Insurance)
United States · Effective December 4, 2023 · NAIC Model Bulletin: Use of AI Systems (Dec. 4, 2023); NAIC Impl. Map (Apr. 2025)
The National Association of Insurance Commissioners adopted a Model Bulletin in December 2023 directing insurers to govern their AI responsibly — documenting AI systems, testing for bias, and overseeing third-party AI vendors. As of early 2026, over half of U.S. states and D.C. have adopted the bulletin through their own state insurance departments, making it the broadest AI governance standard in the insurance sector. It is not a federal law and has no penalties on its own, but state commissioners use it as a market-conduct examination standard.
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Proposed / pending
US H.R. 10210 Doctors Not AI Act (AI in health insurance claim review)
United States · H.R. 10210, 119th Cong. (2026)
A bipartisan House bill that would set rules for how group health plans and health insurers use artificial intelligence when reviewing claims, by amending the Public Health Service Act, ERISA and the Internal Revenue Code. It was introduced on Sept. 1, 2026 and sent to three committees. It has not passed either chamber.
State insurance AI rules (45)
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Enacted (not yet in effect)
Illinois SB 3114 — Transparency in Downcoding Act
Illinois · Effective January 1, 2028 · Illinois PA 104-0568 (SB 3114), approved July 10, 2026; effective January 1, 2028 (Transparency in Downcoding Act)
Illinois Senate Bill 3114, the Transparency in Downcoding Act (Public Act 104-0568), signed by Governor Pritzker on July 10, 2026 and effective January 1, 2028, limits how health insurers and other payors can use algorithms to 'downcode' medical claims (pay a claim at a lower billing code than submitted). A payor may use automated tools to flag claims that might justify downcoding, but may not use any algorithm or automated process that bypasses evaluation of all the information the billing professional submitted, and every downcoding determination must be made or reviewed by a natural person following AMA CPT coding guidelines. Payors cannot downcode based solely on diagnosis codes or target professionals who treat complex or chronic patients, and must give notice and a dispute process. Medicaid managed care organizations must also comply.
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Enacted (not yet in effect)
Iowa HF 2635 (no AI-only prior-auth denials)
Iowa · Effective January 1, 2027 · Iowa H.F. 2635, 91st Gen. Assemb. (2026), Sec. 514F.8(2A), eff. Jan. 1, 2027
Iowa lets a utilization review organization use an AI-based algorithm or system to conduct an initial review of a prior-authorization request, but forbids relying on AI as the sole basis to deny, delay, or downgrade a medical-necessity prior-authorization request. A qualified human reviewer — a clinical peer or qualified reviewer — must make the binding determination.
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In effect
Alabama SB 63 (AI in prior authorization, eff. Oct 2026)
Alabama · Effective October 1, 2026 · Ala. Act 2026-589 (SB 63, 2026 Regular Session), approved April 16, 2026, effective October 1, 2026
Alabama's SB 63 (Act 2026-589), approved April 16, 2026 and effective October 1, 2026, limits how health insurers use AI in prior authorization. When an insurer uses AI to decide whether a requested service is medically necessary, the decision must be based on the patient's own medical history and the clinical circumstances presented by the requesting provider. Any decision to deny, delay or modify a prior-authorization request on medical-necessity grounds must always be made by a licensed physician or other qualified health care professional, not by AI. Insurers must certify every year to the Alabama Department of Insurance that their AI does not rely on a group dataset, is applied fairly and equitably, and does not discriminate against any subscriber group or enrollee. They must also disclose their use of AI in utilization review prominently in their written policies and procedures and review the AI's outcomes periodically for accuracy and reliability.
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In effect
AZ HB 2175 (AI Insurance Denial — Physician Review)
Arizona · Effective July 1, 2026 · Ariz. HB 2175 (57th Leg., 1st R.S. 2025), signed May 12, 2025, eff. July 1, 2026
Arizona HB 2175 requires health insurers and managed-care organizations to have a licensed physician or medical director individually review each case before denying a health insurance claim or prior-authorization request based on medical necessity or experimental status. Insurers may not rely solely on AI algorithms, automated decision-support tools, or algorithmic recommendations to deny coverage. The law directly targets automated prior-authorization systems that issue denials without physician involvement. Signed May 12, 2025, effective July 1, 2026. Arizona is among the first states to specifically prohibit AI-only health insurance denials by statute.
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In effect
TX TDI Bulletin B-0003-26 (AI in insurance)
Texas · Effective June 12, 2026 · Texas Department of Insurance, Commissioner's Bulletin B-0003-26 (June 12, 2026)
The Texas Department of Insurance issued Commissioner's Bulletin B-0003-26 on June 12, 2026, telling insurers that decisions made with artificial intelligence must comply with Texas insurance law: AI-driven decisions may not be inaccurate, arbitrary, capricious, or unfairly discriminatory. Insurers must have a human review and approve consequential AI decisions before they take effect, maintain governance, risk-management, and audit programs for their AI systems, and keep documentation they can produce to TDI on request. TDI will police compliance through examinations and complaint monitoring.
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In effect
Nebraska LB 77 (no AI-only prior-auth denials)
Nebraska · Effective January 1, 2026 · Neb. LB 77 (109th Leg., 2025), operative Jan. 1, 2026
Nebraska's Ensuring Transparency in Prior Authorization Act bars utilization review agents from using an AI-based algorithm or automated system as the sole basis for denying, delaying, or modifying a health care service based, in whole or in part, on medical necessity. Any prior authorization denial based on medical necessity must involve human clinical review, not AI alone. The law also requires a single standardized prior authorization form of no more than two pages, streamlining the administrative process. Signed June 4, 2025 by Governor Pillen; effective January 1, 2026.
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In effect
Maryland HB 820 (AI in insurance utilization review)
Maryland · Effective October 1, 2025 · 2025 Md. Laws ch. 747 (HB 820); Md. Code, Ins. 15-10A-06, 15-10B-05.1
When a Maryland carrier, pharmacy benefits manager, or private review agent uses artificial intelligence or an algorithm in utilization review, the tool's determinations must be based on the individual patient's clinical history, not solely on a group dataset. The AI may not replace the role of the reviewing provider, must not result in unfair discrimination, must remain open to audit, and may not deny, delay, or modify care in a way that harms enrollees. Carriers must report to the Insurance Commissioner quarterly on adverse decisions, including whether AI was used.
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In effect
SB 1120 (CA Physicians Make Decisions Act)
California · Effective January 1, 2025 · Cal. Health & Safety Code § 1367.01; Cal. Ins. Code § 10123.135 (SB 1120, Stats. 2024, ch. 879)
California was the first U.S. state to directly prohibit health insurance plans from using AI to deny, delay, or modify care. Under SB 1120, when a plan uses AI or algorithms in utilization review, a licensed physician or other qualified clinician — not an AI system — must make every medical-necessity determination. AI tools can assist in data analysis, but the final coverage decision must come from a licensed human. Insurers must disclose AI use and make their algorithms available for regulatory audits. Signed September 28, 2024; effective January 1, 2025.
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In effect
NYDFS CL 7 (2024) — Insurance AI Anti-Discrimination
New York · Effective July 11, 2024 · NYDFS Insurance Circular Letter No. 7 (2024) (July 11, 2024)
New York's Department of Financial Services issued Insurance Circular Letter No. 7 on July 11, 2024, establishing the most substantive state insurance AI rule in the country. Going beyond the NAIC Model Bulletin adopted by 24+ states, NYDFS CL No. 7 requires insurers to conduct a comprehensive 'proxy assessment' before using any AI system (AIS) or external consumer data source (ECDIS) in underwriting or pricing — and prohibits any such use unless the insurer can demonstrate the system does not produce unfair or unlawful discrimination against protected classes. When an AI-influenced adverse underwriting decision is made, the insurer must provide written notice within 15 days of the decision. Governance, documentation, and DFS market-conduct examination requirements apply immediately.
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Enacted (not yet in effect)
Utah SB 319 (insurers must disclose AI use in prior authorization)
Utah · Effective January 1, 2027 · Utah Code 31A-22-650(2)(d), (3) (S.B. 319, 2026)
Utah requires health insurers that use AI in reviewing prior-authorization requests to be transparent about it. If applicable, an insurer must post a conspicuous notice on its public website that it uses AI in authorization review, and disclose that AI use to the state Insurance Department, each in-network provider, and each enrollee. The rules sit within a broader prior-authorization overhaul.
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Enacted (not yet in effect)
SB 26-189 (Colorado ADMT Law)
Colorado · Effective January 1, 2027 · SB 26-189 (Colo. 2026)
Colorado's replacement AI law focuses on transparency rather than broad anti-discrimination duties. Starting January 1, 2027, companies using automated decision-making technology to materially influence consequential decisions (employment, housing, lending, insurance, healthcare) must notify consumers before use and provide post-decision disclosures; developers must give deployers technical documentation.
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Enacted (not yet in effect)
SB 444 (GA AI Insurance Review)
Georgia · Effective January 1, 2027 · Ga. SB 444 (2026), sponsored by Sen. Kay Kirkpatrick
Health insurers in Georgia can't let AI alone decide your coverage. Decisions about insurance coverage for healthcare services cannot be based solely on AI systems or software tools — a qualified human reviewer must be part of every coverage determination, especially before denying treatment. Effective January 1, 2027.
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In effect
Indiana HB 1271 (no AI-only claim downcoding)
Indiana · Effective July 1, 2026 · Ind. House Enrolled Act 1271 (2026 Reg. Sess.), eff. July 1, 2026
Indiana bars health insurers from relying on an automated process or artificial intelligence as the only reason for downcoding a claim on medical-necessity grounds; an employee or contractor of the insurer must review the patient's medical record before such a downcode is applied. Health care providers likewise may not use AI to submit a claim without a human reviewing it. Insurers must disclose, in an easy-to-find and readable way, when AI is used to deny a prior-authorization request or to downcode a claim, must explain each downcode, and must give providers at least 180 days to appeal. The rules took effect July 1, 2026 and do not apply to Medicaid.
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In effect
Washington SB 5395 (limits AI in health-insurance prior-auth denials)
Washington · Effective June 11, 2026 · Engrossed Second Substitute S.B. 5395, 2025-26 Reg. Sess. (Wash.)
Washington bars health carriers from using AI to deny, delay, or modify health care services on its own; a denial based on medical necessity must be made by a licensed health professional. Where AI is used in prior authorization, it must be applied fairly, comply with anti-discrimination law, and base determinations on the individual enrollee's medical history, clinical circumstances, and relevant demographic data rather than broad group data. AI tools must be reviewed for accuracy, AI policies are subject to audit by the Insurance Commissioner, and carriers must report the share of denials aided by AI.
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In effect
Maryland HB 1563 (AI-denial reporting)
Maryland · Effective June 1, 2026 · 2026 Md. Laws ch. 165 (HB 1563); Md. Code, Ins. 15-10A-06
Among other emergency-room and post-acute care provisions, this law expands the quarterly report that carriers must submit to the Maryland Insurance Commissioner. The report must include the number of adverse decisions and whether an artificial intelligence, algorithm, or other software tool was used in making them. The Commissioner may use this information as a basis for examining the carrier.
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In effect
PA AG — GEICO AI Underwriting Settlement
Pennsylvania · Effective May 26, 2026 · Pennsylvania AG Investigation — GEICO AI Underwriting Settlement (May 26, 2026); AG David Sunday press release (05/26/2026)
Pennsylvania Attorney General David Sunday reached a settlement with GEICO Insurance in May 2026 after the state investigated GEICO's use of an AI-enabled underwriting review tool that canceled a new policyholder's auto insurance without adequate notice. GEICO's standard 60-day policy review for new customers uses an AI tool to select policyholders for additional underwriting scrutiny. When a West Philadelphia woman was selected for review, the process resulted in her policy being canceled — she believed she had submitted the required documents and was not informed otherwise, unknowingly driving uninsured. Under the settlement, GEICO agreed to give policyholders an extra week to respond to document requests during AI-triggered reviews, simplify residency verification requirements, and train customer service staff on the need for clarity in the process. GEICO also agreed to follow the Pennsylvania Insurance Department's published guidance on the use of AI by insurers.
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In effect
HI DOI AI Bulletin
HI · Effective December 10, 2025 · Hawaii Insurance Commissioner Memorandum 2025-13A (2025-12-10)
The HI Department of Insurance adopted the NAIC Model Bulletin on Use of Artificial Intelligence Systems by Insurers. Insurers licensed in HI must maintain a written AI program with governance, risk-management, testing, third-party-AI oversight, and documentation controls. The bulletin operationalizes existing unfair-trade-practice and unfair-discrimination law as applied to insurers' AI use cases — underwriting, pricing, claims, fraud detection, and marketing.
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In effect
TX SB 815 (No AI-Only Insurance Denials)
Texas · Effective September 1, 2025 · Tex. S.B. 815, 89th Leg., R.S. (2025); Tex. Ins. Code Sec. 4201.156
Texas bars a utilization review agent from using an automated decision system — including certain artificial intelligence — to make an adverse determination, in whole or in part, about whether health care is medically necessary or appropriate. Such coverage denials must involve human clinical judgment, though the law still allows algorithms and AI for administrative support and fraud detection. The Texas Department of Insurance may audit and inspect how utilization review agents use these systems. Violations are subject to the sanctions, cease-and-desist orders, and administrative penalties already available under the Insurance Code.
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In effect
WI DOI AI Bulletin
WI · Effective March 18, 2025 · Wisconsin OCI AI Bulletin (2025-03-18) (2025-03-18)
The WI Department of Insurance adopted the NAIC Model Bulletin on Use of Artificial Intelligence Systems by Insurers. Insurers licensed in WI must maintain a written AI program with governance, risk-management, testing, third-party-AI oversight, and documentation controls. The bulletin operationalizes existing unfair-trade-practice and unfair-discrimination law as applied to insurers' AI use cases — underwriting, pricing, claims, fraud detection, and marketing.
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In effect
NJ DOI AI Bulletin
NJ · Effective February 11, 2025 · New Jersey DOBI Insurance Bulletin 25-03 (2025-02-11)
The NJ Department of Insurance adopted the NAIC Model Bulletin on Use of Artificial Intelligence Systems by Insurers. Insurers licensed in NJ must maintain a written AI program with governance, risk-management, testing, third-party-AI oversight, and documentation controls. The bulletin operationalizes existing unfair-trade-practice and unfair-discrimination law as applied to insurers' AI use cases — underwriting, pricing, claims, fraud detection, and marketing.
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In effect
DE DOI AI Bulletin
DE · Effective February 5, 2025 · Delaware Domestic and Foreign Insurers Bulletin No. 148 (2025-02-05)
The DE Department of Insurance adopted the NAIC Model Bulletin on Use of Artificial Intelligence Systems by Insurers. Insurers licensed in DE must maintain a written AI program with governance, risk-management, testing, third-party-AI oversight, and documentation controls. The bulletin operationalizes existing unfair-trade-practice and unfair-discrimination law as applied to insurers' AI use cases — underwriting, pricing, claims, fraud detection, and marketing.
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In effect
Texas v. Allstate / Arity
TX · Effective January 13, 2025 · Texas v. Allstate / Arity — Driving Data Collection Suit (TDPSA + Data Broker Law) (2025-01-13)
First-ever TDPSA and Data Broker Law suit. Alleges SDK-based collection of geolocation and driving-behavior data from 45M+ Americans via Life360, GasBuddy, etc., used to score drivers and set premiums. Active in 2026.
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In effect
NC DOI AI Bulletin
NC · Effective December 18, 2024 · North Carolina DOI Bulletin 24-B-19 (2024-12-18)
The NC Department of Insurance adopted the NAIC Model Bulletin on Use of Artificial Intelligence Systems by Insurers. Insurers licensed in NC must maintain a written AI program with governance, risk-management, testing, third-party-AI oversight, and documentation controls. The bulletin operationalizes existing unfair-trade-practice and unfair-discrimination law as applied to insurers' AI use cases — underwriting, pricing, claims, fraud detection, and marketing.
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In effect
MA DOI AI Bulletin
MA · Effective December 9, 2024 · Massachusetts Division of Insurance Bulletin 2024-10 (2024-12-09)
The MA Department of Insurance adopted the NAIC Model Bulletin on Use of Artificial Intelligence Systems by Insurers. Insurers licensed in MA must maintain a written AI program with governance, risk-management, testing, third-party-AI oversight, and documentation controls. The bulletin operationalizes existing unfair-trade-practice and unfair-discrimination law as applied to insurers' AI use cases — underwriting, pricing, claims, fraud detection, and marketing.
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In effect
OK DOI AI Bulletin
OK · Effective November 14, 2024 · Oklahoma ID Bulletin 2024-11 (2024-11-14)
The OK Department of Insurance adopted the NAIC Model Bulletin on Use of Artificial Intelligence Systems by Insurers. Insurers licensed in OK must maintain a written AI program with governance, risk-management, testing, third-party-AI oversight, and documentation controls. The bulletin operationalizes existing unfair-trade-practice and unfair-discrimination law as applied to insurers' AI use cases — underwriting, pricing, claims, fraud detection, and marketing.
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In effect
IA DOI AI Bulletin
IA · Effective November 7, 2024 · Iowa Insurance Division Bulletin 24-04 (2024-11-07)
The IA Department of Insurance adopted the NAIC Model Bulletin on Use of Artificial Intelligence Systems by Insurers. Insurers licensed in IA must maintain a written AI program with governance, risk-management, testing, third-party-AI oversight, and documentation controls. The bulletin operationalizes existing unfair-trade-practice and unfair-discrimination law as applied to insurers' AI use cases — underwriting, pricing, claims, fraud detection, and marketing.
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In effect
WV DOI AI Bulletin
WV · Effective August 9, 2024 · West Virginia OIC Insurance Bulletin 24-06 (2024-08-09)
The WV Department of Insurance adopted the NAIC Model Bulletin on Use of Artificial Intelligence Systems by Insurers. Insurers licensed in WV must maintain a written AI program with governance, risk-management, testing, third-party-AI oversight, and documentation controls. The bulletin operationalizes existing unfair-trade-practice and unfair-discrimination law as applied to insurers' AI use cases — underwriting, pricing, claims, fraud detection, and marketing.
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In effect
MI DOI AI Bulletin
MI · Effective August 7, 2024 · Michigan DIFS Bulletin 2024-20-INS (2024-08-07)
The MI Department of Insurance adopted the NAIC Model Bulletin on Use of Artificial Intelligence Systems by Insurers. Insurers licensed in MI must maintain a written AI program with governance, risk-management, testing, third-party-AI oversight, and documentation controls. The bulletin operationalizes existing unfair-trade-practice and unfair-discrimination law as applied to insurers' AI use cases — underwriting, pricing, claims, fraud detection, and marketing.
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In effect
AR DOI AI Bulletin
AR · Effective July 31, 2024 · Arkansas Insurance Department Bulletin 13-2024 (2024-07-31)
The AR Department of Insurance adopted the NAIC Model Bulletin on Use of Artificial Intelligence Systems by Insurers. Insurers licensed in AR must maintain a written AI program with governance, risk-management, testing, third-party-AI oversight, and documentation controls. The bulletin operationalizes existing unfair-trade-practice and unfair-discrimination law as applied to insurers' AI use cases — underwriting, pricing, claims, fraud detection, and marketing.
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In effect
VA DOI AI Bulletin
VA · Effective July 22, 2024 · Virginia SCC Bureau of Insurance Administrative Letter 2024-01 (2024-07-22)
The VA Department of Insurance adopted the NAIC Model Bulletin on Use of Artificial Intelligence Systems by Insurers. Insurers licensed in VA must maintain a written AI program with governance, risk-management, testing, third-party-AI oversight, and documentation controls. The bulletin operationalizes existing unfair-trade-practice and unfair-discrimination law as applied to insurers' AI use cases — underwriting, pricing, claims, fraud detection, and marketing.
- 15 more
- NE DOI AI Bulletin · NE · In effect
- DC DOI AI Bulletin · DC · In effect
- MD DOI AI Bulletin · MD · In effect
- WA DOI AI Bulletin · WA · In effect
- KY DOI AI Bulletin · KY · In effect
- PA DOI AI Bulletin · PA · In effect
- RI DOI AI Bulletin · RI · In effect
- IL DOI AI Bulletin · IL · In effect
- VT DOI AI Bulletin · VT · In effect
- CT DOI AI Bulletin · CT · In effect
- NV DOI AI Bulletin · NV · In effect
- NH DOI AI Bulletin · NH · In effect
- AK DOI AI Bulletin · AK · In effect
- CO Insurance Algorithmic Discrimination Law · Colorado · In effect
- Colorado AI Act (repealed) · Colorado · Repealed / replaced
City / local insurance AI rules (1)
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Expired
DC Algorithm Bill (not enacted)
Washington, DC · D.C. Council B24-0558 (2021); B25-0114 (2023) (not enacted)
A proposed DC law that would ban businesses from using algorithms that discriminate based on protected traits in decisions about jobs, housing, credit, insurance, and education, and would require annual bias audits and consumer disclosures. Despite multiple introductions since 2021, it has never been enacted — DC residents rely on federal protections.