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Bill

HB 4635

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

89th Legislature (2025) Introduced by Cas Garcia Hernandez and 1 co-sponsor

Requires Texas insurers to disclose when artificial intelligence participates in denying insurance claims, enhancing consumer transparency in algorithmic coverage decisions.

Left pending in committee
#artificialintelligence(iq7c5) #healthmaintenanceorganizations(s0853) #insurance--general(i0445)
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Bill Summary · HB 4635

Legislative bill overview

HB 4635 requires insurance companies to disclose when artificial intelligence is used in the decision to deny an insurance claim. The bill mandates that insurers inform claimants of AI involvement and presumably provide explanation or recourse opportunities. This addresses growing concerns about algorithmic decision-making in insurance coverage determinations.

Why is this important

Insurance denials directly affect people's access to healthcare, property protection, and financial security. As AI systems increasingly influence these high-stakes decisions, transparency becomes critical for consumers to understand why claims are rejected and whether they can challenge algorithmic determinations. This reflects broader questions about algorithmic accountability in regulated industries.

Potential points of contention

  • Insurance industry burden: Insurers may argue disclosure requirements increase administrative costs and could slow claim processing, particularly if they must document AI system decision logic
  • Competitive concerns: Companies might resist detailed disclosure claims they rely on proprietary AI models and algorithms, citing trade secret protections
  • Ambiguity on "AI involvement": The bill's scope is unclear—does it apply only to fully automated denials or any claim where AI assists human reviewers, potentially creating compliance confusion and excessive disclosures

Compiled from official sources — confirm details with the bill’s official record.

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