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SB 1425

Retail Sales and Use Tax; data center exemption expiration, distribution of revenues.

2025 Regular Session Introduced by Richard Stuart

Requires meaningful human review and oversight of AI-driven insurer decisions to prevent automated-only adverse outcomes and ensure transparency.

Left in Finance and Appropriations
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Bill Summary · SB 1425

Summary — SB 1425: Artificial Intelligence Systems Use in Health Insurance Act

Note: The document provided contained multiple, unrelated snippets (Arizona groundwater provisions, Hawaii language). This summary focuses on the Illinois bill text titled the "Artificial Intelligence Systems Use in Health Insurance Act" (SB 1425) introduced by Sen. Laura Fine, which is the clearest, self‑contained legislative proposal in the materials.

Purpose / Intent

Establish regulatory oversight of insurers’ development, deployment, and use of artificial intelligence (AI) systems and predictive models in decisions that affect consumers. The bill aims to protect consumers from adverse insurance outcomes driven solely by automated systems by requiring governance, transparency, meaningful human review, and Department of Insurance (Department) authority to examine AI use.

Key definitions

  • AI system: machine‑based systems that produce outputs (predictions, recommendations, content) that influence decisions; explicitly includes machine learning.
  • Predictive model: processing historical data using algorithms or machine learning to identify patterns and predict outcomes.
  • AI systems program: a written program for responsible use of AI systems in regulated insurance practices.
  • Adverse consumer outcome: insurer decision (e.g., denial, reduction, termination of benefits) that adversely impacts a consumer and is determined by use of an AI system.

Major provisions

  • Department oversight: The Department of Insurance’s regulatory authority explicitly includes insurer use of AI systems in making or supporting adverse determinations. The Department may investigate or include AI use in market conduct examinations.
  • Information requests and review: Insurers must provide information about specific models, governance, risk management, vendor diligence, monitoring, audits, and implementation of their AI systems program upon Department request.
  • Prohibition on solely automated adverse outcomes: Insurers may not issue an adverse consumer outcome (denial, reduction, termination) that results solely from an AI system or predictive model.
  • Meaningful human review: Any denial/reduction/termination that results from AI use must be meaningfully reviewed by an individual with authority to override the AI decision, following review procedures set by Department rules.
  • Disclosure standards: The Department may adopt rules requiring “full and fair” disclosure of insurers’ use of AI systems, specifying manner and content.
  • Compliance requirement: Insurers must comply with applicable state and federal insurance laws and unfair practice/discrimination laws when using AI.
  • Rulemaking: The Department may adopt rules, including emergency rules, to implement the Act. The emergency rule authorization (per amendment to the Illinois Administrative Procedure Act) is time‑limited (the emergency provision repeals one year after enactment).

Who is affected

  • All insurers authorized to do business in Illinois using AI or predictive models in underwriting, claims, utilization review, benefit determinations, or other consumer‑facing decisions.
  • Third‑party vendors and data providers whose AI tools or models are used by insurers (subject to insurer diligence and oversight requirements).
  • Consumers: added protections against automated adverse actions and enhanced transparency.

Procedural status (as provided)

  • Introduced/Filed: 01/31/2025 (Sen. Laura Fine)
  • First Reading and referred to Assignments and to relevant committees. (Various committee referrals and procedural entries are listed in the source; consult state legislative tracking for current status.)

Potential impacts / considerations

  • Operational: Insurers will need governance programs for AI (policies, audits, monitoring, vendor due diligence), documentation, and processes for meaningful human review — likely increasing compliance costs.
  • Consumer protection: Limits automated-only adverse decisions and creates transparency/oversight mechanisms that may reduce erroneous denials driven purely by algorithms.
  • Regulatory reach: Broad investigatory authority may require insurers to retain and disclose models, training data summaries, validation/audit records, and vendor contracts.
  • Implementation: The Department’s forthcoming rules will define technical standards for review, disclosure content, and what constitutes “meaningful” human oversight.

Caveat: The bill text in the provided document is partially fragmented in places; final statutory language and Department rulemaking will determine concrete obligations and enforcement mechanics. For the most current status and full text, consult the official Illinois General Assembly bill tracker.

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

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