TX| Bulletin #B-0003-26 clarifies that Texas Department of Insurance (TDI) expects all regulated entities and their third‑party vendors to govern the development, acquisition, and use of AI so that any AI‑supported decisions impacting consumers fully comply with existing Texas Insurance Code provisions on unfair trade practices, unfair discrimination, claims handling, rates, licensing, utilization review, market conduct, and record production, with a strong emphasis on consumer protection, human oversight of consequential decisions, robust governance and risk controls, and readiness to produce AI‑related governance, procedures, and protections during investigations, examinations, and product review.
Key Points:
- TDI will monitor AI use through examinations, product filings, and consumer complaints, and expects entities to furnish documentation on AI governance frameworks, data and privacy protections, internal controls, and specific AI use cases upon request, while reserving full enforcement authority.
- AI‑driven or AI‑supported decisions must meet all existing legal standards (including Chapters 401, 541, 542, 544, 560, 751, 831, 4001, 4101, and 4201), avoiding inaccurate, arbitrary, capricious, or unfairly discriminatory outcomes, and utilization review agents may not use AI to make adverse determinations.
- Regulated entities must implement governance, risk management, internal controls, testing/verification, and human review of consequential AI decisions, informed by NAIC AI Principles and the Texas DIR AI Code of Ethics, to manage bias, privacy, and consumer harm risks.