The proposed bill mandates that insurance claim denials across various sectors, including workers' compensation carriers, insurers, and health maintenance organizations (HMOs), undergo mandatory human reviews. While it permits the use of artificial intelligence (AI) and machine learning systems to assist in processing claims, these technologies cannot be the sole basis for decisions to reduce claim payments or deny claims. Qualified human professionals must independently analyze claims, review AI-generated outputs, and ensure compliance with insurance policy terms. The bill also requires carriers to maintain detailed records of human professionals' actions, including their identification and decision rationale, and mandates that denial communications to claimants include specific contact information and a statement confirming that AI was not the sole determinant in the decision-making process.

Additionally, the bill introduces new regulations specifically for HMOs, requiring them to detail the use of AI and machine learning in their claims-handling manuals and ensure compliance with the outlined regulations. It empowers regulatory authorities to conduct examinations and investigations to verify compliance, with penalties for non-compliance as specified in existing statutes. The provisions of the bill are set to take effect on July 1, 2026.