Florida Bills Propose Human Review Requirement for AI-Driven Claims Denials

New legislation introduced in Florida, House Bill 527 and Senate Bill 202, aims to regulate the use of artificial intelligence and machine learning systems in insurance claims processing. The bills would prohibit AI or algorithmic outputs from being the sole basis for adjusting or denying claims, emphasizing mandatory human review by qualified professionals. Insurers would be required to document their AI system usage and compliance measures in their claims handling manuals. The legislation mandates that all claim denials initially influenced by AI systems undergo review by a qualified human adjuster authorized under Florida's Insurance Code. This human professional would verify and authorize any claim adjustments or denials, ensuring accountability and mitigating risks associated with automated decision-making. Regulatory oversight would be strengthened as the Florida Office of Insurance Regulation (OIR) would have expanded authority to conduct examinations and investigations to ensure insurer compliance. Furthermore, the Financial Services Commission could issue rules to implement and enforce the new requirements. This legislative effort responds to growing concerns about AI-driven errors in claims adjudication, highlighted by instances of high error rates in AI-assisted claim denials. The bills reflect broader industry trends, promoting transparency and accountability in AI usage as encouraged by the National Association of Insurance Commissioners (NAIC) model bulletin on AI governance in the insurance sector. Overall, this proposed regulatory framework addresses emerging risks in the integration of AI technologies within insurance claims management. It aligns Florida's regulatory standards with national efforts to embed human oversight, ensuring fair treatment of policyholders while leveraging AI innovations responsibly.