The Texas Department of Insurance issued Commissioner's Bulletin No. B-0003-26 in June, reminding regulated entities that insurance decisions made or supported by artificial intelligence remain subject to the same laws and standards as decisions made without AI. The bulletin signals that regulators are watching how carriers and related firms deploy AI in underwriting, pricing, and claims handling - and that existing legal obligations do not disappear when a machine makes the call.
The guidance applies broadly across the Texas insurance market, covering carriers, agents, and other entities under the department's jurisdiction. It does not create new rules. Instead, it clarifies that AI-assisted decisions must still comply with existing Texas insurance law, including requirements around unfair discrimination, rate filings, and claims practices.
What the bulletin covers
The bulletin addresses the use of AI in any insurance function that leads to a decision affecting policyholders or claimants. That includes automated underwriting systems, algorithmic pricing models, and AI tools used to evaluate claims or detect fraud. Regulated entities are expected to ensure these systems do not produce outcomes that would violate state law if a human had made the same decision.
Texas joins a growing list of states examining AI use in insurance. Regulators in several other jurisdictions have issued similar guidance or opened inquiries into how carriers use algorithms and machine learning models. The Texas bulletin stands out for its direct framing: AI is a tool, not a legal exception.
What insurers should review
Companies operating in Texas should audit their AI systems to confirm they can explain how decisions are made and demonstrate compliance with applicable statutes. That means documenting the data inputs, model logic, and oversight procedures behind any AI-supported decision, and being prepared to show that work to regulators on request.
The bulletin also implies a need for ongoing monitoring. Models can drift, and the data feeding them can change. A system that complies today may not comply next quarter unless someone is checking. Insurers should have processes in place to test outcomes and correct problems before they become regulatory issues.
For professionals working in insurance operations, compliance, or technology, this guidance is a practical reminder that AI governance is now a core regulatory concern. Understanding how your organization's AI tools make decisions and documenting that process is no longer optional - it is part of the job. For more on how AI is reshaping insurance work and the skills needed to stay current, see AI for Insurance.
Why this matters for insurance professionals
If you work with AI systems in underwriting, claims, or pricing, the Texas bulletin is a signal to verify that your models are auditable and your documentation is current. Regulators are moving from asking whether companies use AI to asking how they control it. The teams that can answer that question clearly - with evidence, not assurances - will have the advantage in examinations and market conduct reviews. Legal and compliance colleagues facing similar questions can find relevant context in AI for Legal.
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