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2026 Regular Session
HOUSE BILL NO. 880
BY REPRESENTATIVE JORDAN
INSURANCE: Creates the Louisiana Artificial Intelligence Insurance Fairness Act
1 AN ACT
2 To enact Chapter 14 of Title 22 of the Louisiana Revised Statutes of 1950, comprised of
3 R.S. 22:1401 through 1424, to be known as the "Louisiana Artificial Intelligence
4 Insurance Fairness Act"; to establish standards for the use of artificial intelligence
5 and algorithmic decision systems in insurance underwriting, rating, and claims
6 adjustment; to prohibit unfair discrimination through algorithmic means; to require
7 disparate impact audits, consumer disclosures, and explainability; to authorize
8 rulemaking and enforcement; to provide civil penalties and a private right of action;
9 and to provide for related matters.
10 Be it enacted by the Legislature of Louisiana:
11 Section 1. Chapter 14 of Title 22 of the Louisiana Revised Statutes of 1950,
12 comprised of R.S. 22:1401 through 1424, is hereby enacted to read as follows:
13 §1401. Short Title
14 This Chapter shall be known and may be cited as the "Louisiana Artificial
15 Intelligence Insurance Fairness Act" or the "LAIFA."
16 §1402. Legislative Findings and Purpose
17 A. The Legislature finds and declares:
18 (1) Artificial intelligence, machine learning, and algorithmic decision
19 systems are being rapidly deployed across the insurance industry to make decisions
20 about coverage eligibility, premium pricing, claims handling, and policy renewal.
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1 (2) These algorithmic systems present significant risks of unfair
2 discrimination. Machine learning models trained on historical data inherit the biases
3 embedded in that historical data, including the effects of past discrimination in
4 housing, lending, insurance, and economic opportunity. When used in insurance
5 without adequate safeguards, such models can perpetuate and amplify discrimination
6 against communities protected under Louisiana and federal law.
7 (3) Black, Hispanic, Indigenous, and other minority communities,
8 communities with lower incomes, communities with older housing stock, and
9 communities located in historically redlined areas are particularly vulnerable to
10 disparate harm from algorithmic insurance practices.
11 (4) Louisiana's homeowners and small business owners within protected
12 classes, already facing a challenged insurance market, are at heightened risk of being
13 further disadvantaged by opaque algorithmic underwriting and pricing systems.
14 (5) Transparency in insurance decision-making is essential to enabling
15 consumers to understand and challenge decisions that affect their access to insurance
16 and their cost of coverage.
17 (6) The responsible use of artificial intelligence in insurance can reduce
18 costs, improve efficiency, and expand coverage if properly regulated. This Act is not
19 intended to prohibit the use of AI in insurance, but to ensure that such use is fair,
20 transparent, and accountable.
21 (7) Louisiana has a compelling interest in regulating the use of algorithmic
22 decision systems in insurance consistent with its longstanding prohibitions on unfair
23 discrimination in insurance practices.
24 B. The purpose of this Act is to:
25 (1) Establish clear standards for the development, testing, and deployment
26 of AI systems used in insurance decisions;
27 (2) Require insurers to conduct and certify annual disparate impact audits of
28 algorithmic systems;
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1 (3) Prohibit the use of variables that function as proxies for protected class
2 membership in ways that produce discriminatory outcomes;
3 (4) Ensure that consumers have access to meaningful explanations when
4 algorithmic systems are used in adverse insurance decisions;
5 (5) Establish a private right of action for individuals subjected to
6 discriminatory algorithmic insurance practices; and
7 (6) Position Louisiana as a national leader in the fair and responsible
8 regulation of AI in insurance.
9 §1403. Definitions
10 As used in this Chapter, unless the context clearly requires otherwise:
11 (1) "Adverse action" means a denial of insurance coverage, a cancellation
12 or nonrenewal of an insurance policy, an increase in premium or surcharge, a
13 reduction in coverage limits or benefits, or any other action by an insurer that is
14 materially unfavorable to an insurance consumer.
15 (2) "Algorithmic decision system" or "ADS" means any computational
16 process, including one derived from machine learning, artificial intelligence,
17 statistical modeling, or other data processing, that processes personal information to
18 generate a score, classification, recommendation, or decision that is used by an
19 insurer in making insurance decisions. The term includes both systems developed
20 by the insurer and third-party systems licensed or contracted by the insurer.
21 (3) "Artificial intelligence" means machine-based systems that use statistical
22 and computational methods to perform tasks that would otherwise require human
23 intelligence, including classification, prediction, recommendation, and
24 decisionmaking.
25 (4) "Commissioner" means the Commissioner of Insurance of the State of
26 Louisiana.
27 (5) "Consumer" means any individual who is an applicant for, policyholder
28 of, or claimant under an insurance policy regulated by this Act.
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1 (6) "Covered insurer" means any insurer authorized to transact insurance in
2 Louisiana that uses an algorithmic decision system in connection with personal lines
3 homeowners insurance, commercial lines property and casualty insurance, personal
4 automobile insurance, commercial automobile insurance, health insurance, or life
5 insurance issued in Louisiana.
6 (7) "Disparate impact" means a materially adverse and statistically significant
7 difference in insurance outcomes, including denial rates, premium levels, or claims
8 payment rates, between consumers who are members of a protected class and
9 similarly situated consumers who are not members of that protected class.
10 (8) "Explainability" means the capacity of an insurer to provide a specific,
11 intelligible, and actionable explanation of the factors that most contributed to a
12 particular insurance decision made with the assistance of an algorithmic decision
13 system.
14 (9) "Input variable" means any data element or feature used as an input to
15 an algorithmic decision system.
16 (10) "Insurance decision" means any decision by a covered insurer regarding
17 underwriting, rating, policy issuance, renewal, cancellation, or claims handling.
18 (11) "Protected class" means any category of persons protected from
19 discrimination under applicable Louisiana or federal law, including but not limited
20 to race, color, religion, sex, national origin, disability, age, familial status, and sexual
21 orientation.
22 (12) "Proxy variable" means an input variable that is not a protected class
23 characteristic itself but is statistically correlated with membership in a protected class
24 in a manner that causes or contributes to disparate impact on that protected class.
25 (13) "Third-party model" means an algorithmic decision system developed,
26 owned, or operated by a person other than the covered insurer, licensed or contracted
27 to the insurer for use in insurance decisions.
28 §1404. Scope and Applicability
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1 A. This Chapter applies to all covered insurers transacting insurance in
2 Louisiana.
3 B. The obligations imposed by this Chapter apply to:
4 (1) Algorithmic decision systems developed by the covered insurer;
5 (2) Third-party algorithmic decision systems used by the covered insurer;
6 and
7 (3) Hybrid systems combining algorithmic outputs with human underwriting
8 judgment.
9 C. The use of a third-party model does not relieve a covered insurer of any
10 obligation under this Chapter. Covered insurers shall contractually require third-
11 party model providers to supply the information and access necessary for the insurer
12 to fulfill its obligations under this Chapter.
13 D. This Chapter does not apply to:
14 (1) Basic actuarial calculations or rating factor applications that do not
15 involve machine learning or AI components;
16 (2) Fraud detection systems used exclusively to detect insurance fraud,
17 provided such systems are not used to influence coverage or pricing decisions for
18 consumers who are not suspected of fraud; or
19 (3) Internal administrative systems that do not affect insurance decisions
20 regarding consumers.
21 §1405. Fairness Standards
22 A. No covered insurer shall use an algorithmic decision system in a manner
23 that:
24 (1) Intentionally considers the protected class membership of any consumer
25 as an input variable;
26 (2) Uses input variables that are proxy variables for protected class
27 membership and that produce a disparate impact on a protected class, unless the
28 insurer demonstrates that each such variable is actuarially justified by sound actuarial
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1 principles and the least discriminatory alternative sufficient to achieve the actuarial
2 purpose; or
3 (3) Produces decisions that are arbitrary, capricious, or bear no rational
4 relationship to the risk of loss being assessed.
5 B. The following input variables are presumed to function as proxy variables
6 that may produce disparate impact and shall be subject to heightened scrutiny under
7 this Chapter:
8 (1) Credit scores or credit-based insurance scores used in personal
9 automobiel or homeowners insurance underwriting or rating;
10 (2) Geographic variables at the census tract, ZIP code, or neighborhood level
11 where those variables are correlated with the racial, ethnic, or national origin
12 composition of the area;
13 (3) Prior insurance coverage gaps or lapses, when used without adjustment
14 for demographic patterns in coverage gaps;
15 (4) Education or occupation variables;
16 (5) Social media data or online behavioral data; and
17 (6) Consumer purchasing patterns or retail transaction data.
18 C. Use of a presumptive proxy variable is not automatically prohibited, but
19 an insurer using such a variable bears the burden of demonstrating, in its disparate
20 impact audit required under Section 1407, that the variable does not produce a
21 statistically significant disparate impact on any protected class, or that the disparate
22 impact is justified by actuarial necessity and no less discriminatory alternative exists.
23 §1406. Governance Requirements for Algorithmic Systems
24 A. Each covered insurer that uses an algorithmic decision system shall adopt
25 written governance policies and procedures for the development, validation,
26 deployment, monitoring, and retirement of such systems. At a minimum, these
27 policies shall address:
28 (1) The roles and responsibilities of persons involved in developing,
29 validating, and overseeing algorithmic systems;
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1 (2) testing requirements, including disparate impact testing before any new
2 or materially modified system is deployed;
3 (3) Ongoing monitoring requirements to detect model drift, performance
4 degradation, or emerging disparate impact;
5 (4) Procedures for investigating and remedying identified fairness issues;
6 (5) Documentation requirements to maintain records sufficient to
7 demonstrate compliance with this Chapter; and
8 (6) Escalation procedures for significant fairness concerns identified by staff.
9 B. Covered insurers shall designate a senior officer with responsibility for
10 AI governance and compliance with this Chapter.
11 C. Covered insurers shall train relevant staff on the requirements of this
12 Chapter and on the principles of fair and responsible AI use in insurance.
13 §1407. Disparate Impact Audits
14 A. Each covered insurer shall conduct an annual disparate impact audit of
15 each algorithmic decision system used in insurance decisions affecting Louisiana
16 consumers.
17 B. The disparate impact audit shall:
18 (1) Analyze insurance outcomes — including coverage denial rates,
19 premium levels, claims payment rates, and claims denial rates — disaggregated by
20 race, color, national origin, sex, age, disability status, and geographic area;
21 (2) Apply statistical testing appropriate to the size and nature of the insurer's
22 Louisiana book of business to determine whether disparate impact exists at a level
23 of statistical significance;
24 (3) Assess the contribution of each input variable to any identified disparate
25 impact;
26 (4) Evaluate whether less discriminatory alternatives exist that would
27 achieve the insurer's actuarial objectives with reduced disparate impact; and
28 (5) Document the methodology, findings, and any corrective actions taken
29 or planned.
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1 C. The disparate impact audit shall be conducted by a qualified independent
2 actuary or data scientist. An actuary conducting an audit under this section shall be
3 a Fellow of the Casualty Actuarial Society, a Fellow of the Society of Actuaries, or
4 a Fellow of the American Academy of Actuaries. A data scientist conducting an
5 audit under this section shall have demonstrated expertise in algorithmic fairness
6 methods.
7 D. Where an insurer lacks sufficient Louisiana-specific data to conduct a
8 statistically reliable audit, the insurer shall use national data supplemented by
9 Louisiana-specific information to the extent available, and shall note this limitation
10 in the audit report.
11 E. Covered insurers shall file a Disparate Impact Audit Certification with the
12 Commissioner annually, no later than June 30 of each year. The certification shall
13 be signed by the insurer's senior AI governance officer and shall include:
14 (1) A summary of each algorithmic system audited;
15 (2) A statement of whether any disparate impact was identified;
16 (3) If disparate impact was identified, a description of the corrective actions
17 taken or a justification demonstrating actuarial necessity and absence of a less
18 discriminatory alternative; and
19 (4) A certification that the audit was conducted in accordance with this
20 section.
21 F. The Commissioner shall maintain a public registry of Disparate Impact
22 Audit Certifications, redacted of confidential proprietary information as provided in
23 Section 1413.
24 §1408. Prohibited Variables
25 A. Notwithstanding any actuarial justification, the following variables shall
26 not be used as input variables in algorithmic decision systems for homeowners
27 insurance underwriting or rating in Louisiana:
28 (1) Credit scores or credit-based insurance scores;
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1 (2) Race, color, religion, national origin, sex, disability, familial status, age,
2 or sexual orientation of any consumer;
3 (3) Membership in any protected class as defined in this Chapter;
4 (4) Social media activity, social network connections, or online behavioral
5 data; and
6 (5) Consumer purchasing data from retail transactions.
7 B. For commercial lines insurance, use of the variables in subsection A(2)
8 and A(3) is prohibited. Use of other variables in subsection A may be permitted
9 upon demonstration to the Commissioner that the variable is actuarially justified and
10 does not produce disparate impact.
11 C. The Commissioner may, by rule, designate additional prohibited variables
12 based on evidence of disparate impact or the absence of actuarial justification.
13 §1409. Claims Adjustment AI Standards
14 A. No covered insurer shall use an algorithmic decision system to generate
15 a final claims payment determination without human review and approval of each
16 determination by a licensed claims professional.
17 B. The human reviewer of an AI-assisted claims determination shall:
18 (1) Have sufficient authority to override the algorithmic determination;
19 (2) Have access to the specific factors driving the algorithmic determination;
20 and
21 (3) Document the basis for approval, modification, or override of each
22 determination.
23 C. An insurer shall not use an algorithmic claims system to generate initial
24 settlement offers designed to be lower than the expected value of the claim with the
25 purpose of settling claims below their true value. Any algorithmic determination that
26 an insurer intends to use as a settlement offer shall be based on objective property
27 and liability valuation data.
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1 D. The Commissioner may conduct market conduct examinations of insurers'
2 AI claims systems to assess compliance with this section and the overall fairness of
3 claims outcomes by protected class.
4 §1410. Disclosure of AI Use
5 A. Every covered insurer shall disclose to consumers, at the time of
6 application, renewal, or any adverse action, whether an algorithmic decision system
7 was used in making the insurance decision affecting that consumer.
8 B. The disclosure shall be clear, conspicuous, and understandable to a
9 consumer without specialized knowledge, and shall appear in the following language
10 or substantially similar language:
11 "[Insurer name] uses automated or artificial intelligence systems to assist in
12 insurance decisions. Your [application/renewal/claim] has been processed using
13 such a system. You have the right to request an explanation of the factors that most
14 influenced this decision."
15 C. When a covered insurer interacts with a consumer through an automated
16 chatbot, virtual assistant, or similar automated system, the insurer shall clearly
17 disclose to the consumer at the beginning of the interaction that they are
18 communicating with an automated system and not a human representative.
19 §1411. Right to Explanation
20 A. Any consumer who is the subject of an adverse action involving the use
21 of an algorithmic decision system has the right to request, within thirty (30) days of
22 the adverse action, a written explanation of the decision.
23 B. Upon receipt of a request for explanation, the covered insurer shall, within
24 twenty-one (21) days, provide the consumer with:
25 (1) A clear statement of the nature of the adverse action;
26 (2) A plain language description of the top factors that most significantly
27 contributed to the adverse action, ranked in order of their relative contribution;
28 (3) A description of the data sources used in the decision;
29 (4) Information about the consumer's right to correct inaccurate data; and
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1 (5) Information about the consumer's right to file a complaint with the
2 Commissioner and to seek a review of the decision.
3 C. The explanation required by this section shall be specific to the individual
4 consumer and shall not consist solely of generic descriptions of the algorithmic
5 system. The explanation shall be sufficiently specific to enable the consumer to
6 understand what, if anything, they could do differently to obtain a more favorable
7 outcome.
8 D. An insurer's assertion of trade secret protection for its algorithmic system
9 does not relieve the insurer of its obligation to provide consumer-specific
10 explanation under this section. The Commissioner shall by rule establish standards
11 for providing meaningful explanation while protecting legitimate trade secrets.
12 §1412. Right to Human Review
13 A. Any consumer who has received an adverse action based wholly or
14 substantially on the output of an algorithmic decision system may, within thirty (30)
15 days of receiving the adverse action notice or explanation, request human review of
16 the decision.
17 B. Upon receipt of a request for human review, the covered insurer shall:
18 (1) Assign a qualified human underwriter or claims professional to
19 independently review the decision;
20 (2) Complete the review and provide a written determination within thirty
21 (30) days of the request; and
22 (3) Provide the consumer with a written explanation of the human reviewer's
23 determination.
24 C. The human reviewer shall have full authority to modify or reverse the
25 original adverse action. The human reviewer's determination shall be based on the
26 specific facts of the consumer's situation and shall not be simply a reendorsement of
27 the algorithmic output.
28 §1413. Data Accuracy and Correction
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1 A. Each covered insurer shall maintain reasonable procedures to ensure the
2 accuracy of data used in algorithmic decision systems.
3 B. Any consumer has the right to:
4 (1) Request that the insurer identify the data sources used in making an
5 insurance decision affecting that consumer;
6 (2) Dispute the accuracy of data used in an adverse action; and
7 (3) Have inaccurate data corrected and the adverse action reconsidered.
8 C. Upon receipt of a dispute regarding data accuracy, the covered insurer
9 shall, within thirty (30) days, investigate the dispute and either correct the data and
10 reconsider the decision or notify the consumer of the insurer's determination that the
11 data is accurate.
12 §1414. Commissioner Authority and Rulemaking
13 A. The Commissioner shall have authority to promulgate rules and
14 regulations necessary to implement this Chapter, including rules governing:
15 (1) Standards for disparate impact audits, including acceptable
16 methodologies and statistical significance thresholds;
17 (2) The format and content of Disparate Impact Audit Certifications;
18 (3) Additional prohibited variables;
19 (4) Standards for AI governance policies;
20 (5) The format and content of consumer disclosures and explanations; and
21 (6) Procedures for market conduct examinations related to AI systems.
22 B. In promulgating rules under this Chapter, the Commissioner shall
23 consider guidance from the National Association of Insurance Commissioners,
24 National Council of Insurance Legislators, the Federal Trade Commission, and other
25 relevant regulatory bodies.
26 C. The Commissioner shall consult with the Louisiana Legislative Black
27 Caucus, consumer advocacy organizations, civil rights organizations, and
28 representatives of the insurance industry in developing rules under this Chapter.
29 §1415. Market Conduct Examinations
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1 A. The Commissioner may conduct market conduct examinations of covered
2 insurers to assess compliance with this Chapter.
3 B. As part of a market conduct examination, the Commissioner may require
4 a covered insurer to:
5 (1) Provide documentation of its AI governance policies and procedures;
6 (2) Provide access to its algorithmic decision systems and the data used by
7 those systems;
8 (3) Provide complete disparate impact audit reports, not merely the
9 certifications filed with the Commissioner; and
10 (4) Demonstrate the explainability of its algorithmic systems.
11 C. The Commissioner may retain independent actuarial, data science, or
12 technology experts to assist in market conduct examinations under this Chapter. The
13 reasonable costs of such experts shall be borne by the insurer being examined.
14 D. Market conduct examination reports relating to AI systems shall be
15 confidential to the extent necessary to protect legitimate trade secrets, but the
16 Commissioner shall publish aggregate findings of AI fairness examinations annually.
17 §1416. Filing Requirements for New AI Systems
18 A. At least sixty (60) days before deploying a new algorithmic decision
19 system, or a material modification of an existing system, a covered insurer shall file
20 with the Commissioner a notice that includes:
21 (1) A description of the system and its intended use;
22 (2) A summary of predeployment disparate impact testing results;
23 (3) A description of the data used to train and validate the system;
24 (4) A description of the input variables used; and
25 (5) A certification that the system complies with the requirements of this
26 Chapter.
27 B. The Commissioner may, within sixty (60) days of receiving a notice
28 under this section, request additional information or documentation from the insurer.
29 Deployment of the system shall be stayed pending the Commissioner's response if
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1 the Commissioner requests additional information within fifteen (15) days of the
2 notice.
3 C. The Commissioner may prohibit deployment of a system or require
4 modification of a system that the Commissioner determines does not comply with
5 this Chapter.
6 §1417. Annual Report on AI Insurance Fairness
7 A. The Commissioner shall prepare and publish an annual report on AI
8 Insurance Fairness in Louisiana. The report shall include:
9 (1) Aggregate findings from Disparate Impact Audit Certifications, including
10 the number of insurers reporting disparate impact and the steps taken to address
11 identified disparities;
12 (2) A summary of market conduct examination findings related to AI
13 systems;
14 (3) An analysis of insurance outcome data by race, color, and national origin
15 for homeowners and commercial lines;
16 (4) Recommendations for regulatory improvements; and
17 (5) An assessment of emerging AI technologies and their potential impact
18 on insurance fairness.
19 B. The Commissioner shall submit the annual report to the Legislature and
20 shall present findings to the House Committee on Insurance and the Senate
21 Committee on Insurance.
22 §1418. Civil Penalties
23 A. A covered insurer that violates any provision of this Chapter shall be
24 subject to a civil penalty as follows:
25 (1) For failure to conduct a required disparate impact audit: not less than
26 twenty-five thousand dollars ($25,000) and not more than one hundred thousand
27 dollars ($100,000) per violation;
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1 (2) For failure to provide required disclosures or explanations to a consumer:
2 not less than five thousand dollars ($5,000) and not more than twenty-five thousand
3 dollars ($25,000) per violation;
4 (3) For use of a prohibited variable under Section 1408: not less than fifty
5 thousand dollars ($50,000) and not more than two hundred fifty thousand dollars
6 ($250,000) per violation;
7 (4) For failure to conduct required human review of an adverse action: not
8 less than ten thousand dollars ($10,000) and not more than fifty thousand dollars
9 ($50,000) per violation; and
10 (5) For failure to file required certifications or notices: not less than ten
11 thousand dollars ($10,000) and not more than fifty thousand dollars ($50,000) per
12 day of violation.
13 B. In determining the amount of any civil penalty under this section, the
14 Commissioner shall consider:
15 (1) The severity of the violation and the extent to which consumers were
16 harmed;
17 (2) Whether the violation was knowing or willful;
18 (3) The insurer's history of compliance with this Chapter and other insurance
19 laws;
20 (4) The insurer's good faith efforts to correct the violation; and
21 (5) The financial size of the insurer
22 C. Civil penalties collected under this section shall be deposited in the
23 Louisiana AI Insurance Fairness Fund established by Section 1421.
24 §1419. Private Right of Action
25 A. Any consumer who suffers harm as a result of a covered insurer's
26 violation of this Chapter shall have a private right of action against the insurer in a
27 court of competent jurisdiction in Louisiana.
28 B. A consumer who prevails in an action under this section shall be entitled
29 to:
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1 (1) Actual damages, including any economic loss attributable to the adverse
2 action;
3 (2) Statutory damages of not less than one thousand dollars ($1,000) and not
4 more than ten thousand dollars ($10,000) per violation, regardless of actual damages;
5 (3) Punitive damages, where the insurer's conduct was knowing, willful, or
6 reckless;
7 (4) Injunctive or declaratory relief; and
8 (5) Reasonable attorneys' fees and costs
9 C. An action under this section shall be filed within two (2) years of the date
10 the consumer discovered or reasonably should have discovered the violation.
11 D. The filing of a complaint with the Commissioner shall toll the statute of
12 limitations for any related private action for the period during which the
13 Commissioner's investigation is pending.
14 E. Nothing in this section shall be construed to require exhaustion of
15 administrative remedies before filing a private action.
16 §1420. Class Actions
17 A. A named plaintiff in a class action under this section need not show
18 individual actual damages as a prerequisite to maintaining the class action where the
19 claims are based on a systematic pattern of discriminatory algorithmic practice.
20 §1421. Louisiana AI Insurance Fairness Fund
21 A. There is hereby created in the state treasury a special fund to be known
22 as the Louisiana Artificial Intelligence Insurance Fairness Fund.
23 B. The fund shall receive civil penalties collected under this Chapter and
24 such other appropriations as the Legislature may provide.
25 C. Monies in the fund shall be used to:
26 (1) Fund the Commissioner's AI examination and oversight activities;
27 (2) Provide technical assistance and education to consumers regarding their
28 rights under this Chapter;
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1 (3) Provide grants to legal aid organizations for representation of consumers
2 in actions under this Chapter;
3 (4) Fund research on AI insurance fairness; and
4 (5) Cover administrative costs of the AI Fairness Advisory Board established
5 by Section 1422.
6 §1422. AI Insurance Fairness Advisory Board
7 A. The Commissioner shall establish an AI Insurance Fairness Advisory
8 Board to advise the Commissioner on the implementation and development of this
9 Chapter.
10 B. The Advisory Board shall consist of fifteen (15) members appointed by
11 the Commissioner, including:
12 (1) Three representatives of the insurance industry;
13 (2) Two consumer advocates;
14 (3) Two civil rights advocates, at least one of whom shall be nominated by
15 the Louisiana Legislative Black Caucus;
16 (4) Two representatives of minority business organizations;
17 (5) Two data scientists or AI fairness experts;
18 (6) One actuary;
19 (7) One legal scholar with expertise in anti-discrimination law;
20 (8) One representative from a Louisiana law enforcement or criminal justice
21 agency; and
22 (9) One member of the general public.
23 C. The Advisory Board shall meet at least quarterly and shall advise the
24 Commissioner on rules, examination priorities, and annual report findings.
25 §1423. Relation to Other Laws
26 A. This Chapter supplements and does not supersede existing state and
27 federal anti-discrimination laws applicable to insurance, including but not limited to
28 the federal Fair Housing Act, the Equal Credit Opportunity Act, and Louisiana's
29 unfair trade practices laws.
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1 B. Nothing in this Chapter shall be construed to limit or restrict the
2 Commissioner's existing authority to prohibit unfair discrimination in insurance
3 under Louisiana law.
4 C. Where any provision of this Chapter conflicts with a provision of another
5 state law, the provision that affords greater protection to consumers shall apply.
6 §1424. Severability
7 If any provision of this Chapter or its application to any person or
8 circumstance is held invalid, the invalidity does not affect other provisions or
9 applications which can be given effect without the invalid provision or application,
10 and to this end the provisions of this Chapter are severable.
11 §1425. Effective Date; Phased Implementation
12 A. This Act shall take effect January 1 of the year following its enactment.
13 B. The following provisions shall be implemented on a phased schedule:
14 (1) Section 1410 (AI disclosure requirements) and Section 1411 (right to
15 explanation) shall be effective six (6) months after enactment;
16 (2) Section 1407 (disparate impact audits) and Section 1416 (predeployment
17 filing) shall be effective twelve (12) months after enactment; and
18 (3) Section 1408 (prohibited variables) shall be effective eighteen (18)
19 months after enactment, to allow insurers time to modify their systems to comply.
20 C. The Commissioner shall publish implementing guidance and model
21 compliance frameworks for each phase of implementation at least ninety (90) days
22 before the effective date of each phase.
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CODING: Words in struck through type are deletions from existing law; words underscored
are additions.
HLS 26RS-1284 ORIGINAL
HB NO. 880
DIGEST
The digest printed below was prepared by House Legislative Services. It constitutes no part
of the legislative instrument. The keyword, one-liner, abstract, and digest do not constitute
part of the law or proof or indicia of legislative intent. [R.S. 1:13(B) and 24:177(E)]
HB 880 Original 2026 Regular Session Jordan
Abstract: Establishes comprehensive standards governing the use of artificial intelligence
and algorithmic systems in the domains of insurance underwriting, rating, and claims
adjustment. Prohibits unfair discrimination facilitated through algorithmic means and
mandates the conduct of disparate impact audits. Requires transparent consumer
disclosures and ensures explainability of algorithmic decisions. Authorizes the
commissioner of insurance to enact rules and enforce compliance and stipulates civil
penalties for violations, along with providing a private right of action for aggrieved
parties.
Proposed law enacts the Louisiana Artificial Intelligence Insurance Fairness Act to regulate
the use of artificial intelligence and algorithmic decision systems in insurance underwriting,
rating, policy issuance, renewal, cancellation, and claims handling.
Proposed law defines key terms including “algorithmic decision system”, “disparate impact”,
“protected class”, “proxy variable”, “third party model”, and “adverse action”.
Proposed law applies the Act to all covered insurers using algorithmic systems in personal
and commercial lines and provides that insurers remain responsible for compliance when
using third party models.
Proposed law prohibits the use of algorithmic systems that intentionally consider protected
class characteristics, rely on proxy variables that produce disparate impact without actuarial
necessity, or generate arbitrary or capricious decisions. Provides heightened scrutiny for
certain presumptive proxy variables.
Proposed law requires insurers to adopt written AI governance policies, designate a senior
AI governance officer, and train staff on fair AI use.
Proposed law requires annual disparate impact audits conducted by qualified independent
actuaries or data scientists, mandates certification filings with the commissioner, and
establishes a public registry of certifications.
Proposed law prohibits specified variables in homeowners insurance underwriting and
rating, including credit scores, protected class characteristics, social media data, and
consumer purchasing data, and authorizes the commissioner to designate additional
prohibited variables.
Proposed law establishes standards for AI assisted claims adjustment, including mandatory
human review, documentation requirements, and prohibitions on algorithmically generated
low value settlement offers.
Proposed law requires consumer disclosures when AI is used in insurance decisions,
establishes a right to explanation for adverse actions, and provides a right to human review.
Proposed law provides procedures for data accuracy, correction, and reconsideration of
adverse actions.
Proposed law authorizes the commissioner to promulgate rules, conduct market conduct
examinations, require access to algorithmic systems and data, and publish aggregate
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HLS 26RS-1284 ORIGINAL
HB NO. 880
findings.
Proposed law requires insurers to file notice before deploying new or materially modified
AI systems and authorizes the commissioner to stay or prohibit deployment.
Proposed law establishes civil penalties for violations, creates a private right of action with
damages and attorneys’ fees, authorizes class actions, and creates the Louisiana Artificial
Intelligence Insurance Fairness Fund.
Proposed law creates an AI Insurance Fairness Advisory Board to advise the commissioner.
Proposed law provides that the Act supplements existing anti discrimination laws.
(Adds R.S. 22:1401-1424)
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CODING: Words in struck through type are deletions from existing law; words underscored
are additions.