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Provides for notice requirements where an insurer authorized to write accident and health insurance in this state, a corporation organized pursuant to article forty-three of this chapter, or a health maintenance organization certified pursuant to article forty-four of the public health law uses artificial intelligence-based algorithms in the utilization review process.

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New York Assembly Bill 1456 (2025) amends the Insurance Law by adding new Section 338 to regulate the use of artificial intelligence in health insurance utilization review. The bill requires the Superintendent of Insurance to mandate that all accident and health insurers, Article 43 corporations, and Article 44 health maintenance organizations disclose on their public websites whether or not they use AI-based algorithms in utilization review. Insurers must also submit their AI algorithms and training data sets to the Department, which must establish a certification process to verify that such tools minimize bias based on race, color, religious creed, ancestry, age, sex, gender, national origin, handicap, or disability, and that they adhere to evidence-based clinical guidelines. Under Section 338(d), when AI is used in an initial utilization review, a clinical peer reviewer must open and document individual clinical records or data before issuing any adverse determination. Violations by insurers may result in license suspension or revocation, refusal to issue a new license for up to one year, fines up to $5,000 per violation or $10,000 per willful violation, with an aggregate annual cap of $500,000 per insurer. Clinical peer reviewers face the same per-violation fines with an aggregate annual cap of $100,000. The act takes effect 60 days after enactment, with rulemaking authorized immediately.

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