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Senate panel narrows AI-insurer disclosure bill; substitute drops private right of action
Summary
A substitute to SB 586 was adopted that would require public disclosure when AI is used to make adverse insurance determinations but removes a private right of action; the measure was reported and sent to Senate Finance after testimony from insurers and the State Corporation Commission.
The Senate subcommittee adopted a substitute to SB 586 that narrows the original bill and focuses on consumer notice when artificial intelligence contributes to adverse insurance determinations. Sponsor Sen. Saleem said the revised language removes a private right of action and appeals provisions that duplicated existing processes, leaving a public‑facing disclosure requirement for insurers and directing implementation aspects to the State Corporation Commission (SCC).
Eric Lowe of the State Corporation Commission’s Bureau of Insurance told the committee he found no existing requirement to disclose when a denial is made because of AI and said the industry uses many levels of automated tools. Industry witnesses, including the Virginia Association of Health Plans, urged striking two short notice lines that, they said, could generate meaningless alerts and costly re‑filings of forms.
Committee members pressed on notice wording and appeals language; after a motion, the committee voted to report the substitute to Senate Finance. Advocates urged clarity so consumers and providers know when AI affected a coverage decision, while insurers warned of operational and compliance costs.
The bill will now go to Senate Finance for fiscal and detailed statutory review before any floor action.
