Source: Mercury News

The Mercury News article reports on a new California law prohibiting the use of artificial intelligence (AI) to deny insurance claims. The legislation is aimed at preventing discriminatory practices and ensuring transparency in claim decisions. Insurers must now provide human oversight and justification for claim denials, even if AI is used to assist in the decision-making process.

The law comes in response to complaints that AI algorithms disproportionately denied claims from certain demographic groups, raising concerns about algorithmic bias. By requiring clear accountability and banning fully automated denials, California seeks to protect policyholders from unfair practices while encouraging ethical AI use in the insurance sector.