Texas TDI Bulletin B-0003-26 Sets AI Governance Expectations for Regulated Entities
Texas Commissioner’s Bulletin B-0003-26, issued June 12, 2026, tells all regulated entities that decisions or actions impacting consumers and made or supported by advanced analytical and computational technologies, artificial intelligence among them, must comply with all applicable insurance laws and regulations. The wording is deliberately wider than AI, so a scoring routine that nobody in the shop calls a model is inside it. The bulletin extends those expectations to any third party working with a regulated entity.
The Texas Department of Insurance is not waiting for a new AI-specific statute. Instead, it is applying existing unfair trade practice, claims settlement, and anti-discrimination rules to AI systems. The bulletin says that if a regulated entity uses AI to make a consequential decision, TDI expects a person to review and agree with the decision before action is taken.
Human-in-the-loop controls stop being a design preference here and become an enforceable expectation that programs have to document. The bulletin also points to the NAIC Principles on Artificial Intelligence and the Texas Department of Information Resources AI Code of Ethics as reference frameworks for responsible AI use.
The third-party extension is particularly important. Carriers that buy AI models, scoring tools, or automated decision systems from vendors must now ensure those vendors are subject to the same governance expectations. This means vendor contracts should include provisions for human review, documentation of AI-driven decisions, and compliance with Texas insurance law.
One of the statutes the bulletin lists is not a general standard at all. Chapter 4201, on utilization review agents, prohibits using AI to make an adverse determination, and TDI sets it down in the same list as the unfair trade practice and anti-discrimination chapters. Texas is treating AI governance as an extension of existing consumer protection and market conduct rules, and Chapter 4201 shows what that looks like in practice. The prohibition arrived in SB 815 during the 2025 session and reaches health benefit plans delivered, issued, or renewed on or after January 1, 2026, so it was on the books months before the bulletin issued. The bulletin’s work is to say that it binds a model the same way it binds a person.
The bulletin names the headings an inquiry will follow instead of prescribing specific practices or documentation requirements: governance frameworks, risk management, data and privacy protections, and internal controls, along with the verification and testing methods TDI encourages carriers to develop for finding errors and bias. Chapter 401 supplies the teeth, obliging a regulated entity to maintain and produce all books and papers relating to its business on request. Build the governance program so that each of those four headings has a document standing behind it.