AI Claims Handling in Texas: What TDI's New Bulletin Means for Agents
On June 12, 2026, the Texas Department of Insurance (TDI) issued a bulletin about artificial intelligence. The message was clear: AI is not a loophole. Insurers cannot use algorithms to do what the law already prohibits.
For Texas insurance agents, this bulletin matters. It affects how claims are handled, how agents advise clients, and how the industry operates in 2026.
This guide explains what the TDI AI bulletin means for agents and policyholders.
Quick Summary: TDI's AI Bulletin at a Glance
- TDI issued AI bulletin on June 12, 2026
- AI decisions must follow all Texas insurance laws
- A licensed person must review and approve all AI decisions
- AI cannot replace licensed adjusters
- Bulletin covers discrimination and claims handling
- Ask clients: "Who reviewed the AI decision? Was that person licensed?"
What the TDI AI Bulletin Says
The bulletin applies to any company using AI to make decisions that affect consumers. The key rule is simple: AI decisions must comply with all insurance laws. This includes laws against unfair trade practices and discrimination.
For claims handling, the bulletin covers:
- How claims are processed and settled
- Unfair trade practices
- Prohibited discrimination
- Adjuster licensing requirements
The bottom line: No company can say, "The computer did it." If an insurer denies a claim, reduces an estimate, or delays payment using AI, a licensed person must review it.
AI Cannot Replace Licensed Adjusters
This is one of the most important rules in the bulletin.
Texas law requires licensed adjusters to investigate and supervise claims. An AI system can help — it can sort data, flag patterns, estimate damages, or compare photos. But it cannot do what a licensed adjuster does.
An algorithm is NOT a licensed adjuster:
- It doesn't owe a duty of good faith
- It cannot be cross-examined
- It cannot handle the legal responsibilities of a licensed adjuster
TDI expects that if a company uses AI to make a major decision, a licensed person must review and agree with it before taking action.
For agents: If a client's claim is denied or reduced, ask: "Who reviewed the AI decision? Was that person a licensed adjuster?"
Why This Matters for Agents
1. Claims are changing
AI is being used more often in claims. But the final decision still needs human review. Agents who understand this can better advise clients.
2. Licensed adjusters are still required
AI can help, but it cannot replace licensed adjusters. They are still required to investigate and supervise claims.
3. Policyholders need guidance
If a client's claim is denied, agents should ask who reviewed the AI decision. The answer may affect the client's next steps.
4. Documentation matters
If a claim is disputed, the file should show how the decision was made. Was it reviewed by a licensed adjuster? Was the review thorough?
What to Tell Your Clients
If a client's claim is denied or reduced:
- Ask if AI was used in the decision
- Ask who reviewed the AI decision
- Ask if the reviewer was a licensed adjuster
- Ask what the reviewer looked at
- Write down the answers
If a client is filing a new claim:
- Let them know AI may be used
- Explain that licensed adjusters still make the final decisions
- Encourage them to ask questions if they get a denial or reduction
What This Means for the Industry
The bulletin shows that Texas regulators are watching how AI is used in insurance. They expect it to be used responsibly.
Key points from the bulletin:
- AI decisions must be accurate and fair — not wrong or discriminatory
- A licensed person must review and approve all major AI decisions
- The rules apply to all regulated entities, not just insurers
Agents who understand these rules can better serve clients and protect their careers.
Frequently Asked Questions
What is TDI's AI bulletin?
It's a bulletin issued by TDI on June 12, 2026. It says AI decisions must follow insurance laws and that licensed adjusters must review all major decisions.
Can AI replace licensed adjusters in Texas?
No. Texas law requires licensed adjusters to investigate claims and supervise claims handling. AI can help, but it cannot replace them.
What does the bulletin require for AI decisions?
A licensed person must review and approve all major decisions before action is taken.
Does the bulletin apply to agents?
The rules apply to all regulated entities. Agents who advise clients about claims should understand the requirements.
Why does this matter for policyholders?
If a claim is denied, policyholders should ask who reviewed the AI decision. Was that person a licensed adjuster? This matters for next steps.
Staying Informed and Prepared
The TDI AI bulletin is just one of several changes affecting Texas insurance in 2026. Staying current helps agents serve clients better and avoid problems.
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