Creates the Louisiana Artificial Intelligence Insurance Fairness Act

House Bill 880 establishes the Louisiana Artificial Intelligence Insurance Fairness Act as Chapter 14 of Title 22 of the Louisiana Revised Statutes, creating a comprehensive regulatory framework governing the use of artificial intelligence and algorithmic decision systems in insurance underwriting, rating, policy issuance, renewal, cancellation, and claims handling. The statute prohibits covered insurers from using algorithmic systems that intentionally consider protected class characteristics as input variables, rely on proxy variables that produce disparate impact without actuarial justification, or generate arbitrary and capricious decisions. The law defines key terms including algorithmic decision system, disparate impact, protected class, and proxy variable, and applies these requirements to all insurers authorized to transact insurance in Louisiana that deploy algorithmic systems in personal lines homeowners insurance, commercial lines property and casualty insurance, personal automobile insurance, commercial automobile insurance, health insurance, and life insurance.

The practical impact of this legislation falls primarily on covered insurers, their third-party model providers, and Louisiana consumers purchasing insurance. Insurers must adopt written governance policies, designate a senior AI governance officer, and train staff on compliant algorithmic use. They must conduct annual disparate impact audits performed by qualified independent actuaries or data scientists and file certified audit results with the commissioner, with findings made available in a public registry. The law imposes specific prohibitions on homeowners insurance underwriting and rating, banning the use of credit scores, protected class characteristics, social media data, consumer purchasing data, and other specified variables unless the commissioner authorizes them. Insurers must provide consumers with disclosures when artificial intelligence influences insurance decisions, offer explanations of adverse actions, and provide a right to human review. Consumers gain a private right of action to bring suit for violations, including class actions, with awards of damages and attorney's fees. The commissioner of insurance gains expanded enforcement authority including market conduct examination powers, the ability to require access to algorithmic systems and data, authority to prohibit deployment of new or materially modified AI systems, and the power to assess civil penalties.

The statute operates within Louisiana's existing insurance regulatory framework under the Louisiana Insurance Code in Title 22 of the Revised Statutes and supplements rather than replaces existing prohibitions on unfair discrimination in insurance. The law interfaces with established protected class definitions drawn from Louisiana and federal antidiscrimination law, including the Fair Housing Act, Equal Credit Opportunity Act, and Louisiana's constitutional and statutory civil rights protections. The statute creates an additional layer of regulation atop existing unfair discrimination standards by specifically targeting algorithmic systems and machine learning models that may perpetuate historical discrimination embedded in training data. The legislation establishes a Louisiana Artificial Intelligence Insurance Fairness Fund and creates an AI Insurance Fairness Advisory Board to assist the commissioner, positioning the state's insurance commissioner as the primary enforcement authority with explicit rulemaking delegated to promulgate detailed regulations implementing the act's requirements.