TX-RNW-0199 FLAG
On 2026-10-06, uw-triage v2.4 (an internally developed system) produced 'non renew' in a TX home renewal transaction. Inputs included aerial imagery, property, claims history. No human reviewed the output before it took effect. The outcome was adverse to the consumer; no notice to the consumer is recorded. RegBench applied 11 rule(s) in force on 2026-10-06 and recorded 3 finding(s); the most serious is 'Consequential AI-supported decision taken without a person reviewing and agreeing' (high, L4).
FLAG: 3 finding(s) under rules 2026.10+dbe5ddf6, corpus 2026-10-30-5f07c521. Routed to the carrier's compliance reviewer with cited findings.
Carrier note (data, never evaluated): Homeowners non-renewal driven by an aerial-imagery roof-condition score; no notice generated; no human review.
Findings (3)
Consequential AI-supported decision taken without a person reviewing and agreeing
Finding. An AI system in a high-risk class produced an outcome adverse to the consumer, and no person is recorded as having reviewed and agreed with the decision before action was taken.
Basis. Commissioner's Bulletin B-0003-26 (12 June 2026) states that for consequential decisions "TDI expects a person to review and agree with all decisions before action is taken", that decisions must not be inaccurate, arbitrary, capricious or unfairly discriminatory, and that the expectation extends to third parties working with the regulated entity.
Required action. Route to the responsible reviewer before the outcome takes effect; record the reviewer on the transaction.
Excerpt: tx-tdi-b-0003-26-human-review · regulatory bulletin addressed to all regulated entities and their agents (government edict) · in force from 2026-06-12
"TDI expects a person to review and agree with all decisions before action is taken" on consequential decisions made or supported by AI; decisions must not be "inaccurate, arbitrary, capricious, or unfairly discriminatory"; "These expectations extend to any third party working with a regulated entity." The bulletin cites Insurance Code chapters 541, 542, 544, 560, 751, 401, 831, 4001, 4101 and 4201.
Excerpt: tx-tdi-b-0003-26-governance · regulatory bulletin addressed to all regulated entities and their agents (government edict) · in force from 2026-06-12
"All regulated entities using AI should be able to furnish procedures and protections upon request by TDI." TDI "will monitor the use of AI through examinations and product filings", will investigate consumer complaints about AI, and may inquire into governance frameworks, risk management, data and privacy protections, internal controls and specific uses of AI. Under Insurance Code chapter 4201, utilization review agents may not use AI to make an adverse determination.
AI-flagged non-renewal or decline with no notice recorded (pattern of the 2026 Pennsylvania agreement)
Finding. An AI system flagged the risk and the policy was declined or not renewed without a notice to the consumer being recorded; this is the fact pattern of the Pennsylvania Attorney General's 2026 agreement with an auto insurer over an AI-enabled underwriting review tool.
Basis. Precedent: as reported, the insurer agreed to follow the Pennsylvania Insurance Department's AI guidance, to extend document deadlines and to accept additional proof after a cancellation without adequate notice. Regulators in other states read the same headlines; the pattern deserves a reviewer's attention wherever it appears.
Required action. Confirm the notice and document deadlines before the cancellation or decline takes effect; record the notice on the transaction.
Excerpt: precedent-pa-geico-2026 · enforcement precedent reported by secondary sources; persuasive only · in force from 2026-05-22
Announced by Pennsylvania Attorney General Dave Sunday on 22 May 2026: a new policyholder in West Philadelphia was selected by an underwriting-review tool with artificial-intelligence features during the insurer's 60-day review of new policyholders and lost coverage without realising it after believing she had sent the requested residency documents. GEICO agreed to act in line with the Pennsylvania Insurance Department's guidance on insurers' use of AI, to extend the document-submission period for selected new policyholders by one week, to accept one form of residency verification (a current driver's licence suffices when its address matches the policy), and to train customer-service staff on the revised requirements. No admission of wrongdoing; no monetary term reported.
Adverse outcome from a high-risk AI system with no human review
Finding. A high-risk system produced an adverse outcome that took effect without human review.
Basis. Doctrine: examiners applying the NAIC bulletin's governance and control expectations, and the AI Risk Evaluation Supplement's Exhibit B question on whether there is a human in the loop for direct-consumer-impact uses, ask first about human oversight of adverse automated outcomes; an unreviewed adverse decision is the case file most likely to be sampled.
Required action. Route to the carrier's reviewer; record the review and any override on the transaction.
Excerpt: naic-ai-bulletin-s3-1-ais-program · NAIC model guidance; binding in a state only as adopted (see adoptions register) · in force from 2023-12-04
"all Insurers authorized to do business in this state are expected to develop, implement, and maintain a written program (an 'AIS Program') for the responsible use of AI Systems that make, or support decisions related to regulated insurance practices. The AIS Program should be designed to mitigate the risk of Adverse Consumer Outcomes ... The Department also encourages the development and use of verification and testing methods to identify errors and bias in Predictive Models and AI Systems, as well as the potential for unfair discrimination in the decisions and outcomes resulting from the use of Predictive Models and AI Systems."
Point in time
- Law as of
- 2026-10-06
- Rules version
- 2026.10+dbe5ddf6
- Corpus snapshot
- 2026-10-30-5f07c521
- Engine
- regbench-engine/0.4.0 · deterministic-1
- Fingerprint
- bb5cdcc31dd03749dad0eef9
- Evaluated
- 2026-10-30 11:23:25 UTC
- Exhibit C case file
- yes
Ledger
- Entry
- #1128 · assessment · recorded 2026-10-06T15:01:29+00:00
- Hash
- 5de84fec1984ed9a0fe4732b619be4eb5f8bb05be6a9509823ce61cb53d223b1
- Previous
- d66a8c916be6b32ef077524a3996446f4fec69c3e554652db5876341e838de18
- Stored copy intact
- yes, hashes match
Carrier review
Resolved by compliance · outcome remediated · 10.9 hours after it opened · Resolved in the carrier's review queue (synthetic).
Recorded facts
- AI system
- uw-triage v2.4 · internal · high-risk class: underwriting
- Governance attested
- True
- Testing report
- test://bluebonnet/uw-triage/2026Q3
- Model documentation
- doc://bluebonnet/uw-triage/2.4
- Feature classes
- aerial_imagery, property, claims_history
- Protected factors used
- none
- External data (ECDIS)
- False
- Consumer report / credit
- False / False
- Data sources
- imagery://vendor/roof-condition
- Decision
- non renew · score 0.84 · codes ROOF-3
- Human review
- none
- Adverse to consumer
- True
- Notice
- not recorded · reasons: False · specific: False · external data disclosed: False
- Appeal channel
- –
- Consumer token
- tok_showcase_0199