USA – FLORIDA Trends and Developments Contributed by: John David Dickenson, Tiffany Bustamante and Alexandra Schultz, Cozen O’Connor
enactment is the date the cause of action accrues. The earliest that the associations’ bad faith claims accrued was when the appraisal awards were entered in Feb- ruary to July 2023, which was after Section 624.1551 was in effect. Thus, there was no impermissible ret- roactive application of the law. The court’s decision was consistent with Isaacson v QBE Specialty Ins. Co. No 2:24-CV-715-SPC-NPM, 2024 WL 4544257, at *2 (M.D. Fla. Oct. 22, 2024). Importantly, though, where the bad faith clam accrued before the enactment of the law, courts have found that Section 624.1551 did not apply retroactively (see, eg, Vo v Scottsdale Ins. Co. , No 1D2023-2228, 2025 WL 611505 (Fla. 1st DCA Feb. 26, 2025). Impact of AI on Florida’s insurance market – regulation and accountability As the market stabilises and carriers refocus on growth and efficiency, emerging technologies are playing an increasingly prominent role. AI, in particular, is reshaping key functions from underwriting to claims management, prompting both promise and concern. Regulatory attention has swiftly followed, making AI governance the next major frontier in Florida’s evolv- ing insurance landscape. Florida’s insurance industry is rapidly integrating AI into its operations. In a storm-prone state with elevat- ed insurance costs, insurers promote AI as a tool to enhance efficiency, accuracy and speed in servicing policyholders. At the same time, regulators and law- makers are scrutinising AI’s impact on fairness and accountability in critical decisions like claim denials. Insurers in Florida, as in other jurisdictions, have long relied on data-driven algorithms. Today’s AI systems represent a natural evolution of that trend. Current market practices reflect a growing, albeit cautious, embrace of AI tools across various functions, includ- ing underwriting and pricing, claims handling and fraud detection. AI and machine learning models analyse vast datasets to refine risk assessment and help underwriters calcu- late premiums with greater precision. In the aftermath of hurricanes and other disasters, insurers now deploy AI to triage and process claims at scale. These tools can extract insights from adjuster notes, evaluate
photographic or drone imagery of property damage, estimate settlement ranges, and flag potentially fraud- ulent submissions for further review. The overarching promise is faster initial assessments, potentially accel- erating claim payments and enhancing consistency in evaluation outcomes. Insurance representatives have emphasised to Florida lawmakers that AI is being used to supplement, not supplant, human judgement. Nonetheless, growing public and political concern has prompted legislative intervention. In response to these concerns, Florida lawmakers introduced House Bill 527, a measure that would require human oversight for any insurance claim denial involving AI. The bill reflects Florida’s early and assertive approach to regulating AI in the insurance sector. Florida is among the first states to pursue sub- stantive legislation specifically addressing the use of AI in insurance, with HB 527 at the forefront. Formally titled the “Mandatory Human Reviews of Insurance Claim Denials” bill, HB 527 was filed on 24 November 2025 and passed unanimously out of the House Insurance & Banking Subcommittee on 9 December 2025. A companion measure, Senate Bill 202, is concurrently advancing through Senate com- mittees. The legislation addresses a central concern: that algorithms, when operating without meaning- ful human input, could improperly deny or underpay insurance claims. As of December 2025, HB 527 has not yet become law but continues to advance in the Florida Legis- lature. Following subcommittee approval, a commit- tee substitute (CS) was filed, and the bill is currently pending before the House Commerce Committee, its final stop before a full House vote. The Legislature will reconvene in January 2026 for the regular ses- sion, during which HB 527 must pass the House and Senate. If passed, the law would take effect on 1 July 2026. HB 527 makes clear that insurers may use AI and algo- rithms to assist in processing claims and generating coverage recommendations. However, it establishes a requirement that a “carriers’ decisions to deny a claim
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