AI in Insurance · Court ruling

Fifth Circuit vacates Mississippi DEI injunction and reassigns the case after AI-linked errors in the judge's orders

A US federal appeals court on 22 October vacated a preliminary injunction against Mississippi's 2025 law on diversity programmes in public education and ordered the case reassigned to a different district judge. The Fifth Circuit panel said Judge Henry Wingate's orders contained invented parties, false quotations of the law and a case that does not exist; he had said a law clerk used AI in drafting.

Illustration of a generic courthouse with a stack of papers on a stone ledge and one sheet set apart.
Illustration generated with AI for insurewire.org. Not a photograph of the event.

A Fifth Circuit panel on 22 October set aside the preliminary injunction that Judge Henry Wingate of the Southern District of Mississippi had issued against House Bill 1193, a law enacted in April 2025 to stop Mississippi public education money paying for diversity, equity and inclusion programmes. The panel directed the district's chief judge to give Jackson Federation of Teachers v. Fitch to another judge for all further proceedings. Judge Jerry Smith wrote the opinion; Judge Catharina Haynes joined only its final paragraph.

The panel acknowledged that reassignment is a rare and exceptional step but held that both of the circuit's tests for it were satisfied. Its reasoning rests on how the district court ran the case, which the opinion describes as "a botch job", and on errors of law, among them the judge's handling of the Supreme Court's decisions in Moody v. NetChoice and Trump v. CASA.

The opinion lists defects in the restraining order of 20 July 2025: eleven plaintiffs and two defendants who were never parties, terms attributed to the statute that its text does not contain, and declarations from people absent from the record. The judge replaced that order with a corrected one dated back to 20 July, treated the mistakes as clerical, and later said a law clerk had used AI on an earlier draft that was filed in error. The corrected order in turn cited a Fourth Circuit case, Cousins v. School Board of City of Norfolk, which the panel found does not exist and called "an apparent AI hallucination"; the citation was discovered at oral argument.

The panel did not decide whether the law is constitutional; it gave the new judge instructions on the framework to apply. The Mississippi Independent reported that the law can be enforced while the case continues and that the plaintiffs may ask the full Fifth Circuit to rehear the appeal. ComplexDiscovery reported that the panel imposed no sanctions.

Read the source

US Court of Appeals for the Fifth Circuit ↗

Regulator · 22 Oct 2026

This is an original brief based on the linked publication. Company statements and forecasts are attributed to their source.

Continue reading

All stories →
Illustration

AI in Insurance

Anthropic tells investors a catastrophic AI incident could exceed what insurers can cover

Anthropic's IPO registration statement, filed with the US SEC on 26 October, warns that a catastrophic AI incident could be larger than any single insurer, and possibly the whole industry, can underwrite. The AI developer also says the market for AI-specific cover is still young and that it may be unable to buy some AI liability cover on reasonable terms, or at all. Morningstar DBRS said the filing highlights an AI insurance protection gap.

Illustration

AI in Insurance

Naked launches pet insurance in South Africa and says its AI approves eligible claims automatically

South African digital insurance broker Naked has launched cover for cats and dogs, underwritten by Hollard, and says its AI approves eligible claims automatically while staff handle the rest. Naked's early data shows a median of 1.3 days from claim to payment, with about 60% paid within 48 hours, but it has not said how many claims this covers. Accident-only cover starts at R40 a month.

Illustration

AI in Insurance

Guidewire agrees to buy AI underwriting firm hyperexponential for up to $2.1bn

Guidewire has agreed to buy London-based hyperexponential, which sells AI underwriting and pricing software to commercial insurers, for $1.7bn in cash plus up to $400m tied to revenue targets. The core-systems vendor will fund the deal partly with $1bn of new term loans and expects to complete it in the second quarter of its 2027 fiscal year.

The daily briefing