Calif. Senate Passes Bill Protecting Consumers' Privacy in Insurance
The California Senate passed a bill that requires insurance licensees and their third-party service providers to adhere to a comprehensive privacy framework. The vote was 28-10 on Wednesday.
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SB-354, or the Insurance Consumer Privacy Protection Act of 2025, would update privacy standards for the collection, use and disclosure of information obtained in relation to insurance transactions. Introduced by Sen. Monique Limon (D), the measure would limit personal information processed to what is needed for an insurance transaction or other consumer-authorized purpose.
Under the bill, a licensee would be required to provide an understandable and obvious privacy notice with specific information to consumers at given times. In addition, insurance personnel would provide consumers with a privacy rights notice. Consumer consent would be required for certain actions, and a process for correcting or deleting personal information must be established and made available to the consumer. If consumers choose to exercise their rights, the bill protects them from retaliation.
SB-354 would also mandate contracts between licensees and any third-party service providers that outline how to process personal information on behalf of the licensee.
Insurance Commissioner Ricardo Lara, who supports the bill, said that it establishes modern and reasonable privacy rights and protections, and closes a gap in oversight of personal information in the insurance industry, according to a summary in the June 2 bill analysis.
On the other hand, insurers said SB-354 poses significant challenges, and needs revisions to become workable.
The Assembly Appropriations Committee previously approved the measure with a 5-1 vote (see 2505230062). The bill now heads back to the Assembly to be approved with Senate amendments.