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Senate committee advances bill to restrict unnoticed drone inspections by insurers
Summary
The Senate Insurance Committee advanced SB 260, which would set new limits and notice requirements on insurers’ use of drones for property inspections and on unmanned aircraft near critical infrastructure. Lawmakers and witnesses discussed privacy, consumer notice, retention of images and industry practicality.
Senator A. Wahab, chairing the California State Senate Insurance Committee, advanced SB 260 on a 5-0 vote to the Appropriations Committee after discussion about privacy, consumer notice and industry operations.
The bill, as presented by Senator Wahab, would establish updated guidelines for the use of unmanned aircraft — commonly called drones — over critical infrastructure and for insurers that use aerial imagery for underwriting and claims inspections. ‘‘Insurance carriers are not required to notify property owners of an aerial inspection,’’ Wahab said, calling the lack of notice “a concern” and framing the measure as one of consumer protection.
The senator said her office worked with the Department of Insurance and committee staff on amendments she planned to adopt if the bill advanced. ‘‘We shared those amendments with the office of committee members,’’ she said, adding the changes remove retroactive provisions and strike an initial two-year prohibition for inspections while adding exceptions and record-retention clarifications.
Jonathan Feldman, lead lobbyist for the California Police Chiefs Association, told the committee the association’s primary concern is protecting critical airspace and infrastructure. ‘‘Our primary focus in this bill is the protections of critical air infrastructure, airspace, and making sure that we’re not allowing recreational, or commercial drones to damage energy structures, communication infrastructure,’’ Feldman said, while also noting the chiefs support privacy protections.
Industry witnesses urged changes to several requirements in the draft. Sherry McHugh of the Pacific Association of Domestic Insurance Companies said a 30-day pre-notification requirement is ‘‘simply not workable’’ because insurers often receive images from third-party vendors who archive imagery and deliver it only on request. She recommended that notification be provided with annual renewal documents instead. McHugh also asked the committee to remove a 120-day right-to-cure provision and the proposed 90-day destruction requirement for images, arguing insurers must retain records for market conduct exams, fraud investigations and other regulatory obligations.
Denny Ritter of the American Property Casualty Insurance Association said aerial imagery is a lower-cost, scalable option for property inspections and that the bill’s barriers could force insurers to revert to in-person inspections, increasing costs and reducing insurer capacity. ‘‘The cost of an aerial inspection is a mere fraction’’ of an in-person inspection, he said.
Advocates and a representative from the ACLU California Action raised separate privacy concerns and asked the committee to preserve consumer notice and rights. Senator Padilla said the operational concerns raised by industry ‘‘don’t seem to me to be insurmountable’’ and encouraged continued negotiations. Senator Becker and others said they saw a need for balance between consumer privacy and insurer operations.
The committee approved a motion to pass the bill to the Appropriations Committee. The official vote record in the hearing transcript states the bill was moved forward and later recorded as passing out of committee by voice/roll-call (tally recorded as 5 yes, 0 no). The committee remarks show the author and stakeholders intend to continue technical negotiations on notice timing, retention, right-to-cure mechanics and exceptions for industry practice.
If enacted as discussed, SB 260 would require insurers to adopt new notice practices for aerial inspections, add limitations on the retention and use of images taken without a homeowner’s prior knowledge, and include carve-outs the author said were added with Department of Insurance input. The bill text and final amendments were not read into the record in full during the hearing; supporters and opponents urged continued refinements before final passage.
The committee record shows the Department of Insurance participated in negotiation and the author said she would adopt proposed amendments before the bill leaves committee.
Votes at a glance: SB 260 — Passed to Appropriations Committee; committee tally reported as 5 yes, 0 no.
(Reporting from the October hearing: excerpts of committee discussion and roll call are recorded in the committee transcript.)
