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Committee advances insurance privacy overhaul after lengthy debate; industry seeks amendments
Summary
SB354 would modernize insurance‑sector privacy rules—creating opt‑in limits, banning data sales, and imposing new transparency and deletion rights—but industry groups warned the bill in current form exceeds CCPA and sought targeted exemptions and technical fixes.
The committee advanced SB354, a comprehensive proposal to modernize insurance privacy law that would give consumers new rights to opt in to certain data sharing, prohibit sale of personal information within the insurance sector, limit processing of sensitive information and require ongoing disclosures from insurers.
Sen. Ben Padilla presented the bill on behalf of Pro Tem Monique Limon and said California’s insurance‑sector privacy rules ‘‘haven’t been updated in 40 years’’ and must be aligned with contemporary data practices. Insurance Commissioner Ricardo Lara described the measure as a modernization that would preserve the commissioner’s role as the primary regulator.
Supporters and concerns: Supporters including consumer advocates and Kaiser Advocacy praised the strengthened protections. However, numerous insurance trade groups, surplus‑line associations, independent agents, banks and credit unions urged amendments. Allison Eady of the Personal Insurance Federation of California said SB354 in print ‘‘goes well beyond’’ CCPA and could be the most stringent global standard for data processing if left unchanged. Industry witnesses requested a small‑business exemption for independent agents, disentangling internal processing from external sharing rules, and narrowing notices that would otherwise require broad outreach.
Committee exchanges: Members asked whether the bill will be conformed to CCPA standards and whether private‑right‑of‑action language would be narrowed. Sponsor and department officials said negotiations are ongoing and expected to produce substantial amendments before the bill reaches the privacy committee. Assemblymembers expressed both urgency to modernize protections and caution about unintended operational consequences.
Outcome and next steps: The committee voted to pass SB354 to the Committee on Privacy and Consumer Protection. Committee members and witnesses said they expect substantial technical amendments in the next committee; the bill will return with revised language for further analysis.
