California Insurance Commissioner Ricardo Lara supports proposed legislation to create updated consumer privacy rules for insurers, producers, and third-party service providers.
Senate Bill 354 aims to give consumers more control over their personal data, specifically addressing the data-heavy nature of the insurance industry.
The bill requires insurers to explain how personal information factors into negative policy decisions, such as cancellations or nonrenewals, according to the California Department of Insurance (CDI).
Additional provisions mandate consumer consent before data can be shared for non-insurance purposes. Policyholders would also gain the right to amend or delete incorrect data and maintain privacy without facing penalties, Lara stated.
The bill further limits the amount of data collected, defines its purposes, outlines who can access it, and specifies retention periods.
The last time these laws were updated, social media was just starting, and most people did not have a cell phone. SB 354 allows consumers to decide how their personal data is used and shared.
Ricardo Lara, California Insurance Commissioner
Lara noted that insurance privacy laws have not kept pace with technological advancements. “The last time these laws were updated, social media was just starting, and most people did not have a cell phone,” he said. “SB 354 allows consumers to decide how their personal data is used and shared.”
The bill introduces stronger protections than California’s existing privacy laws and would apply to over 400,000 insurers, producers, and third-party service providers, according to the CDI.
Data categories covered include names, aliases, email addresses, online identifiers, and Social Security numbers, as well as insights gathered from consumer preferences, traits, and behaviors.
State Senator Monique Limón, who introduced the bill, emphasized its importance. “As data is collected freely, often without consumer awareness, giving individuals control over their personal information is more critical than ever,” she said.
If approved, the insurance commissioner would enforce these regulations.
Separately, California lawmakers are advancing the Fair Plan Stabilization Act, aimed at strengthening the state’s insurer of last resort. The bill passed the Assembly on April 1 and is under review in the Senate.
