California Bill Seeks to Beef up Consumer Privacy Protections for Insurance

A new bill introduced in California aims to increase transparency and accountability in California’s insurance market by bolstering consumer privacy protections and establishing a privacy rights framework for insurance licensees and their third-party service providers.

Senate Bill 354, the Insurance Consumer Privacy Protection Act of 2025, aims to give consumers greater control over their personal data.

Authored by state Sen. Monique Limón and sponsored by California Insurance Commissioner Ricardo Lara, SB 354 addresses privacy protections in the information-intensive insurance business.

The authors of the bill say SB 354 exceeds protections under California’s consumer privacy laws, including the Consumer Privacy Rights Act, including an expanded scope of protection, insurers’ use of third-party service providers, enhanced notices and disclosures, data sharing and minimization/retention policies, data breach reporting and information security, and enforcement tools.

Personal information covered by SB 354 includes identifiers including: real name, alias, postal address, unique personal identifier, online identifier, Internet Protocol address, email address, social security number, driver’s license number, passport number; biometric information; Internet or other electronic network activity information; geolocation data; no publicly available education information; Inferences drawn from consumer preferences, characteristics, character, habits; or other sensitive personal information.

SB 354 would apply to more than 400,000 California insurance licensees and their third-party service providers that process personal information in connection with insurance transactions; engage in insurance transactions with consumers; or engage in activities not related to insurance transactions involving consumers’ personal information (personal information processed in the business of insurance, but that isn’t directly related to an insurance transaction requested by the consumer).

Other provisions in SB 354 include the consumer’s:

• Right to consent by opting-in to the sharing of consumers’ personal information by licensees for purposes unrelated to insurance transactions;
• Right to amend, correct, or delete inaccurate personal information that licensees have about consumers (with some exceptions);
• Right to know or access the categories of personal information that are processed; the categories of sources from which consumers’ personal information is collected, and to identify recipients when such information is shared; the reasons for adverse underwriting decisions; and
• right to exercise their consumer privacy rights free from retaliation to ensure that consumers have reasonable access to their privacy rights.

The California insurance commissioner would have enforcement authority under SB 354, imposing escalating penalties against licensees and third-party providers found in violation of the act.

Topics California