Senate Bill 354 (Limon) is an extensive overhaul of privacy and data laws in the insurance space. The goal of the bill is to increase the privacy protections to meet or exceed those in Prop 24. Also named the Insurance Consumer Privacy Protection Act of 2025, SB 354 would set new standards for how insurance licensees and third-party providers collect, use, and share consumer data. The bill’s sponsor, the California Department of Insurance (CDI) claims It aims to enhance transparency, accountability, and align privacy regulations with modern insurance practices.
The insurance industry has long operated under strong privacy regulations, primarily through the Insurance Information and Privacy Protection Act (IIPPA) and the Gramm-Leach-Bliley Act (GLBA). In recent years, the California Privacy Protection Agency (CPPA) has increasingly involved itself in the insurance sector by introducing regulations aimed at enhancing consumer data privacy and oversight. These efforts reflect the CPPA’s broader mandate to enforce the California Consumer Privacy Act (CCPA) and its amendments, including the California Privacy Rights Act (CPRA). As part of this regulatory expansion, the agency has begun drafting and proposing rules that impact how insurance companies collect, use, and share personal information. This move has signaled a growing interest by the CPPA in sectors traditionally overseen by other state agencies, creating new layers of compliance for insurers and raising questions about jurisdictional boundaries and regulatory coordination within California. CDI has indicated that the purpose of this bill is to take the lead in this area, considering the CPPA’s efforts on insurance regulations over the past year.
As currently drafted, the provisions in SB 354 would impose excessive regulatory burdens on insurers and businesses, creating operational inefficiencies, potential privacy risks, and confusion among consumers. PIFC has been working with the author of SB 354, Senator Limon, and other stakeholders on significant revisions for the bill to become workable.
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