Senate Standing Committee on Insurance

Just a little patience. We're waiting for our authors to show up. Thank you.

The Senate Committee will start in 60 seconds.

We will bring this Committee to order. Good afternoon, everyone, and thank you for your patience. As you know, we have a lot of committees happening at the same time. I will ask Members to join our Committee in room 2100 so we can establish a quorum.

In the meantime, we just wanted to highlight that we have a very brief agenda. We have three bills. SB 354, SB583 and SB616. Currently we have SB583 on consent. And we will go in file order at this time. First, we need to establish a quorum. Madam Secretary, please call the roll.

[Roll Call]

We have established a quorum. Before we move forward, we have to adopt the Committee rules for this year. We will now adopt Committee rules that Committee membership has received previously. The Committee rules to review without objection. The Committee rules for the 202526 legislative session will be adopted after we call roll. Madam Secretary, please call roll. No.

Okay. Any objections? No objections. Thank you. Without any objections, the legislative session rules will be adopted. We are still waiting for our author and she has share that she'll be showing up shortly. We will just take a short recess.

I'm going to come back to order. We will adopt the consent calendar. Since I know some of you have to leave, we will have one Bill in consent. SP583. Does any Member wish to pull this off? Consent Seeing no interest. Do we have a motion?

I have moved this consent calendar.

Is that your first one for the year?

Yes.

Yes. Very. Congratulations. First time in this Committee. So we have. It's been moved by Senator Becker. Please, Madam Secretary, call the roll.

[Roll Call]

We will wait for the rest of the Members to attend. We will leave that on call. Once again, I will pause for a brief moment to ensure that we give our authors time to join us.

We don't know where our other authors are. So I will convene and I will be presenting my Bill. We're going to just make sure that we continue to call her at this time. I'm going to let my Vice Chair take over trying to see if that's her. No. Okay.

So I will present and I will turn it over to Senator Leno.

We are going out of order. So we're going to be taking SB 616 just for clarification. Thank you.

You may proceed.

Zero, thank you. So I have it. Thank you so much. Well, thank you. Vice Chair and Members of this Committee, I'm proud to present SB616, an important Bill that will take crucial steps towards improving the availability and affordability of of the property insurance here in the State of California.

Later you will hear from representatives from both the state government and local government. So, former Council Member, it is very important for me to always bring our local perspective to the table. So I appreciate it. This issue is critically important and we need all voices at the table. We're going to get it right.

SB616 will create an independent community hardening Commission within the Department of Insurance. The Commission will be tasked with bringing together state and local government entities as well as experts and stakeholders to create consistent data driven standards to guide statewide fire mitigation policies and programs across the state and local agencies.

Effective fire mitigation is crucial and very important to to help improve availability and affordability and property insurance, which is what we hear over and over from our constituents and consumers, especially those that are currently struggling to recover after the fires.

Under existing law, work on community and home hardening is guided through so many different state codes, regulations, state and local agencies, as well as guidelines from nonprofit organizations. Here we have some sources of consumers that are currently being asked to do things from these agencies.

The California's building code, Chapter 7 a California fire code Chapter 49 on requirements for wildland urban interface areas, the safer from wildfire by the Department of Insurance, the low cost retrofits list from the state fire marshal and the list goes on and on.

And if we want something to succeed, the key is going to be greater coordination coming together to ensure that we're all working together for a common goal. And the fact remains that climate change is still making wildfires more frequent and destructive and that's not changing.

So growing wildfire risks are driving up costs and it's also reducing the availability. We have so many homeowners in California distressed not only because they can't find adequate fire coverage, but also the increase in price.

And we want to do what we can to ensure that consumers are confident that we will be taking care of them when the next fire strikes, that they will be made whole as well.

So in this case, we want to make sure that we include perspectives from leaders across the the state, from fire scientists to construction planning, insurance, emergency response disciplines. The Commission will be a Commission that will be comprised of seven Members or their designees in the following five areas.

It'll be the insurance Commissioner who will be chair, the Secretary of National Resources or State Fire Marshal, the Director of Housing and Community Development, the Director of Emergency Services, the Director of Office of Infrastructure and Safety. As mentioned, they could also have a designee.

The following two will be a Member of the legislative body appointed by the speaker of the Assembly and a Member of the legislative body appointed by the Senate President Pro Tem.

The Commission will be advised by an advisory council made up of representatives from a diverse group of stakeholders appointed by the Insurance Commissioner, including experts from research institutions, state and local governments, again, consumers, industry and public representatives appointed by the Governor.

Lastly, and equally important, in the event of future wildfire catastrophes, the Commission will be tasked with conducting post catastrophic reports. We know that we've had many fires in the State of California. I've been around for a lot of them.

And we need to figure out how to take lessons learned, really assess how we can improve practices and processes and make sure that we analyze the mitigation standards to ensure that they work and make recommendations on improvements that can reduce severity of future events.

Joining me here today is Insurance Commissioner Ricardo Lara from the State of California, as well as Supervisor from Nevada County, Heidi Hall. If I may allow my witnesses to proceed. Thank you.

You may proceed. Thank you.

This on. zero, sorry. Thank you. Mr. Vice Chair Neo and Chair Rubio and Members of the Committee today, I want to thank you for the opportunity to be here today to speak in support of my sponsored Bill, SB616. With me is Mike Peterson, our Senior Deputy to help assist in any technical questions you might have.

I'd like to thank Senator Rubio, Senator Cortese and Senator Stern for their partnership in jointly authoring this very critical measure to strengthen our wildfire mitigation efforts and to protect California homeowners and businesses across the state.

SB616, the California community Fire Hardening Commission, aims to prevent tragic events like the ones we've been seeing, not just in Southern California, but throughout the entire state. So this is really in response to all the fires since 2017. We just experienced, you know that we keep experiencing an independent Commission within my Department of Insurance.

This is the goal will be to communicate the benefits of community wide mitigation clearly with one voice to every corner of our state by aligning our statewide efforts for community wildfire reduction and mitigation efforts. We know this works.

We've all seen the photo of that one house in Lahaina, we've seen that one house in the Palisades and numerous of other examples of how mitigation and home hardening is critical to saving your property, your only investment and ultimately your family.

As you know, our communities across California are facing one of the most urgent crisis of our time. Climate driven disasters that threaten lives, homes and local economies. Wildfires are more frequent, more destructive and more costly than ever as we haven't even entered our wildfire season and already had the most devastating wildfires in US history in January. So.

And we know it's also leaving many Californians struggling to find and afford the coverage they need. In my experience, meeting with over tens of thousands of Californians across our state has shown me that when neighbors work together, they are more effectively protect protect themselves and their communities.

Even in Nevada county, even a few homes lacking effective mitigation can be the weak link in wildfire defense. That is why creating a safer from wildfires regulation, the nation's first mandatory insurance discount program, recognizing community wide mitigations through Firewise USA and Fire Risk reduction community programs are critical.

Without community wide mitigation, fire can more easily spread from structure to structure until entire communities are demolished. A pattern that we keep seeing over and over and over. SB616 would unite government with experts across multiple disciplines.

As Chairwoman Rubio stated, to ensure that our policies reflect real world challenges and solutions while creating a unified, science based, data driven approach to wildfire mitigation for every community across our state. Firefighters and wildfire scientists know that we need to protect homes and properties.

But current laws scatter mitigation efforts across multiple codes, multiple regulations, multiple guidelines within various state, local, nonprofit and private entities. This is something that I kept hearing over and over again across the state. We would talk to people that have lost their homes and they said we followed what the local government told us.

And then we would ask what local government they're like, well my town council, but the county requires something different and this is all being used against the consumer at the time of trying to file claims to see if they've met these mitigation standards.

So it's time that we coalesce all these Experts come up with clear and concise standards so that everybody understands. Regardless if you live in Trinity, Nevada, Siskiyou, CaLaveras County or La, Orange County, we're all operating under one set of rules and being able to modify those to meet the Latest technology and the Latest fire science is critical.

So beginning in 2026, I'm loath to interrupt the Commissioner, but as a former Member, you'll recall. Yes, I will.

I respectfully ask where I vote. How's that? Thank you.

And the next witness. Proceed.

Thank you. Can you hear me all right? Yes. Okay. Thank you. Honorable Chair Rubio, Vice Chair Niello, Members of the Committee, and Insurance Commissioner Lara and staff, thank you so much for having me here today. It's an honor.

My name is Heidi Hall and I serve as the Nevada County District 1 supervisor and chair of the Nevada County Board of Supervisors. The crisis of insurance for homeowners and businesses in California has never been more acute than it is today.

Locally, we are hearing from aging seniors facing the impossible decision to give up their homes after being dropped by their longtime insurance carriers despite not having filed a claim in decades. We see commercial businesses shuttering their doors despite fire hydrants on adjacent sidewalks.

Our public housing projects are losing their insurance or receiving premiums so high they become at risk for insolvency. The circumstances are simply unsustainable and getting more desperate every day. I want to thank Insurance Commissioner Lara for his continued and tireless effort working to stabilize the market. But more must be done, and fast.

Insurance premiums currently fail to reflect significant local frontline fire risk mitigation efforts. The lowering of risk must be passed on to the consumers paying for these costs. Consumers understand that insurers need to be solvent to offer insurance.

But the glacial pace at which markets respond to what local governments are doing now to prevent fire at the landscape scale cannot wait for an actuarial table to catch up. Thank you, Senator Rubio, for your leadership.

SB616 provides a framework for the Insurance Commissioner and CDI to incorporate direct feedback across diverse set of stakeholders, bringing representatives of the industry directly to the table on the front end to incorporate stuff standards and regulations coming from a mid sized rural county. I strongly support that.

The Bill specifically provides a seat at the table for a rural county representative to ensure our most vulnerable voices in the wue the wildland urban interface are heard.

County supervisors have been at the epicenter of this crisis for a decade, hearing from our homeowners and realtors and businesses and were some of the first to sound the alarm from the Sierra Mountain Range. We are making budgetary and land use decisions that prioritize fire prevention and safety and we are standing ready to tackle this crisis.

SB616 is critical to serve as a bridge between state and local government to connect the risk mitigation work being completed to our private partners in the industry. With that, I express my support for SB616 and urge your support as well. Thank you.

You ran just slightly over, but not as much as the Commissioner did. I worked on that. Thank you. Do we have other witnesses in the audience that are in support? State your name, organization and position.

Kim Stone. Stone Advocacy on behalf of Consumer Watchdog in support.

Good afternoon. Stacy Heaton with the Rural County Representatives of California in support.

Good afternoon. Delilah Clay on behalf of the California Construction and Industrial Materials Association in support.

Good afternoon. John Norwood on behalf of the Independent Insurance Agents and Brokers of California in support. Thank you.

Good afternoon. Karen Lang on behalf of the Mendocino County Board of Supervisors in support. Thank you.

Good afternoon Mr. Vice Chair. Robert Harrell with the Consumer Federation of California. We don't have an official position yet. We're encouraged by where this is going. We did note some concerns to the Committee about appointment authority and things like that, and we're happy to work with the author and sponsor on that.

Excuse me. Seeing no other additional witnesses in support. Do we have primary witnesses in opposition? Seeing no one come forward. Are there other MeToo, if you will, witnesses in opposition to the bill? Seeing no one come forward. We'll bring it back to to this side of the dais. Senator Becker?

Sure. Thank you. First, I want to thank you, supervisor, for being here and for the work that you are doing on the front lines. And I want to particularly thank our insurance Commissioner. Thank you for your leadership during this incredibly difficult time steering our ship and doing what needs to get done to stabilize our system.

I would like to be added as co author of this Bill. This Bill is a critical part of our Senate work. Wildfire insurance package and home hardening is a critical part of making sure our communities are survival in the face of these catastrophic wildfires.

I did a town hall recently on home hardening and it was one of the most attended, you know, I've ever had.

People are interested, you know, they want to do the right thing, but they need to have all the right information first and then hopefully over time making sure the funding follows as well so that we're rewarding home hardening, we're encouraging home hardening and again making sure that people have all the information that they need, you know, note that I'm authoring sb326 which is I think very complimentary dealing with the Wildfire Strategic Planning act and reducing the risk for future wildfires.

So the standards the home Hardening Commission will develop pursuant to this Bill will be critical part of the work that's done as part of the Wildfire Strategic Planning act in 326 if that is to pass. So I want to commend you chair on this Bill and would be love to move it at the appropriate time.

I believe this would be the appropriate time. Not seeing any other questions or comments. Senator Rubio, you may close.

Thank you. Well, first of all, a key component of this Bill is really bringing all the stakeholders and experts to the table. And also I think what we, you know, this is my personal opinion we haven't done is really assessing where we go wrong.

And so there's a very important piece here where we're going to assess the effectiveness of what's happening and keep improving. But I want to thank the insurance Commissioner because he'll remember last year we spent months together.

This did not come up today last year, if I recall call we spend 15 days zooming every minute of the day, including weekends to educate every single Member of the the Senate. You know, our body as well as stakeholders. It was weekends, nights and it was not easy.

We spent quality time making sure that we took everyone's perspective into consideration and we're never going to get it perfect. But I love that we're at a really good place. We want to make sure that our consumers that are really struggling right now begging for solutions, know that we are on this.

We're trying to make sure that we keep our community safe and bring not only stability to the market, but we want them to know as well that when the next catastrophe hits that they should have confidence that we're going to be taking care of them.

So with that I appreciate the co authorship from Becker and I ask for an ivoid. Thank you.

Now to the suspenseful part. Please call. The roll.

[Roll call]

We will keep that on call for others to catch up. And passing the gavel back to the chair.

Thank you for that. So, we'll now hear from our next author. We're going to be hearing SB 354 by Senator Limon. Senator Limon, when you're ready, you may proceed. Thank you.

Thank you, Chair and Members. First, I want to start off by thanking the Chair, the Committee for ongoing discussions and certainly a commitment on my part to continue the conversations. In particular, the Chair has expressed convers, you know, conversations and ongoing need to talk about elements of this piece including opting in or opting out.

So we will continue those discussions. California has been a leader in consumer privacy. In fact, California voters enacted a constitutional right to privacy over 50 years ago and reaffirmed this commitment with the enactment of the California Consumer Privacy Act and most recently in 2020 with the California Privacy Rights Act. Protecting consumer privacy is only becoming more important in a digital world where information is often collected, stored and shared without the knowledge or consent of consumers. Our current privacy laws regulating insurance date back to the 1980s and did not contemplate all the ways that consumer data could be collected and shared.

This bill would create a modern structure for protecting consumer privacy across the insurance industry. Specifically, this bill gives consumers the right to opt in to the sharing of personal information that is used for purposes unrelated to insurance. As I said, we will continue this conversation. It gives consumers the right to correct inaccurate information held by insurance providers.

It gives - consumers will also have the right to know what categories of information are collected and from where it comes and where - with whom it is shared. Consumers will also be able to access the reasons for adverse underwriting decisions. And finally, consumers will be able to delete inaccurate or unnecessary information that insurance companies may have.

We have heard again from consumers and from stakeholders about the need to continue the conversations and we are committed to continue those conversations. With me today, I have Insurance Commissioner Ricardo Lara and Damon Diederich, Privacy Officer for the California Department of Insurance to answer any technical questions.

We will now move on to lead witnesses. I may not be as generous as my colleague. So, Senator Lara. I'm sorry. Insurance Commissioner Lara, you may proceed. Thank you.

Thank you. I know, I know. SB 354 is a landmark bill that is both necessary and timely to protect consumers in California's insurance industry. We live in a world that is vastly different from the one that we all grew up in. More than 20 years ago have passed since our state insurance privacy laws were updated. At that time, many people were still had dial up Internet. Most people barely owned a cell phone and social media was in its infancy. California's decades old insurance privacy laws have been outpaced by scale, speed and manner in- in which consumers personal information is processed in the insurance market.

By law, consumers are required to hold many type of insurance and more than Almost any other industry. Insurers require significant amounts of personal information to manage risk and service the requested insurance transactions. As more personal information is being shared and processed, consumers end up bearing the brunt of the risk when the privacy of their data is compromised.

We don't have the time for- of- or luxury to simply wait and let's see what's happening. As Commissioner, I have the duty to protect 40 million Californians who call this state home. And SB 354 is about protecting everyday people. The bill helps prevent insurance consumers from becoming victims of fraud because of their personal- if their personal data was hacked. I respectfully asked for your aye vote.

Will you be speaking?

No just-

Okay. For technical support. Thank you. We will now move on to support witnesses in the room, please only state your name organization I'm going to give you brief minutes to ... your support.

Becca Cramer-Mowder on behalf of Oakland Privacy in support.

Madam Chair and Members. Robert Herrell with the Consumer Federation of California. We don't have an official position yet. We're encouraged by what we see in the bill. We hope the department will stay strong. I'll just before you hear the opponents coming up in a moment, I would just remind this panel that a decade ago the insurance industry was using data mining to charge more-

We're trying to keep it very minimal. So can you wrap it up in 10 seconds?

Yeah. To charge people more if they had information suggesting that they were less likely to shop around when their insurance renewal was up. So that's a decade ago. So we thank the author for her efforts. We're going to be meeting with her in the department soon. Appreciate the time, Madam Chair.

Thank you. We will now hear lead witnesses in opposition. Welcome. I'm going to let you self identify and you may start whenever you're ready. Thank you.

Absolutely. Thank you very much. Madam Chair and Members of the Committee. Matt Powers, on behack- behalf of ACLHIC, the Association of California Life and Health Insurance Companies. Were respectfully in an opposed unless amended position. We have great respect for Senator Limon, Commissioner Lara and their staffs as the author and sponsor of the bill.

However, we do have serious concerns with the measure before you today. To start, let me be clear. Our members are deeply committed to protecting consumer privacy. For decades, our industry has disclosed our information practices and has been subject to the Insurance Information Privacy Protection Act. We do not make money from selling personal data.

Yes, we use personal data, excuse me, personal information to underwrite policies and ensure Californians receive the most appropriate coverage. But personal data is not our product. That context is critical when evaluating this bill. In several key areas, this Bill goes well beyond existing state privacy standards, even beyond those applied to companies whose entire business model relies on the commercialization of personal data. It's difficult to understand why insurers who use data primarily to write and fulfill policy obligations should be subject to stricter rules than companies that profit from consumer data itself.

We do appreciate the productive conversations we've had with the author's office, CDI and the Committee, and we remain committed to engaging. But we remain deeply concerned about the specific provisions and want to ensure we get this right. To that point, we understand the intent of the bill and we want the Department of Insurance to be our regulator in all aspects of our business and including AI and privacy. But there's no statutory reason for this bill to move right now.

There's no Prop 24 deadline for the CPPA to conduct their CCPA to IIPPA study, and in fact, the CPPA is currently drafting regulations to clarify the IIPPA's jurisdiction relative to CCPA. There is therefore no rush and we believe that a bill of this magnitude deserves more time and deliberation. In parallel, the National Association of Insurance Commissioners, NAIC, is actively working to update the National Privacy Model law. California has historically used NAIC models to inform its insurance statutes, including IIPPA.

While the process has taken some time, there has been meaningful progress in the last six months, and at a minimum, we believe it's prudent to let that work inform our approach here. Our- our letter outlines 12 specific areas where we believe the bill must be improved if it moves forward. Chief among them, we urge the committee to align the bills opt out consent provisions, data processing restrictions, and third party disclosure standards with those in the CCPA. As I mentioned, the insurance industry has taken privacy seriously since at least 1981, long before the Internet and long before personal data became a commodity on the scale it is today.

Insurance consumers have had the right to correct, amend or delete information for decades. We've been providing privacy notices and informing consumers of adverse underwriting decisions long before most other industries. So, when we say we're committed to this process, it's not just rhetoric. Our interests are aligned with Senator Limon and Commissioner Lara. We're simply deeply concerned about the bill's complexity and the speed at which this 56-page proposal is advancing. Thank you very much for your consideration.

Thank you. You need to be a little bit more concise. Thank you.

Absolutely. Thank you. Madam Chair. Allison Adey on behalf of the Personal Insurance Federation of California. In large part, we align our comments with our companions from ACLHIC today so I will be very brief in my additional comments. The last time we saw a privacy bill of this substance moving through the legislature was the CCPA. That moved through in just one year and it led to substantial issues and oversights that required years of follow up legislation as well as issues at the CPPA to clean up. We are deeply committed to this conversation with both the department and the author's office. We just want this to be correct the first time around. So we're urging that it move at a pace that allows that to happen. Thank you.

Thank you. We will now invite those who also plan to oppose in the room. Keep your comments as briefly as possible. Thank you.

Madam Chair. Chris Micheli on behalf of the Civil Justice Association of California in respectful opposition. Thank you.

Thank you.

Madam Chair and Members of the Committee. Laura Curtis on behalf of the American Property Casualty Insurance Association also in an opposed and less amended position. Thank you.

Good afternoon. Sherry McCue representing the Pacific Association of Domestic Insurance Companies and the National Association of Insurance and Financial Advisers in respectful opposition unless amended. Thank you.

Dennis Loper for the American Council of Life Insurers remain opposed.

Good afternoon Madam Chair, Members. Anthony Helton with the California Land Title Association. Opposed unless amended to maintain the current exemption for title insurance under current law. And due to concerns over substantial negative impacts to real estate. Appreciate the author's willingness to engage and. Look forward to continuing the conversation. Thank you.

Good afternoon Madam Chair and Members. Robert Moutrie, California Chamber of Commerce, echoing the concerns stated by the witnesses. Thank you.

Thank you.

Afternoon. John Norwood on behalf of the Independent Insurance Agents and Brokers of California. Opposed unless amended. Thank you.

Thank you.

Good afternoon. Mark Farouk on behalf of the California Hospital Association. Opposed unless amended. Thank you.

Thank you. Anyone else wishing to speak? Seeing no interest, we'll bring it back now to the Committee Members. Any questions, comments or concerns. We'll start with Senator Becker.

Thank you. Want to thank- thank the author for tackling this. We all agree that protecting consumer privacy is- is- needs to be paramount for us and especially insurance where it's required by law that people participate.

And you know, I've been working for years to ensure that consumers are protected and are aware of what kind of sensitive data that companies collect on them and that we've right to easily delete that information. So I do agree with you. I think strengthening privacy rights and is- is just vital to ensuring that consumers information is- is-

is protected. I- I do have a couple questions. I'll say a couple things that I do, you know and I passed the strongest data broker law in the country failed one time, that we passed it the second time on the Delete Act. And I didn't hear in that process a lot about insurance companies being ones that were-

that were the ones that were sharing this information, selling this information. So I did have a couple questions that were kind of specific to the bill. There was a provision around sort of sharing information.

Is it conceived that folks will be able to share with similar companies in an umbrella of companies who might offer other policies that people might want? How is that- how or- i guess or how should. How are you thinking about that in terms of the bill?

By way of the chair? If it's okay, I'll have the. The. Yes, thank you.

I have our staff.

Good afternoon. Yeah, the, the concept at this point. Oh, I'm sorry. I'm Damon Diederich. I'm a attorney at the department. I'm privacy officer for the department. The concept of we have it today is that consumers would have to opt into the sharing of their information for purposes other than the insurance transaction.

Insurance transaction, broadly defined to be all purposes related to the servicing of the insurance policy from application through claim, including fraud detection. For other purposes, which is what we're calling the business of insurance, such as, you know, marketing, research activities, anything that's not strictly necessary to servicing the consumer's transaction.

We currently have an opt in standard for this. So with the consent of the consumer, that information would be able to be. Be shared for those purposes.

Yeah, it seems that should be important for, you know, I get that from my company, you know, like, hey, they offer one line, they want to offer me a discount, another line, you know, like the. Feels like that should be. And I know. And with all this, I just, again, have great respect for the author.

I know you're talking, you know, working with. With some of the opposition concerns. I know you'll continue to do that going forward, but feels like that should be a piece that is, you know, accommodated. I feel like that's something as a consumer that I've benefited from. As part of that.

I think there's another part of the bill which was sort of listing every specific vendor rather than maybe grouping by types of vendors. Is that something you're open to looking at?

So we're having discussions on all parts of the bill.

Right.

I just want to be clear, we're probably not going to negotiate on the dais.

Yeah.

I'm open to having conversations on all parts of the bill.

Yeah, yeah. Well, I just flagged that as, you know, as an area, you know, we want to be operational, you know, at- at the end of the day.

And just I'll ask you, you know, how do you respond to, you know, the concern about the, the different standard between the CPPA and this bill in terms of opt in, opt out. How have you thought about that?

Well, I- I think that you have to consider everything as a whole, as a collective. So there also is a very big piece that I think you heard the opposition talk about that there is a desire for them to be regula- regulated under the Department of Insurance.

So if you're going to get something, you also have to be able to even out and balance out the entire package. And so I think that this is what we're trying to figure out. Right. Consumers are okay with CCPA- CPPA being the entity that oversees, you know, the insurance companies as it really- as it relates to privacy.

They are in the process of doing regulations, but we also know that those in the Department of Insurance spend the most amount of time, minutes. They know the issues, the details related.

So there is value to the consumer for an entity that has significant amount of expertise to also be that entity that regulates on privacy, that gives something to the opposition. And so I understand that they don't want to give more on their end, but we're trying to ensure that consumers have a balanced package on this piece.

Can I just add to that, we've also, Madam Chair, we've also learned from not only the creation of the committee, but of the other law, of what we need to do to update it. This is the problem, not the law. Also the current law and the current statute also leave some other things to be desired for consumers.

And so right now we're not at a stage to negotiate against ourselves. We're just beginning the process. And I know there's concern about the timing of us getting this done through the legislative calendar. Well, we got the largest reforms in our history in 30 years in one year, as promised.

We're prepared to have that conversation with everybody engaged in- in this discussion. But it needs to happen. It needs to be regulated at the department because the privacy agency is asking us, as insurance is regulated through the state, through our department.

Yeah, good.

Well, I do agree that we do need to strengthen this, as you say, 20 years ago, I don't know, maybe that was my MySpace again, I don't know if MySpace was, was sharing, I can't remember, but, but I do appreciate you working on this and working through these issues and I- I- I will be supporting the bill today.

Thank you, Senator Niello.

Thank you.

Thank you, Madam Chair. This is a large bill in the committee analysis that talks about the existing law, there's three points and then it goes into this law and there's 35 points.

And the more detail in a piece of legislation, the more opportunity there is for unintended consequences, which in this body sometimes we're- we can be kind of good at. And sometimes, especially when a- with a complicated piece of legislation, just when you know you're done is probably the exact right time to stop and review.

And since the National Association of Insurance Commissioners is currently reviewing exactly this, it would seem to me the product of that would be the perfect way to assess what we have here so as to avoid unintended consequences. That would suggest that perhaps what we have here is a two year bill.

And for that reason I can't support the bill today. I certainly support the idea, the concept, but I'm concerned with as many moving parts as we see here, there just isn't the time to truly analyze it. I know California likes to lead, I get that. But it's better to lead together than to lead alone.

Who's in our rear view mirror? I'm not sure because there's this other group who's working on the same thing in a different time frame and maybe with a different view and maybe we ought to know that view before we move forward.

Appreciate the feedback. Thank you. Appreciate the feedback. Thank you.

Any other members wishing to ask questions? Senator Wahab?

Thank you. I- I just wanted to provide the author a moment to address the concerns in the letter that was given by basically all the insurance companies. They have very detailed 12 items that they are concerned with. And I just want, want to be able to give you an opportunity to respond.

Oh, to each one of those? I think we're having a conversation about all of them and they are, this is- this is a work in progress.

I think that one of the things that's really important is that the vehicle allows for public discussion, public engagement and also public input on these. These are all- these 12 points are, you know, I think are meaningful. Whether it's, you know, the- the process of how folks opt in or opt out of it.

I think that that's one of the ones you heard about today. I think, you know, Senator Becker brought up the list of the detailed, you know, categorizations of- of the particular spaces. I mean, we will have conversations on all of those as this bill moves forward.

If this bill moves forward.

Right. If or as.

So- So I have some concerns. I- I'll just state this. The opt in. There's a number of things. Number one, with the collection of so much information And I've said this and I've talked about privacy a lot. What is the guarantee that this information is going to remain private? Right.

There's a lot of data analysis being done both by the department as well as all other stakeholders that are collecting this information, including the companies. So that is one of my first priority concerns is the privacy. Right.

And I- I with all the leaks out there, with all the data breaches and things like that, I don't feel very confident in- in that regard. The consumer privacy notices. I hate filling out all the paperwork to say, you know, just notifying you this, notifying you of this. Nobody reads them, nobody knows what they mean.

An average person, that's what I care about. Right. That is a big concern of mine. The marketing provisions. Right. The opt in. I think that there should be a default on marketing. Getting hit with a bunch of like, hey, upset selling things like that should be automatically removed. My personal opinion.

Because nobody wants to have things that they're forced and required to have and also be upsold on things that they don't necessarily need. Right. The fact that we also have data sharing, you know, who are we sharing it with? We have one software company that's deeply interested in supporting this. Why? I'd love to know.

And then, you know, one of the goals, and I think that what we're seeing in bills today is that it's over litigious. Right. And I think that's a big problem. And that also increases the cost to the consumer. It does increase the cost to the consumer. And that is a deep concern. I sit on Judish.

I will tell you that those are my concerns that I would like an answer to more concretely. And you know, just again, we, we need to be prioritizing the individual user.

So I will say the part that I disagree on, on some of these things is the fact that being able to list, I think, you know, Senator Becker mentioned it earlier, is basically being able to list every single detail of where it's going, what's happening, who's- who's, you know, getting this and that. I think that's incredibly important.

Right? As- As an individual user, yes, it may be burdensome, but I think that it should be very easy to any provider to be able to say that this is what's happening, this is where your data shared, this is some of the concerns.

So that third party disclosure, the category is not as necessary as like literally listing it out. Right. Because there are bad actors. What is also the provisions of ensuring that if this is all shared what are the safeguards to limit bad actors? What are the penalties? I'd like to see that, too. And what is the true framework?

So I- I will say I, out of courtesy for all the hard work you do, I will be supportive of this bill. But I just want to say in Judish, I expect a lot more concrete.

So we will be happy to go through some of those points. I don't know if you want to go through some of these points at this moment, but we're happy to go through these points and get you additional information.

Thank you.

Would you like to address that now or?

We could set up a separate meeting.

Yeah. Okay.

I would love that.

Perfect.

So would I.

Thank you.

Okay. Any other Members wishing to comment or ask questions? Okay. So thank you so much. So I wanted to just share that. Yeah, this is a bill that we've had conversations on, you know, and I agree with the insurance commissioner that last year you passed one of the most comprehensive, difficult things to do.

But in one year, however, I remember having multiple meetings and conversations. And I mean, we were, like, attached at the hip almost all year long. So it took time. And this is very comprehensive. Just so much to read and dig deep into.

And so the conversation we had really is encouraging because I know you as an author and I know you as a senator, and I know that you committed to continue to work on this.

So I'm not going to reiterate everything, the other concerns everyone shared, but clearly it is something that we all have concerns, but it's something that should move forward to see how we can get in a good place.

But I'll tell you, I will continue to have my reservations and I'll look to your commitments to see how you continue to work with the opposition to figure this out. It is important that we get it right. And sometimes we do react to things and we have unintended consequences that later on end up hurting our consumers.

So with that, I just want to say thank you for your openness to have a conversation with me and discuss it. Thank you, Insurance Commissioner, for being here. And with that, would you like to close?

Thank you, Members. Thank you for the discussion and the feedback. And certainly all feedback is welcome. As we move forward, as we consider the bill. We think it's important to have a public conversation about this. And so this is the reason for the vehicle to have a deliberation, a public deliberation with legislative input on this particular process.

And so I appreciate the trust. And also there is an expressed commitment to continue the conversations, take this feedback and you know, see- see how the bill moves forward. But certainly I think that there is, you know, also a recognition we are not starting from scratch. Right? So this is not starting from scratch.

There are existing laws that actually have regulation. And absent this bill, those existing laws will still be in place related to consumer privacy.

They will just be different because they will be regulated by the CPPA as opposed to the Department of Insurance, an entity that is absolutely committed to privacy, but also has a different level of expertise related to insurance and for the consumer. And that is what we're trying to address.

So I want to be clear that some of the concerns expressed today are concerns that you have with existing law.

And so we are trying to also make sure that what we are doing here is providing the best entity to oversee our consumers and to provide that expertise that we think is needed in an industry that impacts so many of our consumers. And so as this bill moves forward, we continue again to make that.

There's an express commitment here on my part to work with all parties to figure out how this bill moves forward. But I do want to just clarify that absent this bill, some of the concerns expressed are concerns expressed about existing and current law.

Thank you. So I know we have a motion from Senator Wahab. Madam Secretary, please call the roll.

Motion is do passed to the Committee on Judiciary. [ROLL CALL]

The. The Bill is 5:2. It's out. Thank you so much. Thank you. Thank you, Commissioner for. For stopping by and all the. The guest speakers to today. We will now I believe we have a full body today. So we will now move to consent calendar. Madam Secretary, please call the roll on for the consent calendar.

[Roll Call]

The Bill is 7-0. It's moved. Now we will move over to SB616 by Rubio. Madam Secretary, please call the roll.

[Roll Call]

The bill's out 7-0. We want to thank all the Members of the Committee and everyone for showing up here today. We have concluded the agenda and this State Senate Insurance Committee is adjourned. Thank you.