SB 354 is moving through the California Legislature, and independent insurance agents should be paying close attention. The bill could create costly new privacy compliance requirements for agencies, brokers, and other insurance licensees.
The measure, known as the Insurance Information and Privacy Protection Act, would make broad changes to insurance privacy rules in California. If passed, it could create new requirements for insurance licensees, surplus line insurers, reinsurers, and third-party service providers.
For independent insurance agents and brokers, the issue is clear.
The American Agents Alliance supports protecting consumer privacy. However, this proposal is the wrong approach. It would create broad, costly, and unnecessary compliance burdens for independent agencies that are not the source of the privacy concerns the bill claims to address.
For that reason, the American Agents Alliance opposes the measure and urges lawmakers to reject it in its entirety.
What Is SB 354?
SB 354 is a California insurance privacy bill that would make broad changes to the state’s Insurance Information and Privacy Protection Act.
The proposal focuses on how personal information is collected, used, shared, retained, corrected, and deleted in insurance transactions. In addition, it would create new responsibilities involving consumer notices, adverse underwriting decisions, vendor contracts, and privacy-related procedures.
Supporters say the bill is intended to increase transparency and strengthen consumer privacy protections.
However, this legislation goes too far. It would place unnecessary compliance demands on independent agencies that are already working hard to serve clients in a difficult insurance market.
Current Status of the Bill
As of July 6, 2026, SB 354 is still active.
The bill has passed the California Senate and is now moving through the Assembly. Most recently, it passed out of the Assembly Privacy and Consumer Protection Committee and was re-referred to the Assembly Appropriations Committee.
That means the proposal has not yet become law.
However, it is still moving forward. Therefore, insurance agents and brokers should continue paying close attention and urge lawmakers to reject it.
You can review the official bill status through the California Legislative Information website.
Why This Matters to Insurance Agents
Independent insurance agents already operate in a highly regulated environment.
Agencies must manage licensing rules, carrier requirements, client communication, E&O risk, privacy obligations, documentation, and daily service demands. Because of this, new compliance mandates can have a real impact on agency operations.
This legislation could create additional responsibilities related to consumer data, third-party vendors, records, notices, and privacy rights.
For larger companies, these duties may be absorbed by existing compliance departments. For independent agencies, however, the cost and workload could be much harder to manage.
That is why the Alliance believes the bill should be rejected in its entirety.
The Problem for Independent Agencies
The American Agents Alliance supports strong consumer protection. At the same time, this legislation unfairly targets insurance licensees with broad obligations that could fall heavily on independent agents and brokers.
Many independent agents are not the source of the data practices this proposal appears designed to address.
Instead, agents often work within systems, platforms, carrier requirements, and vendor processes that they do not fully control. As a result, holding agencies responsible for broad privacy compliance obligations could create serious unintended consequences.
Those consequences may include higher costs, more administrative work, increased legal exposure, and less time available to serve consumers.
Possible Penalties and Compliance Costs
One of the most serious concerns involves potential penalties.
The measure includes enforcement language that could authorize penalties for violations of the act. Depending on the circumstances, those penalties could be significant.
For independent agencies, even the threat of steep penalties can create serious pressure. Agencies may need legal guidance, new procedures, updated vendor contracts, staff training, and new recordkeeping systems just to reduce compliance risk.
Therefore, the bill would not simply create a new privacy standard. It could create a costly compliance burden that many agencies are not equipped to absorb.
Why the Bill Should Be Rejected
This proposal should be rejected because it places too much burden on the wrong group.
Independent insurance agents are not large technology companies. They are not massive data brokers. They are local professionals who help consumers compare coverage, understand options, and protect their families, businesses, homes, and vehicles.
Yet the measure could force these agencies to absorb new privacy compliance duties, vendor-contracting requirements, records policies, notice obligations, and legal risks.
That is not practical. It is not proportionate. And it is not fair to the independent agents and brokers who are already working through one of the most difficult insurance markets in years.
What Happens Next?
The bill is now in the Assembly Appropriations Committee.
This step is important because the committee reviews bills with fiscal impacts. If the proposal advances, it could continue through the Assembly process and move closer to a final vote.
However, it can still be stopped.
That means agents still have time to speak up and urge lawmakers to reject this legislation before it moves any further.
Independent agents should not be forced to absorb costly new compliance obligations, legal exposure, and administrative burdens for a problem they did not create.
The American Agents Alliance Is Opposing This Legislation
The American Agents Alliance continues to advocate for independent insurance agents and brokers throughout California and beyond.
Advocacy is one of the most important roles of an insurance agent association. When legislation threatens to create new burdens for agencies, agents need a strong voice at the table.
The Alliance is opposing this legislation because it would place unnecessary costs, risks, and administrative demands on independent agencies.
Learn more about our work on the American Agents Alliance Advocacy page.
Why Agent Involvement Matters
Legislators need to hear from the people who would be affected by this bill.
Independent agents can explain what it actually takes to run an agency, serve clients, manage carrier relationships, and comply with existing rules. That perspective is critical.
Without agent input, lawmakers may not fully understand how new privacy requirements could affect day-to-day agency operations.
That is why advocacy matters. It gives agents a voice before a harmful proposal becomes law.
Stay Connected Through the American Agents Alliance
SB 354 is another reminder that independent insurance agents need to stay engaged.
The insurance marketplace is changing quickly. New laws, regulations, market disruptions, and compliance obligations continue to affect how agencies operate.
Through advocacy, education, networking, and member resources, the American Agents Alliance helps agents stay informed and prepared.
If you are not yet a member, now is the time to get involved.
Join the American Agents Alliance and add your voice to the advocacy efforts protecting independent agents, brokers, consumers, and the future of the insurance marketplace.
SB 354 should be rejected. Now is the time for lawmakers to listen to independent agents and reject the bill in its entirety.
