Senate Bill 354 is very bad for thousands of California small businesses that are not the problem this legislation is attempting to solve.

This legislation is not directed at what agents and brokers do—it is designed to regulate how large insurance carriers, their affiliates, and data-driven enterprises collect, share, monetize, and transfer consumer information across complex corporate networks. This is not the business of the independent insurance producer. 

When a consumer contacts an agent or broker, they voluntarily provide personal information for one specific purpose: to obtain insurance coverage they have requested. That information is used solely to facilitate that transaction. It is not sold. It is not shared with unaffiliated third parties for marketing or commercial purposes. It is protected. Once coverage is placed with a carrier, responsibility for the consumer’s data transfers to that insurer, the primary subject of Senate Bill 354’s regulatory framework.

Applying Senate Bill 354’s compliance obligations to independent agents and brokers does not strengthen consumer privacy, because producers are not the source of the privacy risks the bill seeks to address. It simply imposes costs and burdens on small businesses for conduct they do not engage in.

Lawmakers should amend Senate Bill 354 to include a small business exemption or provide an explicit safe harbor for licensed producers who collect consumer information solely in connection with a requested insurance transaction and who do not sell, share, or otherwise monetize that information.