AB311 - Consumer Driving Data Protection Act of 2026.

Amended IN Senate July 09, 2026 Amended IN Senate June 10, 2026 CALIFORNIA LEGISLATURE— 2025–2026 REGULAR SESSION Assembly Bill No. 311 Introduced by Assembly Member McKinnor January 23, 2025 An act to add Article 10.5 (commencing with Section 1861.5) to Chapter 9 of Part 2 of Division 1 of the Insurance Code, relating to insurance. LEGISLATIVE COUNSEL'S DIGEST AB 311, as amended, McKinnor. Consumer Driving Data Protection Act of 2026. The Insurance Rate Reduction and Reform Act of 1988, an initiative measure enacted by Proposition 103, as approved by the voters at the November 8, 1988, statewide general election, prohibits specified insurance rates from being approved or remaining in effect that are excessive, inadequate, unfairly discriminatory, or otherwise in violation of the act. Under the act, rates and premiums for automobile insurance are determined based on specified factors, including the insured’s driving safety record. Existing law authorizes the provisions of Proposition 103 to be amended by a statute that furthers the purposes of the act and is enacted by the Legislature with a 2 / 3 vote. This bill, the Consumer Driving Data Protection Act of 2026, would authorize a consumer to opt to use telematics to establish their driving record, thus amending Proposition 103. The bill would prohibit the use of telematics data for a purpose other than rating private passenger automobile insurance. The bill would require a rate application under which telematics would be used to establish an insured’s driving record to include specified materials related to the insurer’s telematics program. This bill would prohibit an insurer that uses telematics from taking specified actions, including conditioning eligibility for a discount upon participation in a telematics program, unless the discount is approved by the commissioner. The bill would also set forth written consent and privacy requirements for the collection and use of telematics data. The bill would authorize the commissioner to impose specified penalties for violations of the bill’s provisions, including civil penalties and suspension of an insurer’s telematics program. This bill would require an insurance provider or third-party vendor to take specified actions with respect to the telematics data, including immediately deleting the data once a rating has been assigned to the consumer and obtaining an express written or electronic signature of a consumer on a notice meeting specified conditions. The bill would additionally prohibit an insurance provider or third-party vendor from keeping the telematics data for longer than 6 months and collecting audio or visual recordings of the occupants of the vehicle or persons outside the vehicle, among other specified prohibitions. The bill would declare that its provisions further the purposes of Proposition 103. Existing constitutional provisions require that a statute that limits the right of access to the meetings of public bodies or the writings of public officials and agencies be adopted with findings demonstrating the interest protected by the limitation and the need for protecting that interest. This bill would make legislative findings to that effect. Digest Key Vote: 2/3 Appropriation: NO Fiscal Committee: YES Local Program: NO Bill Text The people of the State of California do enact as follows: SECTION 1. This act shall be known, and may be cited, as the Consumer Driving Data Protection Act of 2026. SEC. 2. The Legislature finds and declares all of the following: (a) (1) The Insurance Rate Reduction and Reform Act of 1988, an initiative measure enacted by Proposition 103, as approved by the voters at the November 8, 1988, statewide general election (Proposition 103), established a prior approval system for private passenger automobile insurance rates and required automobile insurers to use the following three mandatory rating factors in order of importance: (A) Driving safety record. (B) Annual miles driven. (C) Years of driving experience. (2) Neither the text of Proposition 103 nor the associated ballot materials from the 1988 campaign define the first mandatory rating factor: “driving safety record.” (3) In addition, Proposition 103 authorizes the Insurance Commissioner to adopt regulations that add additional, optional rating factors that an automobile insurer may, but is not required to, use after the commissioner determines they have a substantial relationship to the risk of loss. In Foundation for Taxpayer & Consumer Rights v. Garamendi (2005) 132 Cal.App.4th 1354, the California Court of Appeals stated that Proposition 103 “delegated the exclusive authority to approve ‘optional rating factors’ to the elected Insurance Commissioner” and, further, held that any legislative attempt to add optional rating factors “arrogates to the Legislature the Insurance Commissioner’s exclusive authority to adopt optional rating factors, contrary to Proposition 103.” (b) Since issuance of the original California Department of Insurance regulations in 1989 defining the first mandatory rating factor, the only permissible data to determine “driving safety record” has been a driver’s Motor Vehicle Report (MVR) at the California Department of Motor Vehicles, which includes traffic violation convictions and principally-at-fault crashes. There has been significant technological advancement since adoption of these regulations in 1989, when cutting-edge technology included dial-up internet, fax machines, and the first GPS satellites. California is the only remaining state that mandates exclusive use of MVR data to measure driving safety record, following New York’s decision in 2021 and Idaho’s decision in 2022 to authorize “usage based insurance” or “telematics” programs that rely upon actual, observed driving data collected directly by a vehicle or by a plug-in or wireless device that connects to a vehicle. A few examples of permissible driving safety records include speeding above the flow of traffic, distracted driving, including use of cell phones, and hard acceleration, and braking and cornering. By linking those behaviors with higher insurance premiums, telematics programs encourage the opposite behaviors. In his bulletin encouraging auto insurers to adopt telematics programs, New York Superintendent of Financial Services Benjamin Lawsky stated: “Telematics programs can be a win-win for insurers and drivers. They can save policyholder money and save lives by making our roads safer. We encourage all New York auto insurers to submit plans to our Department making use of this innovative technology.” (c) (1) The Legislature may only amend Proposition 103 upon a two-thirds vote and if the legislation “furthers the purposes” of the initiative. The stated purpose of Proposition 103 is “to protect consumers from arbitrary insurance rates and practices, to encourage a competitive insurance marketplace, to provide for an accountable Insurance Commissioner, and to ensure that insurance is fair, available, and affordable for all Californians.” (2) The Legislature has repeatedly amended Proposition 103 since its original passage, with courts establishing clear rules that the Legislature cannot further Proposition 103’s purposes while simultaneously restricting its application. Examples of court decisions striking down legislative amendments include: Amwest Surety Ins. Co. v. Wilson (1995) 11 Cal.4th 1243 (exempting sureties from Proposition 103), Proposition 103 Enforcement Project v. Quackenbush (1998) 64 Cal.App.4th 1473 (reducing the rollback refunds insurers owed policyholders), and Foundation for Taxpayer & Consumer Rights v. Garamendi (2005) 132 Cal.App.4th 1354 (discriminating against previously uninsured drivers and arrogating to the Legislature the Insurance Commissioner’s exclusive authority to adopt optional rating factors). (3) In adding a modern consumer option to an undefined term in Proposition 103’s mandatory rating factors to allow telematics, with no impact on the Insurance Commissioner’s exclusive authority to control optional rating factors, the Legislature is furthering the initiative’s purposes. Consistent with the first stated purpose of Proposition 103 to protect consumers from arbitrary rates, this legislation would allow drivers to choose, on a voluntary basis, day-to-day driving measurement of driving safety, as opposed to the current system that only measures driving behavior in isolated incidences or based upon policing presence and practices. (4) Consistent with the second stated purpose of Proposition 103 of encouraging a competitive insurance market, this legislation would allow automobile insurers to submit rate filings to the Insurance Commissioner, for rejection or approval, that include a wider variety of options for consumers than presently exists. The legislation would not impact Proposition 103’s prior approval ratemaking requirements. (5) Consistent with the third stated purpose of Proposition 103 to provide for an accountable Insurance Commissioner, this legislation preserves the Insurance Commissioner’s sole authority to review automobile insurance rate filings that include telematics measurements, subject only to this legislation’s general requirements for consumer privacy protection and public transparency. (6) Consistent with the fourth stated purpose of Proposition 103 to ensure that insurance is fair, available, and affordable for all Californians, this legislation preserves California’s prior approval rate system implemented by the elected Insurance Commissioner while providing consumers the choice of modern technology that improves assessment of insurance risk and empowers consumers to make daily improvements in their driving behaviors that are measured and which would translate directly into lower insurance premiums. Regarding fairness of insurance rates, the Legislature acknowledges the 2022 study entitled “Measuring Racial and Ethnic Disparities in Traffic Enforcement with Large-Scale Telematics Data,” by William Cai, Johann Gaebler, Justin Kaashoek, Lisa Pinals, Samuel Madden, and Sharad Goel, which finds that, while the racial composition of traffic stops closely tracks with residential demographics of the areas where enforcement is focused, telematics measurements of speeding are uncorrelated with neighborhood racial or ethnic demographics, and “averaged across the cities we analyze, and after adjusting for differences in speeding behavior, we find that neighborhoods with higher proportions of non-White residents have greater numbers of speeding stops...Our results show that current enforcement practices can lead to inequities across race and ethnicity.” (d) (1) In its 2021 publication, “Watch Where You’re Going: What’s Needed to Make Auto Insurance Telematics Work for Consumers,” the Consumer Federation of America states: “While telematics has great potential to help consumers, promote better driving, and make auto insurance more affordable, it also has significant potential for misuse, violations of consumer privacy, and poorly explained premium impacts.” (2) In its 2023 publication, “Steering Mobility Data to a Better Privacy Regime,” the Electronic Frontier Foundation suggests consumer protection guardrails for deployment of an insurance telematics program, including all of the following: (A) Opt-in, informed consumer consent. (B) Insurer public disclosure of telematics data collection and use, along with clear consumer data access, dispute rules, and a subsequent opt-out procedure. (C) Consumer consent rights regarding sharing, selling, disclosing, and marketing of data. (D) Consumer notice rights regarding information sharing. (E) Continued consumer option to be rated without telematics. (F) reasonable Reasonable limits on insurer retention of data. (3) The purpose of this act is to provide statutory guidance for the voluntary collection, use, analysis, retention, and disclosure of telematics data in private passenger automobile insurance rating, while ensuring actuarial integrity, promoting fairness, preserving regulatory oversight, and safeguarding strong fundamental consumer privacy rights, consistent with these concerns and principles and in furtherance of the purposes of Proposition 103. (e) Because Proposition 103 does not define “driving safety record” and the California Department of Insurance regulations that initially defined the term are more than 35 years old, leaving California as a national outlier in options for automobile insurance consumers, it is the intent of the Legislature to modernize California’s outdated, and anachronistic, automobile insurance system, with the purpose of promoting better driving, lowering emissions, and reducing social concern about insurance rates being linked to traffic stops. This legislation authorizing voluntary telematics-based discount programs is consistent with the intent of voters upon passing Proposition 103 in 1988, particularly because this legislation: (1) Does not alter the mandatory rating factor hierarchy established under Section 1861.02 of the Insurance Code. (2) Creates an additional consumer option in the undefined term “driving safety record” under the first mandatory factor, while allowing consumers to ignore telematics rating programs in favor of the current MVR system. (3) Does not disturb the Insurance Commissioner’s exclusive authority over optional rating factors. (f) California seeks to modernize its insurance regulatory system by adopting a telematics framework consistent with the protections of Proposition 103. It is the intent of the Legislature to authorize voluntary telematics-based rating programs that (1) do not alter the mandatory rating factor hierarchy established under Section 1861.02 of the Insurance Code and (2) are adopted as a “driving record” under the first mandatory factor and are a voluntary consumer choice alternative to the Department of Motor Vehicles motor vehicle record, which has been the only form of driving information allowable for rating purposes since Proposition 103 passed almost 40 years ago. (g) The purpose of this act is to provide statutory guidance for the voluntary collection, use, analysis, retention, and disclosure of telematics data in private passenger automobile insurance rating, while ensuring actuarial integrity, promoting fairness, preserving regulatory oversight, and safeguarding strong fundamental consumer privacy rights. (h) Ensuring fairness, transparency, and accountability in the use of telematics data is essential to maintaining public trust in the insurance marketplace and preventing the emergence of hidden or unregulated rating factors. (i) Consumers have a fundamental interest in controlling their personal driving data, including the right to know what is collected, how it is used, and with whom it is shared. (j) Strong privacy and data security standards are necessary to protect consumers from unauthorized access, misuse, or commercial exploitation [Text truncated for display. Full text available on Congress.gov.]