AB 637 California Assembly · 2025-2026 Regular Session

False or misleading commercial disaster communication.

Summary

Existing law generally regulates the rules governing insurance and insurance contracts. Existing law prohibits a person from engaging in any trade practices that are defined as unfair methods of competition or unfair or deceptive acts or practices in the business of insurance, including publicly making or dissimilating in a publication or advertising device, among others, a statement containing an untrue, deceptive, or misleading statement regarding the business of insurance, and makes a person who engages in those practices liable to the state for a civil penalty not to exceed $5,000 or $10,000, as specified. This bill would authorize a court to increase a civil penalty by up to $2,500 for a commercial disaster communication, as defined, that otherwise constitutes a violation of the above-described provisions. The bill would authorize the increase for a commercial disaster communication made on or after the date of a proclamation of a state of emergency or catastrophic disaster, as defined, until 60 calendar days after the termination of the state of emergency or catastrophic disaster, but prohibits the increase for applying more than 180 calendar days for any one state of emergency or catastrophic disaster. The bill would make related findings and declarations.

Bill status failed 1 of 4 stages cleared

Introduction

Feb 2025

Committee Review

Floor Vote

Governor

Introduced Feb 13, 2025 Last action Feb 2, 2026

Maddy AI version diff · 3 comparisons

What changed between versions

04/21/25 - Amended Assembly → AB637 · 2 edits

MINOR

This diff reflects a formatting and presentation update to the published version of AB 637 rather than a substantive legislative change. The bill text, definitions, penalties, enforcement mechanisms, and time limits are identical between the two versions. The differences consist of web navigation elements being added, line numbers being removed, and minor reformatting for the legislature's online bill tracking system.

TECHNICAL

The bill was reformatted from a traditional legislative document with line numbers to a web-friendly layout for the California legislature's online bill tracking page. Navigation elements (skip to content, home, accessibility, FAQ, etc.) were added and the page title was set to 'Bill Text - AB-637 False or misleading commercial disaster communication.'

The Legislative Counsel's Digest header was slightly restructured for web display, splitting the bill number/author line from the subject heading, but the substantive digest language remains unchanged.

02/13/25 - Introduced → 03/13/25 - Amended Assembly · 10 edits · Mar 13, 2025

MAJOR

AB 637 was dramatically expanded from a minor technical amendment to Section 1072 of the Insurance Code (changing gendered pronouns) into a comprehensive new law prohibiting false or misleading commercial disaster communications during declared states of emergency. The amended bill adds two entirely new code sections that create definitions, safe harbors, enforcement mechanisms, and penalties targeting bad actors who exploit disaster victims with deceptive advertising that mimics government or not-for-profit communications.

Scope change

The bill's scope expanded from a narrow technical correction to insurer withdrawal procedures into a broad consumer protection law targeting deceptive advertising during disaster emergencies, adding two new code sections across both the Business and Professions Code and the Insurance Code with significant enforcement and penalty provisions.

SCOPE

The bill now covers false or misleading commercial disaster communications made during a declared state of emergency, applying from the date of proclamation until 60 days after termination (capped at 180 days per emergency).

New Section 757.5 of the Insurance Code specifically makes it unlawful to make false or misleading communications related to the business of insurance in violation of the new B&P Code section, and authorizes the Insurance Commissioner to bring actions.

DEFINITION

New Section 17533.1 of the Business and Professions Code defines 'commercial disaster communication' as any communication targeting people in or displaced from an emergency area that either advertises for-profit goods/services related to disaster losses or uses the name of a geographic area named in the emergency declaration.

Defines 'false or misleading' to include communications that give the impression of being made or approved by a governmental entity (including using state flag/seal imagery without approval) or by a not-for-profit organization (including using terms like 'aid,' 'relief,' or 'assistance' without nonprofit approval).

REQUIREMENT

Creates a safe harbor: a communication is not deemed false or misleading if it conspicuously displays a required disclosure statement (e.g., 'THIS PRODUCT OR SERVICE HAS NOT BEEN APPROVED OR ENDORSED BY ANY GOVERNMENTAL AGENCY AND THIS OFFER IS NOT BEING MADE BY AN AGENCY OF THE GOVERNMENT. THIS IS AN ADVERTISEMENT.') and identifies the name and incorporation status of the provider.

ENFORCEMENT

Authorizes the Attorney General, district attorneys, county counsel, city attorneys/prosecutors, the Insurance Commissioner (for insurance-related violations), and the Department of Consumer Affairs (for their licensees) to bring enforcement actions.

Creates a private right of action allowing any harmed person to recover treble damages (three times the amount solicited) in addition to other available remedies.

FISCAL

Imposes civil penalties of up to $2,500 for an initial violation and up to $5,000 for each subsequent violation, payable to the general fund of the entity that brought the action.

TECHNICAL

The original technical amendment to Section 1072 (changing 'he' to 'the commissioner' and 'his' to 'their') is retained but renumbered as a later section in the expanded bill.

Fiscal committee answer changed from 'no' to 'yes,' indicating the bill now has fiscal implications due to the new enforcement and penalty provisions.

Floor votes

How they voted

No floor votes recorded yet.

Full legislative history

Actions timeline

Total actions

Key actions

Committee

Amendments

Feb 2, 2026

Lower · Passed

From committee: Filed with the Chief Clerk pursuant to Joint Rule 56.

lower

Apr 30, 2025

Lower · Passed

In committee: Set, first hearing. Hearing canceled at the request of author.

lower

Apr 21, 2025

Committee

Re-referred to Com. on INS. pursuant to Assembly Rule 96.

lower

Apr 21, 2025

Introduced

From committee chair, with author's amendments: Amend, and re-refer to Com. on P. & C.P. Read second time and amended.

lower

Mar 17, 2025

Committee

Re-referred to Com. on P. & C.P.

lower

Mar 13, 2025

Introduced

From committee chair, with author's amendments: Amend, and re-refer to Com. on P. & C.P. Read second time and amended.

lower

Mar 13, 2025

Committee

Referred to Coms. on P. & C.P. and INS.

lower

Feb 14, 2025

Lower · Passed

From printer. May be heard in committee March 16.

lower

1 primary · 0 co-sponsors