Tesla aims to produce self-driving cars by 2016 that will give a computer 90 percent control of the car. General Motors has announced plans for a Cadillac that will have self-driving features with advance cruise control that offer hand and foot free driving in 2017 models. And Nissan Motor Co. and Renault anticipate that by 2018 their cars will have the ability to autonomously avoid hazards and change lanes.

With that in mind, California Insurance Commissioner Dave Jones has held a public hearing at the Tech Museum of Innovation in San Jose to obtain public input regarding liability and insurance issues associated with self-driving cars.

“California is a leader in new technologies and business models. One such innovation – self-driving cars – holds the potential to dramatically change the world of transportation and potentially reduce accidents, injuries, and deaths,” Commissioner Jones said. “While fully autonomous cars are not yet available, a number of self-driving features, such as self-parking cars and active collision avoidance systems, are already in use. Based on the rapid advance of technology, it's entirely possible that fully autonomous cars will be available in a few years' time. We need to consider and be ready to answer questions around who will be responsible and what insurance will be available to mitigate losses that might occur in the operation of this new technology, so that the technology can achieve its potential while protecting consumers.”

The hearing agenda follows:

Autonomous Vehicles Now and the Road Ahead

Alain Kornhauser, Professor, Operations Research and Financial Engineering, Princeton University

Bernard Soriano / Brian Soublet, Deputy Director / Chief Counsel and Deputy Director, California DMV

Current and Future State of AV Technology:

- Implications for frequency and severity of vehicle crashes?

- Impact on associated costs and their distribution?

- Effects on the insurance industry?

DMV Rulemaking Implementing California's AV Bill (SB 1298):

- Determining liability for traffic violations and awarding violation points?

- Allowing AVs to operate without a licensed driver at the wheel?

- Earliest date AVs could be available to the public?

- Earliest date driverlessAVs could be available to the public?

Insuring Autonomous Vehicles in the Short and Long Term

Robert Peterson, Director, Center for Insurance Law and Regulation and Professor of Law, Santa Clara University School of Law

Hilary Rowen, Partner, Sedgwick LLP  

Michael Stienstra, Chairman, Casualty Actuarial Society Task Force on Automated Vehicles AVP, Actuary, QBE the Americas

Cathy Schwamberger, Associate General Counsel, State Farm

Matthew Gilbert, CA Auto Product Manager, Nationwide Insurance

Richard Holober, Executive Director, Consumer Federation of California

Short Term Insurance Issues:

- If a developer has a driverless AV ready to market to consumers as early as 2015, will an insurance product be available? Will the insurance product be Private Passenger Auto (PPA) or something else?

- Is it workable to rate AVs under Proposition 103's auto rating factor framework, which requires insurers to take into account driver safety record and years driving experience, so long as a licensed driver must be in the driver's seat and ready to take control of the vehicle?

- Must insurers write AVs under Proposition 103's “take all comers” provision requiring insurers to offer a good driver discount policy to all qualified good drivers?

- How do insurers currently rate vehicles with semi-autonomous features like adaptive cruise control, lane assist, parking assist, accident avoidance, and driver fatigue detection?

- How would insurers handle aftermarket products that would allow the consumer to retrofit a vehicle with AV technology?

Long Term Insurance Issues:

- What type of insurance product will ultimately be most appropriate to cover AVs? PPA? Commercial products liability? Something else? Are there analogous models that would be useful to consider?

- Will California statutes or regulations need to change to accommodate AVs?

- Is there other action CDI should take to accommodate AVs?

General Insurance Issues:

- What is the appropriate use of the data AVs collect? To what extent is this an insurance issue?

- Are there policy exclusions that might limit coverage for accidents involving AVs?

- Are California's minimum liability insurance requirements for private passenger vehicles appropriate for AVs?

- How would a driverless AV present proof of insurance?

The hearing can be seen at: https://www.youtube.com/watch?v=pI-POiHymw0.