NAIC San Diego: Self-driving cars and regulatory renewal
Autonomous-vehicle technology stands to reshape both the insurance industry, and society as a whole, dramatically. California Insurance Commissioner Dave Jones noted as part of a panel discussion on the topic that his principal concern as a regulator was that insurance markets be able to adapt to the emerging technology, citing California’s recent experience with transportation network companies and the work to craft legislation normalizing insurance requirements for the then-emerging industry.
A fellow panelist and one of the chief sponsors of that legislation – State Assemblywoman Susan Bonilla, D-Concord – struck a cautious tone about the transition of driverless technology from the private sphere of testing and development to the public sphere of consumer adaptation and use, suggesting that emerging rules will have to balance economic upside and consumer protection carefully.
Bonilla currently is chief sponsor of A.B. 1592, a bill that would make a small exception to California’s ill-conceived ban on Level 4 autonomous technology, in which the automated system can control the vehicle in all but a few environments, such as severe weather. Widely anticipated to be a candidate for the California insurance commissioner post in 2018, Bonilla offered something of a preview of her regulatory temperament by observing that public officials should be restrained from writing standards into statutory law that could later be rendered useless or, worse, prove harmful to innovation. Rather, she argued, legislators should approach regulation as an evolutionary process.
Bonilla noted the prospect of self-driving technology already had made some transportation industry labor unions nervous because they see the “writing on the wall” with respect to their members’ future employment prospects. Somewhat surprisingly, given her political history as a staunch labor ally, she opined that such fears were not sufficient reason to confound the technology’s promise as both an environmental and economic windfall.
Were Bonilla to be elected insurance commissioner, a race likely to be decided effectively by the June 2018 Democratic primary, she would assume control at a time when autonomous vehicles already could be in the midst of sparking a full-blown reevaluation of some of the basic assumptions underpinning personal auto insurance, including the assumption that liability primarily runs with the driver. This is of particular concern in California, whose unique system of insurance regulation under Proposition 103 makes it especially brittle to changing assumptions.
Insurance markets are ripe for innovation in the face of technological changes like self-driving cars. As the nation’s largest insurance market, California will necessarily play a major role in writing the new rules of the road. This panel could well be remembered both as the beginning of Bonilla’s stint in the insurance regulatory spotlight, and a foreshadow of what’s to come.