House Financial Services Subcommittee Issues Testimony From State Farm
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"Automated vehicle technology will significantly impact how insurers protect policyholders from financial loss and risk - and, to the extent these advancements enhance auto and highway safety,
"Throughout our ninety-five year history,
"According to the
I. Collaboration and Research
"In order to learn more about ADS technologies and its potential impact on insurance and our policyholders,
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II. Public Policy Considerations
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"Key issues for
* Safety is paramount: We fully support ADS innovation and development that enhances safety.
* Insurer data access is critical: Insurers should have access to ADS information and data - including crash accident and incident information and data - that is timely, complete and useful.
* Standards should be set nationally: The Federal government - through NHTSA - should have the authority to make determinations for the required performance and safety, as well as data integrity, of ADS.
* Administration should remain local: States and localities should have the authority to make their own determinations of the registration, licensing, and operation of ADS in their jurisdictions
* Insurance requirements should be set by the states: States should continue to regulate ADS insurance for the vehicle or operator.
* Existing liability principles/authorities should apply: States should define and address ADS personal liability issues in state/tort law and regulation in line with existing liability constructs. States and federal authorities should have the authority to define and address ADS liability issues in law and regulation.
* Data security/privacy standards must adapt to the reality of ADS: States and federal authorities working together should make clear and workable data security and privacy requirements for AVs. From these public policy principles, several key issues emerge for
a. Data
"First, data access is a key issue for the insurance industry. Data access is (1) essential to developing proper pricing and underwriting of vehicles, (2) critical for liability determinations, and (3) from the general public's perspective, important in determining the safety and reliability of technology. Insurers should have access to automated driving system information and data - including crash accident and incident information and data - that is timely, complete, and useful.
"It is important to note that access to data does not infringe on the proprietary nature of that data and the access is relevant to specific issues of, for example, underwriting and liability, as opposed to the wholesale collection of all data associated with a vehicle.
"It is important to note that ADS data access is a key issue for numerous stakeholders.
"More recently, the
b. Liability Landscape
"The liability landscape is critical to insurers from two perspectives - liability laws and cybersecurity issues.
"In considering the evolving liability landscape, cybersecurity is critical, as there are growing concerns regarding the ability for a person, entity, or state to hack into an ADS, ultimately causing accidents. These risks will increase the complexity of underwriting and adjusting cyber insurance products, but may also provide opportunities for new product development.
c. Ability to Innovate
"Finally, as there is a continued focus on allowing manufacturers, suppliers, and tech companies innovate in the connected and automated vehicle space, there needs to be an examination of how insurers will also be able to innovate in relation to product and coverage development for these new technologies. There is a greater understanding of the role of the insurance industry as a stakeholder in the future of these technologies. As recent events show, there will continue to be crashes regardless of what level of automation exists on a vehicle, and thus a need for the ability to properly address risk in the future state.
"As laws expand and are amended to allow for testing and implementation of these technologies, it will be appropriate to determine how insurers can appropriately match price to risk and develop new products. For example, how will insurers be able to match price to risk when there is limited data to use to underwrite these technologies. Also, considering the traditional way of reviewing and approving insurance coverages and rates, will insurers be able to sync up their new products with the pace of development of connected and automated vehicle technologies? It may be worth exploring the need to allow for the insurance industry to better adapt to the future state of connected and automated vehicles. This in turn can help encourage the safe implementation of connected and automated vehicle technologies.
Conclusion
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Footnotes:
1 https://newsroom.statefarm.com/state-farm-releases-autonomous-vehicles-survey-results/
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