Autonomous vehicle regulation in Ontario will ‘come to fruition,’ MTO official says

The Ontario government plans to implement a regulation on testing autonomous vehicles, though initially they will require drivers to intervene if necessary, a manager for the province’s transportation ministry said Monday.

In 2014, Ontario Premier Kathleen Wynne released a mandate letter, to the transportation minister, “to permit a regulatory framework to permit testing of autonomous vehicle on our roads,” said Jessica Mahon, team leader, special projects at the Ontario ministry of transportation.

“We are trying to put together something right now,” Mahon said during a presentation at the Insurance-Canada.ca Executive Forum, held at the Sheraton Centre in Toronto. “In terms of next steps, it will be presented to decision makers shortly. I don’t have a time frame today.”

She made her remarks during a panel titled Automotive Technology, Transformation and Risk.

Mahon said in Ontario, a regulation on autonomous vehicles “will most definitely come to fruition.”

MTO is “looking at it solely from a road safety perspective,” Mahon added. “For example, we don’t intend to permit driverless cars right off the bat. We will require that a driver be in the driver’s seat, ready to intervene at any time should something fail.”

Such technologies will making driving safer, suggested Matthew Turak, president of insurance for CAA.

But Turak noted that in aviation, pilots are still at the controls of airplanes, though the technology for “pilotless planes” has been available for more than 30 years.

He added the “big question” for the insurance industry is the liability for autonomous vehicles.

Another technology affecting insurers is mobile apps, suggested Aviva Canada president Sharon Ludlow, during Executive Forum.

She cited Sharp Insurance, which made a mobile app for auto insurance in Alberta- including pink slips – even though the province requires drivers to have paper copies.

“Police are reportedly accepting the image as proof of insurance if the pink slip isn’t available, and the Alberta Registries agents are accepting the application-based pink slip as proof of insurance to get your plates issued,” Ludlow said. “It seems only the regulator is enforcing the notion of an actual printed pink slip, and so there is direct lobbying to the regulator to formally remove this requirement, and while it is not fully legal today, it appears that the application version of this pink slip is being accepted, at least in most circumstances.”

Ludlow made her remarks during a presentation titled Disruption, Consumers and Technology. She suggested fewer people are interested in owning vehicles.

“They simply want a car when and how they need it, which means they only want to pay for insurance when and how they need it, so getting to true usage-based – I don’t simply mean the telamatics that are offered in Canada today – but I mean truly usage-based insurance, where when I get in the car, the meter starts running, and when I get out of the car, the meter stops.”

Insurance professionals “need to think about what that looks like, how the regulators view that, how others view that,” Ludlow added. “How do you price that appropriately? Can you run a business with that as auto insurance? Is there enough volume or scale there to offer that kind of insurance?”

She warned technology is disrupting the insurance industry.

“There are new models disrupting almost every established industry and the P&C space there is an increasing pattern in experimental startups and innovation from new and established entities,” she said. “Our view is that the competitor is not even in this room.”

She suggested a company with large amount of electronic data could be one of the competitors.

“Even more scary, it’s even the younger guy or girl working in his or her garage,” Ludlow warned. “The likelihood of a tipping point of some sort in Canada is increasing or coming soon. The Uber of insurance is around the corner, and so what role is technology playing? What role will it play going forward?”