Insurance representatives told California lawmakers Wednesday that access todata generated by autonomous vehicles will be key to theirindustry's ability to write policies and assess liability in theemerging market. RyanGammelgard, counsel for State Farm Insurance Company Inc., told theSenate Insurance Committee that underwriters are not seekinginformation "on every aspect of [a] vehicle." But they do want datathat shows driverless-car technology "actually does what itadvertises it's doing."

Demand for data

"Data access is essential to develop proper pricing andunderwriting of vehicles, critical for liability determinations andfrom the general public's perspective, important in determining thesafety and reliability of the technology," Gammelgard said.

Related: Fully leveraging data analytics ininsurance

"In some situations there may have to be a determination of:Where does this vehicle go?" he added. "What is it allowed to do?There are going to be some challenges in terms of those issues and[asking]: Is there a way to still preserve those privacy rightswhile at the same time making sure that we can verify that thetechnology actually does what it advertises it's doing?"

That demand for data puts the industry at odds with somecar manufacturers that fear the release, potentially through ahack, of trade secrets. Privacy advocates have also questionedwhether such data collection, if shared with third parties, couldhurt consumers.

The insurers' data pursuit may also run afoul of California'svoter-approved car insurance law, which prohibits a driver's homeaddress or driving destinations to be used as primary factors insetting rates.

Highly sensitive data

"From a privacy perspective, recommending constant collection ofdata by private entities — especially without also mandatingprivacy protections and data restrictions — is bad policy in anycontext," Jamie Williams, a staff attorney for the Electronic Frontier Foundation, wrote inNovember in response to proposed federal guidance on driverless cardevelopment. "But it is particularly problematic for connected orautonomous vehicles, which collect highly sensitive data, such asbiometric data and location information."

Advocates on all sides of the issue agreed Wednesday thatself-driving cars will not be commonplace on highways fordecades.

Still, 26 companies have already received state permits to testearly prototypes on California roads. One is Uber TechnologiesInc., which, after initially halting its San Francisco-based testing in December due toa tiff with the California Department of Vehicles, submitted thenecessary paperwork Wednesday to receive stateauthorization to operate two test vehicles.

Related: Insurance rules for driverless cars considered inNew Jersey

Brian Soublet, the DMV's deputy director and chief counsel, alsoannounced Wednesday that the state will issue a new round ofproposed autonomous vehicle regulations this month with plans tohave final deployment rules on the books by the end of theyear.

Can traditional cars safely co-exist with autonmouscounterparts?

The flurry of activity has state lawmakers scrambling to figureout how to ensure traditional cars can safely co-exist with theirautonomous counterparts. Although no directly related legislationhas been introduced this year, lawmakers were eager to askWednesday who is responsible if a driverless car crashes.

"I think if you ask the [plaintiffs bar] they'll be suingeverybody that they can because it's not going to be clear," saidRex Frazier, president of the Personal InsuranceFederation of California. "And to preserve their clients'rights, they probably will be filing under different theories ofjudicial negligence theory as well as the product liability theory,because they may not know."

Related: Regulator says self-driving cars must be twice assafe

Consumer advocates urged lawmakers not to alter California's carinsurance rate-setting laws, consider a move to no-fault insuranceor to enact manufacturer-immunity statutes.

"When their autonomous technologies fail, hardware and softwaremanufacturers must be held strictly liable," said HarveyRosenfield, founder of the public interest group Consumer Watchdog.

Cheryl Miller is a reporter at TheRecorder. She can be reached at [email protected].