China Drafts First National Framework for Autonomous Vehicle Mandatory Insurance

A draft amendment to the Road Traffic Safety Law has, for the first time at the national legislative level, established a framework for mandatory insurance for autonomous vehicles. The draft adds a new chapter titled "Special Provisions on Autonomous Vehicles," which for the first time clarifies at the national legal level the legal status of autonomous vehicles, the conditions for operating on roads, and the attribution of liability for violations.

The draft stipulates that the state supports safe, orderly, and regulated road testing, demonstration applications, and operation of autonomous vehicles. It also includes legislative design covering compliance testing of road-traffic rules, the division of liability for traffic violations, and the insurance system.

Previously, China's regulations on autonomous driving existed only at the level of departmental rules, normative documents, or national standards. Local legislative attempts faced issues such as limited scope of effectiveness and inconsistent rules for allocating liability in traffic accidents.

The draft defines an autonomous vehicle as a vehicle that, under its design operating conditions, continuously and automatically performs all dynamic driving tasks in place of a human driver. Assisted driving functions refer to functions that assist the driver in performing part of the dynamic driving tasks under design operating conditions. According to the national standard "Taxonomy of Driving Automation for Vehicles," driving automation is divided into six levels from L0 to L5, with L3 representing conditional automation, L4 high automation, and L5 full automation.

The draft provides that autonomous vehicles with autonomous functions not activated, and vehicles equipped only with assisted driving functions, shall be managed under the rules applicable to non-autonomous vehicles when operating on roads.

Regarding liability, the draft adopts a model based on whether autonomous driving is "activated." If a road-traffic violation occurs while the autonomous driving function is activated, the manufacturer or importer of the autonomous vehicle shall accept the handling of the violation.

The draft's new chapter explicitly establishes a compulsory motor vehicle traffic accident liability insurance system for autonomous vehicles, with specific measures to be formulated by the State Council. It also encourages and supports autonomous vehicle manufacturers, importers, owners, and managers to purchase commercial insurance. This framework-authorization model establishes the basic institutional framework for mandatory insurance for autonomous vehicles. Details such as actuarial models, rate standards, and liability boundaries will depend on technological development and data accumulation, and will be further specified in subsequent supporting regulations.

The draft mainly sets out obligations for enterprises, with the essential requirement for relevant companies or groups being to reduce accidents and casualties. When the system detects that the driving environment is approaching the boundary of safe operating conditions, it shall provide continuous alerts to the driver inside the vehicle.

The draft currently imposes obligations mainly on enterprises but lacks provisions on the obligations of users.