What is the legal ruling in Islamic Sharia concerning the accidental killing of a child in a car accident, where the driver was operating the car without a license, and another person holding a driving license claims to be the driver in order to pay the blood money from the insurance?

What you and your friend did—distorting the truth by claiming he was the driver at the time of the accident—is deception, fraud, and a lie, which is impermissible. Both of you must repent sincerely. The money taken from the insurance company in this manner is unlawfully acquired wealth, and it must be returned to the entity from which it was taken, if possible. The person responsible for returning it is the actual driver.