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E-Signatures in the Insurance Industry
Thomas, Thomas & Hafer LLP
HARRISBURG ● ALLENTOWN ● PITTSBURGH ● PHILADELPHIA ● WILKES-BARRE ● MARYLAND ● NEW JERSEY
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Meet Your
Presenters
Thomas, Thomas & Hafer LLP
Jeff
Truitt
Jeff
Criswell
Associate
Associate
Pittsburgh, PA Office
412-926-1422
jtruitt@tthlaw.com
Pittsburgh, PA Office
412-926-1443
jcriswell@tthlaw.com
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What is an E-signature?
An e-signature is much more than just a
signature on an electronic pad at the grocery
store. In fact, as defined by statute, an
electronic signature includes an electronic
sound, symbol, or process attached to or
logically associated with a record and
executed or adopted by a person with the
intent to sign the record.
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Why use E-signatures?
Cost
Security
There is, without a doubt, a large initial cost to
switching from paper-based signatures to e-signatures.
This is an investment in the future.
The use of e-signatures technology can help combat
fraud and identity theft.
Over time, e-signatures represent a large cost savings
through less postage and less money spent on
document management.
Speed
Consumers and adjusters, alike, demand speed more
than ever. Speed is not a wish, it is an expectation.
E-signature technology eliminates the need for
sending claims document via the mail or by fax. Esignatures can drastically improve the speed of the
claims process.
E-signature technology allows for signers to be
uniquely identified and encryption technology ensures
that documents cannot be altered without proper
authority.
Competitive
Advantage
Embracing e-signature technology, will set you apart
from the competition.
Consumers have more insurance choices than ever.
The cost saving, security, and speed of e-signatures is
enough to attract and maintain consumers.
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What laws govern E-signatures?
Pennsylvania follows Federal law
ESIGN
• Passed in 2000, the Electronic
Signatures in Global and
National Commerce Act (ESIGN),
represents
the
controlling
federal law on e-signature
technology
• Recognizes the legality of esignatures, electronic delivery,
and electronic archival as
method for satisfying the
requirement to have written
signatures and records
• Expressly provides that the esignature technology applies to
the insurance industry
UETA
•
•
•
Drafted in 1999 by the
National Conference of
Commissioners on Uniform
State Laws, the Uniform
Electronic Transactions Act
(UETA), aligns federal law with
state governance
Adopted by 47 states, including
Pennsylvania
“If a law requires a record to
be in writing, an electronic
record satisfies the law.”
PA ETA
•
Signed into law by Governor
Ridge in 1999, the PA ETA
adopted and enacted the
provisions of the UETA
•
Transactions subject to the PA
ETA are also subject to other
applicable substantive law
•
Includes additions to the UETA
to enhance and promote the
reliability of electronic
commerce
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Best practices for E-Signature Implementation
Research
Conceptualization
Continuity
Implement
The key to the successful implementation of e-signature technology is planning. Ask yourself these questions:
•
Why do we want/need to implement e-signature technology?
•
What do we want? Do we want to use e-signature technology from policy inception to claims to termination?
•
Who do we want to reach?
•
How are we going to achieve full-scale implementation?
•
When do we want to launch?
Partner with experts. E-signature technology involves lots of moving parts that can make implementation seem overwhelming. Without a
well thought strategy for implementation, the use of e-signature technology loses its value and can end up costing more than its worth.
Case study: Barwick v. GEICO, 2011 Ark 128 (2011)
Does pressing a computer button constitute a “writing”?
•
Arkansas Insurance Code – waiver must be
“in writing”
•
Online application for auto insurance coverage
•
Waiver of minimum medical coverage
Holding: The electronic record memorializing an applicant’s rejection of coverage
qualified as a written rejection
Tip: A waiver of statutory rights or opt-out election can be effective and enforceable,
when signed online using an electronic signature.
Case study: Prudential v. Dukoff, 674 F.Supp.2d 401 (E.D.
New York 2009)
The uncertainty of electronic signatures:
1) Who submitted the application?
2) When was the application actually submitted?
3) Who is the intended party to the contract?
4) Was there apparent authority for one party to sign for the other?
5) Who can verify that the person providing the electronic signature
is actually the intended applicant?
Case study: Long v. Time Insurance Co., 572 F.Supp.2d
907 (S.D. Ohio 2008)
Online applications completed by another person
• Policy rescinded for false statements
• Pre-existing medical condition
Holding: Having signed the application, the individual adopts and ratifies
all statements appearing above the signature regardless of whether he
specifically provided answers
Tip: By authorizing his/her signature on the application,
the insured is responsible for correcting any false
answers recorded by another
Case study: Indian Harbor Insurance v. San Diego, 972
F.Supp.2d 634 (S.D. New York 2013)
Where is an insurance policy “issued”?
•
Does not matter where the electronic signature was created
Where is the electronic signature affixed to the policy?
•
The location of the electronic signature can determine which state’s laws
apply if there is no choice of law provision in the contract.
Tip: The need for a record custodian with first-hand
with knowledge of the electronic records
Admissibility Requirements
The Records Custodian should be able to testify to these facts:
1) How the electronic signature process worked at the time of
the questioned record
2) How he/she may conclude that the record is a true and
accurate copy
3) The ability to show that the consumer was the person that
signed/acknowledged the record
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Additional Resources
• Electronic Signature and Secure Forms in the Insurance Industry: Taking the P&C
Pen to the Web by Karen Pauli of TowerGroup
• Guidelines for e-SIGNATURE and e-DELIVERY in the Insurance Business by Gregory
T. Casamento and Patrick J. Hatfield of Locke Lord LLP
• Fidelity Insurance Issues related to the Paperless Officer: The Effect of Electronic
Signatures on Financial Institutions and other Hot Coverage Issues relating to ECommerce by Roger Nettie, Scott Spearing, and Alexandra Geiger
• Relevant Federal and State Statutes
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E-Signature Vendors*
• Adobe Systems
• Communication Intelligence Corporation (CIC)
• DocuSign
• Silanis Technology
*This is not an exhaustive list. It is recommended that each individual mutual
researches what vendor will work best for their needs.
Electronic Signatures
Thank you!
Jeff Truitt
Jeff Criswell
Thomas, Thomas & Hafer, LLP