The impact on insurers of the Electronic Signatures in Global and National Commerce Act of 2000 (also known as “E-Sign”) was discussed by a representative of the American Insurance Association at a Capitol Hill hearing.
Christopher Roe, vice president and legal counsel for Fireman’s Fund Insurance Company, cited the lack of uniformity among state laws governing e-commerce as the biggest handicap for insurers wishing to take advantage of E-Sign’s provisions. Roe made his remarks in testimony before the House Financial Services Subcommittee on Domestic Monetary Policy, Technology, and Economic Growth.
Roe stated that E-Sign, coupled with state passage of the Uniform Electronic Transaction Act (UETA), will ultimately enable insurers to better deliver speed, efficiency, and cost savings in future online insurance transactions, but he underscored that non-uniformity of UETA provisions among the states still remains a significant impediment to the most effective delivery of online services.
UETA, which is a model state law, has been adopted exactly as written by about 20 states. Another 15 states have enacted an amended version of UETA. Federal E-Sign provisions apply in the remaining states. Roe concluded his testimony by urging the Subcommittee to:
* Contact the NAIC and state insurance regulators to encourage the states to strive for the highest level of uniformity possible in implementing E-Sign or UETA, so that insurance companies can have the highest level of confidence in delivering services to its customers online in a way that utilizes the best technology available.
* Recognize that, in many policy/regulatory areas, but particularly in e-commerce, a strong federal preemption is vital in giving businesses greater certainty and confidence to use technology and the Internet to serve their customers.
Noting “that more time is needed to test the workability of the E-Sign provisions before advocating specific changes to the Act,” Roe cited some of advantages of E-Sign that “are already evident.” Specifically:
* E-Sign sets a higher degree of legal uniformity among the states than currently existed, which is more conducive to an online marketing strategy for the 50 states;
* E-Sign establishes a higher degree of predictability and stability in the states which allows insurers to more confidently provide their customers with the online services they are increasingly seeking; and,
* E-Sign now allows customers to execute an online insurance transaction completely online.