eSignatures and Delivery in Insurance. Best Practices, Customer - - PowerPoint PPT Presentation

IASA 87TH ANNUAL EDUCATIONAL CONFERENCE & BUSINESS SHOW

eSignatures and Delivery in Insurance. Best Practices, Customer Experience and Updated Court Cases

Session 474

IASA 87TH ANNUAL EDUCATIONAL CONFERENCE & BUSINESS SHOW

Greetings!

• Chris Chandler, Director of Operations, Florida

Peninsula Insurance

• Pat Hatfield, Partner, Locke Lord, LLP
• Brad DuPont, Practice Director, Solutions Group, e-

SignSystems

IASA 87TH ANNUAL EDUCATIONAL CONFERENCE & BUSINESS SHOW

Insurance Companies Face

• rising operational costs,
• more demanding compliance,
• security requirements,
• and more exacting demands from customers

Institutions are realizing that implementing e-signature solutions can deliver a critical competitive edge while increasing the customer service experience.

Forrester 2013

IASA 87TH ANNUAL EDUCATIONAL CONFERENCE & BUSINESS SHOW

The Customer Experience Timeline 10k BC when “Wheels by Bruce” at the Cave Retail Store offered the first return for exchange

IASA 87TH ANNUAL EDUCATIONAL CONFERENCE & BUSINESS SHOW

The Customer Experience Timeline 1868 the first unconditional guarantee by Watkin’s Liniment

IASA 87TH ANNUAL EDUCATIONAL CONFERENCE & BUSINESS SHOW

The Customer Experience Timeline 1889 in Italy the royal family receives the first door-to door hot pizza delivery

IASA 87TH ANNUAL EDUCATIONAL CONFERENCE & BUSINESS SHOW

The Customer Experience Timeline 1900s The Age of Manufacturing. Mass Manufacturing makes industrial powerhouses successful

• Ford
• Boeing
• GE
• RCA

IASA 87TH ANNUAL EDUCATIONAL CONFERENCE & BUSINESS SHOW

The Customer Experience Timeline 1960s The Age of Distribution Global connections and transportation systems make distribution key.

• Walmart
• Toyota
• GE P&G
• UPS

IASA 87TH ANNUAL EDUCATIONAL CONFERENCE & BUSINESS SHOW

The Customer Experience Timeline 2010… The Age of the Customer. Empowered buyers demand a new level of satisfaction.

• USAA
• Amazon
• Salesforce.com

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The Customer Experience Timeline 2015 Technology plays a huge part in Customer Experience

IASA 87TH ANNUAL EDUCATIONAL CONFERENCE & BUSINESS SHOW

Customer Satisfaction in Insurance

• On a 1,000 point scale, customer satisfaction is higher

when

• insurers are involved during service interactions (865)
• exclusively with the broker (769).
• The study also finds that there is not a strong

relationship between the service interactions that a customer has with their broker and a customer’s

• verall satisfaction with their insurer.

JD Power 2014 Large Business Commercial Insurance Study

IASA 87TH ANNUAL EDUCATIONAL CONFERENCE & BUSINESS SHOW

Superior Customer Experience

• Today, customers expect seamless digital experiences

that enable them to rapidly complete transactions without interruptions.

• The frustrations and delays associated with obtaining

physical signatures negatively impact customers and can drive them to look for more convenient ways to conduct business.

Forrester 2013

IASA 87TH ANNUAL EDUCATIONAL CONFERENCE & BUSINESS SHOW

Superior Customer Experience E-signatures simplify and streamline customer-facing processes. Now with the exploding popularity of smart devices in the sales process across industries, e-signatures have become a technological imperative.

IASA 87TH ANNUAL EDUCATIONAL CONFERENCE & BUSINESS SHOW

• Homeowner Insurance in the state of

Florida, specializing in hurricane/wind coverage

• 8th Largest carrier in the Florida with

approximately 130K policies.

• 6th Largest writing carrier, over 24K

applications per year.

• Combined ratio less than 1.
• Approximately 3,000 Independent

Agents, no captive agents. eSignature – Carrier Perspective

Chris Chandler

• Dir. of Operations

IASA 87TH ANNUAL EDUCATIONAL CONFERENCE & BUSINESS SHOW

eSignature – Business Case Prior to eSignature, we did not require agents to submit signed applications to the company.

• We relied on our agents to keep copies of the

applications in their offices.

• During a routine audit of our agents, we were unable to

locate 3 out of 20 applications and

• 7 had been signed by agents that were not appointed

with our company.

IASA 87TH ANNUAL EDUCATIONAL CONFERENCE & BUSINESS SHOW

eSignature – Business Case Agents were trying to submit applications electronically. At first, we accepted them. But legal got involved and stated that the insured consent to sign electronically had to be between the insured and the carrier. Since the agents were using their own individual products and the agreement was between the agent and the insured, we stopped accepting electronically signed applications by our agents.

IASA 87TH ANNUAL EDUCATIONAL CONFERENCE & BUSINESS SHOW

eSignature – Business Case However -

• We wanted to increase the number of insured account

registrations on our website.

IASA 87TH ANNUAL EDUCATIONAL CONFERENCE & BUSINESS SHOW

eSignature – Perceived Additional Benefits

• Eliminate lost forms and late submissions caused by the

manual handling of paperwork

• Accelerate the signing process and improve the

customer experience with immediate access to electronic forms

IASA 87TH ANNUAL EDUCATIONAL CONFERENCE & BUSINESS SHOW

eSignature – Perceived Additional Benefits

• Reduce transaction costs through lower paper, printing

and archiving

• Easy Preparing, Sending and Sharing
• Streamline and Innovate Repetitive and Common Tasks

IASA 87TH ANNUAL EDUCATIONAL CONFERENCE & BUSINESS SHOW

eSignature – Perceived Additional Benefits

• Improve control, quality and consistency of your

paperwork and contracts by ensuring everyone uses company approved business form templates

• Optimize workflow by automating signer reminders,

time limits and workflow form sharing as soon as it has been signed and accepted

IASA 87TH ANNUAL EDUCATIONAL CONFERENCE & BUSINESS SHOW

eSignature in Action

• Agent binds policy with company and initiates the

process to sign the application electronically.

• Agent reads some rules explaining the process and

agrees to follow by them.

IASA 87TH ANNUAL EDUCATIONAL CONFERENCE & BUSINESS SHOW

eSignature in Action

• Agent provides some basic information about the

signers—name and email address.

• Agent selects from list of appointed agents and signs

the document. System sends email to insured with signing instructions.

IASA 87TH ANNUAL EDUCATIONAL CONFERENCE & BUSINESS SHOW

eSignature in Action

• If document not electronically signed within 14 days,

signing room expires and document cannot be signed with eSignature.

• Most documents signed within hours
• Once document is fully signed, document is secured,

signing room event is archived, and document is stored in offsite location viewable by agent and insured.

IASA 87TH ANNUAL EDUCATIONAL CONFERENCE & BUSINESS SHOW

eSignature in Action- Agent Signing Process

• At the option of the agent, agent can sign document

immediately or sign the document later.

• Agent agrees to Consent and electronically signs the

applications.

• Simple interface for the agent; one-click and the

document is signed.

IASA 87TH ANNUAL EDUCATIONAL CONFERENCE & BUSINESS SHOW

eSignature in Action- Insured Signing Process

• Insured receives an email with instructions on how

to sign the document.

• Insured clicks link in email and creates an account on

carrier website.

IASA 87TH ANNUAL EDUCATIONAL CONFERENCE & BUSINESS SHOW

eSignature in Action- Insured Signing Process

• Insured agrees to Consent Statement and

electronically signs document.

• Insured clicks as directed, and the signing room

inserts the appropriate initials/signatures.

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eSignature – Post Implementation Benefits Realized

• Agents who elect electronic signature receive a daily

email listing all pending signatures and status.

• Electronically signed applications are immediately

viewable by agents and insureds on the website and archived indefinitely in our document repository.

IASA 87TH ANNUAL EDUCATIONAL CONFERENCE & BUSINESS SHOW

eSignature – Post Implementation Benefits Realized

• When new business file is reviewed, Underwriting

knows immediately the status of the application, whether signed or not signed.

• If electronically signed, underwriting saves time by not

verifying the signature.

IASA 87TH ANNUAL EDUCATIONAL CONFERENCE & BUSINESS SHOW

eSignature – Post Implementation Benefits Realized

• For electronically signed applications, we know that

100% are signed by appointed agents, and we have a copy of the signed application.

• New account registrations on website are up 6.6%
• 92% of applications completed electronic signature.

IASA 87TH ANNUAL EDUCATIONAL CONFERENCE & BUSINESS SHOW

Customer Experience For further information/materials or to be added to our e-Matters e-mail alert, please send your request to brosen@lockelord.com Patrick J. Hatfield 512-305-4787 phatfield@lockelord.com

IASA 87TH ANNUAL EDUCATIONAL CONFERENCE & BUSINESS SHOW

Agenda

• Opening remarks
• Overview of laws
• Electronic Signatures
• Consumer disclosures
• 6-Point Risk Framework
• e-Payments
• Caselaw update
• e-Delivery
• More Q &A

IASA 87TH ANNUAL EDUCATIONAL CONFERENCE & BUSINESS SHOW

Supplemental Materials

• Overview of 6-Point Framework
• Enhancing the Admissibility and Enforceability of

Electronically Signed Documents (Bloomberg Law Reports)

• File Memo re: e-Vaults Are Essential and Enforceable

Electronic Signature Transactions

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Preliminary Comments

• A reasonably well designed process, supported by solid

technology, can actually reduce risk, relative to traditional process.

• It’s more about process and workflow than it is about

technology, but technology plays important role.

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Preliminary Comments (cont’d)

• In designing where the records will be stored and

which records will be kept, consider long-term e- discovery implications.

• Reasonable customer self-serve portals allow

customers to make changes when convenient to them – their “Martini time”!

• Use of e-signatures and e-delivery for existing

customers presents a huge opportunity for company savings and customer retention.

IASA 87TH ANNUAL EDUCATIONAL CONFERENCE & BUSINESS SHOW

Overview of Laws

• ESIGN – federal laws
• UETA – state laws
• Various state laws consistent with or interpreting

ESIGN/UETA

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Basics of e-Sign

• Documents required to be provided in writing may be

e-delivered.

• Consumer disclosures may be e-delivered, with an extra

step.

• Electronic signature broader than “digital” signature,

may be as simple as clicking “I agree”, typing a name,

• r even saying “I agree”.
• Voice Signatures

IASA 87TH ANNUAL EDUCATIONAL CONFERENCE & BUSINESS SHOW

Basics of e-Delivery

• Documents required to be provided in writing may be

e-delivered.

• Consumer disclosures may be e-delivered, with an extra

step.

IASA 87TH ANNUAL EDUCATIONAL CONFERENCE & BUSINESS SHOW

Consumer Disclosures

• Can be given via e-delivery
• May require special consents
• state law disclosures
• federal law disclosures
• states that have included special provision: AK, AL,

CO, CT, GA, MD, MA, NH, NV, NC, NJ, OR, SC, TN, VT, WV, and WI

• Call center model

IASA 87TH ANNUAL EDUCATIONAL CONFERENCE & BUSINESS SHOW

Customer Experience

6 Point Risk Framework

IASA 87TH ANNUAL EDUCATIONAL CONFERENCE & BUSINESS SHOW

6-Point Framework

• Developed over time from risks identified by clients and

attendees at sessions like this

• Framework helps distinguish the risk, to calibrate the

mitigation strategy with the right risk

• Helps multi-disciplinary team communicate

IASA 87TH ANNUAL EDUCATIONAL CONFERENCE & BUSINESS SHOW

6-Point Framework (cont’d) 1. Authentication Risk 2. Repudiation Risk 3. Admissibility Risk 4. Compliance Risk 5. Adoption Risk 6. Relative Risk

IASA 87TH ANNUAL EDUCATIONAL CONFERENCE & BUSINESS SHOW

Authentication Risk – “That’s not my signature” Mitigant – Use “shared secrets” or other ways to affirm identity

IASA 87TH ANNUAL EDUCATIONAL CONFERENCE & BUSINESS SHOW

Repudiation Risk – “That’s not what I signed” Mitigant – Hash each document and hash the audit trail

IASA 87TH ANNUAL EDUCATIONAL CONFERENCE & BUSINESS SHOW

Admissibility Risk – “Objection, your honor!” Mitigant – Determine who is able and willing to testify upfront (Read Markel)

IASA 87TH ANNUAL EDUCATIONAL CONFERENCE & BUSINESS SHOW

Compliance Risk – “I never saw that” Mitigant – Varies

IASA 87TH ANNUAL EDUCATIONAL CONFERENCE & BUSINESS SHOW

Adoption Risk – “Am I done yet?” Mitigant – Test, adjust, test, repeat

IASA 87TH ANNUAL EDUCATIONAL CONFERENCE & BUSINESS SHOW

Relative Risk – “How does each category of risk for the e-process compare to that in the traditional process?” Apply the relative risk to each previous point

• Authentication
• Repudiation
• Admissibility
• Compliance
• Adoption

IASA 87TH ANNUAL EDUCATIONAL CONFERENCE & BUSINESS SHOW

Customer Experience

e-Payments

IASA 87TH ANNUAL EDUCATIONAL CONFERENCE & BUSINESS SHOW

Source of Rules

• NACHA Rules – INDUSTRY RULES
• Reg E – FEDERAL REGULATION
• PCI DSS – INDUSTRY RULES
• Payment Card Brand Rules – INDUSTRY RULES
• Merchant Agreement – CONTRACT
• Payment Processor Agreement – CONTRACT

IASA 87TH ANNUAL EDUCATIONAL CONFERENCE & BUSINESS SHOW

Customer Experience

Case Law Update

IASA 87TH ANNUAL EDUCATIONAL CONFERENCE & BUSINESS SHOW

Summary

• There are a few bad processes
• The courts are not struggling to recognize electronic

signatures can be enforceable

IASA 87TH ANNUAL EDUCATIONAL CONFERENCE & BUSINESS SHOW

Summary (cont’d)

• Take-away: Courts continue confirming e-Delivery and

e-Signatures in the employee/consumer settings, as long as it is made clear to the person the significance of the action accepting new terms

• Plan for admissibility, we suspect there will be more

disputes in this area

IASA 87TH ANNUAL EDUCATIONAL CONFERENCE & BUSINESS SHOW

Customer Experience

e-Delivery of the Fulfillment Package: Can it be Done?

IASA 87TH ANNUAL EDUCATIONAL CONFERENCE & BUSINESS SHOW

e-Delivery

• Yes – e-Delivery is permissible
• Requires clear consent from recipient
• Consider obtaining consumer’s consent for

e-delivery for all permitted notices, such as:

• GLB annual notices
• FCRA opt-out notices
• Security breach notices
• Other notices that may be required

IASA 87TH ANNUAL EDUCATIONAL CONFERENCE & BUSINESS SHOW

e-Delivery (cont’d)

• e-Delivery method can reduce risk:
• proof of delivery of complete package
• proof of when delivery occurred
• e-Delivery can also present a quandary: what happens

if consumer does not retrieve package/notice?

• UETA has deemed receipt and upfront consent should

emphasize

IASA 87TH ANNUAL EDUCATIONAL CONFERENCE & BUSINESS SHOW

The Bottom Line?

• e-Signatures can be legal
• Authentication and repudiation risks are manageable,

especially in new business areas

• Evaluating these risks must be done in context
• More work flow and process than technology
• Consider how you’ll prove it

Presentation | 4/22/2015 | 58

eSignSystems Overview | 4/26/10 | 58

Questions? Answers!

Pat Hatfield phatfield@lockelord.com Chris Chander chris.chandler@floridapeninsula.com Brad DuPont eSignSystems bdupont@esignsystems.com

IASA 87TH ANNUAL EDUCATIONAL CONFERENCE & BUSINESS SHOW

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