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IASA 87TH ANNUAL EDUCATIONAL CONFERENCE & BUSINESS SHOW
eSignatures and Delivery in Insurance. Best Practices, Customer Experience and Updated Court CasesSession 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
1900sThe Age of Manufacturing. Mass Manufacturing makes industrial powerhouses successful
Ford Boeing GE RCA
IASA 87TH ANNUAL EDUCATIONAL CONFERENCE & BUSINESS SHOW
The Customer Experience Timeline
1960sThe Age of DistributionGlobal connections and transportation systems make distribution key.
Walmart Toyota GE P&GUPS
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
IASA 87TH ANNUAL EDUCATIONAL CONFERENCE & BUSINESS SHOW
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 overall 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 ChandlerDir. 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.
IASA 87TH ANNUAL EDUCATIONAL CONFERENCE & BUSINESS SHOW
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. Hatfield512-305-4787
phatfield@lockelord.com
IASA 87TH ANNUAL EDUCATIONAL CONFERENCE & BUSINESS SHOW
Agenda
Opening remarksOverview of laws Electronic Signatures Consumer disclosures 6-Point Risk Framework e-Payments Caselaw update e-DeliveryMore 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
IASA 87TH ANNUAL EDUCATIONAL CONFERENCE & BUSINESS SHOW
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.
IASA 87TH ANNUAL EDUCATIONAL CONFERENCE & BUSINESS SHOW
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
IASA 87TH ANNUAL EDUCATIONAL CONFERENCE & BUSINESS SHOW
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, or 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 | 58eSignSystems Overview | 4/26/10 | 58
Questions? Answers!
Pat Hatfieldphatfield@lockelord.com
Chris Chander chris.chandler@floridapeninsula.com
Brad DuPonteSignSystems
bdupont@esignsystems.com
IASA 87TH ANNUAL EDUCATIONAL CONFERENCE & BUSINESS SHOW
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