eSignatures and Delivery in Insurance. and Updated … 2015/Sessions/TECH/474IAS… · eSignatures...

IASA 87TH ANNUAL EDUCATIONAL CONFERENCE & BUSINESS SHOW

eSignatures and Delivery in Insurance. Best Practices, Customer Experience and Updated Court CasesSession 474


Greetings!

Chris Chandler, Director of Operations, Florida Peninsula Insurance Pat Hatfield, Partner, Locke Lord, LLP Brad DuPont, Practice Director, Solutions Group, e-

SignSystems


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


The Customer Experience Timeline

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



1868 the first unconditional guarantee by Watkin’s Liniment



1889 in Italy the royal family receives the first door-to door hot pizza delivery



1900sThe Age of Manufacturing. Mass Manufacturing makes industrial powerhouses successful

Ford Boeing GE RCA



1960sThe Age of DistributionGlobal connections and transportation systems make distribution key.

Walmart Toyota GE P&GUPS



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

USAA Amazon Salesforce.com



2015 Technology plays a huge part in Customer Experience


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


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


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.


• 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


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.



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.



However -We wanted to increase the number of insured account

registrations on our website.


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



Reduce transaction costs through lower paper, printing and archiving

Easy Preparing, Sending and Sharing

Streamline and Innovate Repetitive and Common Tasks



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


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.



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.



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.


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.


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.


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.


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.



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.



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.


Customer Experience

For further information/materials or to be added to our e-Matters e-mail alert,

please send your request to [email protected]

Patrick J. Hatfield512-305-4787

[email protected]


Agenda

Opening remarksOverview of laws Electronic Signatures Consumer disclosures 6-Point Risk Framework e-Payments Caselaw update e-DeliveryMore Q &A


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


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.


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.


Overview of Laws

ESIGN – federal laws

UETA – state laws

Various state laws consistent with or interpreting ESIGN/UETA


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


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.


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


Customer Experience

6 Point Risk Framework


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


6-Point Framework (cont’d)

1. Authentication Risk

2. Repudiation Risk

3. Admissibility Risk

4. Compliance Risk

5. Adoption Risk

6. Relative Risk


Authentication

Risk – “That’s not my signature”

Mitigant – Use “shared secrets” or other ways to affirm identity


Repudiation

Risk – “That’s not what I signed”

Mitigant – Hash each document and hash the audit trail


Admissibility

Risk – “Objection, your honor!”

Mitigant – Determine who is able and willing to testify upfront (Read Markel)


Compliance

Risk – “I never saw that”

Mitigant – Varies


Adoption

Risk – “Am I done yet?”

Mitigant – Test, adjust, test, repeat


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


Customer Experience

e-Payments


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


Customer Experience

Case Law Update


Summary

There are a few bad processes

The courts are not struggling to recognize electronic signatures can be enforceable


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


Customer Experience

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


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


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


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 [email protected]

Chris Chander [email protected]

Brad DuPonteSignSystems

[email protected]


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