States Move to Posting, Delivering Insurance Docs Electronically

The insurance industry is taking more steps toward modernization after two states recently approved legislation, with others considering similar proposals behind them, that allows insurers and consumers to post or deliver certain documents via online channels instead of traditional mail.

There have been a gaggle of studies on the insurance industry’s potential—much of it untapped—of sales and transactions conducted online.

A J.D. Power and Associates study published last year highlighted the weight that a consumer’s online experience had with their overall opinion of an insurer, especially Generation Y consumers who showed in a survey that they plainly lean toward online interactions with their insurers.

A roundtable discussion last January highlighted consumers’ growing preference for online channels and its impact on a “growing distance” between consumers and agents and brick-and-mortar agencies.

A study from research firm comScore released last June showed that an increasing number of auto insurance purchases are conducted online.

Arizona Allows Online Posting of Policies

In Arizona, HB 2565 allows insurers to forgo mailing a hard-copy policy to a policyholder, unless he or she asks for it, and instead post that policy online and provide the policyholder with an emailed link to that policy. Endorsements of insurance policies can also be posted online in lieu of mailed copies.

Under the new law, mailed copies at a policyholder’s request must be at no charge. Also, a consumer’s personal information is not allowed in any online postings by an insurer. That provision is meant to establish a “consumer protection” while serving the needs of a modernized world, according to Property Casualty Insurers Association of America (PCI).

“The digital age is changing how consumers conduct their personal business and this new law is just another way to use technology to make everyday life a little easier,” Kelly Campbell, vice president for PCI, said in a statement.

The bill began its legislative journey in the state House in February before senators passed it on April 10; Gov. Jan Brewer signed off on it on April 29.

Kansas and Oklahoma approved similar laws authorizing online posting for policies, according to PCI.

The trade group applauded Arizona for being at the forefront of a modern industry movement, after the state was one of the first to approve “e-card” legislation last year that allows electronic proof of insurance.

Campbell called the law “a great step towards modernizing how insurers service policies.”

Idaho Clarifies E-Delivery with New Law

PCI describes Idaho’s HB 232 as a “clarification bill” and said that it allows what the industry has termed “e-delivery” of insurance-related documents.

E-delivery can only occur with a policyholder’s consent, according to the law, which set parameters for “posting” and “delivery.”

Under the law, “e-delivery” can mean an insurer emails insurance-related documents to a policyholders; posts on “an electronic network or site” that the policyholder has access to along with an email to the policyholder directing them to that network or site; or delivering or posting the documents “directly” to an electronic device authorized by the policyholder.

Provisions under HB 232 go into effect on July 1.

Insurers Say ‘It’s Time’ as California Mulls Measure

In California Legislature, SB 251 is up for consideration after a committee of senators voted 9-0 on April 24 to put it on the Senate floor; it was read on the floor for a third time last week but hasn’t gotten a vote.

The proposal applies to e-delivery of renewal documents and notices.

According to legislative analysis, renewal documents relating to personal auto coverage were exempt from 1999’s Uniform Electronic Transactions Act that put “electronic signatures and records” on equal footing with hard-copy documents.

SB 251 would lift that exemption, allowing personal auto insurers to e-deliver renewal documents to policyholders.

The Association of California Insurance Companies (ACIC), an offshoot of PCI and sponsor of SB 251, said the “unique” exemption for personal auto insurers has held back modernizing the state’s industry.

Armand Feliciano, ACIC’s vice president, called SB 251 a “common sense measure.”

“The time has come to modernize the Golden State’s insurance laws,” Feliciano said in a statement.

When it comes to personal auto coverage, a policyholder should get a notice from an insurer about renewal at least 20 days before a policy expires or, if the notice is for nonrenewal, at least 30 days before a policy’s expiration.

If no notice is given in that mandated time frame, the policy stays in effect for 30 days after the notice is finally delivered.

SB 251 would keep those time frames in place but authorizes e-delivered notices.

Opposition to the proposal include Consumer Attorneys of California, which said that common mishaps could lead to problems, including Spam filters unknowingly preventing documents from reaching policyholders and policyholders forgetting to inform their insurer of changed email addresses.

Legislators said that insurers can strengthen reliability of e-delivery by “monitoring” emailed documents that bounce back, “coordinating” with service providers that can help them bypass Spam filters and actively following up with customers to keep contact information up-to-date.

About Charles Nguyen
Charles Nguyen is an enterprising journalist who reported for and the Desert Dispatch and was the editor in chief of the Guardian (the twice-weekly newspaper at the University of California, San Diego) before coming to Online Auto Insurance News.

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