Electronic Signature Technology Takes Hold
If you haven’t seen them yet, chances are you soon will. Electronic signature technology – ‘e-signature’ for short – is rapidly making inroads into a variety of professional services – and the insurance industry is among the leading proponents.
The technology has many benefits both for the insurance industry and for the customers themselves:
Cost savings. E-signatures help control costs. One property and casualty insurer estimates that e-signatures reduce the cost of issuing a new policy by at least $10, and that’s just at the carrier level. Cost and time savings are even more significant when you consider that a customer or agent can use an e-signature on an emailed document much faster and more easily than driving across town to get a signature, or even emailing, printing, signing, scanning, and emailing the document back.
Fewer mistakes. An electronic process has less potential for paperwork errors to delay a policy issuance. This means less risk exposure for the client. It also means much lower administration and compliance costs for the carrier as well.
What are e-signatures? An e-signature is a safe, secure and legally binding digital fingerprint that establishes that you have viewed a document – and affixed your signature to it – except you used bits rather than ink. The signature itself consists of a digital identifier that can be used to verify that your signature came from you.
Are e-signatures secure? Yes, they are as secure as any online or digital procedure – and much more secure than a pen-and-ink signature, which can be forged later on an altered document. An e-signature not only establishes you were there, but also freezes a document in place. The document cannot be altered without removing your signature.
There are three levels to ensuring the security and validity of electronic signatures:
- User verification. The technology authenticates the user, via a variety of possible techniques:
Login/password combinations
Secret questions and answers
Third party authentication services
“Smart cards” and PIN number combinations
SMS codes - Document verification. The technology authenticates the document. It takes a snapshot of the document with the signatures in place. The file cannot be altered without your signature being removed. So if your signature is on the document, you know the document has not been altered since you signed it.
- Process authentication. This is still in its earlier stages of development. But some e-signature vendors also have technology that verifies exactly what information was displayed to the customer, as well.
Legal background. Congress formally recognized the validity of e-signatures under the Electronic Signatures in Global and National Commerce Act (ESIGN). This law first passed in 2000, formally laying out the legal protocols and underpinnings for the validity of the electronic signature in interstate commerce.
Conclusion
The technology has not been universally rolled out yet. Some carriers and agencies are slower to adapt than others. But it is likely that substantially all major carriers and the agencies that represent them will have adopted electronic signature technology over the next few years. You can be sure that the technology is safe and legally sound.
At Cleary, we know how important a comprehensive benefits package can be to your continued success. Give us a call today at 617-723-0700 and we will work with you to create a plan that meets your business objectives, takes into account state and federal laws, and capitalizes on incentives and innovative solutions now being offered.
Client Spotlight: Charles River Aquatics
This Spring we are pleased to spotlight our client Charles River Aquatics. They are an organization committed to helping children develop life skills through swim lessons. Their main objective is to provide an atmosphere conducive to development and personal growth for individuals of all ages. They teach water safety, foster sportsmanship and fair play.
The Charles River Aquatics teaching philosophy is designed to introduce children (ages 3 and up), to the thrill of learning how to swim efficiently and promoting a healthy lifestyle through aquatic activities.
Please click here to read more about Charles River Aquatics.
Changes in Massachusetts Workers’ Compensation Rates
Presented by Michael Regan
The Commissioner of Insurance recently approved a general revision of Massachusetts workers’ compensation rates that was effective April 1, 2014, applicable to new and renewal policies. There was no change to the overall rate level; however most individual class rates will change to reflect industry group differentials.
This may not necessarily be a bad thing for you! Depending on the classifications used for your workers compensation policy the rates may increase or decrease within a range for any particular industry.
Workers’ compensation rates were last raised in 2001 by one percent. Although Loss of Wage coverage has not changed, medical costs, as we all know too well, have been skyrocketing and workers compensation rates have not kept pace. Given the recent political climate, there has not been an appetite by regulators to approve any increases.
After many years of asking for relief and not getting any, the insurance industry took a harder stance on writing workers compensation policies in Massachusetts. Some existing accounts were receiving non-renewal notices and new business was scrutinized by underwriting with a fine tooth comb. The end result was a spike in business to the Massachusetts Workers Compensation Assigned Risk Plan.
Some may see the allowance for rate changes within industry ranges, as a fig leaf offering between regulators and carriers. To the public there is no overall change, but it allows the carriers to get some rate relief in specific industries and classes that have been troublesome and the changes may better predict workers compensation losses. Bear in mind that not all rates will increase. In fact many are decreasing. For example; the rate per $100 of payroll for Electrical Wiring (code 5190) was $2.84 and is now going down to $2.74.
If you would like to review the effect of these changes on your policy please click on the following link https://www.wcribma.org/mass where you can look up the rates as well as see what other changes may impact your business.
At Cleary, we will evaluate your business exposures and work with you to develop a comprehensive plan to safeguard your business. Give us a call today at 617-723-0700.