The I accept button on many life insurance Web sites isbecoming the electronic signature of choice for some insurers, anda new study indicates the number of users will continue togrow.

Four years after the Electronic Sig-natures in National andGlobal Commerce Act (ESIGN) was enacted by Congress, the use ofelectronic signatures in insurance has failed to spread as fast assome pundits predicted it would, but a recent study by LIMRAInternational shows 50 percent of U.S. life insurers will have sometype of e-signature functionality available for customers withinthe next year.

About 30 percent of companies currently are active ine-signatures, reports Maria Dynia, assistant scientist, technologyin marketing and distribution center for LIMRA, with another 20percent aiming to roll out a solution sometime soon. A lot of thecompanies start by rolling out pilot programs with products thatare simpler in the process, she says. Some carriers are using Iaccept buttons, others are using a signature pad, and some evenoffer a voice signature. The LIMRA data shows the most prevalentform of e-signature is the signature pad. If [e-signature] is doneusing agents, it is likely to involve a signature pad, she says.There is the comfort [for carriers] having agents use technologywith their clients.

The report, entitled Electronic Sig-natures in Insurance andFinancial Services, blames part of the delay on the
e-signature law itself. Some of the legal risks have held companiesback from going into this forcefully, says Dynia. The reportstates: Regulation and legislation around electronic signatureshave been inconsistent. The study mentions the Uniform ElectronicTransactions Act (UETA) passed by the National Conference ofCommissioners on Uniform State Laws. The UETA and ESIGN differ inseveral ways, says the study, with ESIGN believed to be stricter inthe area of consumer protection.

The LIMRA report lists several benefits carriers can achieve byadopting e-signatures. Five of them are:
Reducing underwriting time.
Maximizing an agents sales time.
Successfully completing straight-through processing.
Recruiting and licensing new agents.
Conducting business-to-business applications such as business withreinsurers.

Studies among agents on the types of technology they haveavailable in the field show there is a great deal of interest ine-signatures on the part of agents, Dynia suggests. An e-signaturegoing along with an electronic application certainly can move theprocess along quicker, she says. It can process the policy quickerfor the applicant. It also can speed up the time it takes foragents to get their commission.

The LIMRA report notes: When reduced to its most commondenominator, the primary opportunity financial services companiessee for electronic signatures is increased profitability. Thiscomes from expectations in several areas, such as reducedturnaround time, greater customer participation in the decision orapplication process, and increased consumer loyalty through thetransparency required for some transactions.

LIMRA also warns carriers about the risks of e-signatures. Theseinclude authentication risk, repudiation risk, and relative risk.Authentication risk involves obtaining an e-signature from someonewho later disavows the signature. Repudiation risk is defined as adisagreement over whether the document on which the e-signatureappears is not the same one the customer signed. While the tworisks mentioned can be found in the paper/wet signature world, aswell, relative risk pertains to insurers reviewing theire-signature policies to ensure all the risks are mitigated. Some ofthe legal risks have been what is holding companies back from goinginto this forcefully, says Dynia.

The adoption of e-signature technology has been slow, concedesLIMRA, but the consensus among carriers the organization has spokenwith is adoption will continue to grow. As the economy continues toshow signs of recovery, many expect interest in electronicsignatures to increase, the report contends. Dynia adds: Theres acertain amount of caution that is prudent in rolling out technologythat can impact the industry significantly. ROBERT REGIS HYLE