New York State Seal
STATE OF NEW YORK
INSURANCE DEPARTMENT
25 BEAVER STREET
NEW YORK, NEW YORK 10004

The Office of General Counsel has issued the following informal opinion on February 10, 2000, representing the position of the New York State Insurance Department.

Insurance Agent's Internet Web site

Questions Presented:

1. Does New York require that an insurance agent request that each insurer participating in its web site have the electronic version of the insurance policies approved by New York, even though the exact language has already been approved?

2. If the answer to question 1 above is no, how would such an insurance agent comply with statutory formatting requirements?

3. If there are restrictions on electronic presentation of insurance forms in New York, what are they? For example, are there restrictions on paper size, paper color, font size or font color that our client will not be able to ensure are met if the form is printed or viewed from the on-line service?

4. Can an Agent proceed to broadcast their designed HTML format for policy forms on the Internet?

Conclusions:

1. No, New York does not require that an insurance agent request that each insurer participating in its web site have the electronic version of the insurance policies approved by New York if the exact language of the non-electronic version has already been approved.

2. As to those insurance policies which are subject to filing with and approval by the Department, such as group health insurance policies, the statutory and regulatory formatting requirements must be complied with. The policy that is displayed on the Internet must be in a format which complies with the formatting requirements under the New York Insurance Law, just as did the non-electronic version of the policy which was filed with and approved by the Department so that what is transmitted electronically is viewable and may be printed by the recipient in the same format.

3. Yes, there are many formatting requirements under the New York Insurance Law affecting such matters as font size, prominence of language and that certain documents be attached to others.

4. An insurance policy form can be transmitted electronically on the Internet by an insurance agent if the document displayed on the Internet and the document that will be viewed and printed by the recipient complies with the applicable statutory formatting requirements, such as if the document is placed on the Internet using PDF technology.

Facts:

The subject agent is interested in developing a website that would offer consumers the opportunity to purchase various types of insurance policies, as a sort of 'e-broker.' They would like to take the exact language of insurance forms that insurers have already had approved in New York, and put them up on their site in HTML format for review by potential customers. The HTML format would not necessarily display or print insurance forms with the same font size, font color, specific page size or color, that the non-electronic version would.

The party further stated that they are currently focusing on group health insurance policies and intend to expand into individual life and health policies later. Accordingly, they only seek guidance at this juncture as to the group health insurance marketing by means of electronic commerce conducted over the Internet. They propose to display insurance policies and related information in HTML format whereby the text of the policies will be identical to the policies approved by the Department, although the policies would be displayed in a different format than the approved version of the policy.

If the Department does not consider the HTML format to be an acceptable representation of approved policy forms, the party wants to know whether the Department's concerns would be alleviated if the webpage used PDF (personal document format) of the approved insurance policies and related materials. The PDF format would be an identical representation of the approved policy format in a near-photograph-like image on the webpage, with the same font size, font color and other attributes as the non-electronic version which has been approved by the Department.

Analysis:

New York State has enacted the Electronic Signatures and Records Act (hereinafter referred to as "ESRA") as part of Chapter 4 of the Laws of 1999 that added the State Technology Law as new Chapter 57-A of the Consolidated Laws. While ESRA establishes a legal framework in New York for the conduct of electronic commerce, it does not address issues regarding the formatting of documents. The Department has issued Circular Letter No. 33 (1999), regarding the use of electronic commerce in the insurance business.

New York does not require that either an insurer or insurance agent who maintains a web site have the electronic document version of its insurance policies separately approved by the Department. If the exact language of the non-electronic version of the insurance policy which has been approved by the Department is contained in the electronic document version thereof, the electronic document version may be used in New York. No separate filing of the electronic document is required.

Formatting requirements contained in the New York Insurance Law include font size, type, style, clarity, prominence, attachments, placement, and color. Specifically, as to the formatting of group accident and health insurance policies, several such statutory provisions apply. For example, N.Y. Ins. Law § 3221(a)(15) (McKinney Supp. 1999-2000) provides that a policy other than one issued in fulfilling continuing care responsibilities of a continuing care community operator, but which is available to a consumer because of residence in a facility, housing development or community, shall contain a required notice in 12 point type, in bold face on the first page to the effect that the policy does not meet the requirements of a continuing care retirement contract. Under Article 43 of the New York Insurance Law policies issued by non-profit insurers described therein must meet formatting requirements such as that the policy be in the form of a booklet (N.Y. Ins. Law § 4305(a) (McKinney Supp. (1999-2000)), or that a notice statement appear on the first page (N.Y. Ins. Law § 4304(h) and § 4305(f) (McKinney Supp. (1999-2000)). The Department is of the opinion that such statutory formatting requirements can be met if the electronic document versions of the policies placed on the web site and printed off of the web site comply with the applicable statutory formatting requirements.

The important consideration in regard to formatting is how the electronic document version of the insurance policy that is being issued to a policyholder or insured will appear to those accessing it from the Internet. The form should be transmitted over the Internet in a format which ensures that those viewing it and printing it receive the document in the same format as the non-electronic document that was approved for use in New York State.

If the foregoing requirements are met, an insurer and an insurance agent can place a group accident and health insurance policy, as an electronic document, on its web site on the Internet without violating Insurance Law formatting requirements.

For further information you may contact Associate Attorney Barbara A. Kluger at the New York City office.