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

The Office of General Counsel issued the following informal opinion on September 20, 2000, representing the position of the New York State Insurance Department.

RE: Electronic Insurance Applications and Electronic Signatures

Question Presented:

Does the New York Insurance Law permit the use of an electronic application for a life insurance policy, accident and health insurance policy, or annuity contract that is electronically signed by the applicant?

Conclusion:

The New York Insurance Law permits the use of an electronic application for a life insurance policy, accident and health insurance policy, or annuity contract that is electronically signed by the applicant.

Facts:

An inquiry was made as to whether the Department would object to a licensee’s use of an electronic application for its life insurance policies, accident and health insurance policies, or annuity contracts, which would be electronically signed by the applicant. The licensee proposed to have insurance agents collect data from applicants on laptop computers and transmit such information to the licensee’s home office for processing. The proposed process would include the capture of an applicant’s signature at the point of sale (via an electronic signature pad) that would then be affixed to the electronic application.

Analysis:

New York State has enacted the Electronic Signatures and Records Act ("ESRA"), which establishes a legal framework in New York for the conduct of electronic commerce. See N.Y. State Tech. Law Art. 1 (McKinney Pamphlet 2000). ESRA specifies five electronic signature criteria that, if met, give the same validity and effect to an electronic signature that is given to a signature affixed by hand. Insurance forms may be electronically created, signed and transmitted provided that the electronic methodology implemented meets the criteria imposed by applicable law; all other statutory and regulatory requirements must also be met. The electronic version of an insurance application must be submitted to the Department for approval if the electronic version differs from an already-approved form in text or other material manner. Where there are no such differences, no separate approval is necessary.

Please note that the new federal Electronic Signatures in Global and National Commerce Act, 15 U.S.C. §§ 7001 – 7031 (2000), may pre-empt ESRA, in whole or in part. The New York State Office for Technology, which is the electronic facilitator under ESRA, is currently examining the relationship of the federal law to ESRA and the pre-emption issue. Thus, we offer no opinion thereon at this time. This is a matter that a licensee may wish to independently consider before implementing its electronic application and electronic signature procedure.

For further information you may contact Attorney Sally A. Geisel at the New York City Office.