The Office of General Counsel issued the following informal opinion on January 19, 2001, representing the position of the New York State Insurance Department.
Re: Electronic Alternatives for Signing and Storing Reinsurance Contract Wordings
New York State enacted the Electronic Signatures and Records Act ("ESRA") as part of Chapter 4 of the Laws of 1999, adding the State Technology Law as new Chapter 57-A of the Consolidated Laws, N.Y. State Tech. Law §§ 101-109 (McKinney Pamphlet 2000). ESRA establishes a legal framework in New York for the conduct of electronic commerce. I note that the recently enacted federal "Electronic Signatures in Global and National Commerce Act," 15 U.S.C. § § 7001-7031 (2000), may preempt, in whole or in part, ESRA. The New York Office for Technology ("OFT), which is the electronic facilitator under ESRA, is currently examining the issue of preemption, and we therefore offer no opinion at this time as to whether or not a particular technology or procedure constitutes an electronic signature, and whether or not it complies with the laws.
Generally speaking, insurance transactions may be effectuated electronically over the Internet to the same extent that they may be effectuated by other means. That is, effectuating an insurance transaction over the Internet does not add any additional requirements not otherwise required under the Insurance Law. However, requirements may not be disregarded, such as formatting and signature requirements, because the transaction is being effectuated over the Internet. Thus, if a statute or regulation requires a signature to effectuate a certain type of policy, then a signature must be obtained. However, as stated above, at this time we offer no opinion as to what constitutes an electronic signature.
Electronic Records Retention:
A reinsurance intermediary would be maintaining the records of reinsurance transactions electronically while acting on behalf of the insurer. Thus, a reinsurance intermediary would be required to comply with Regulation No. 152, N.Y. Comp. Codes R. & Regs. tit. § 243 (1996), in maintaining records that the insurer would otherwise be required to maintain.
Insurers are permitted to maintain their insurance records in a "durable medium," defined in Section 243.1(c) as:
[A] medium for maintaining a record where the properties of such medium provide reasonable assurances against tampering with the information contained in the original and degradation of any reproduction generated, and where the reproduction is an exact copy of the original. The medium may include paper; facsimile; or photographic, micrographic, magnetic, optical, mechanical or electronic media.
Therefore, if the electronic records comply with the standards contained in the aforementioned regulation, it would be acceptable as a means of records retention.
For further information, you may contact Attorney Meredith S. Kaufer at the New York City Office.