E Insurance A Supervisory Perspective

Transcription

1 E Insurance A Supervisory Perspective Tokyo Executive Seminar 10 January 2002Tokyo Japan Alessandro A. Iuppa Superintendent of Insurance State of Maine, USA

2 The insurance-buying public and industry must be allowed to benefit from the broad range of opportunities that e-commerce offers..... As e-commerce evolves, we will continue to identify necessary reforms that will facilitate e- commerce while maintaining important consumer protections. 2

3 ½ Electronic Commerce: Develop Specific Recommendations To Update And Harmonize State Laws And Regulations To: á Facilitate The Use Of E-commerce By Insurers. á Allow Improvement In The Cost And Quality Of Access To, And Delivery, And Administration Of Insurance Products And Services, And á Maintain And Improve Necessary Consumer Protections. 3

4 ½ Electronic Regulation: á Evaluate Methods By Which Web Technology & Other Means Of E-commerce Can Increase Efficiencies In Regulating Insurance. 4

5 State Regulation Goals NAIC ISSUES PAPER Electronic Regulation áeliminate Licensing & Approval Barriers. áleverage Technology & Automation Initiatives To Achieve Economies Of Scale. áincrease Uniformity & Consistency Across State Boundaries. 5

6 á Affected Areas á Producer (Intermediary) licensing á National Insurance Producer Registry (IRIN) á Producer Information Network á Producer Database á Electronic Filing (SERFF) of Rates & Forms á (UCAA) - Uniform Certificate of Authority Application á Financial reporting á Financial Database Reengineering: New 6

7 NAIC Electronic Commerce and Regulation Working Group ½Incentives ½ Progressive/Sense Of Urgency ½ Consumers Want Benefits Of E-commerce ½ Insurers Want More Efficient And Responsive Regulatory System ½ Respond To Change ½ Demonstrating Leadership 7

8 Internet Penetration (Households) Business Generated $23 Billion 65% $42 Billion Source:Forrester Research and Quicken Insurance 8

9 Market Opportunity ½29% of all insurance premiums ($326 Billion) are from lines of insurance most likely to be sold online. áprivate passenger auto áhomeowners ávariable Annuities áfixed Annuities áindividual Term Life Source: A.M. Best 9

10 Market Opportunity 10

11 ½42 % Of Consumers Who Purchased Insurance Online Listed Comparison Shopping As A Big Plus. (Source: Data Monitor) ½78 % Of Consumers Want Their Health Insurer To Be Online And 37 Percent Are Willing To Switch Carriers For That Convenience. (Source: Cyber Dialogue) 11

12 E-COMMERCE Market Opportunity 12

13 NAIC ISSUES PAPER Electronic Commerce ½ Identify Barriers To The Use Of E- commerce ½ Identify & Evaluate The Policy Objectives For Such Laws, Regulations, Or Procedures ½ Meet Policy Objectives Barrier Without Compromising Consumer Protections. 13

14 NAIC ISSUES PAPER Electronic Commerce ½ Broad Principles Breaking Down Barriers ½ Uniformity ½ Coordination with Federal Bills & NAIC Model Acts ½ Technology & Industry Neutrality ½ (Flexibility & Level Playing Field) 14

15 NAIC ISSUES PAPER Barriers to Electronic Commerce ½ Countersignature Requirements ½ Signatures & Electronic Authentication ½ Records Retention ½ Advertising ½ Format ½ Document Delivery ½ Proof of Coverage ½ Electronic Payment ½ Disclaimers and Disclosures ½ Jurisdiction 15

16 NAIC ISSUES PAPER Consumers ½ Greatest Areas Of Consumer Risk ½ Privacy Not Unique To E-commerce ½ Fraud Unauthorized Insurers Or Scams ½ Rate Quotes - Accurate And Fair Comparisons ½ Life Insurance Beneficiary Changes. Source: Cap Gemini & Working Group 16

17 ½ Intent E-COMMERCE Federal Legislation ½ Promote The Acceptance And Use, On An International Basis, Of Electronic Signatures. ½ Take Action To Eliminate Or Impediments To Commerce In Electronic Signatures For The Purpose Of Facilitating The Development Of Interstate And Foreign Commerce; ½ Items Required To Consider: ½ Paper Based Obstacles ½ Authentication Technologies ½ Authentication In Legal Proceedings Source: S761 conference report 17

18 E-COMMERCE Federal Legislation ½ General Rule: á A signature, contract or other record relating to any transaction in or affecting interstate or foreign commerce may not be denied legal effect, validity, or enforceability solely because it is in electronic form. á A contract relating to such transaction may not be denied legal effect, validity or enforceability solely because an electronic signature or electronic record was used in its formation. Source: S761 conference report 18

19 E - COMMERCE Federal Legislation ½Exclusions: ½ The cancellation or termination of health insurance or benefits or life insurance benefits (excluding annuities). Source: S761 conference report 19

20 NAIC E-Commerce Bulletin General Intent ½Regulatory requirements are not designed to discriminate against any medium, but are designed to accomplish a particular regulatory objective, regardless of the medium used. ½When medium-specific references are contained in existing laws, the regulatory intent is to follow the objective of the law, rule or regulation, which may necessitate an interpretation of the existing law, rule or regulation to ensures that there is no discrimination of or against any particular media. 20

21 NAIC E-Commerce Bulletin ½Records Retention á Regulated Entity Must Be Able To Reassemble The Original Information Upon Request. á If No Paper Copy, Must Be Able To Produce Accurate Record Of Communication Between Policyholder And The Regulated Entity. 21

22 NAIC E-Commerce Bulletin ½E-delivery And Electronic Communications Permitted Where Agreed To By The Parties Involved. ½ Burden On Regulated Entity To Meet All Existing Requirements For Delivery. ½ Must Be Able To Provide Electronic Or Paper Document To Regulator Or Policyholder Upon Request. 22

23 NAIC E-Commerce Bulletin ½Jurisdiction and Licensing á Maintenance Of A Web Site Does Not Alone Constitute Doing Business In A State. á Operating A Web Site That Includes Insurance Advertising Does Not Constitute The Transaction Of Insurance Provided The Operator Does Not Solicit, Sell Or Negotiate Insurance. á States Will Not Assert Jurisdiction If Consumer Are Provided Reasonable Notice That Advertised Products Are Not Available In The State. 23

24 FUTURE CHALLENGES ½Regulatory Enforcement ½Fraud Programs Allocation of Resources á Focus Of Enforcement Actions - If & What Will States Focus On First? á Compensation Arrangements - Should Law Be Changed To Take Into Account New Marketing Channels. á Misrepresentations 24

25 What Does the Future Hold ½The Internet Is Here To Stay Good For Consumer & The Industry. ½Industry Will Continue To Respond To Consumer Demand. ½Regulators Should Foster An Environment Where E-commerce Will Thrive. 25