Bulletin: IN2014005

Date:
June 19, 2014
To:
All Indiana Issuing Offices
RE:
LEGISLATIVE UPDATE - House Enrolled Act 1058 Electronic Delivery of Insurance Documents and Notice

Dear Associates:

The purpose of this bulletin is to provide information on House Enrolled Act 1058, which authorizes electronic delivery of insurance documents to a party in an insurance transaction upon receipt of consent or confirmation of consent from the party. Party is defined as including an “applicant, insured, or policyholder”. The effective date of the Act is July 1, 2014.

The Act allows insurers to deliver Notices and Documents electronically as long as the statutory requirements for notice to and consent from a party are satisfied. Electronic delivery includes email transmission of Notices and Documents, or posting the documents to an electronic network or web site accessible via the iInternet, mobile application, a computer, a mobile device, a tablet, or another electronic device with separate notice delivered to the electronic mail address at which a party has consented to receive notice of the posting.

The Act applies to electronic delivery of Notices and Documents that are 1) legally required in an insurance transaction; or 2) serve as evidence of insurance coverage. At the present time, we have received confirmation from the Indiana Department of Insurance (“DOI”) that the notice to an insurance applicant/proposed insured for insurance and consent from the insurance applicant/proposed insured is required prior to electronic delivery of a policy. The DOI has indicated that an insurer’s appointed agent, on behalf of the insurer, may deliver policies electronically as long as the statutory notice and consent requirements are met. We are awaiting additional clarification from the DOI as to what other Notices and Documents in an insurance transaction or evidencing coverage may require consent to electronic delivery in compliance with the new law. We will provide additional information as it becomes available.  

HEA 1058 requires that a party electronically consent or confirm in a manner that reasonably demonstrates that the party is able to access information in an electronic form. The new law requires the following information be provided in writing to a party prior to consent:

  • Statement that party has right to be provided with paper or other nonelectric copy.
  • Statement that party has right to withdraw consent, and what fees, conditions, or consequences will be imposed if party withdraws consent.
  • Whether the party’s consent applies to a specific transaction or all transactions during the course of the party’s relationship with insurer or agent.
  • The means by which party may obtain a paper copy and any applicable fee.
  • The procedure for a party to follow to withdraw consent to electronic delivery, or update information needed to contact party.
  • Statement of hardware and software requirements for access to and retention of an electronically delivered Notices and Documents.

The attached Notice and Consent to Electronic Delivery of Insurance Notices and Documents under Indiana Code 27-1-43 can be transmitted by email for a party’s signature and returned to your office by email transmission for retention in your file as evidence of consent. The Act allows an insurer to charge a fee for a paper copy of Notices and Documents to a party if notice of the charge was provided in the required notice to obtain the party’s consent to electronic delivery.  

A party may withdraw consent for electronic delivery at any time. The withdrawal of consent is effective 30 days after receipt by the insurer of the withdrawal of consent. If an insurer has a party’s consent on file prior to July 1, 2014, for electronic delivery of certain Notices and the insurer or its agent intends to continue to deliver documents electronically, the party must be notified that documents that were not electronically delivered previously may now be delivered under this Act and that the party has the right to withdraw consent.  

The Act provides that the legal effectiveness, validity, or enforceability of a contract or policy of insurance executed by a party may not be denied solely because of the failure of the insurer to obtain electronic consent or confirmation of consent. If, after a party has consented to electronic delivery of Notices and Documents, a change in the hardware or software requirements needed to access or retain electronically delivered Notices and Documents, creates a material risk that the party will not be able to access or retain subsequent Notices and Documents the party must be provided with a statement of the revised hardware and software requirements for access to and retention of electronically delivered Notices and Documents and informed of the right to withdraw consent without the imposition of any fee, condition, or consequence that was not disclosed herein. An insurer’s failure to comply with this provision with respect to a change in hardware or software is considered to be withdrawal of party’s consent.

As indicated above, we are awaiting additional information from the DOI to clarify certain provisions of the new law and applicability to title insurance. We will keep you informed of any new developments.

A copy of HEA 1058 can be found at the following link:

http://iga.in.gov/static-documents/1/9/6/b/196b13f7/HB1058.05.ENRH.pdf

If you have any questions relating to this or other bulletins, please contact a Stewart Title Guaranty Company underwriter.

For on-line viewing of this and other bulletins, please log onto www.vuwriter.com.

THIS BULLETIN IS FURNISHED TO INFORM YOU OF CURRENT DEVELOPMENTS. AS A REMINDER, YOU ARE CHARGED WITH KNOWLEDGE OF THE CONTENT ON VIRTUAL UNDERWRITER  AS IT EXISTS FROM TIME TO TIME AS IT APPLIES TO YOU, AS WELL AS ANY OTHER INSTRUCTIONS. OUR UNDERWRITING AGREEMENTS DO NOT AUTHORIZE OUR ISSUING AGENTS TO ENGAGE IN SETTLEMENTS OR CLOSINGS ON BEHALF OF STEWART TITLE GUARANTY COMPANY. THIS BULLETIN IS NOT INTENDED TO DIRECT YOUR ESCROW OR SETTLEMENT PRACTICES OR TO CHANGE PROVISIONS OF APPLICABLE UNDERWRITING AGREEMENTS. CONFIDENTIAL, PROPRIETARY, OR NONPUBLIC PERSONAL INFORMATION SHOULD NEVER BE SHARED OR DISSEMINATED EXCEPT AS ALLOWED BY LAW. IF APPLICABLE STATE LAW OR REGULATION IMPOSES ADDITIONAL REQUIREMENTS, YOU SHOULD CONTINUE TO COMPLY WITH THOSE REQUIREMENTS.

References

Bulletins Replaced:
None
Related Bulletins:
None
Underwriting Manual:
None
Exceptions Manual:
None
Forms:
None