Electronic Signatures And Insurance

Residents of Grand Prairie, Fort Worth, Dallas, Arlington, Haltom City, North Richland Hills, and other places in Texas have all become familiar with the use of computers and the purchasing products and services over the internet. A question that often comes up in the context of insurance, particularly Personal Injury Protection (PIP) benefits and Uninsured / Underinsured (UM) benefits is: How is the requirement of a signed rejection of these benefits viewed when the insurance purchase is made over the internet?
Here is some guidance:
The Texas Department of Insurance issued a bulletin that required compliance with the Texas Uniform Electronic Transaction Act. This act is found in the Texas Business & Commerce Code, Chapter 43.
The bulletin says:
COMMISSIONER’S BULLETIN No. B-0002-02 January 2, 2002 TO: REGULATED PERSONS AND ENTITIES, INCLUDING ALL INSURANCE COMPANIES, CORPORATIONS, EXCHANGES, MUTUALS, RECIPROCALS, ASSOCIATIONS, LLOYD’S, HEALTH MAINTENANCE ORGANIZATIONS, … AND OTHER ENTITIES REGULATED BY THE TEXAS DEPARTMENT OF INSURANCE AND AUTHORIZED OR ELIGIBLE TO DO BUSINESS IN TEXAS; AND TO THEIR AGENTS AND REPRESENTATIVES AND THE PUBLIC GENERALLY RE: The use of Electronic Signatures and Records in Connection with Marketing and Selling Insurance and Related Products or Engaging in Other Business Regulated by Texas Department of Insurance.
This Bulletin is intended to provide information to individuals and entities regulated by TDI and too prompt discussions between the regulated community, consumers and TDI about transacting business electronically.
Advances in electronic technology are allowing businesses, including those regulated by TDI, to integrate various elements of electronic commerce into their operations. The Internet and electronic commerce have resulted in increased conveniences and opportunities for consumers and the industry.
Texas UETA The 77th Texas Legislature passed and Governor Perry signed SB 393 adopting the Uniform Electronic Transactions Act (UETA). UETA became effective January 1, 2002, and is codified in Chapter 43 of the Texas Business & Commerce Code. In accordance with Federal Law, UETA qualifies as a statute that will “modify, limit, or supersede the provisions of section 101” (15 U.S.C. Section 7001) of the Federal Electronic Signatures in Global and National Commerce Act (E-Sign).
The Texas UETA creates a statutory structure in Texas that supports the use of electronic signatures and electronic records in everyday public and business undertakings. Texas UETA addresses the effect of electronic transactions as follows:
a. A record or signature may not be denied legal effect or enforceability solely because it is in electronic form.
b. A contract may not be denied legal effect or enforceability solely because an electronic record was used in its formation.
c. If a law requires a record to be in writing, an electronic record satisfies the law.
d. If a law requires a signature, an electronic signature satisfies the law.
Section 43.007 defines “electronic signature” as “an electronic sound, symbol, or process attached to or logically associated with a record and executed or adopted by a person with the intent to sign the record.” Therefore, certain insurance transactions may be conducted through electronic means.
This issue of electronic signature comes up in the context of insurance in two areas. One is the requirement under Texas Insurance Code, Section 1952.101, which discusses UM coverage and the other is Section 1952.152, which discusses PIP coverage.
Texas law makes it clear that electronic signatures are good and valid in Texas.