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Regulation of Insurance on the Internet U.Conn. School of Law 4/14/99 |
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Regulation of Insurance on the Internet U.Conn. School of Law 4/14/99 |
| Financial
Services Online: March '98 Update on Insurance Insurance.com
Bi$Net97 Bi$Net96 |
Web Sites and Personal Jurisdiction The WWW’s "request-and-response" system means that a Web-based advertisement only enters the forum upon the request of the user. Courts have recognized that the geographical insensitivity of the Internet places issue of purposefulness at the heart of WWW advertising cases. Direct electronic communications, such as exchanges of email or messages conveying terms of contracts, may have different considerations. Mere placement of WWW content may confer personal jurisdiction. See, e.g.:
Purposeful conduct in addition to mere placement has been required. See, e.g.:
Level of interactivity and nature of information exchange may be determinative. See, e.g.:
Electronic contracting may create clear grounds for personal jurisdiction. See, e.g.:
References:
Electronic Signatures & Digital Certificates Features:
Methods:
Several states have enacted or are considering "digital signature" laws
General References:
Rates & Forms Electronic filing of forms and rates. Compare S.E.C.’s Electronic Data Gathering, Analysis, and Retrieval "EDGAR" System www.sec.gov/edaux/wedgar.htm, and rules concerning the "Use of Electronic Media for Delivery Purposes" www.sec.gov/rules/final/33-7289.txt Digital signature technology enables a form to be certified by its author and regulatory authority as authentic or approved. Recipient or regulator can perform immediate, independent, online test of
Licensure Issues Net-based sales and underwriting may actually resolve some licensure issues for online insurance sales, because Net technology enables a corporate entity or single individual to handle more customers than possible by traditional technology, reducing the required number and likely turnover of licensees. See, e.g.: InsureMarket.com (an Intuit facility) at which one can receive real-time quotes, obtain information, connect with agents, and compare quotes and purchase policies from the nation's leading insurance companies. Intuit Insurance Services, Inc., (or its President Steven Aldrich) report holding life/health and P&C licenses in 50 states www.insuremarket.com/license.htm. Compare: InsWeb, which describes itself as "a marketplace where consumers can do extensive research to help them make the best choices in insurance coverages and Insurance Companies" and disclaims acting as an advisor or broker insweb.com/market.htm#4 InsWeb presents for some 30 insurers ( listed at insweb.com/members.htm Compare direct sales by Progressive Insurance at www.auto-insurance.com, which identifies its licensed insurance company entities by state on its site. The N.A.I.C. has founded an Insurance Industry Regulatory Network ("IRIN") to facilitate an electronic Producer Information Network ("PIN") and a Producer Database ("PDB"). More information at www.irin.org/products_services/irin_faqs.htm The adoption by the PIN Working Group of the Uniform Treatment Non-Resident License will allow IRIN to develop an electronic transaction standard for non-resident licenses during 1999.
This is part of the N.A.I.C.’s Financial Database Reengineering ("FDR") Project that projects electronic filing of all business types and all filings by 2001 (2000 data year). See, e.g., www.naic.org/help/conf299/fdr/sld001.htm
Privacy See, e.g. Federal Trade Commission: "Privacy Online: A Report to Congress" (June 1998) at www.ftc.gov/reports/privacy3/index.htm (Executive Summary is at www.ftc.gov/reports/privacy3/exeintro.htm And see July 21, 1998 prepared remarks "Consumer Privacy On the World Wide Web" at www.ftc.gov/os/1998/9807/privac98.htm
Compare privacy policies of, e.g.,
"TRUSTe is an independent, non-profit initiative whose mission is to build users’ trust and confidence in the Internet by promoting the principles of disclosure and informed consent. Because this site wants to demonstrate its commitment to your privacy, it has agreed to disclose its information practices and have its privacy practices reviewed and audited for compliance by TRUSTe. When you visit a Web site displaying the TRUSTe mark, you can expect to be notified of:
TRUSTe is at www.truste.org and maintains a storehouse for online privacy information at www.truste.org/webpublishers/pub_privacy.html
Convergence of Banks & Insurance Operations Nationally chartered banks located in small towns may sell insurance, according to a 1901 federal law that preempts state law to the contrary. Barnett Bank v. Nelson, __ U.S. ___, 116 S. Ct. 1103 (1996) supct.law.cornell.edu/supct/html/94-1837.ZO.html . The Internet is one possible platform for banks located in small towns to sell insurance across a wide geographical area. Banks in larger towns may be unable to benefit from the Barnett decision, but have the capability to buy insurance agencies and upgrade their technology.
Internet bank software companies are building Internet Insurance Company Operating Systems ("O/S")
See also Bank Administration Institute and Boston Consulting Group joint report "Putting It Together: Convergence Strategies for Banking, Insurance, and Investments," (summary of findings at news.propertyandcasualty.com/feature-articles/19990324-1785.html The report points out that, because of the economies of scale that a bank's existing infrastructure affords, a customer that is negligibly profitable for a traditional insurer is a viable for the bank. The full report for sale online at www.bai.org/putting/index.html See also Office of the Comptroller of the Currency Advisory Letter 96-8, "Guidance to national banks on insurance and annuity sales activities" at www.occ.treas.gov/ftp/advisory/96-8.htm |
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