It's debatable if the fiduciary standard is 'higher' than suitability. But the better question might be, who's holding the bar?
By Cyril Tuohy
John Hancock announced it has signed off on electronic signatures for life insurance customers, as another major life insurer moves to meet the demand of advisors and customers to automate core products and services.
Forms that customers and brokers can complete online using electronic signatures include name and address changes, dividend withdrawals, beneficiary changes, payment plans, loan requests and policy and ownership changes, the company said.
“Customers today want seamless, self-service online processes,” said Mike Doughty, president of John Hancock Insurance.
Electronic signatures lower costs, shorten policy cycles times and improve service to customers, said Karen Monks, an analyst with the consultancy Celent and author of a recent report on electronic signatures in the life insurance industry.
Speed is a byproduct of accuracy. Electronic forms are “smart,” and help guide people to fill them out properly with autocomplete algorithms. As a result, 97 percent of forms submitted and signed electronically are accurate, Doughy said.
Agents and consumers “demand that the organization with which they conduct business make conducting that business easy,” Monks wrote.
Smartphones, tables and touch screen computers are helping push life insurers to adopt electronic signature capability. The technology, codified by systems standards, has held up in state and federal courts, and has passed muster with state insurance regulators, according to Monks.
John Hancock’s electronic signature adoption signals the carrier has gone “mainstream” in terms of what other life and retirement carriers are doing.
In her report titled “E-Signatures in Life Insurance: A Vendor Spectrum,” 74 percent of insurers said their life insurance companies were using some form of electronic signature in dealing with customers and agents, up from about 47 percent five years ago.
“The market is leading insurers to no other direction than into the automated world of e-signatures,” Monks wrote at the conclusion of her October report.
If John Hancock seems late to the electronic signature party, it was not alone. A quarter of insurers surveyed said they have not been using electronic signatures due to legal and compliance risks, and because technology dollars were redirected to other projects, Monks said.
There are a dozen ways for technology systems to accept an electronic signature, from a simple mouse click to stored signature images to biometric signature data, a method which is considered the most secure form of signature technology, according to Monks.
Vendors AssureSign, DocuSign and Adobe EchoSign, dominate the electronic signature market, according to Celent.
Cyril Tuohy is a writer based in Pennsylvania. He has covered the financial services industry for more than 15 years. Cyril may be reached at firstname.lastname@example.org.
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