Electronic signatures may be great in theory, but unless consumers are comfortable with the process of purchasing insurance online, the technology will not have any discernable impact.With that in mind, the Kansas City, Mo.-based National Association of Insurance Commissioners (NAIC) is working diligently to come up with a protocol for Web site authentication that won't be too cumbersome and costly, but will provide consumers some peace of mind.

The NAIC has yet to decide whether a so-called "seal" program is either feasible or desirable in fulfilling the ultimate aim of providing the consumer with confidence in Internet transactions, says David Fogarty, a top legislative aide to Ohio Insurance Commissioner Lee Covington. (See "Will Consumers Sign On?" October.)

Limited protection

Insurance regulatory technology experts are well aware of not only what they want to accomplish but also what they can't.

First and foremost, experts agree that technology alone cannot protect consumers from fraudulent insurance Web sites, but it can provide levels of security designed to inform the consumer that they are doing business with a legitimate insurer.

"A seal or assurance on any insurer or producer Web site is a good start, but it will never provide total protection," says an industry source who declined to be identified. "A seal approach may only be ultimately as good as its links to other verification sources."

The insurance industry traditionally has looked to the banking industry for some guidance on technology issues. To help convince consumers that online banking is safe, bankers have implemented Web site authentication to support their online initiatives.

Two years ago, the Washington, D.C.-based American Bankers Association (ABA) partnered with the Digital Signature Trust Co., Salt Lake City, to create the kind seal of assurance program that carriers are seeking to implement.

The SiteCertain program allows customers to verify the authenticity of a financial institution's Web site.

After clicking on the icon, customers receive information on the institution as well as a link to the Federal Deposit Insurance Corp. database of financial institutions.

The two groups took their partnership a step further this year with the TrustID Internet identity program that banking officials hope will bolster confidence in online transactions.

The American Council of Life Insurers (ACLI) is developing a seal program along the lines of the ABA's that would start with the life companies but eventually expand to all lines of insurance, according to David Leifer, senior counsel for the ACLI, Washington, D.C.

"We believe the first choice of our members would be for the NAIC not to do something like this," he says. "In keeping with the general philosophy of the Internet letting industry lead, if an idea like this makes sense, the industry should do it."

Letting the market lead

Although Congress was clear in its intent to make no law establishing a digital signature technology standard--preferring to let the marketplace and consumers decide--lawmakers took a keen interest in what is available to make digital signatures a safe alternative to the paper and ink variety.

"This [e-signature law] is going to revolutionize the way we do business," says Rep. Thomas Bliley (R-Va.), who chairs the House Commerce Committee.

The Electronic Signatures in Global and National Commerce Act is "as important to e-commerce as the genome [human gene-mapping project] is to medicine," says Scott Lowry, president of Digital Signature Trust Co.

Steven Tuckey, associate editor for Insurance Accounting, a Thomson Financial publication based in New York.

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