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E-signatures Are OK For Investments & Life Insurance… But Not For Employee Benefits

Last year around this time I wrote that I felt insurance providers needed to step up to the plate and start accepting electronic signatures – and if wet signatures still had a place in today’s high-tech world.

As we fast forward thirteen months later, it’s incredible to see the collective progress an entire industry can make, because we’re finally seeing the acception of electronic signatures – for the most part.

The IIROC now supports the use of e-signatures

The Investment Industry Regulatory Organization of Canada (IIROC) recently released updated guidance to advisors, officially letting investment firms know that they can offer their clients the use of electronic signatures (“e-signatures”) for client agreements, contracts and consent forms.

Not only is this a major convenience factor for both parties involved, but it also helps reduce administrative workloads, eliminates repetitive tasks and saves a boatload of time for a more streamlined-process.

Does this mean the time for “wet” signatures has all but dried up?

This doesn’t mean that the digital route has completely paved over the traditional pen-to-paper route, it just means that it gives firms and clients the flexibility to choose whether to require “wet,” hard-copy signatures or to allow digital signatures when it comes to client agreements, contracts and consents.

While this has paved the way for efficiencies in the process, there still will be some forms of documentation that will require wet signatures, such as trusts or Powers of Attorney’s.

Does this movement open the door for Blockchain in the benefits space?

I have been a major proponent on how blockchain technology could be used to address the considerable inefficiencies, gaps and errors caused by poor data quality in both front and back offices of insurance providers.

The use of smart contracts to speed up the validation of client documents could lead to big reductions in administration costs for benefits providers, as well as higher customer retention.

Blockchain’s ability to provide tamper-proof, shareable records of transactions could drastically speed up the interaction between insurance providers, their customers and third parties.

Why haven’t we closed the loop in the benefits space?

While this is breaking incredible new ground for many investment firms, the benefits space is still trying to figure out how it fits into all of this – and why it still feels like it’s part of the industry people forget about.

With many advisors being vocal about seeing insurance carriers improve their underwriting process to sharpen the time and accuracy, a major issue that still stands out is the ability to use digital signatures. It’s just this never-ending loop where a lot of carriers say they can’t accept them because they are taking their lead from the CLHIA – but CLHIA still says it’s up to each carrier.

The technology is growing rapidly, and many in the insurance space are embracing document-oriented management and workflow platforms to speed up this process. But when you look at this in the context of how life insurance policies with large exposures can accept digital signatures, but a group benefits policy valued at a lot less will still need a hard copy signature, it shows how easily our corner of the industry gets overlooked and brushed aside.

We need to have a lobbying advocate for brokers

In order to bring about changes for our corner of the industry, we need an advocate to go to bat for us so we can improve the advisor/carrier relationship for the long run.

Having a unified voice to represent independent agents while operating in the highest ethical manner when it comes to making well-informed policy judgements is long overdue – especially when it comes to recognizing electronic signatures as valid and legally binding.

And in order to keep up with a highly complex digital world, it’s all about making the best use of the next-generation technology that’s available and using it to cater to the evolving needs of our clients.