A few weeks ago, I received an e-mail notice from the school that my children attend about a meeting to discuss the future possibility of a curriculum without books. Everything would be electronic. Colleges seem to be headed this way. Paychecks and bills are already electronic (though I know a few people who still get that paper paycheck). Shopping, reminder notices, advertisements, coupons, daily mail, and the books we read – all electronic. And all this electronic delivery is supposedly done in an effort to “go green” and contain costs (though whose is a matter open for debate).
So when I recently was asked by a few customers whether or not written claims notices could be sent via e-mail, I was mildly surprised by the results of the research. Yes, I know that the insurance industry as a whole is generally slow to change and to adopt new technologies. And yes, more and more companies are utilizing electronic forms of communication, be it for billing or the delivery of policies. But when you look specifically at the issue of claims notices you find very few states that specifically address the issue:
- Alabama allows denials and delay letters to be sent electronically, to include email (482-1-125-.07)
- Tennessee recently advised that electronic mail messages, when certain conditions are met, constitute effective notice under the Tennessee insurance law (Bulletin dated January 26, 2012)
- New Hampshire allows for acknowledging a claim in writing by e-mail (Ins 1002.05)
That’s not to say that in the remainder of the states electronic claim notices would not be allowed under broader laws that permit use of electronic notices (such as the adoption of the Uniform Electronic Transactions Act (UETA)) – just that they weren’t specifically recognized or authorized in the claim notice requirement. For example, the New Jersey Administrative Code (NJAC) Section 11:1-47.1 recognizes and permits electronic transactions between insurance carriers and insureds. This subchapter on electronic transactions allows for a writing that is required by law – to be made electronically – provided certain conditions are met, which include the requirements of the UETA. (NJAC 11:1-47.3) To date, 47 states have adopted the UETA. So while individual states may have not specifically enacted laws or rules stating that a specific notice may be sent electronically, I suspect, much as is revealed in New Jersey, that there is opportunity for claims notices to be sent when reviewing the Insurance Code in states where the UETA has been adopted.
Is this a good thing? I think it can be argued both ways. From a regulatory viewpoint, I think Tennessee did a good job of summarizing the concerns in the bulletin referenced above. Tennessee focuses on the cost benefits to the insurer as weighed against the protections afforded to the consumer. Insurers should consider cost savings that can be passed on to the consumer versus the inherent safeguards of mailing through the United States Postal Service not available with electronic mailings; for example, proofs of mailing, the ability to leave a change of address and to forward mail (even when the insured forgets to change his address with the insurer) provide important safeguards that help assure delivery of certain notifications important for consumer protection. Beyond that, I think that there’s also a cost transference to the insured for printing, storing and monitoring of the electronic notice.
In any event, it would appear that the advent of electronic claim notifications is close to being upon us.
Editor’s Recommendation: With NILS INsource and AuthenticWeb for Claims, you can keep current with all the changes and updates to electronic claim notifications.
