Insurance Policies via E-mail
Allianz Insurance Company (AIC) Moves Ahead with E-commerce


A couple of years ago Allianz Insurance Company (AIC) embarked on a journey to significantly improve quality in our industry. One of our main focuses is on accuracy and speed of service employing cutting edge technology for internal and external applications. Today, AIC's clients and producers have already online access to their claims and engineering records.

We are now taking the move into e-commerce one step further by delivering insurance policies electronically.

On June 30, 2000, President Clinton signed a federal law—the Electronic Signatures in Global and National Commerce Act, colloquially referred to as "E-Sign"—which gives electronic documents, contracts and signatures the same legal status as though they were generated in hard-copy or handwritten form. Business and legal commentators have hailed the new legislation as 1) removing much uncertainty regarding enforceability of electronic transactions; 2) increasing efficiency by cutting transaction costs; and 3) positively facilitating contracting in all industries. E-Sign also promotes governmental paperwork-reduction requirements and will have a substantial positive impact on environmental and waste-management problems.

E-Sign validates electronic contracts and signatures, but it does not have any effect on the legal rights or obligations of contracting parties. E-Sign does not have any effect on existing provisions of law, except that it preempts any existing law that requires signatures, contracts or other records to be in writing. The E-Sign legislation, by its express terms, applies to insurance policies and to the insurance industry in general. The Act states that "It is the specific intent of the Congress that [E-Sign] apply to the business of insurance."

E-Sign makes it possible for insurance companies to issue policies in electronic form. In view of E-Sign's vast positive impact in so many areas, Allianz Insurance Company announces that it will distribute its policies in electronic format via e-mail, beginning with all accounts quoted after May 31, 2001.

Allianz Insurance Company has been and will continue to be on the cutting edge of business technology. We hope that you will embrace our efforts as we lead the way into the digital age. At the same time, we recognize that you may have some questions and concerns about electronic insurance policies. We hope that the following Frequently Asked Questions and Answers, provided by our outside legal counsel, will help answer some of those questions.

Frequently Asked Questions

Q: Is an Electronic Insurance Policy a Valid Contract?

A: Yes. E-Sign expressly validates electronic contracts, signatures, and records. The intent of the legislation is to remove any existing legal barriers to using electronic signatures in business and commerce.

Q: Will State Law Have Any Adverse Impact on Electronic Policies?

A. Probably not. E-Sign promotes uniformity in electronic contracting by preempting inconsistent state laws, including any laws that are not technologically neutral. So long as the policy meets other applicable legal requirements, the policy's effectiveness may not be denied under state law simply because it is in electronic form. Currently, at least 18 states have adopted some form of electronic signature or electronic contract legislation. E-Sign preempts any inconsistent provisions in those laws. While preemption of some aspects of inconsistent state laws may be litigated in the courts, the overall validity of electronic signatures and contracts will remain intact.

Q: May State Insurance Departments or Other Regulatory Agencies Deny the Enforceability of An Electronic Policy?

A: No. In addition to expressly preempting inconsistent state law, E-Sign also: 1) authorizes any signature or record that must be notarized or made under oath to be notarized electronically, as long as all of the other legal requirements of any applicable regulation are met; 2) eliminates, through the authorization of electronic signatures, any state-law requirement that a stamp, seal or similar embossing device be used to authenticate the signature or policy; and 3) validates electronic contracts and authorizes state regulators to make or amend their rules consistent with E-Sign's principles and procedures.

Q: Will Electronic Policies Increase A Broker's Potential Liability to Policyholders?

A: No. E-Sign specifically provides that an insurance broker acting under the direction of an insured that enters into an electronic contract with an insurer may not be held liable for any deficiency in the electronic procedures agreed to by the parties under the policy, so long as the broker: 1) has not engaged in negligent, reckless, or intentional tortious conduct; 2) was not involved in the development or establishment of the electronic procedures; and 3) did not deviate from such procedures. The fact that a policy has been issued electronically should have no effect on a broker's Errors and Omissions liability.

Q: Will The Security and Privacy of Policyholders Be Protected?

A: Yes. Like all electronic communications, the security and privacy of policies issued electronically can vary depending on the security features of the computer software used to transmit the material. Allianz has established and will use a software system commensurate with its policyholders' need for security and privacy.

Q. How Will Issuing Policies Electronically Help My Business?

A. The use of electronic policies will make all aspects of policy management more efficient. Additionally, the use of electronic policies will substantially reduce costs associated with the production and issuance of paper policies, resulting in cost savings across the board. Of course, brokers (and insureds) will still have complete access to hard copies of the policies should the need arise.



Dr. Wolfgang Schlink
Chairman, President and CEO


(This document was prepared with the assistance of our outside legal counsel, Robins, Kaplan, Miller & Ciresi L.L.P. and is provided as a courtesy and should not be construed as legal advice. As with all business matters, you should consult your own attorney regarding specific issues.)

06/01/2001