E-Commerce and Insurance Regulation: A Q&A for Agents and Companies

Insurance Company Filing Requirements

1. Question: May an insurance company submit electronic documents to the Texas Department of Insurance (TDI) as part of a filing of information required under the Insurance Code?

2. Answer: TDI’s ability to accept electronic filings varies by program area. To determine whether a particular item may be submitted electronically, please contact the appropriate program area:

   Consumer Protection: Jack Evins (512-463-6580)

   Financial: Ron Newton (512-322-4193)

   Licensing: 512-322-3503

   Regulation & Safety: Angelia Johnson (512-322-3575)

   Technical Analysis: Karen Ranspot (512-475-3022)

   
   
3. Question: May an insurance company submit electronic documents to TDI accompanied by a digital signature?

4. Answer: Although Section 2054.060 of the Texas Government Code allows the use of a digital signature to authenticate a written electronic communication sent to a state agency if the digital signature complies with rules adopted by the agency, TDI does not currently have the capability to accept digital signatures. When the agency develops this capability, rules will be adopted to provide guidance on the submission of electronic documents.

5. Question: How does an insurance company obtain policy form approval for policies marketed on the Internet?

Answer: Companies should continue to follow existing Texas law, which requires insurers to submit certain forms to TDI for approval. TDI does not currently have the capability to receive these forms electronically. Therefore, companies must submit hard copies for review. Companies should describe how the forms will be used and explain how they maintain the security and privacy of policyholder information. In addition, companies must include any other details that may be relevant to form approval.

Sales and Marketing Through Electronic Transactions

1. Question: Does TDI have guidelines concerning the sales and marketing of insurance products via the Internet?

2. Answer: TDI’s current advertising regulations apply to Internet marketing. TDI staff review websites on a case by case basis to verify compliance with advertising requirements. Additionally, the Texas Department of Insurance is reviewing specific issues related to the use of the Internet to market and sell insurance products and is developing guidelines for Texas licensees. When completed, the guidelines will be available on TDI's website.

3. Question: What information should be included on the website of an agent licensed to sell insurance in Texas?

4. Answer: TDI recommends that an agent include a TDI license number, business street address, and telephone number on a website. Agents are encouraged to include this information on their websites now. If new legislation is adopted on this matter, guidelines will be available in the latter part of 1999. Some insurance companies have written guidelines for use of their names, logos, trademarks, and other company-specific information displayed on an agent’s website. Agents who are considering a website should review their company’s guidelines as well as TDI advertising requirements.

5. Question: May insurance policies be sold using only electronic transactions?

Answer: TDI is currently reviewing this issue. Until that review is completed, TDI recommends that agents and companies continue to follow existing Texas law. The Texas Insurance Code generally requires certain aspects of an insurance transaction to be in writing. While TDI has consistently viewed a "fax" as a writing for the purposes of the Insurance Code requirements, many questions remain concerning whether electronic documents will also satisfy this requirement.

For More Information

TDI offers publications and services to help you learn more about insurance and resolve insurance-related complaints. Publications are available in alternate languages and formats.

• For general information and information about how to resolve insurance-related complaints, call the Consumer Help Line between 8 a.m. and 5 p.m., Central time, Monday-Friday

• 1-800-252-3439
  (463-6515 in Austin)

• For copies of TDI’s free consumer publications, call the 24-hour Publications Order Line

• 1-800-599-SHOP (7467)
  (305-7211 in Austin)

• To view TDI publications on-line, visit our Internet website

• www.tdi.state.tx.us

• For recorded information on TDI jobs, call our 24-hour Job Line

• 1-800-952-7099

The information in this publication is current as of the date of publication. Changes in laws and agency administrative rules made after the date of publication may affect the content. View current information on our website. TDI distributes this publication for educational purposes only. This publication is not an endorsement by TDI of any service, product, or company.

For more information contact: ConsumerProtection@tdi.state.tx.us