The Department of Financial Services recently approved the TIRSA Policy Authentication Endorsement. Let’s take a look at what the endorsement does and how it should be used.
The endorsement says:
“When the policy is issued by the Company with a policy number and Date of Policy, the Company will not deny liability under the policy or any endorsements issued with the policy solely on the grounds that the policy or endorsements were issued electronically or lack signatures in accordance with the Conditions.”
This allows insureds, particularly lenders, to receive, store, and transmit policies electronically without having to worry about an original signature in case of a claim. This should result in the lender getting their policy more quickly and keeping track of it more efficiently. For us, that should mean lower costs for paper, postage and time spent producing duplicate originals when policies have been lost. It will also mean less time spent signing policies.
Does this mean that you no longer have to sign policies? That’s correct. As long as your policy is numbered and dated and includes the Policy Authentication Endorsement it is not necessary to sign it. Before you start sending out policies without signatures, think about your customers. If you have been in the business for a while you probably remember when we started printing policy jackets from our own printers instead of using nicely colored, numbered, pre-printed jackets. It took a while for our customers to understand that policies with black and white covers that looked like photocopies were the original policies. You will probably get the same reaction when you start sending unsigned policies. It will take a few phone calls or emails to educate some of your customers that this is in fact the policy and it does not have to be signed.
Be careful if you issue a Pro Forma policy. If it is not intended to be the final version of the policy do not date it, do not include the policy number and most importantly, do not include the Policy Authentication Endorsement. You do not want to create multiple versions of the final policy.