New York insurance producers are no strangers to electronic delivery of insurance documents—during the COVID-19 pandemic, sending documents electronically became the easiest and safest way to connect with clients. However, certain legal restrictions in the state prevented some insurance documents from being transmitted electronically.

Restricted documents

Electronic delivery is not allowed for notices in which a statute requires a notice to be sent in the mail. This requirement exists for many personal auto policy documents. Having different rules for different insurance documents is problematic. Producers risk violating the law unintentionally, and clients risk missing important insurance documents.

The fix

Legislation (S.653-A/A.651-A) has now passed both the state Assembly and state Senate that would amend the insurance law to allow all insurance notices to be delivered electronically.

Safeguards

• Consumers must consent to receive the documents electronically.
• After consent is given, consumers can withdraw it at any time.
• Consumers must be provided with notices of necessary software/hardware requirements.
• Consumers must acknowledge that they have received important notices electronically upon delivery.
• Insurers are required to try to deliver with an alternative method if they believe the electronic delivery failed.
• Insurers must flag important communications conspicuously in the subject line of the email.

PIANY’s efforts

While PIANY has supported electronic delivery of insurance documents for a long time, the association objected to an earlier version of this bill that contained a counterproductive requirement to include a “clickwrap” agreement every time a document is delivered.

This clickwrap requirement, while well meaning, was redundant and possibly counterproductive. Consumers already are required to consent to the documents they wish to receive electronically. Additionally, including clickwrap agreements on emails would have increased the likelihood that important documents could end up in spam folders.

PIANY worked with bill sponsors and other industry trade associations to remove this requirement.  The final version of the bill passed the state Legislature without the clickwrap requirement.

If the governor signs this bill, it will go into effect 90 days after it is signed.

For more information on best practices when e-delivering documents to clients, see An engaging article on e-delivery of documents, which originally ran in the April 2021 issue of PIA Magazine.