The Internet and electronic commerce are increasingly valuable tools for reaching consumers in Texas, including insurance consumers. In recognition of the growing use of electronic commerce in the business of insurance, the Texas Department of Insurance provides this bulletin as guidance on the use of electronic commerce in the marketing and delivery of insurance and other regulated products to Texas residents in compliance with the Texas Insurance Code. For purposes of this bulletin, "insurance" includes all products and services regulated by the Texas Department of Insurance.
Texas' insurance laws and rules do not specifically address the use of electronic commerce in the marketing and sale of insurance to Texas residents. Therefore, persons conducting insurance transactions through electronic commerce must comply with the statutes and rules that apply to standard insurance transactions using paper. Although the following is not an exclusive list, these items should be considered when engaged in electronic commerce:
- Any insurer, agent, or other regulated entity that wishes to do the business of insurance in Texas in any form, including electronic commerce, must be properly licensed or registered in the State of Texas. Surplus lines business must be properly eligible as required in Article 1.14-2 of the Texas Insurance Code.
- Any Internet site marketing insurance to Texas residents must comply with Texas advertising statutes and rules.
- Contracts and policies marketed to Texas residents via electronic commerce are subject to all Texas laws and rules including, but not limited to, requirements for: prior approval; file and use subject to review and approval; and file for information and/or exemption from review.
- Record retention procedures should be reviewed to ensure proper maintenance, security and privacy of electronic documents.
- There is no Texas law authorizing digital signatures for insurance transactions. But, the U.S. Congress is currently considering legislation in a conference committee that would permit the use of digital signatures in electronic commerce in the United States. See S. 761 and H.R. 1714.
Insurers, agents, and other regulated entities engaging in electronic commerce in Texas should review their marketing procedures and electronic forms to ensure compliance with all applicable Texas insurance laws and regulations. Nothing in this bulletin limits the ability of the Commissioner of Insurance to take any action pursuant to the Texas Insurance Code or the rules and regulations promulgated pursuant to the Texas Insurance Code, or to take any other enforcement action authorized by law.
Electronic commerce is a rapidly evolving medium, as are the laws governing it. The Texas Department of Insurance anticipates insurance transactions via electronic commerce will change as the laws and technologies evolve. Further guidance will be provided as such changes occur.
Questions regarding the application of this bulletin in the following areas may be directed to:
Consumer Protection - 512-463-6580
Agents licensing - 512-322-3503
Life/Health - 512-305-7310
HMO - 512-322-4266
Property & Casualty - 512-322-3431
Other inquiries may be directed to 512-475-1821.
Jose Montemayor
Commissioner of Insurance