An individual who signed up for a Prudential life insurance policy online allegedly submitted fraudulent information when completing his application. Prudential pursued a case against him for fraud, and in response, the individual argued that he had never “signed” his policy as is required under New York law. Although indicating that electronic signatures are generally acceptable, the court denied the insurance company’s motion for preliminary injunction, indicating that it was a question of fact whether or not sufficient information was asked during the online application process to enable the company to authenticate the signator. The court in reaching its decision indicated that electronic insurance contracts can only be deemed as “signed” under New York state insurance law if the company requesting the signature had authentication procedures in place permitting it to identify the signator.
TIP: If setting up an electronic signature process, keep in mind that there may be specific requirements depending on the type of contract being signed. These requirements may vary depending on the state where the contract will be executed.