Electronic Signatures: A New Opportunity for Growth May 10, 2005 1
Contents Is It Legal? 3 E-Signature Technology 12 Another Industry Example 15 National Association for Variable Annuities Applications for Credit Unions 38 Working Examples 44 What s on Your Mind 62 2
Legal Validity same validity as paper documents and handwritten signatures - NCUA Legal Opinion Federal ESIGN Act UETA State Law Used by banks, financial firms passing SEC and NASD audits and carriers selling life insurance policies in 49 states 3
What Makes It Legal Do I know who signed the document? (Signer Authentication) Do I know he or she intended to? (Affirmative Act) Has there been proper disclosure and consent? (Compliance) Has the document been altered in any way? (Document Authentication) Is the document electronically accessible to all signers? (Access) Can I prove it? (Evidence) 4
Signer Authentication A signature should indicate who signed a document, message or record, and should be difficult for another person to produce without authorization. Digital Signature Guidelines of the American Bar Association (DSG) There are five accepted verification techniques for authenticating an individual s identity logical, positive, negative, out of session and third party. Signix s Superior level digital certificate utilizes all five to ensure valid authentication. 5
Affirmative Act The affixing of the signature should be an affirmative act which serves the ceremonial and approval functions of a signature and establishes the sense of having legally consummated a transaction. - DSG Signix s signature ceremony can be customized, but it includes the standard language I am SIGNER S NAME, and I agree to be legally bound by this electronic signature. A two step process is required including this acknowledgement of the legality of the transaction and then the affixing of a signature. 6
Compliance It is critical that any system be implemented in a way that is compliant with all requirements for obtaining consent for e-delivery of documents as well as review and/or approval of necessary disclosure documents. Signix offers considerable flexibility in accessing and presenting documents or disclosure language and also requiring defined steps, such as review or approval of necessary documents, to be completed before allowing a signature to be applied. 7
Document Authentication A signature should identify what is signed, making it impracticable to falsify or alter either the signed matter or the signature without detection. - DSG Some of the principal technologies incorporated in the Signix solution - digital hashing, encryption and public key infrastructure make it virtually impossible for a document to be altered without detection once the digital signature has been applied. 8
Access All signers must have ongoing access to documents that they have signed. Signix provides permanent online access to documents from any PC for all individuals who have signed the document or have been given review rights. 9
Evidence An effective e-signature process incorporates technology and processes that should improve a company s ability to defend and enforce electronically signed documents Anthony Brannon of Lord, Bissell and Brook A detailed audit trail of an electronic transaction, including such facts as the time and date of each relevant activity and the IP address of every computer utilized, can be maintained in a way not possible for manual transactions. Signix acts as a third party signature authority and certificate authority providing independent verification of the signer s identity, the validity of the signing process, the authenticity of the document, and other factors supporting non-repudiation. 10
References DSG Digital Signature Guidelines: Legal Infrastructure for Certification Authorities and Secure Electronic Commerce Information Security Committee, Electronic Commerce and Information Technology Division, Section of Science and Technology, American Bar Association. August 1, 1996. http://www.abanet.org/scitech/ec/isc/dsgfree.html ESIGN Electronic Signatures in Global and National Commerce Act U.S. Public Law 106-229. June 30, 2000. http://frwebgate.access.gpo.gov/cgibin/getdoc.cgi?dbname=106_cong_public_laws&docid=f:publ229.106.pdf FDEESP A Framework for Designing an Effective e-signature Process Brannon D. Anthony and Michael P. Bruyere. Part I -- The Building Blocks Insurance & Technology, May 05, 2004. http://www.insurancetech.com/showarticle.jhtml?articleid=19502372 Part II -- Significant Risks and Possible Mitigants Insurance & Technology, May 19, 2004. http://www.insurancetech.com/showarticle.jhtml?articleid=20800084 Part III -- Proving an Electronic Signature Insurance & Technology, June 02, 2004. http://www.insurancetech.com/showarticle.jhtml?articleid=21400908 UETA Uniform Electronic Transactions Act Model law drafted by the National Conference of Commissioners On Uniform State Laws. 1999. http://www.law.upenn.edu/bll/ulc/fnact99/1990s/ueta99.htm 11
E-Signature Alternatives Signature capture/biometric Voice capture/biometric Other biometric Clickwrap PKI Hosted PKI 12
The Signix Solution 1. Instantly and positively identify and register an individual 2. Generate a certificate, only usable by that individual 3. Apply a legally binding signature to a document 4. Apply time stamp services to each document 5. Automatically route the document for further signature(s) or processing 6. Electronically store the executed document 7. Provide permanent access, retrieval and verification of the document by all signing parties 13
Trust Delivery High Trust Superior = Logical, Third Party, Negative, Out of Session, and Positive Call Center = Logical, Third Party, Negative, Out of Session, and Positive Select Certificate Call Center Registry Superior Certificate Select = Logical, Third Party, and Negative Express = Logical, Third Party, and Negative Express Certificate Low Trust Rudimentary Basic Medium High 14
NAVA E-Sign Project The National Association for Variable Annuities (insurance carriers and securities forms) identified electronic signatures as a critical industry requirement to improve efficiency and reduce the cost of paperwork. A committee of industry leaders (Merrill Lynch, Nationwide, American Express, Allstate, ING, etc.) studied all forms of e-signature e for two years. Leading technologies were selected to conduct an industry Proof of Concept. 15
NAVA Requirements Customer Working Online Customer on the Phone Face-to-Face with Customer 1035 Transfer 16
Member Criteria Enhance Customer Experience Grow VA market Enhance Operations/ROI Reduce expenses/improve margins Leveraged Solution Enables other processes Business Risk Decrease existing risk Sustainability/Life Cycle Known technology/not a throw-away 17
Facilitating Industry Usage Infrastructure free - no investment in hardware/software to install at the enterprise level No special client facing hardware/equipment required only a browser or a telephone Universally valid signatures & documents even for non-adopters No downloads required no impact on corporate firewalls and security policies Limited financial risk only pay for successful use Multiple value-added added applications internal & external compliance, new accounts, sales execution, etc. 18
Signix s Role in POC Hosted Solution PKI Infrastructure Identity Authentication Certificate & Registry Authority Online Signatures Non-repudiation Document Workflow Document Storage/Access 19
Technology Partners Voice biometric verification and signature Signature capture and biometric Document presentation in PDF 20
Financial Advisor Logs In Customized User Guides for each page help the signer. Log in as a Financial Advisor. 21
Policy Information The FA begins filling out key information about the contract. Each POC Participant can choose a Distributor or Carrier from the list of Participating Companies. The FA chooses NEXT to continue the process. 22
Data Complete All the information has been entered...... and it s time for the Applicant s identity to be authenticated and registered. 23
Choose Registration A registration method is selected among the options available. Signix Select enables an online signature with streamlined authentication and signature based on document review by FA. 24
Identity Questions In this case, the FA turns the keyboard over to the Applicant. The Applicant establishes a Signing Pin. The Applicant s identity data is verified to ensure it is accurate. The Applicant also answers certain questions the FA would not know in order to prevent a fraudulent identity. 25
Ready for Signature Necessary information has been provided. The Applicant s identity has been confirmed and registered. The application is ready to be signed by the Applicant. 26
Application Ready The appropriate form is generated and pre-filled with the data already entered. 27
Confirm Legal Intent All necessary questions must be completed before the signature can be applied. The Applicant confirms an intent to sign a legal document. 28
Digital Signature Applied A digital signature is applied once the Applicant s credentials are entered. The document can no longer be changed. 29
Email Confirmation After applying a digital signature, the signer always receives email confirmation...... with a reference to the document...... and a link to the Document Center. 30
FA Can Sign Application The FA can now sign the application below the Applicant s signature. 31
Signed Application to Carrier Carrier enters a contract number to generate a contract. Representative of the Carrier opens the document, which is now ready for signature. 32
All Signatures Applied Annuity Delivery and Acknowledgement Receipt can now be generated. Signed application has been submitted and approved by all parties. 33
Diaphonics: Sign by Phone In the offline, non-edelivery use case, the FA meets with the Applicant, completes a paper application and later enters the order online. The carrier mails the contract to the Applicant, who uses the phone to sign the Annuity Delivery and Acknowledgement Receipt. To allow the Applicant to sign over the phone, the FA helps the Applicant to enroll his/her voice during the sales meeting. 34
Signing Instructions Included When the Applicant receives the Receipt document, it includes instructions for signing it by phone. Click to hear a recording of this call. (1 min. 57 sec.) 35
CIC: Signature Pad The FA follows standard procedures to verify the Applicant s identity (checking a governmentissued picture ID, for example) before the Applicant signs on the pad. The FA enters the identity information in the application, but otherwise no additional registration steps are required. 36
Signs the Pad The Applicant clicks the signature line to start signing. As the Applicant signs on the signature pad, the signature appears on the screen. 37
Applied to Signature Line When the Applicant finishes signing, the biometric signature and other data appear. The text of the Applicant s name is copied from earlier in the document to the signature block abc and the date is copied from the signature block into the document. 38
Traditional Account Opening Funds account and sends thank you letter Prospect visits web page, prints application, signs and mails application Receives checks and mails opening deposit 14 Day Scenario Create Account, mail signature cards Credit Union receives account documents, verifies data Signs signature cards and mails picture ID copy to CU 39
E-Sig Account Opening Authenticated Prospect signs application and T&Cs using Signix 5 Minute Scenario Create Account Funds account, generates debit card and sends thank you letter Notifies new Member of Account Acceptance, Online banking process, and optional paper check process with signature cards 40
E-Sig for Cross-Sell 1. Credit Union creates Signix enabled offer 2. Member receives offer via web or email 3. Member completes application 4. Signix verifies identity 5. Member executes transaction 6. Credit Union receives completed transaction and detailed report 41
Credit Union Applications Member Applications Loan Documents Brokerage Accounts Transaction Accounts Home Equity Lines Insurance Policies Wire Transfer Settlement 42
Financial Benefits Increased Top Line Immediate closing online or via call center Time value of money Elimination of buyer s regret/procrastination Increased Bottom Line Reduced process cost for printing, mailing/fedex, storing, retrieving, scanning, etc. Reduced staff cost for filing, keying/re-keying, sorting, human error, etc. Reduced IT cost for servers, integration 43
Risk Mitigation Concurrent authentication, compliancy and closing User experiences immediate closing while authentication is simultaneously validated and legal compliance is ensured Authentication and non-repudiation by Independent Trusted Signature Authority Multi-level risk management Option of Express, Select or Superior Service 44
CSR Starts the Process 45
Completes Loan Application 46
Ready for Delivery 47
CSR Asks Challenge Info 48
E-mail to Customer 49
Customer Logs In 50
Answers Challenge Questions 51
Customer Provides Consent 52
Selects Signing PIN 53
Receives Link to Secure Docs 54
Completes with Digital Signature 55
Legally Signed Document 56
Select Products 57
Completed Member App 58
E-Sign Agreement 59
Disclosures Complete 60
New Member Signs 61
Signed and Approved 62
E-Sig for Growth What s on your mind? Business Technical Legal 63
Pem Guerry 423-593 593-30623062 pguerry@signix.com...signed, sealed & delivered! 64