Commercial Insurance Groups Propose Comprehensive Principles To Guide E-Commerce
Three leading commercial insurance industry trade associations this week proposed a set of 12 key principles to guide lawmakers and policymakers in defining the government's role in electronic commerce. It is the first time the commercial insurance industry has endorsed a comprehensive set of e-commerce principles, sponsors said.
The American Insurance Association (AIA), The Council of Insurance Agents & Brokers (CIAB or The Council) and the Reinsurance Association of America (RAA) said in their proposal that the first requirement of government policy toward the Internet should be to "do no harm" and should be based on three fundamental objectives. Those objectives are:
• to protect the integrity of all aspects of the e-commerce system;
• to promote competition by providing open markets; and
• to ensure regulatory efficiency and support efforts to maximize system efficiency.
"As the industry leaders, our three associations took the initiative to fill the void and develop these vital principles to ensure the growth, strength and flexibility of the e-commerce marketplace," said The Council President Ken Crerar. "It is critical that lawmakers and policymakers not erect barriers to insurance e-commerce."
The principles were unveiled Tuesday at the first annual Commercial Insurance Legislative Summit on Capitol Hill, which was convened by the three groups. "E-commerce is evolving rapidly and changing the way we do business," said RAA President Franklin Nutter. "As this evolution continues, it is crucial that government support industry efforts to maximize commercial efficiency."
The principles were developed at a time when government agencies are seeking to heighten their involvement in electronic commerce issues. U.S. Secretary of Commerce William Daley on February 1 called for public comments and suggestions regarding policies, laws and regulations that could create barriers to the growth of online business. Commerce is seeking public input on how government regulatory schemes may pose such barriers.
"These principles reflect the commercial insurance community's belief that public policy should protect the fundamental integrity of the emerging e-commerce system, and ensure that the e-commerce marketplace remains free of anti-competitive government involvement," said AIA President Robert Vagley. "The Internet should be declared a free-trade zone, where government involvement and taxation are minimized to facilitate market growth and strength."
Executives from AIA, CIAB and RAA member firms at the Summit heard from congressional leaders and industry officials on a range of public policy issues, including e-commerce and the Internet. The executives later met with individual senators and representatives in their offices.
Folowing is a brief summary of the principles. A full list can be downloaded through a link found at the end of the list.
Public Policy Principles For Electronic Commerce and Insurance
I. System Integrity
Principle 1
Electronic signatures should have the same legal effect as written signatures, and electronic documents should have the same legal status as written documents.Principle 2
Electronic storage should be recognized as an acceptable alternative to the storage of written documents.Principle 3
Businesses responsible for protecting the confidentiality of e-commerce customer information should have maximum flexibility to implement solutions that are best suited to their particular needs and requirements. Federal and state regulations in this area should be consistent and should promote flexibility in responding to potential security threats.Principle 4
Fraudulent electronic business practices should be prohibited and prosecuted in the same manner as non-electronic fraud.Principle 5
Consumers and businesses should be allowed to use the strongest forms of encryption available.II.Open and Competitive Markets
Principle 6
Business-to-business e-commerce transactions, including commercial insurance transactions, should be unregulated. No additional regulations should be imposed on electronic personal lines insurance transactions.Principle 7
No individual or business should be denied the benefits of electronic commerce in order to protect or promote non-electronic forms of business.Principle 8
There should be a level playing field for all industries and businesses with respect to e-commerce regulatory requirements.Principle 9
Taxes on all goods and services should be technology-neutral; therefore, there should be no unique Internet taxes. In determining whether to implement and administer a sales tax on Internet transactions, the difficulty and costs involved in adopting such a system should be weighed against the likely benefits.Principle 10
The use of electronic commerce in global business transactions should be encouraged and supported by every nation and by the World Trade Organization.Principle 11
Issues of regulatory jurisdiction should be resolved in a manner that best serves the needs and interests of the e-commerce customer. Wherever electronic commerce is regulated by multiple jurisdictions, there should be uniformity and minimum duplication in regulatory requirements.Principle 12
The development and maintenance of e-commerce communication and data transmission standards should be led by the private sector. Technical e-commerce standards should be implemented voluntarily and should be reviewed and updated n a regular basis.