It makes electronic signatures and records legally binding and sets up a national set of rules governing this aspect of electronic commerce. This legislation gives people more opportunities to purchase the financial protection they need. The fact is, many people prefer gathering their information and transacting business over the Internet. Earlier versions would have allowed regulators of any business to speed up the starting date. The problem for the insurance industry in this connection is that those industries with a single regulator stood a very good chance of getting permission to enter the paperless era before insurers, who are regulated by 50 different states and the District of Columbia.
Insurers rely heavily on the transmission of records to consummate and service a contract.
For example, policyholders must receive a copy of their life insurance application to enter into a contract for coverage. The Electronic Signatures Act guarantees that insurers can transmit such records over the Internet. Sets national standards. UETA is a model law that provides for the uniform acceptance of electronic signatures and records and is very similar to the federal Electronic Signatures Act. The federal Electronic Signatures Act eliminates the patchwork of inconsistent state laws affecting this aspect of electronic commerce.