ESRA has begun work to create standard for electronically signed documents for the benefit of organizations around the globe
Bill Brice – the CEO of AlphaTrust and a longtime ESRA Board of Director – has formally introduced ESRA’s new effort to create electronic signature and document standards that vendors and others can use.
“ESRA has been in the business of removing barriers,” Mr. Brice said at a recent ESRA event. “That’s one thing ESRA does, to reduce barriers to the adoption of e-signatures. Even after 15 years and billions of transactions, there are still people who get itchy about dealing with these documents. They don’t understand them and don’t know what to do.”
Brice continued: “Historically, ESRA has done two things: education through the conferences and public policy. That’s all about removing barriers, through dealing with arcane laws and other ways to make the e-signature process a smooth one.”
Now, as Brice explained, ESRA would like to add what he called “a third leg on the stool,” starting with a project that will cover the acceptability of e-sign documents by relying parties.
He explained: “Most e-sign stuff is done first party, which means a company is getting documents signed with an e-sign solution and they keep the documents. But then the question becomes: What happens when those e-signed documents have to go to a third party that needs to feel comfortable with them?
“This usually becomes an issue for lawyers working for those third parties. For example , in the insurance market, the annuities business is a combination of insurance policies and investments. People buy them but decide down the line that they don’t like current carrier, or they get a better deal, and they want to move things through what’s called a 1035 exchange.
“To do that, if those investments were set up with e-signature, they have to ship the electronically-signed documents to a new carrier, who might decide they don’t like e-signature, or they feel it wasn’t done correctly. So they have to do a due diligence hunt to figure it out, and if they don’t like how it was handled originally, they might require wet ink signatures, which is a hassle.”
Brice then noted another example: “Or if you have e-assets, which are that are financial instruments, such as in the mortgage world, they could have originated via e-signature, but they might have to live for decades, in the case of mortgages.”
He then went on to note that ESRA can codify the best practices that vendors have created over the years and put them under a stamp. Then if a third party receives documents that have a certified stamp on them, they know they adhere to specific standards and can feel good about them.”
During last fall’s ESRA conference, attendees were asked for feedback, and Brice noted that work on the standards would commence at the beginning of 2017. He said that ESRA wanted other people to participate, especially anyone in financial services and insurance. The process would be open to anyone, even those not in ESRA, and Brice said that the organization would like to talk to people in compliance, legal, government agencies, and so forth.
“This is the first of several standards efforts,” Brice said. “The next one is creating standards around preparation of documents. There’s a lot of friction when people have documents to be e-signed and every vendor is different with the fields to be filled out and so forth. If everyone had an open standard where they could pre-prepare documents in a standardized way, that would be very helpful.”