Research Handbooks in Financial Law series
Edited by Julian Burling and Kevin Lazarus
Chapter 22: E-Commerce: The Regulation of Insurance in the Age of the Internet
Anne Flanagan 1. INTRODUCTION Insurance has been a transnational business for centuries. However, it is not surprising that the insurance industry was not an early adopter of the Johnny-come-lately, ‘borderless’ internet with insurance’s traditional methods of doing business based on veriﬁcation, assessment and pricing of individual risks, established local channels of distribution tied to independent brokers and complex regulatory requirements that typically follow jurisdictional boundaries. All businesses are, however, under pressure to use IT to innovate, hone business models, differentiate services, add value, lower costs, monitor performance and provide enhanced customer satisfaction that can arise from greater efﬁciency and timeliness of standardised global processing and customisation of services and to exploit IP, data and knowledge in new ways.1 They are also driven to develop new markets and create broader brand awareness including via the social networking technologies. Thus, the insurance industry is now nearly globally pursuing these efﬁciencies and other beneﬁts of the internet. While various legal issues arise in implementing electronic systems for business operations and processes, few are uniquely signiﬁcant to the insurance industry, and these likely arising from the interface of laws governing electronic commerce with insurance regulation which this chapter considers. As the former are also important to insurance industry businesses, a brief examination of some of these is worthwhile. This chapter addresses such e-commerce legislation designed to enable valid formation of contracts online and their legal recognition. It also considers issues such as governing jurisdiction and law where access to...
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