Signature tune

If you had told me a couple of weeks ago that I would be writing a column advocating the use of an online new bus-iness system that requires a hard copy signature from the client as part of the process, my answer would probably have been unprintable. Today, you are reading that column. This goes to show that it is always important to keep an open mind and that if you do things in the right order you can achieve the best of both the old and new worlds.

The offering that has caused such a significant change in my thinking is the new Protection Online service launched last week by Standard Life. Of all the products in the adviser’s arsenal, protection is the one that can deliver the most obvious business benefits by using online submission. In the vast majority of cases, if a client needs life cover they need it underwritten quickly. Online underwriting increasingly means that the time taken in getting acceptance terms can be cut from at best a few days to literally a few minutes.

Automated underwriting services mean that complex questions can be asked online and requests for specific additional information that might otherwise have taken days to arrive can be generated dynamically and appear in seconds. These services are nothing new, Friends Provident, for example, has operated an exceptional service for over a year now and a number of other providers have been rolling out these tools in recent months.

The new Standard Life service is available via its new site. The adviser begins either by generating a new quotation or by selecting an existing one that has been created via Adviser-zone or a portal.

Adviserzone can access quotations regardless of which portal they were originally obtained from. All quotes are guaranteed for 30 days and when an adviser reviews quotations obtained the service will identify any cases where the rates have changed in the intervening period. This gives the adviser the opportunity to requote, if the rates have gone down they can use the new rates, if they have increased they can use the original quotation.

As the online application is completed, the information is saved page by page, avoiding the risk of systems crashing and having to re-enter data again. All information including underwriting details can be submitted in multiple sessions.

Questions concerning underwriting are generated dyn-amically based on the answers given, however if there are questions for which the adviser does not have the information to hand they can opt to complete these later.

Once all the application pages have been presented, all the outstanding information is identified so the adviser only has to go back to the client once for additional information. The adviser is given a final opportunity to review answers before submitting the case for an underwriting decision.

To support situations where the client is in the adviser’s office and where forms are completed at a different location, Standard Life provides a paper data capture form which is laid out in the same way as the online screens. An adviser can use this to get all the necessary information from a client and then enter the case on the Protection Online when they return to the office. This also allows advisers to use paper and have the information entered by other staff who may be happier using keyboards.

To compensate for any additional effort on the part of the adviser, an extra 5 per cent of Lautro rates’ commission is paid on cases where quotations are obtained electronically plus an additional 15 per cent when the case is submitted online. I am delighted to see such an incentive for the advisers to trade electronically although it could be argued that the other business improvements this service provides should make advisers want to work this way even without it.

The company has kept to a minimum the amount of information that an adviser has to enter before getting an underwriting decision, so issues such as direct-debit mandate details and money-laundering checks are left until after the underwriting has taken place.

Once the adviser wants to put the policy in force they return to the system and enter the start date. It is important to understand that this must not be done before you want the plan to start as once this date has been entered it can only be changed by repeating the whole process and rewriting the contract from scratch.

When the policy has been put in force, Standard Life sends the client a confirmation schedule which states full details of the information on which the contract is based. This is accompanied by a declaration form which the client must sign and return to confirm all the details are correct.

In recent months, the Financial Ombudsman Service has plunged the entire online underwriting process into chaos with a ruling on a crit-ical-illness policy that seems to defy any sensible logic.

By requiring that a hard-copy signature is required, but not until after the plan has gone into force, Standard Life has come up with an approach that protects both itself and the adviser against attempts by consumers to abuse the online process and fail to disclose material facts.

In the light of the FOS ruling, many advisers will have had concerns about using online underwriting services that do not provide them with a full copy of the proposal information without some specific confirmation from the client.

Getting the hard copy signature after the contract has gone on risk mitigates this risk and allows the provider to collect the access to medical reports’ declaration so this can, if necessary, be used in the event of a claim. It is worth recognising that this is more important to have in the event of a claim than it is when underwriting, after all, you cannot get the client to sign it when they are dead.

The statutory cooling-off notice is only issued once the declaration, which must be received by Standard Life within 28 days, has been returned. Full cover is provided while this is being obtained. Protection Online is operating now via Adviserzone, The Exc-hange and Webline and is exp-ected to go live with AssureWeb in a matter of weeks.

This is an excellent e-commerce service that can significantly accelerate the speed with which applications can be processed. What impresses me most about this, however, is the way in which Standard Life has delivered a well thought out balance between e-commerce efficiency and the benefit of obtaining a hard copy signature to add to the audit trail.•Secret service, p48Ian McKenna is a consultant and director of the Financial Technology Research Centre, which works for a range of industry organisations, life offices and technology companies.

He can be contacted by email at

Tel: 020 7863 0863


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