Ruling: Online Application with e-Signature Qualifies as Written Rejection of Insurance Coverage

Ken Moyle, Chief Legal Officer and Vice President of Legal and Corporate Affairs, provides commentary on a recent ruling from the Arkansas Supreme Court, affirming the lower court's granting of summary judgment in favor of GEICO, upholding the applicability of the Uniform Electronic Transactions Act ("UETA") to a waiver of minimum medical coverage.

Ken comments:

The Arkansas Supreme Court affirmed an order from the lower court granting summary judgment and dismissing a claim for medical benefits under an automobile insurance policy on the grounds that an electronically generated record containing an electronic signature meets the requirement that a rejection of no-fault coverage be "in writing" under Arkansas law. Barwick v. Government Employee Insurance Co., Inc., 2011 Ark. 128 (2011).

When the appellant's wife purchased insurance coverage online with GEICO, she did not select coverage for medical benefits. Subsequent to that purchase, the appellant, a named insured on the policy, was involved in an accident and presented a claim for medical expenses, which GEICO denied. GEICO claimed the rejection of coverage was valid under the Uniform Electronic Transactions Act (UETA), found in Arkansas Code Annotated sections 25-32-101 to 120 (Repl. 2002 & Supp. 2009).

The circuit court granted GEICO's motion for summary judgment, ruling that the online rejection of coverage and electronic signature satisfied the statutory requirement for a rejection of medical coverage to be in writing under the Arkansas Code. The Arkansas Supreme Court affirmed, holding that there was no conflict between the insurance statute and the Arkansas UETA statute and that read together, they mean that an electronic record fulfills the requirement of a written rejection of coverage. The UETA was intended to apply to all statues that require a writing or a signature.

We rarely get to see case law that is so directly on point, since it is rare to have a case get to an appeals court that disputes the meaning of such a straightforward statute as the UETA.

Some industries, such as the insurance industry, and government agencies believe that the UETA and the ESIGN Act apply to everyone but them, that some particular aspect of their governing rules excludes them from coverage of the overlay statutes. This has been observed in the insurance industry. This ruling makes clear that the statute means what it says.

Click to access a copy of Barwick v. Government Employee Insurance Co., Inc., 2011 Ark. 128 (2011)

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