Related: Read "Health Care Back in the Ring."

At the same time technology is solving problems for consumers, it is also benefiting agents and brokers by freeing them from routine tasks. With many of the repetitive administrative issues resolved, agents and brokers are free to offer higher-quality personal interaction when customers call or stop in the office. Through electronic communications, agents can more easily track a customer's transactions and changes associated with a policy in real time. This may lead to new sales opportunities or the ability to interact with a policyholder to ensure they are aware of all their coverage options.

Technology Meets Regulation

But while technology is opening new windows of communication, state regulatory and legal environments can prevent the industry from more fully delivering even basic products and services that a consumer may desire. Some states prohibit certain discounts that could help lower the cost of insurance or provide an incentive to take loss control measures.

For example, as recently as early last year, nearly every state made it impossible for consumers to use technology to show proof of insurance coverage during a traffic stop or access a copy of their policy online. Fortunately, the law is starting to catch up to consumer habits. Since that time, policymakers in nearly half of the country have enacted laws allowing consumers to use smartphones to show they have insurance. This means instead of digging around in a glove compartment hoping to find a current insurance identification card, policyholders can simply display the information on their smart phone.

At the beginning of 2013, only 7 states permitted the use of e-cards. However, electronic display of proof of insurance (alternatively called e-card) became one of the year's hot insurance-related legislative trends, with 17 states (Alaska, Arkansas, Colorado, Georgia, Indiana, Iowa, Kansas, Kentucky, Maine, Mississippi, North Dakota, Oregon, Tennessee, Texas, Utah, Washington and Wyoming) passing laws. This list is likely to grow as legislation is awaiting signature by governors in Florida, Illinois, Missouri and Wisconsin.

In addition to the spread of e-card laws, we are also seeing related legislative initiatives develop. Just as e-cards enjoyed early legislative success in 2012 and picked up steam in 2013, we may see similar growth in the number of states that promote greater access to policy information through electronic delivery of policy information and the ability to post policies online in 2014.

Related: Read "Major Misfire."

This year, Idaho, Kansas and Minnesota approved laws allowing electronic delivery of insurance documents. Kentucky issued a bulletin allowing e-delivery, and legislation is moving or on the governor's desk in California, Florida, Missouri, Pennsylvania and Texas.

Generally these laws allow insurers—with the express consent of the consumer—to electronically conduct most insurance transactions, including policy application, issuance and cancellation. The legislation is based on "e-transaction" model legislation that was the subject of industry-wide discussion earlier this year. This model provides that the electronic delivery of a notice or document is considered equivalent to other delivery methods such as first-class or certified mail.

Electronic delivery of insurance documents will give consumers and insurers more choices and greater flexibility in how policies are serviced. These laws are moving the interaction between customers and insurers away from the Pony Express and into the 21st century.

Public policymakers also see the benefits of having insurance policies available electronically. Six states (Alaska, Arizona, Kansas, Minnesota, Oklahoma and Texas) have approved laws in 2013 that will allow consumers to access their insurance policy through a website. Bills are on the governor's desk in Florida and Illinois, and Pennsylvania is considering legislation.

Generally these new laws permit insurers to post policies and endorsements on their websites if no personal or privileged information is disclosed on the policy in lieu of mailing the documents to policyholders. Insurers must provide hard copies to policyholders upon request and without charge.

What do these legislative trends mean for agents or brokers? These laws simplify how agents stay engaged with their insureds. Any standard client agreement should provide for carbon copies of every email sent by an insurer to any client who chooses electronic delivery, something for which some insurers offer a discount. As agents, you'll receive real-time notice whenever an insurer talks to your client via email, allowing you to track important events in the life of the policy.

Related: Read "From e-Cards to Cats."

Agents will receive immediate notice of renewal rather than waiting for snail mail, giving you more time to reach out to the client to discuss possible changes to the policy or changing carriers. For less technically inclined clients, agents and brokers can and should offer to create online profiles with insurers that allow them to access and print out any documents the client might request. 

Technological innovation and the market disruption it can entail often results in great benefit to those who see opportunity where others see doors closing. These latest changes to how documents are delivered to policyholders are another example. The only question is, will you or your competitors seize the opportunity first?