Electronic transfers

DocuSign: How Financial Services and Insurance Companies Are Using Remote Online Notarization

Over a billion documents are notarized each year, ranging from powers of attorney and affidavits to certificates and trust deeds. Traditionally, most notarizations have been done in person and on paper. But in recent years that has started to change.

Today, the maturation of electronic and audiovisual signature technologies heralded the arrival of remote online notarization (RON), which enables financial institutions, insurance companies and other organizations to achieve more. easily and more effectively notarized signatures and provide their clients and members with a better digital experience. Demand for RON is growing as more businesses have moved to remote working environments, and state law is also catching up, with more than 29 states having adopted some form of RON provision from of 2020. Just as we have seen with the electronic signature in the past two decades, the legal standards surrounding notarization will continue to evolve in ways that facilitate wider adoption of RON.

The alternatives of electronic notarization have arrived

A notarization refers to the act of signing a document in the presence of a notary approved by the state. Public notaries verify the identity of the signatory, witness the signing of the document, affix a notarized seal to the document and record the transaction in a journal.

Although notarization has played an important role in ensuring the validity of official transactions for thousands of years, until recently the process has not evolved to meet the changing needs of our digital life. For financial institutions and insurers, the demands of an in-person notary experience translates into an inefficient manual process that slows the pace of business and ultimately increases costs to the organization. For members and clients, it can also be a frustrating and inconvenient experience.

To address these challenges, various electronic notarization services have evolved in recent years, including remote signed ink (RIN) notarization, in-person electronic notarization (IPEN), and remote online notarization (RON).

Of these, RON is the most transformative, as the entire process from start to finish takes place in the digital realm, without the need for paper exchange or direct physical interaction between the notary and the signer.

RON offers multiple benefits, including greater convenience and increased access to notarial services for signatories, a stronger evidence case, reduced risk of fraud, and increased security and enforceability. It also creates a digital audit trail, which helps the notary and the organization track notarial activity over time to ensure compliance with local laws and regulations.

Three Common Use Cases of RON in Financial Services and Insurance

Financial services and insurance organizations can start modernizing key business processes in the United States today using remote online notarization. Some of the most affected areas include:

  • Automatic securities transfers: Virtually every transfer of vehicle title to the United States requires a limited power of attorney, which must be notarized to complete a transaction. In auto loans and insurance, transfers of securities from borrowers to lenders or insurers are common, allowing the institution to complete important documents on behalf of the borrower. For example, in the case of a claim for total loss, a power of attorney is required to authorize the insurer to legally transfer title and possibly sell the vehicle to a salvage yard to compensate the insured. RON solutions can enable insurers to resolve claims faster for their clients and lenders to provide a better refinancing experience for their borrowers.
  • Beneficiary changes and pension distributions: When a member of a pension plan wishes to change beneficiary or choice of pension benefits, some pension plans eligible for ERISA require the consent of the spouse to authorize such changes. The spouse’s consent is often entered as part of a beneficiary designation form or a stand-alone form, and the spouse’s signature must be certified by a notary. Asset managers or insurance companies offering pension solutions can help their clients to manage plan changes more effectively using RON solutions.
  • Establish trusts: Estate planning is a complex and important service provided by financial advisors to their clients. Trusts – a fiduciary arrangement allowing a third party, or trustee, to hold assets on behalf of a beneficiary – are a common component of estate plans. Trust agreements are often written specifically for a client and are often accompanied by a certificate of trust, a legal document that certifies the existence of the trust and the legal authority of the trustee to act. These documents often need to be notarized, and the certificate of trust is also often requested by banking institutions to fund and open a trust account. Using RON solutions for these trust documents can simplify a planning process that wealth management clients often find too long and complicated.

In addition to internal business processes, many banks, credit unions and insurance agencies offer notarization as a discreet service and are willing to notarize agreements that their clients or members bring to the branch, either for free or for a fee. small fee. As remote and digital banking services gain acceptance, we expect more institutions to consider offering RON as a convenient and secure alternative to in-person notarization for these clients.

Presentation of DocuSign Notaire

With DocuSign Notary, banks, wealth management companies and insurance organizations can now remotely and electronically notarize their critical agreements. Notary gives your notaries public the digital tools they need to securely perform remote online notarizations via an encrypted audiovisual session. This helps you create a smoother and more convenient experience for your signers, mitigate risk with a robust audit trail, and accelerate the speed at which you do business – all while digitizing your notarizations.

All of this is built on DocuSign eSignature, making it easy for our customers to send, sign and legalize agreements, all in DocuSign. Let’s see how the notary can authenticate a power of attorney, as mentioned above.

Learn more about how you can send, sign and notarize remotely with DocuSign Notary.

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