E-Signatures Are Official Oct. 1.

The insurance industry cheers legislation that helps e-commerce; Gop prescription-drug bill passes House, but is unlikely to survive in Senate.

The insurance industry expects good things from the Electronic Signatures in Global and National Commerce Act, which was signed into law, electronically, by President Clinton.

That's the consensus from the trade associations that helped craft the electronic-commerce legislation, S. 761, which pre-empts inconsistent state laws concerning e-commerce.

The law has two critical dates: It takes effect formally on Oct. 1, and the date for the start of electronic record retention for all segments of the financial-services market is March 1.

The law gives formal legal status to electronic signatures--equal to that of pen and paper.

Roland Brandel, a partner wit Morrison & Foerster in San Francisco, who has been active in electronic-signatures legislation and issues, said the new law would allow the banking and insurance industries to save substantial amounts as they conduct business. He said companies would be able to send statements and other information by e-mail instead of thorough the mail. Additionally, consumers would be able to conduct transactions online, he added.

Carroll Campbell, president and chief executive officer of the American Council of Life Insurers, said the new federal law negates state laws that work to inhibit insurers conducting e-commerce transactions.

The scattered approaches by the states in enacting the model Uniform Electronic Transactions Act, to assure the validity of electronic records and electronic signatures, moved Congress to enact S. 761. Eighteen states have adopted UETA in one form or another, and it's pending in five states and the District of Columbia. UETA was under consideration in 30 states, but time ran out or the measure was not enacted during the legislative year.

Under the new federal law, states can't enact provisions inconsistent with S. 761 when it comes to financial transactions, including insurance.

Clinton's signing of the legislation seals two years of effort by several trade organizations to allow insurers and their customers to conduct electronic business with confidence and save both time and money in the process.

E-commerce "will have a long and far-reaching impact on our economic well-being and the continued growth in financial services, especially insurance,' said John Saver-cool, the American Insurance Association's vice president for federal affairs.

David Reddick, government affairs advocate for the National Association of Mutual Insurance Companies, said the "beauty of S.761 is its simplicity," letting companies decide their own rules for engaging in e-commerce. Reddick said the new law should "encourage insurers to begin developing business-to-business relationships with their various vendors,"

The measure formally adds a new medium for insurers, allowing them "to plug in" to an electronic environment, said Patrick Watts, assistant vice president of the Alliance of American Insurers.

Republican Prescription-Drug Bill Squeaks by House

After a stormy partisan battle, the U.S. House of Representatives has approved voluntary prescription-drug coverage for Medicare recipients.

The Republican bill squeaked by with a 217-214 win, meaning that neither the Senate nor President Clinton is likely to accept the plan. But the battle is expected to carry over into this year's congressional and presidential elections under the banner of health-care reform and related issues.

The Democrats started the debate by walking off the House floor to protest closed-door action by the Republicans to block introduction of an alternative Democratic plan. They frequently charged that drug and insurance companies would benefit from the Republican bill rather than seniors in need of relief from the burden of high drug costs.

The GOP plan provides a $35 to $40 monthly premium with a $250 annual deductible and a 50-50 sharing arrangement on drug costs of up to $2,100. Catastrophic coverage would kick in once a senior had spent $6,000.

House Speaker Dennis Hastert, R-Ill., said the legislation "will keep people alive and enhance their lives" while reducing prescription-drug costs by 25% for participating seniors.

House Minority Leader Richard Gephardt, D-Mo., called the GOP plan "a sham, a hoax...a political fig leaf" held out to seniors who need help paying for prescription drugs.

The Democrats' plan would have started premiums at $25 a month, increasing in relation to additional use. Their plan had no deductible and a 50-50 cost sharing up to $2,000. The catastrophic coverage of the Democratic plan would start when drug costs reached $5,000.

The Republican bill brings in private insurers and offers them federal subsidies to ensure coverage for any Medicare-qualified person who wants the drug benefit. It also provides $23 billion to the governors of states to integrate their drug programs with the federal program.

Democrats want the drug program managed by the federal government for all 39 million seniors eligible under Medicare, instead of a combination of private insurance plans and subsidies by the government.