As public sentiments surrounding insurance companies darken and legal challenges increase, carriers are facing new threats from an unexpected source – proof of mail. After years of relying on a US postal bulk mailing certificate as their go-to proof that critical communications were sent to policyholders, insurers at insurance carriers, MGAs and insurtechs are facing increased pressure to provide more accurate documentation that those communications were delivered as part of insurance compliance for policyholder communication. As a result, insurers need to pivot their longstanding processes to accommodate this shift. The days of relying on bulk mail certificates may be coming to an end.
What Is Proof of Mail?
Proof of mail, in its simplest form, is the documentation that confirms a piece of correspondence has been produced and received by the USPS to be delivered to the recipient. For insurance companies, this postal proof represents more than just a logistical task. It is a critical element in managing risk, ensuring compliance, and maintaining trust with policyholders.
When insurers mail important documents to policyholders like legal notices, policy cancellations, important claims documents, it is an important touchpoint in policyholder communication but can also be a critical piece of evidence in court should a dispute arise.
Regulatory Requirements for Insurers
Regulatory requirements set by the National Association of Insurance Commissioners (NAIC) have driven the adoption of technologies that ensure compliance with state and federal laws for proof of mail of policyholder communications. For example, insurers must often prove that notices of cancellation, non-renewal, or claims determinations were sent and received within specific timeframes. Advanced systems that integrate automated workflows and centralized tracking have made it easier for insurance companies to meet these obligations but can be costly and challenging to manage.
History of Proof of Mail in the Insurance Industry
The concept of proof of mail has played a significant role in the insurance industry for decades, with insurance industry best practices evolving alongside advancements in technology and shifting regulatory and legal requirements.
The Early Days
In the early days of the insurance industry, proof of mail was a manual and labor-intensive process. Insurance companies relied on handwritten logs, postal receipts, and certified mail as the legal evidence to document legal proof of mailing of important policyholder communications. This process, though reliable in its time, was prone to human error. Missing signatures, misplaced receipts, or delayed deliveries often created disputes over whether documents had been sent or received.
This system worked well enough when the volume of correspondence was manageable. However, as the insurance industry grew, particularly in the mid-20th century, the inefficiencies and risks associated with manual proof of mail processes became increasingly evident.
Enter Technology: From Fax Machines to Early Digital Tools
The introduction of fax machines in the 1970s and 1980s revolutionized proof of mail by providing a faster and more traceable way to send important documents. Insurance companies began using fax confirmations as an additional layer of proof that communications had been sent. While this reduced the reliance on postal services, it was still not foolproof, as fax machines were often prone to errors such as busy signals or incomplete transmissions.
By the late 1990s and early 2000s, email and early digital document management systems began to replace traditional mail and fax as the primary means of policyholder communication in the insurance sector. Email offered a faster, more cost-effective way to send policy updates and other notices, and delivery receipts or read receipts provided a form of digital proof of mail. However, this too came with limitations, as not all recipients are enabled to read receipts, and email delivery could be impacted by spam filters or incorrect addresses.
Modern Advancements: Certified Digital Communications
Today, the insurance industry benefits from highly sophisticated systems that offer robust proof of mail solutions. Certified email platforms, electronic signature software, customer communication management (CCM) systems and even texting have become part of the standard arsenal for many companies. These tools provide time-stamped records, delivery confirmations, and even digital audit trails to verify the transmission and receipt of important documents.
Insurance Printing and Mailing Services Continue to Play a Part
Despite all these advances, printed documents and mailing evidence continue to be important insurance industry best practices, especially for documents that are required to be printed and physically mailed. But as we’ll see, the regulatory changes in insurance can make this simple solution challenging.
Explore how Covenir can help you streamline your proof of mail requirements AND reduce costs with Covenir IntelliMail Advantage. Find out more.
What Are Proof of Mail Options for Insurers?
Insurers have many choices today but still rely on physical mail as part of their policyholder communications strategy. The United States Postal Service (USPS) provides a few options for domestic deliveries:
- Certificate of Bulk Mailing (Form 3606-D): This option confirms the quantity of mail pieces being sent by obtaining a Postmaster stamp on a cover sheet attached to a listing of all the documents to be dispatched on a given day.
- Certificate of Mailing (Form 3665): While a more costly option, utilizing this USPS form obtains a Postmaster stamp on EVERY page of the document listing providing a greater level of proof that specific pieces were delivered to the USPS and mailed on a given day.
- Certified Mail (Form 3800): The costliest solution, Certified Mail takes it further by providing the date and time of delivery or attempted delivery to the recipient. Upon request, it also provides a postmarked mailing receipt.
Traditionally, carriers have largely relied on Form 3606-D.
What Has Changed Regarding Proof of Mail?
Regulations vary widely across jurisdictions as to what constitutes mailing evidence and proof of mailing for policyholder communications. Florida, for instance, now has some of the strictest standards for what is accepted as proof of mail. This was the result of court rulings in favor of the insured after determining that Form 3606-D did not constitute enough postal proof that a policy cancellation had been mailed.
In order to ensure they are adhering to the legal requirements for insurers, some are moving to the more costly Form 3665 to reduce the risk of non-compliance and ensure they can substantiate that important or sensitive policyholder communications are being received.
The Impact of Evolving Proof of Mail Requirements on Insurers
The trend toward more stringent proof of mail regulations is likely to expand to other states and jurisdictions. At the same time, insurers are more motivated than ever to ensure their policyholder communications are being delivered appropriately. That means potential shifts in how proof of mail is handled.
However, implementing such changes can be onerous and costly for insurers when every policy, envelope, address and hand-off needs to be documented and accounted for throughout the document processing and mail delivery lifecycle. This is complicated even more by insurance regulations that may differ from state to state.
How Covenir Can Help
In response to the shifting legal requirements for insurers for proof of mail, Covenir launched a new solution, the Covenir IntelliMail Advantage (IMA). This solution is designed to help insurers respond to both the tightening proof of mail legal requirements and the need to maintain traceable policyholder communications. In addition, IMA will reduce costs for most carriers.
Whatever the legal requirements for insurers, IMA makes proof of mail compliance easy and cost-effective and improves process visibility from end-to-end. It tackles two critical aspects:
- Policy and Packaging Accuracy – Covenir uses file-based processing, a high-integrity document processing solution that leverages barcode technology to ensure that no mail piece is checked out until confirmation that all steps are complete and that what is intended to be in that envelope is in that envelope. Barcodes on documents and envelopes allow tracking at every stage, from printing to insertion to final handover for mailing.
- Cost-Efficient USPS Proof of Mail Processing – Covenir leverages pre-sort for delivery to the USPS which helps customers save money on postage for any proof of mail option, including Forms 3606-D and 3665. This approach can translate to reduced costs for most insurers, even after the inclusion of service fees.
The IMA solution is fully managed by Covenir’s US-based onshore teams who are equipped with the latest technologies and a deep understanding of the insurance space. This ensures exceptional policyholder experiences and greater service value.
The result is a streamlined, compliant, and cost-efficient proof of mailing solution that offers insurers an end-to-end audit trail, from print to post office.
The Bottom Line
As proof of mail regulations shift, Covenir IMA helps insurers seamlessly manage the complexities of printing, mailing and tracking sensitive policyholder communications to provide both peace of mind and the proof to go with it.
Want to learn how Covenir can optimize your proof of mail process and potentially reduce your costs? Contact us to get started.