State Lawmakers Consider Remote Notarization Model

The in-person notarization process is an example of something life insurers need to change, said Jordan Martell, innovation counsel at Pacific Life, during a Life Insurance and Financial Planning Committee session. He said updating the notarization process could make life insurance more popular, by simplifying the online purchasing process.

Members of Congress considered two identical remote online notarization bills, H.R. 6364 and S. 3533, during the 116th Congress. The bills had support from both Democrats and Republicans.

The American Council of Life Insurers and the National Association for Fixed Annuities were part of a coalition of industry groups that wrote to congressional leaders in support of the bills.

However, there was some friction. Catic, a real estate support services group, suggested that the bills could let the federal government interfere in what has traditionally been an area left in the hands of the states. It also could cause conflict with local customs and practices and expose local real estate agents and real estate lawyers to more competition from out-of-state entities.

NCOIL Efforts

NCOIL is a Manasquan, New Jersey-based group for state legislators who work with insurance issues. It often develops model acts, or sample language for bills. State legislators can choose whether to use the models when developing their own bills.

The current version of the Remote Notarization Model Act draft in the NCOIL meeting packet appears to be similar to the text of an emergency remote online notarization act that New Jersey adopted in April 2020, in response to the COVID-19 emergency.

That New Jersey act is set to expire when the emergency ends.

Like the New Jersey emergency act, the NCOIL model draft starts with definitions of terms. Drafters define "identity proofing," for example, to mean a "process or service by which a third person provides a notary public or an officer authorized to take oaths, affirmations, and affidavits, or to take acknowledgements with a means to verify the identity of a remotely located individual by a review of personal information from public or private data sources."

In one section, the drafters include provisions a notary could use to handle notarizations for individuals located outside the United States as well as for individuals located inside the country.

A state that created a law based on the model could set its own standards for the communication technology and identity proofing processes used.

The draft encourages a state to consider any notarial standards set by organizations such as the Mortgage Industry Standards Maintenance Organization and the National Association of Secretaries of State.

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