Insurance Company Bound to Reg E Disclosures?

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Question:

I work for an insurance company and we are about to begin offering EFT for insurance payments. As an insurance company are we bound to Reg E disclosures on our notices?

Answer:

Yes, if your customers/clients are consumers. Before you initiate any EFT debits to consumer deposit accounts to pay for insurance premiums, you must comply with section 205.10(b) of Regulation E, and obtain a written, signed (or similarly authenticated) authorization from the consumer, and provide the consumer a copy of same.

Assuming that you plan to originate the EFTs via the Automated Clearinghouse (ACH), you will also need to adhere to the ACH Originator rules which require that the authorization contain certain specific information. You should obtain information about the ACH requirements from the Originated Depository Financial Institution with which you will work.

First published on BankersOnline.com 08/29/05