Forthcoming e-commerce legislation will have a muted impact unless the Government pressures insurance industry regulators to accept digital signatures, IT managers have warned.
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Insurance companies also need to ensure that their IT systems can handle the demands of electronic signatures or face having their IT systems "screwed up".
The warning comes as the section of the Electronic Communications Bill which makes electronic signatures legal is due to come into force later this month.
Margaret Smith, director of e-commerce at Legal & General (L&G), said, "Now people can visit the L&G Web site and fill-in an application form but then they have to print it off and sign it."
A spokesperson for the Financial Services Authority said it is was developing a new rulebook for conducting business that will allow electronic signatures once the legislation comes into force.
Malcolm Whitehouse, head of IT strategy for Royal and Sun Alliance Life, called for the Government to ensure that insurance industry regulators embrace electronic signatures.
"The Government needs to put pressure on the insurance industry," he said. "Regulators are saying they will not necessarily accept digital signatures."