It seems that you are using a smart card for signing. Please, provide more information. Which OS, which smart card? Which driver?
Windows 7 has a new way to provide encryption (and signing is an encryption) services, called CNG. Acrobat XI started to use this service. One usually gets this error if the driver for the smart card with the signing credential is not compatible with CNG. You may need to update the driver. The same driver that worked with Windows XP and Acrobat 9 may not work with Windows 7/8 and Acrobat XI.