Ethics Part I(1.5 Credit Hour) TDI Course No.

 

Chapter 2

2.1   Dictionary and Working Definition of Ethics

(Webster says) Ethic(s) is the "discipline dealing with what is good and bad and with moral duty and obligation. "A set of moral principles or values, and the principles of conduct governing an individual or a group." ;

(A Working Definition) Ethical is defined "as of or relating to ethics" and simply put is a way to conduct your insurance business in a way that conforms to acceptable professional standards of conduct and moral principles. Moral principles that govern the behavior of insurance agents, and adjusters, the moral correctness of specified conduct of insurers, agents and adjusters. Finally, the core values of insurers, agents and adjusters.

 

2.2     Moral principles that govern the behavior of insurance agents, and adjusters

The Health Insurance branch of the industry, appears to have had the most publicized unethical actions over the past decade. There probably are several reasons for this, with the result that this branch seems to have suffered more regulations and more "housecleaning" probably more than any other area of insurance. Any Health Insurance agent who has been active very long, can still remember situations where it was discovered that a policyholder has multiple coverage on the same risk because a "slick" agent convinced them that they needed the coverage (that could never be used) for a variety of reasons. The elderly are obviously the most gullible, and there have been (are?) agencies that target elderly widows as many (if not most) were in an unfamiliar position of having to make financial decisions formerly handled by their late husbands. Many agents have seen "portfolios" of multiple coverages. The elderly have always been a ready market for unethical agents; hence the very strict laws regarding Medicare and Medicare Supplements. The government stepping into the insurance business and dictating the standardization of Supplement policies is a direct result of sales abuse. This was followed by more stringent laws, such as the illegality of selling a Medicare Supplement policy to a person who already has such a policy, unless strict criteria is met and multiple forms completed. Financial planners, many of them former "agents" were under scrutiny. A problem in ethics arises where, for instance, a "financial planner" who is also an insurance agent, is made privy to the financial records of a client, and who then passes this information on to a stockbroker or mutual funds salesman, sometimes for a "fee" and sometimes for "goodwill." This raises many questions discussed later, such as should the agent disclose his connection to the broker to his client and would that make it okay? Or is it just the right thing to do if it is apparent the client would benefit more by investing in a mutual fund or bonds?

 

2.3     Some benefits of adhering to core values that, have as a foundation – ethical behavior.

• Receive more referrals
• Retain clients
• Promotes team synergy
• Promotes better relationships with clients
• Increases opportunities for growth and promotion
• Retain license in good standing

 

2.4     What ethical principles relate directly to the above definitions of ethics and the examples of unethical behavior in the above stories?

• Moral principles that govern the behavior of insurers, agents and adjusters.
• The rules of conduct recognized in respect to insurers, agents and adjusters.
• Core values and ethical behavior of insurers, agents and adjusters.Respecting others and self
• Client satisfaction