Transcript Ethics for the Insurance Professional - Home

Presented by
Chris McLeod
CPCU,CIC,ARM,AAI,AIM,AIS,API,AU,CRIS,CPIW,CISR
President Smart Choice Agents Programt
High Point, NC
Statistics to Think About
 1 in 2 Americans genuinely believe you get ahead by
politics and cheating, not by hard work
 1 in 6 Americans regulary drinks or uses drugs on the
job
Statistics
 1 in 4 Americans expect to compromise their personal
beliefs in order to get ahead in their current job
 American workers frankly admit they spend more than
20% (8 hours a week) of their time at work totally
goofing off
Statistics
 Americans feel the #1 cause of business decline is low
executive ethics!
Definitions
 Ethic


A system or moral standards or values
A particular moral standard or value
Definitions
 Ethics –

The study of standards of conduct and moral judgment; moral
philosophy

They system or code of morals or a particular person. . . Group
or profession
Definitions
 Ethical
 Conforming to moral standards; conforming to
standards of conduct of a given profession or group
My View
 JUST DO WHAT IS RIGHT!!!!!!
Definitions
 Moral
 Honest
 Integrity
 Legal
Why be Ethical?
 Social Responsibility
 Contractual Responsibilities
 Avoid Public Criticism
 Avoid Government Regulation
 Minimize Errors or Omissions
Core Principals
• Is it honest, truthful, sincere, frank and candid?
• Is there integrity? Am I using sound moral principles?
• Is it fair to all?
• Is there due consideration for the rights of others?
• Do I accept responsibility for the consequences of my
actions and decisions?
Core Principles
 Is there diligence in the pursuit of excellence?
 Most importantly, is it altruistic?
Why do people Act Unethically?
 Inadequate training
 Poor Reasoning
 Self Deception
 Self Protection
Business Ethics and Public
Stakeholders
 Insurance Agent and Insurance Company
Management Relationships
Business Ethics and Public
Stakeholders
 Insurance Company Relationships
 Duties owed by the Agent to the Insurance Company:

What information do we need to transmit to the underwriter
when applying for new coverage?

What are “Material Underwriting Facts”?

What should an agent do if there is a material change in the
operation of an insured mid-term?
Duties owed by the Agent to the
Company
 Do you answer “unasked” questions form the
underwriter?
 Do you reveal information to the insurance company
learned “after the fact”?
 What should an agent tell one insurance company
about another insurance company?
Duties owed by the Insurance
Company to the Agent
• Should the insurance company honor mistakes they
make?
• Should the insurance company tell the agent of
changes in claims reserves?
• Should an insurance company marketing person or
underwriter tell another agent about an insured they
quoted but the original agent did not deliver?
Duties owed by the Company to
the insured
 What information should the insurance company
divulge to the agent about an insured.
Agent’s fiduciary responsibility to
their Insurance Company
 Does an Agent have a responsibility to hold their
represented insurance companies in high esteem and
not reveal to others their methods of doing business?
 Does an Agent have a responsibility to deliver an
insurance company’s quote to a prospective client?
Agent’s fiduciary responsibility
 Should an agent give one insurance company’s quote to
another insurance company also represented by the
agency?
Duties owed by the Agent to their
Customer
 What Duty is owed?
 Is the duty to offer the lowest premium?
 Is the duty to place the business with the most
financially sound insurance company?
 Does the Agent have a duty to identify ALL possible
loss exposures to a customer, or is the duty to only
insure what the client requests?
Duties owed by the Agent to the
Customer
 Should the Agent request renewal quotes from all
represented insurance companies?
 What responsibility does the Agent have to update
coverage at renewal?
 What Information can you share about a customer?
Miscellaneous Duties
 Duties owed to the Public?
 Competitive Advantage vs Ethical standards
 Soliciting New Accounts
Legal vs Ethical
 Unfair Trade Practices
 Misrepresenting the terms of a policy
 Making untrue statements
 Making false statements regarding the financial
condition of an insurer
 Filing false statements
 Unfair discrimination
 Intentionally establishing unfair premiums
Ethical Decision Making
 Is it an ethical question or legal issue
 Gather all information
 Who are the stakeholders and what are their rights?
 What are the alternatives
 Reach a decision
 Monitor the decision
Scenarios
 What are the ethical issues?
 What should the Agent do?
 With the Customer
 With the Insurance Company
 With the current Agency
Thank you!
 On behalf of the Independent Insurance Agents and
Brokers of South Carolina and Smart Choice we thank
you for attending today’s session.
 Please complete the evaluation form provided