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Similar to What Are Ethics
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What Are Ethics
- 1. What are ethics? Professional Insurance Agents of VA & DC
- 2. What are ethics? • Standards of right and wrong; good and bad • A set of principles of right conduct. • Theory or system of moral values • General nature of morals and moral choices • Rules or standards governing conduct or a profession
- 3. Ethical Behavior • Based on morals, laws, and ethics • Morals entail making the distinction between right and wrong. • Laws are legal tenents. • Ethics entail knowing what to do when a situation presents more than one “right” answer.
- 4. 3 Basic Methods of Examining Ethics • Metaethics – where our ethical principles come from & what they mean • Applied Ethics – examining specific controversial issues • Normative Ethics – to arrive at moral standards that regulate right & wrong conduct
- 5. Ethics involve consideration for duty and for what is the right response when a conflict arises. Ethics are, in essence, codes of expected behavior that apply in the absence of laws.
- 6. Ethics are derived from morals and are applied when a purely moral response might not be ultimately appropriate. Contradictory laws or societal norms set up conflicts that must be resolved in an ethical manner.
- 7. Searching for Ideal Behavior The Golden Rule: “Do unto others as you would want others to do unto you!”
- 8. Searching for Ideal Behavior Virtue – develop good habits of character • Wisdom • Courage • Temperance • Justice • Fortitude • Generosity • Self-Respect
- 9. Searching for Ideal Behavior Duty – Clear Obligations: • Duties to your God: inward and outward practice of your individual faith • Duties to Oneself: developing ones’ own skills and talents; to not harm ourselves • Duties to Others: not to cause harm, respect others
- 10. Avoid wronging others Treat people as equals, promote the good of others, keep one’s promises.
- 11. Our rights Justified claim against another person’s behavior – our right not to be harmed, payment of debt, life, health, liberty or possessions. Thomas Jefferson’s 3 Foundation Rights: • Life • Liberty • And the pursuit of happiness!
- 12. Our actions Treat people as an end, and never as a means to an end. Treat people with dignity and respect and not as an instrument for our end goals.
- 13. Moral convictions • Fidelity – duty to keep promises • Reparation – duty to compensate others when we harm them • Gratitude – duty to thank those who help us • Justice – duty to recognize merit • Beneficence – duty to charitable acts • Self Improvement – duty to improve our virtue & intelligence • Non-malfeasance – duty not to injure others
- 14. Influence on Ethical Behavior Individual values significantly influence ethical behavior. Values are what one believes. Define what is important. A strong factor that influences which “right” answer one chooses. Ethics are what one does.
- 15. Business Ethics In reality, they are applied ethics. The insurance professional must embrace moral values, be aware of applicable laws, rules, and regulations, and then apply those values and rules to a given situation. Entail making optimal choices in the workplace & doing what’s right in context of products & services & relationships with stakeholders.
- 16. Consequential Behavior • Judges that an action is morally right if the consequences of that action are more favorable than unfavorable. • Add up the good vs. the bad • Decide if the good outweighs the bad
- 17. The Three R’s • Respect • Responsibility • Results
- 18. Respect • Treating customers, co-workers, managers, etc. with dignity, courtesy and respect. • Using business supplies, equipment, time, money appropriately, efficiently and honestly, for business purposes only. • Protecting & improving your work environment – abide by laws & rules to protect us and our environment.
- 19. Responsibility • Provide timely, high-quality goods and services. • Work alongside your co-workers and carrying your share of the load. • Meet all performance expectations and add value.
- 20. Results “The end justifies the means” is an excuse, not a reason for acting improperly or unethically.
- 21. Are you acting ethically? • Compare actions to the Golden Rule • Would you want your peers to know your actions? • What about family, friends, neighbors, church, the media?
- 22. Ethical Dilemma – What would you do? • The Claim Adjuster • The Conflict • The Resolution
- 23. •Think through each conflict situation, bearing in mind the codes of expected behavior, ethical guidelines, and moral values. •Ethical decisions originate from reasoned consideration of all the issues surrounding a conflict. Ethics Requires…
- 24. Universal Standards • Laws and Regulations • Public and Employee Safety • Truthfulness of records and statements
- 25. What qualifies as an unethical act? • Falsehoods • Stretching the truth • Misrepresentation • Misappropriation of monies • Unfaithful to promises • Sharing confidential information • Breaking contracts • Putting your interests before others
- 26. Unethical acts = short term gains • Instant gratification; later regret • Are you in this for the long haul? • Is your reputation important to you? • What legacy would you like to leave?
- 27. Why are ethics important to our industry? • Proper premium for identified risks • Claims have direct effect on premium & coverage availability • Honesty in dealing with customers • Honesty in dealing with carriers • Accepting responsibility for our actions • E&O potential • Insurance Industry Reputation
- 29. Agent Owes Insurance Company • Loyalty • Good Faith • Reasonable Care • Contractual Duties
- 30. Agent Owes Customers • Adequate Coverage • Proper Coverage • Coverage placed in the best interest of the customer • Coverage placed with a financially sound carrier • Prompt communication
- 31. Ethical Dilemma – What would you do? • Commission • Short Investigation • Contingent Commission
- 32. Talk the Talk ~ Walk the Walk • Everyone else does it • They won’t miss it • Nobody will care • The boss does it • I don’t have time to do it right • That’s close enough • Some rules were meant to be broken
- 33. Talk the Talk ~ Walk the Walk • They owe it to me anyway. • Its not my job. • I won’t make my sales goal this month if I don’t tweak the truth a little.
- 34. Act within your authority • Actual or Expressed • Implied • Apparent
- 36. Ethical Dilemma Situation – A co-worker proposes an action that you believe is not ethical or downright wrong. • What do you do? • Do you tell your employer or partner?
- 37. •You may be tempted to do what is asked because you know the person or you feel obligated for some other reason. •Are you looking at doing this questionable action simply to “go along to get along”? •If so, you would be knowingly be doing what you believe is unethical.
- 38. That makes you as wrong as the other person!
- 39. Fight the temptation. Take a stand. Say NO, with tact. Here’s how…..
- 40. First, don’t accuse the other person of being unethical. Instead, use “I” statements to describe your feelings.
- 41. State your objection & concern • I have serious concerns about that and I need your understanding as to why I can’t do…. • I honestly believe it is wrong because… • I can’t do what I feel is wrong…
- 42. Propose Alternative Action • I think I know what you’re trying to accomplish, and I think we can do this a better way…
- 43. Ask for Help & Agreement • I really need your help… • I want to make sure we both do the right thing… • Will you go with me on this one?
- 44. Situation • Your producer tells you to leave out some pertinent information on the application. • What do you do? • Do you tell your employer or manager?
- 45. •You may be tempted to do what he asks because you fear the loss of your job. •First, let the producer know of your dilemma. •Next, practice the same process as given in the first situation.
- 46. If you are not successful, go to a higher authority!
- 47. Words of Wisdom • Keep true, never be ashamed of doing right, and decide on what you think is right and stick to it. ~ George Eliot • If you don’t stand for something, you will fall for anything. ~multiple sources • To know what is right and not do it is the worst cowardice. - Confucius
- 48. Words of Wisdom • Honesty is the cornerstone of all success, without which confidence and ability to perform cease to exist. ~ Mary Kay Ash • It is not who is right, but what is right, that is of importance. ~ Thomas H. Huxley
- 49. Words of Wisdom • We may be personally defeated, but our principles never. ~ William Lloyd Garrison • Nothing can stop the man with the right mental attitude from achieving his goal; nothing on earth can help the man with the wrong mental attitude. ~ Thomas Jefferson
- 50. Words of Wisdom • We are what we repeatedly do. Excellence, therefore, is not an act but a habit. ~ Aristotle
- 51. Thank You! • Please sign the Sign Out Sheet for your CE credit. • Please complete the Class Evaluation. • Now, go and do the right thing!
Editor's Notes
- Welcome to the class – thank you for coming out tonight. House keeping issues – bathrooms, snacks, etc. Break – 50 minutes into the class we will take a 10 minute break. Handouts – everyone have one? Really don’t need to refer to it during the class – as everything is on the slides!
- Standard example of proper behavior is the Golden Rule.
- What does Virtue mean? Moral Excellence and righteousness; goodness An example or kind or moral excellence Chastity A particularly efficacious or beneficial quality; advantage Effective force or power
- Claim Adjuster – Carmen is an adjuster and has evaluated a claim at a certain dollar amount. Upon calling the claimant, she begins discussing the special damages. She realizes that the claimant has not taken into account a rather large expense for which there is no other insurance available to the claimant. Carmen must decide if she will reveal the additional covered expense to the claimant or whether she should settle the case based on the claimant’s demand, which is significantly lower than what Carmen had expected to pay to close the case. Of course, the right thing to do would be to advise the claimant of the additional expense & negotiate an appropriate settlement. Conflict – but suppose Carmen had just left a message with her supervisor, who encouraged her to make the lowest settlement possible regardless of the circumstances, even thought this was not the company’s claim settlement philosophy? Carmen’s decision to discuss the mission expense with the claimant could have been influenced by her supervisor’s admonishment. If she settled the claim at the lower amount then the claimant discovers later she had coverage for the expense but it was omitted, Carmen’s and the company’s reputation could be damaged. Short term = supervisor praise. Resolution – By applying her moral values of fairness, truth and trust, Carmen’s decision to reveal the additional coverage led to her ethical decision, despite potential repercussions from her supervisor.
- There are several universal areas where zero tolerance for violation is appropriate for any and all organizations. These universally accepted norms include:
- Loyalty – remain faithful to the company/agency relationship by maintaining honesty. Good Faith – honesty throughout the insurance transaction Acting in the best interest of the Insurance Company Reasonable Care – To submit only that business that meets or exceeds the company’s underwriting requirements. Contractual Duties – Per the agency agreement Stay within your binding authority Submitting or uploading applications, endorsements, requests, etc within the required time frame Timely payment of premiums and return commissions
- Placing coverage with a financially sound insurance company Be sure to place coverage with a company financially able to pay a claim If an agency learns that a company is having financial difficulty, notice should be sent to the insured and consideration given to replacing the coverage immediately with a sound carrier Signs of financial difficulty can include the insurance company’s delay in payment of claims, high rate of declined claims, late payment of commissions, delay in returning of insured’s premiums, high rate of personnel turnover, etc
- Commission – an agent may receive a larger commission from Insurer A than from Insurer B. What could motivate the agent to place more business with Insurer A even if Insurer A’s coverage may not be the best for the needs of the customer? Short Investigation – adjusters and appraisers frequently work on a production basis, which may encourage short-changing an investigation in order to more quickly conclude a loss. Contingent commission – a commission that an insurer pays, usually annually, to an independent agency that is based on the premium volume and profitability level of the agency’s business with that insurer. (This had been viewed as a “negative” in recent years and was temporarily outlawed in New York thanks to Aon. However, that ruling has recently been overturned.)
- Actual or Expressed: actual authority is expressly given by the insurance company as found in the agency contract/agreement Implied: grows from a relationship based on actual authority. The insurance company has allowed the agent to have the appearance of authority either through estoppels or through custom and usage. Apparent: the insured believes the agent “apparently” has the authority. This authority protects the insured from the unauthorized acts of the agent. The insurance company may have to pay the claim; however, the insurance company may subrogate against the agent (E&O Claim)