Remaining Ethical in Insurance

Table of Contents

Chapter 1: Looking at the General Picture		1
	Ethics by definition	2
	Mores by definition	2
	Ethical Expectations	3
	Easier to say what is NOT ethical	3
Chapter 2: Who Needs Ethics		6
	Ethics are a form of excellence	6
	Definition of ethics changes	7
	Creating Excellence	8
	Creative Insights	8
	Sensitivity	9
	Vision	9
	Versatility	9
	Focus	10
	Patience	10
Chapter 3: Avoiding Deadly Attitudes		12
	Value judgments	13
	10 Ethical Attitudes	14
	#1 “I only need one more sale to meet my quota.”	15
	#2 “She doesn’t need this money. In fact, she won’t even miss it.”	16
	#3 “Okay, the boss said to simply say this pitch & not worry about understanding the product.”	17
	#4 “I know my product simply mimics the one he already has, but I’m going to replace it anyway.”	17
	#5 “What he doesn’t know won’t hurt him… or me.”	18
	Clean sheeting	18
	Example	18
	NAIC Appendix B Consumer Refusal to Provide Information	19
	#6 “I’ll only put this premium payment in my account for a couple days. I’ll send it to the company before anyone even thinks about it.”	20
	Example	20
	#7 “I don’t have time to return this call. It’s probably not important anyway.”	21
	#8 “I know I was supposed to see this client personally, but it too far to drive.”	21
	#9 “Damn, I forgot to get this signature. Oh well, I can copy it and no one will know.”	22
	Example	22
	#10 “What a lousy morning. To hell with the rest of these appointments.”	23
	Commissioned Sales Requires Perspective	23
	Negative mindset	25
	Sympathy & Empathy	27
	Presentations need to be respectful	28
	Understand the Why	29
	Example	29
Chapter 4: Business & Ethics Need Each Other		31
	Decisions at every level	31
	Ethical Dilemma	34
	Chart	35
	Develop Product Knowledge	36
Chapter 5: Making Ethical Decisions		37
	Determining Facts Verses Fiction	37
	Determining Ethical Decisions	37
	Laws are designed to mandate behavior	38
	How does one make ethical decisions?	42
	An Ethical Foundation	43
	Persistence	43
	Positive Attitude	44
	Continual Effort	45
	Example	45
	Ability to Face the Uncertain	47
	Competitive Spirit	47
	Acceptance of Occasional Adversity	47
	NAIC Appendix C Consumer Decision to Buy Not Based on	48
	What can a person do to personally make insurance an ethical occupation?	49
Chapter 6: Ethical Marketing		50
	Requirements of Different States CA Article 6.3	50
	Responsibilities in Marketing Strategies 1-4	50
	Honesty & Professionalism	51
	Value of the Insurance Product	51
	Reasons why an agent sells an inappropriate policy	52
	Planning Financial Strategies	52
	Two Elements in Ethical Marketing	54
	State Requirements Regarding Advertising	55
	Door Approaches	56
	Example from Texas Sec. 541.059	56
	Referral Business	57
	NAIC Appendix A Disclosure	58
Chapter 7: Ethical Selling		61
	Education	62
	Common Feedback (aka Complaints)	63
	Getting Education in a Timely Manner	64
	Example	65
	Laying out Policy Benefits & Limitations	67
	Full Disclosure	68
	Slow to Replace Existing Contracts	68
	Worker’s Compensation	68
	Health Questions (clean sheeting)	68
	Eligibility of Applicants	69
	Continuity must be considered	69
	Policy Replacement	69
	NAIC Model Law Section 6. Duties of Insurers and Producers	70
	When the Agent Allows Misconceptions	71
	When Premiums seem too High	72
	Obtaining Proper Signatures from the Client	73
	Example	73
	Keeping in Touch after the Sale	74
	Selling the “Fast Buck” Items	74
	Competency	75
	Financial Due Diligence	76

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