Ethical Issues in the Insurance Industry Essay

1325 Words Jan 22nd, 2012 6 Pages
Ethical Issues in the Insurance Industry
Jeff Bolling
Columbia College

Abstract Ethical behavior is crucial to preserving not only the trust on which insurance transactions are based, but also the public’s trust in the insurance industry as a whole. Sometimes the push to act unethically comes from the consumer. How many consumers expect their insurance agents to falsify their applications or claims? You like your agent, he or she likes you, they really want to help you out, that’s just another conflicting loyalty. Over the years many have experienced unethical behavior by insurance agents. I have had them give their sales pitch to me and my family just to find out later that the product they sold us was completely wrong for
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An insurance agent must decide whether he wants to dishonestly chase the dollar or treat his clients with honesty and respect. An insurance agent must understand that he works to protect the assets and even the health of his clients. The health and well being of a client and the protection of his assets should play a central role in his thinking. An insurance agent who ignores the needs of his clients in favor of his own financial gain enters into an ethical conflict with the demands of his profession. Ignoring the needs of clients can manifest in the casual manner in which the agent deals with emergencies or the lack of timely processing of claims when the client suffers adverse effects to his livelihood.

An insurance agent in the business solely for monetary gain is nothing more than a mercenary according to the Insurance Journal. These individuals often look at those who purchase policies with them as customers--mere purchasers of goods and services. An ethical, professional insurance agent views policy purchasers as clients--someone who has entered into a support pact with them. Professional insurance agents have an ethical obligation to support clients in the client's time of need in accordance with the client's policy. While the life and property and casualty insurance industries have many differences involving such things as products, delivery systems, company operations, and regulatory requirements, several studies have suggested

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