Essay The Insurance Industry and Business Ethics

3307 Words Feb 12th, 2012 14 Pages
Erik Cohen

Business Ethics
26 September 2011

The Insurance Industry and Business Ethics
The Insurance industry is a perfect example of the use of “grey areas” in the culture of business ethics in the United States. Within my research and years of experience in the field of insurance the use of business ethics couldn’t be of greater importance then the companies that provide the actual policies themselves. Even with all of the regulations the Insurance Department puts on the insurance companies, agents, brokers, and adjusters there are still areas where discrepancies in the code of business practices exist. I will explain some of the insurance company’s ways of motivation, monetary compensation, underwriting rules
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With this massive and growing insurance industry New York State created The New York State Insurance Department to regulate its functions. “The Insurance Department was created in 1859 by the New York State Legislature[->2], and assumed the functions of the Comptroller and Secretary of State relating to insurance.” (Department)
The Insurance Department is responsible for supervising and regulating all insurance business in New York State. The Department’s mission is to:
· Ensure the continued sound and prudent conduct of insurers’ financial operations;
· Provide fair, timely and equitable fulfillment of insurer obligations;
· Protect policyholders from financially impaired or insolvent insurers;
· Eliminate fraud, other criminal abuse and unethical conduct in the industry; and
· Foster growth of the insurance industry in the State. (Department)

According to the NYSID, the department carries out its regulatory function by issuing licenses to agents, brokers, consultants, reinsurance intermediaries, adjusters, and bail bondsmen. The NYSID audits insurers to verify if their financial stable, they also make sure the insurers’ treatment of policyholders and claimants is fair, and that they have a reasonable underwriting practice. The NYSID is responsible for…

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