Ethics 311

Don has acquired a significant body of knowledge relating to coverage for additional insureds. This knowledge, and his skill in applying it, has resulted in significant new business for him and his firm. To best comply with the ethical canon titled Maintaining and Raising Professional Standards, Don should

A. Ask regulators to establish a license with minimum standards of understanding the exposure. B. Maintain his advantage in the marketplace. C. Share his knowledge with other appropriate insurance professionals. D. Seek clients with additional insured challenges.

Unselfish concern for the welfare of others is referred to as

Altruism

When considering an ethical dilemma from a situation-based perspective, which one of the following best explains the process used in making the decision? Selection and application of a rule or regulation that may apply Analysis of who will be helped and who will be hurt by the decision Consideration of possible outcomes from another's perspective Consideration of whether the method for reaching a decision is fair

Analysis of who will be helped and who will be hurt by the decision

Elmer is a commercial underwriter at ABC Insurance Company. Elmer and one of his co-workers, Jeff, play golf together regularly at the local public course. One weekend, Jeff suggests that instead they play at an expensive private club. He explains to Elmer that the owner of a new commercial account Jeff recently wrote gave Jeff a membership to the club. The situation makes Elmer uncomfortable because he knows that ABC has a strict policy about not accepting gifts from policyholders. Elmer has an ethical dilemma and is torn about whether to inform his employer about the gift or not. Which one of the following types of ethical conflicts does this situation most clearly represent? A. Individual versus community B. Truth versus loyalty C. Justice versus mercy D. Long-term versus short-term

B. Truth versus loyalty

All of the following are factors insurance professionals must balance with their responsibility to insurers, EXCEPT A.) customers need for a fair price B.) Insurance professionals' need to maximize personal income C.) Insurance professionals, duty to Market adequate coverage at a fair profit D.) customers' needs for comprehensive coverage

B.) Insurance professionals' need to maximize personal income

Oliver is a reinsurance intermediary placing reinsurance for a variety of insurers with a variety of reinsurers. He has no contact with the public or policyholders of the insurers for which he places reinsurance. In this position, Oliver's duties are best characterized by which of the following? A.) Oliver only owes his duties to the insurers for which he places business and the reinsurance B.) Oliver still has significant duties to the public and primary insurer policyholders C.) Oliver only owes his duties to the insurers for which he places business D.) Oliver owes his primary duties to the insurance regulators overseeing reinsurance

B.) Oliver still has significant duties to the public and primary insurer policyholders

Which of the following could create an ethical issue? A.) not paying premiums when due B.) Placing insurance with the insurer paying the highest commission C.) exaggerating a proof of loss D.) lying about educational background

B.) Placing insurance with the insurer paying the highest commission

Burt's young son belongs to a scouting organization. A father of a fellow scout has volunteered to be the group's treasurer. Burt, as a bond underwriter, knows from an application he had rejected that the other father had been in trouble for embezzlement, but Burt's employer has a policy against disclosing publicly that which is learned in the course of underwriting. Burt is contemplating whether he should reveal to the scouts that which he knows. His dilemma could probably be resolved by A. Recognizing that the issue is one of practicality and not ethics. B. Considering that his employer may someday want the rejected account. C. Analyzing whether any laws, regulations, or standards apply to the situation D. Realizing that the scouts are a not-for-profit organization to which no ethical duty is owed.

C. Analyzing whether any laws, regulations, or standards apply to the situation

Penny is in the marketing department at insurance company. Which one of the following is an important truth for her to know? A.) maintaining high ethical standards cannot directly result in an increase in an organization's overall profitability. B.) organizations with high ethical standards and those without such high ethical standards are equally susceptible to allegations of negligence that could lead to tort actions. C.) organizations that focus on short term profits and fail to adhere to high ethical standards often do so at the expense of their long term success. D.) consumers are more concerned with short term relationships than about authentic relationships with companies with high ethical standards

C.) organizations that focus on short term profits and fail to adhere to high ethical standards often do so at the expense of their long term success.

Ann has developed an educational program for a local civic organization about insurance and risk management issues related to flood situations. Which one of these canons is Ann demonstrating?

Canon 7-Public Education

Ariel is facing an ethical dilemma at work and is using a checklist for ethical decision making to help resolve it. At the end of his experience, he should Select one: A. Avoid making a hard decision. B. Find that some problems cannot be solved. C. Find that there is a rule for everything. D. Internalize everything learned.

D. Internalize everything learned.

T/F As a broker Josh has a responsibility only to his clients, the policyholders

False

T/F While valuable, an organization's code of ethics cannot protect it against a lawsuit.

False

To violate Canon 3- Legal conduct, an insurance professional's act must be illegal (t/f)

False

The first step in resolving an ethical dilemma involves gathering information starting with

Identifying stakeholders

An insurance professional is responsible for his or her thoughts, decisions, and actions. Knowledge, skill, and expertise guide decisions and ensure that the insurance professional uses his or her

Professional judgement

The ability to apply knowledge to risk and insurance circumstances is acquired through

Professional training and job experience