Ethics For Insurance Professionals

The Harvard Business School study found that companies that truly cared about their customers saw a _____% increase in revenues, while companies that did not care only saw a _____% increase in growth. 250% / 150% 682% / 166% 500% / 250% 482% / 150%

682% / 166% The Harvard Business School study found that companies that truly cared about their customers (treat their customers with honesty, truthfulness, and a high level of ethics) saw a 682% increase in revenues, while companies that did not care only saw a 166% increase.

U.S. News and World Report found that about _____ of all high schools students cheated on a test within the last year, and nearly ________ say it is ok to defraud an insurance company. 50% ; 2 in 4 adults 70% ; 1 in 4 adults 66% ; 3 in 4 adults 100% ; 1 in 4 adults

70% ; 1 in 4 adults The report cited that 70% of all high schools students admit to cheating on an examination within the last year, and that one in four adults believe that it is acceptable to defraud an insurance company.

"Trust" would be best defined as which of the following? A belief in a person's ability to get the job done in a timely manner A belief that all investment recommendations will be profitable A belief in the honesty, reliability, credibility and integrity of a person A belief that all people are basically honest and ethical

A belief in the honesty, reliability, credibility and integrity of a person Trust is considered to be a firm belief in the honesty, reliability, credibility and integrity of someone.

Which of the following would best describe ethics? A definition of how all people should act in a given situation A branch of philosophy dealing with moral behavior The result of a decision made The specific actions that should be taken when under undue pressure

A branch of philosophy dealing with moral behavior "Ethics" is a branch of philosophy dealing with moral behavior, and is the general pattern of how a person believes they should act in a given situation when making a proper ethical decision.

A position of trust, honesty, loyalty and good faith towards the principal is referred to as what type of relationship? A fiduciary relationship An employer-employee relationship The Law of Agency relationship The insurer-employee relationship

A fiduciary relationship A fiduciary relationship deals with a position of trust, honesty and loyalty with all parties to the insurance transaction. This duty is owed to the producer, the principal and all third parties, such as clients.

Which of the following do polls show has led to a poor reputation for insurers? A lack of leadership and poor communication about how the industry and products are designed Poorly designed insurance products that rarely cover losses Producers that are more interested in their checkbooks than the customer's needs and goals Too much state and federal regulation

A lack of leadership and poor communication about how the industry and products are designed A lack of leadership and poor communication to the public are the leading concerns of the insurance-buying public. Shareholder demands, a lack of customer focus, bureaucratic red tape, a lack of understanding at times of loss and many other problems compound the frustration of insureds and policyowners.

Which of the following would be considered a true statement on morality? It is rarely the basis for legal rules and statutes It is not influenced by environmental pressures and expectations A person's conduct is usually considered moral when it is in substantial conformity with the legal standard It is situational rather than rule-based

A person's conduct is usually considered moral when it is in substantial conformity with the legal standard Morality is often associated with a basis for certain statutory and legal ideals, and is commonly influenced by extraneous pressures and expectations of the public and others. One's individual conduct is considered moral when it is within certain legal standards.

Ethical problems cited in surveys of insurance producers mentioned which of the following as a primary ethical concern? Use of false or misleading advertising Improper use of the term "all-risk" in certain property policies Use of the word "savings" or "profit" in a life insurance transaction All of the above

All of the above All of the described activities are considered illegal by various statutes and rules, as well as being unethical, as they are considered deceptive trade practices.

Core ethical values for an insurance producer are honesty and integrity in dealing with applicants and insureds. accountability and taking responsibility for one's actions. the ability to keep one's promise. All of the above

All of the above It is important to understand that the core ethical values of an individual are influenced by all of the responses - honesty in dealing with all people, not just clients, learning that mistakes will happen and how crucial it is for someone in a fiduciary position to take responsibility for their actions (or lack of), and always remembering that a promise is one's bond.

In designing a company's ethical mandate, one should consider which of the following? A history of over-charging customers A history of complaints to management and regulatory bodies Whether the company truly believes in the spirit of the law All of the other responses

All of the other responses All of the responses should be considered when designing a company's ethical statement.

What three concerns did respondents cite in their responses to financial services ethics surveys? Lack of investor confidence, corporate scandals, and marketplace fluctuations Lack of corporate knowledge, loss of share value, and inflation Inadequate professional education, poor investment choices, and inflation Management compensation, investment risk, and lack of product offerings

Lack of investor confidence, corporate scandals, and marketplace fluctuations Ethical survey respondents cited a lack of investor confidence, corporate scandals and irresponsibility at top levels of management, and economic fluctuations in the marketplace as the top concerns of customers.

A situation where the ethical decision is not very clear-cut is the concept of a "________" ethical decision. Good vs. Bad Right vs. Wrong Right vs. Right Customer vs. Carrier

Right vs. Right A "right vs. right" ethical decision is when a person is confronted with several ethical choices, both of which seem "right" in a given situation given the facts at hand.

One method of testing whether an action would be considered ethical would be referred to as the Whistleblower Test. Mother Test. Ethical Dilemma Test. Framework Test.

Mother Test. The "Mother Test" asks: "Would you perform the exact same actions if the person being affected by those actions is your mother?" If a person can honestly answer "yes" to that question, and assuming one actually likes their mother, the test has been validated and successfully navigated!

Of the following, which feeling do customers have about their individual insurance producers? Producers are equally as trusted as the insurance company Producers are trusted more than the insurance company Producers are trusted less than the insurance company Producers are not considered trustworthy

Producers are trusted more than the insurance company The public trusts their producer more than the insurer according to polls.

Which law states that a producer will do his job primarily for the benefit of the principal? The Law of Producers The Law of Large Numbers The Law of Supply and Demand The Law of Agency

The Law of Agency The Law of Agency demands that a producer perform his duty primarily for the benefit of the principal, and not simply conduct business for the sole benefit of the producer.

Upon which two ideals do business ethics today seem to be based? The need to make a profit and the need to satisfy investor needs The desire to please shareholders and top management The need to satisfy shareholder earnings and the regulatory environment The requirement to show earnings growth and the need to stay current on product offerings

The need to satisfy shareholder earnings and the regulatory environment The two ideals that appear to be the main concerns of business ethics today are the need to please shareholders with increased earnings and profitability and the regulatory environment.

In a survey conducted in 2001, what was the most common response as to why clients, centers of influence and prospects did business with their financial services professional? Confidence Trust Product knowledge Knowledge of tax law

Trust Trust was cited as the most common reason financial services professionals believe their customers do business with them.

Three duties that a producer would owe to his principal would be loyalty, a good work ethic, and promptness. loyalty, confidentiality, and obedience. trust, honesty, and obeying minimum threshold ethical guidelines. accountability, continuing education, and truthfulness.

loyalty, confidentiality, and obedience. Producers owe their principal(s) the duties of loyalty, confidentiality, and obedience. While trust, honesty, accountability, and faithful performance of the job are crucial elements and absolutely a duty of the profession, B is the correct answer.

A primary function of a producer is the "duty of obedience." One of the requirements of this duty would be that producers must obey all insurer instructions. producers must forward notice of a loss only when convenient to the producer. producers must obey the insurer's lawful orders and instructions. producers are free to maintain an insurer relationship any way they choose.

producers must obey the insurer's lawful orders and instructions. Producers are required to only obey lawful instructions and orders from their principal. A producer will not have to obey orders that are illegal or against public trust.

The practice of ethical decision-making is based on a person's assumptions about fair play and moral decency in all decisions-making situations. the treatment and rights of people and the treatment of property. the way an ideal, moral world might work if all people were honest. their upbringing and cultural background.

the treatment and rights of people and the treatment of property. The practice of ethical decision-making is based on a person's assumptions about the treatment of people, the rights of people, and the treatment of property. It is also influenced by environmental pressures and expectations, and requires education, patience, practice and understanding.