NOTE: This text is written “gender-free,” and any reference to the male gender – he, him, man, etc. – should be considered as also being compatible with the female gender. It is much easier to read and understand (and write) by using a single-gender, as opposed to his/her, him/her, etc.
It should also be noted that most of the discussions of ethical situations contain questions as to what ethical action should be taken, or whether an action was ethical. Most of these questions are not answered in the text and some are purely rhetorical. They are intended to make the reader think about the proper ethical action. Sometimes, there can be more than one ethical action, at other times there may simply not be a ready answer as more detailed information would be needed.
The final chapter of this text discusses the Code of Ethics for the Chartered Life Underwriters (& ChFCs) and for the Chartered Property and Casualty Underwriters. These are the two principal professions within the insurance industry so their Codes are representative of other Codes of Ethics. Other professions, such as Society of Actuaries, Life Office Management Association designated, and many others within the insurance industry, all have their own specific Codes. Those in the various fields will be well served to obtain a copy of the Code of Ethics that pertains to their particular field or discipline.
(Webster says) Ethic(s) is the “discipline dealing with what is good and bad and with moral duty and obligation.” “A set of moral principles or values, the principles of conduct governing an individual or a group.” “Ethical” is defined as “of or relating to ethics, and conforming to accepted professional standards of conduct.”
Business ethics has become a much discussed topic in the press over the past few years, primarily because of Enron, Tyco, WorldCom, and other companies and the financial problems that have developed because of unethical behavior of corporate officers, accountants, attorneys, and others. Well-heeled corporate officers in these firms have been indicted, fined heavily and further punishment still is being disseminated as this books is written.
True, there are other reasons other than “cooking the books” that caused chaos in these and other similar companies, but in nearly every situation, the proper application of “ethics” would have avoided – or, at least, diminished – the suffering of stockholders. For those who have not been affected, it should be pointed out that a public corporation, such as those mentioned, consists of innumerable stockholders (owners), many of which are small investors and a large percentage are usually retirees who depend upon the performance of the stock for their income and therefore, are hurt the most. It is fair to say:
F When ethics are discarded, those affected are generally those who will suffer the most and who can ill afford the consequences.
For discussion purposes, this text is divided into a general discussion of Ethics, and then particular application to Insurance Ethics for Life and Health insurance, Financial Planning, and Property and Casualty insurance or those that apply to all disciplines.