| The insurance professional must be aware that he | | | | and attempts to develop a long-term relationship with |
| she has five areas in which to act ethically. They are: | | | | quality service after the sale. |
| - Act ethically for himself/herself. | | | | Since this unique situation requires a great deal of |
| - Act ethically toward the insurer. | | | | contact between the consumer and the agent, public |
| - Act ethically toward the policy-owner. | | | | perception of the industry itself is based on this |
| - Act ethically toward the general | | | | relationship. Such perceptions of the industry hinge |
| public. | | | | on the behavior of the agent. One can now |
| - Act ethically toward the state. | | | | understand the importance of ethical behavior in a |
| Ethical Responsibilities to himself/herself | | | | business setting. |
| The agent must act ethically in order to conduct | | | | The professional agent has two ethical responsibilities |
| business. Experience alone will not be enough to | | | | to the public: |
| meet this extremely important responsibility. | | | | - To strive for the highest level of professionalism in |
| Ethical Responsibilities to the Insurer | | | | any and all public contact in order to maintain the |
| The duties of an insurance professional to his/her | | | | strongest positive image of the industry as possible; |
| insurer are established by the concept of | | | | and |
| "Agency.” This concept is represented by the | | | | - To keep the public informed about the insurance |
| agent contract, which both parties agree to and | | | | with the highest level of professional integrity. |
| sign. In carrying out his/her duties, the insurance | | | | Ethical Responsibilities to the State |
| professional is the direct representative of the | | | | Although the responsibility to regulate the insurance |
| insurer. The professional must keep this in mind. | | | | industry is shared by both the federal and state |
| His/her day to day activities will be a direct reflection | | | | governments, the states carry the burden of |
| on the insurer within the community. | | | | regulating insurance affairs, including the ethical |
| Ethical Responsibilities to Policy-Owners | | | | conduct of licensed insurance agents. |
| By filling needs and providing quality service, the | | | | In some states, the regulation of ethical conduct falls |
| insurance professional can meet his/her ethical | | | | under marketing practices while other states refer to |
| responsibilities to policy-owners. Service is of | | | | is as unfair trade practices. Regardless of its |
| utmost importance since proper service will often | | | | monitor, all states have established a code of ethical |
| lead to future sales and referrals. | | | | standards for insurance agents by defining through |
| In addition, to quality service, the agent owes the | | | | laws the proper behavior expected from an agent. |
| policy-owner loyalty. The agent must also meet | | | | Though these laws differ from state to state, there |
| ethical responsibilities to policy owners by timely | | | | are enough similarities to discuss them in general |
| submission of all applications, prompt policy delivery | | | | terms. As we study the legal framework, one must |
| and confidentiality. | | | | remember these laws provide the industry with a set |
| Ethical Responsibilities to the Public | | | | of absolutes. There are situations which are legal |
| Fortunately, the insurance professional has much | | | | but not ethical. On the other hand, there are a |
| more control over shaping the public's attitude | | | | few situations, which are illegal, but ethical. |
| toward insurance than do the other army of sales | | | | Knowledge of such laws is important because they |
| representatives for other consumer products. The | | | | provide the insurance professional with guidelines, |
| nature of the way insurance is sold creates this | | | | pointing the way to stay out of trouble. Staying out |
| advantage. The insurance professional initiates | | | | of trouble is very important due to the heavy |
| contact with a prospect, then determines if and what | | | | penalties that can be meted out for various violations |
| the insurance needs are. Upon completing these | | | | of the law. Penalties can include suspension or |
| tasks, the agent recommends certain products. | | | | revocation of any insurance license. Penalties can |
| During the course of making these recommendations | | | | also include the payment of monetary damages and |
| the agents provides a professional sales presentation | | | | could quite possible end a promising career. |