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    Insurance Ethics Training
    Insurance Ethics Training
    Insurance Ethics Training
    Ebook112 pages1 hour

    Insurance Ethics Training

    By Michael Lustig

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    About this ebook

    Insurance Ethics Training is a study of ethical practices for insurance agents, examining closely the parties to whom agents owe an ethical responsibility, the law of agency, agent and broker liability, and deceptive trade practices and fair claims handling. This textbook will teach you about the "new focus" on business ethics and give you an understanding of ethical decision making, compare ethic obligations and legal requirements, and help you identify the duties resulting from the law of agency.

    LanguageEnglish
    PublisherMichael Lustig
    Release dateAug 8, 2011
    ISBN9781933891712
    Insurance Ethics Training
    Author

    Michael Lustig

    Michael Lustig is a graduate of the University of San Diego, California and a former Professor at California State University at Pomona and Immaculate Heart College (Los Angeles). He has been a California Real Estate Broker and the Owner and President of Real Estate License Services, a California real estate and insurance licence school, since 1978, offering state-approved license courses in 47 states and the District of Columbia. He is the author of 35 books on real estate and insurance topics.

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      Book preview

      Insurance Ethics Training - Michael Lustig

      tmp_63c68dc29e2b1e006ac85a518842f01a_CoGwJy_html_m693d1e9a.jpg

      INSURANCE ETHICS TRAINING

      Prepared by Michael Lustig

      Contributing Editor: Denise Iona

      Distributed by:

      Real Estate License Services

      5059 Newport Ave. #209

      San Diego, CA 92107

      Phone Toll-Free 1-800-877-5445

      Smashwords Edition

      © Copyright 2010 - 2006 by Michael Lustig, Real Estate License Services. Copyright registered. All contents protected by laws of copyright. No portion of this book may be reprinted, reproduced, transmitted, stored in a retrieval system or on the Internet, or otherwise utilized in any form or by any means, electronic, mechanical, or otherwise, including photocopying or recording, now existing or hereinafter invented, nor may any part of this book be used for teaching without the prior written consent of Michael Lustig.

      Contents

      CHAPTER ONE: ETHICS FOR THE INSURANCE INDUSTRY

      WHAT IS ETHICS?

      LEGAL VS. ETHICAL RESPONSIBILITIES

      LEGAL RESPONSIBILITIES OF CONDUCT - CONDUCT BEYOND LEGAL MEASURES

      THE NEW FOCUS ON BUSINESS ETHICS

      IN THE INSURANCE BUSINESS - WHO IS RESPONSIBLE?

      ENCOURAGING ETHICS

      AT THE CORPORATE LEVEL - MIDDLE MANAGEMENT - AGENCY LEVEL

      ETHICS CAN BE TAUGHT

      ETHICS MUST TAKE HIGH PRIORITY

      ETHICAL DILEMMAS THAT CHALLENGE

      THE ETHICAL COMMUNITY

      WHERE DOES ETHICAL FITNESS BEGIN?

      CHAPTER TWO: THE LAW OF AGENCY

      INTRODUCTION

      THE COMMON LAW OF AGENCY

      AGENCY LAW AS APPLIED TO THE BUSINESS OF INSURANCE

      TYPES OF AGENCY - AN AGENT’S OBLIGATIONS - THE CREATION OF AGENCY - SOURCE OF AUTHORITY - SCOPE OF AUTHORITY - FIDUCIARY DUTIES OF THE AGENT - BREACHES OF FIDUCIARY DUTY - TERMINATION OF AGENCY - STATUTORY DUTIES OF AN AGENT

      LIABILITY

      PENALTIES

      CHAPTER THREE: AGENT AND BROKER LIABILITY

      INTRODUCTION

      PARTIES TO WHOM DUTIES ARE OWED

      DUTIES OWED TO THE STATE - DUTIES OWED TO THE INSURER - DUTIES OWED TO INSUREDS AND CLAIMANTS - DUTIES OWED TO OTHER PARTIES

      SPECIAL ETHICAL CONSIDERATIONS

      BAD FAITH CLAIMS - SUITABILITY - TRUST FUND HANDLING AND ACCOUNTING - MISREPRESENTATION - THE UNAUTHORIZED PRACTICE OF LAW

      THEORIES OF LIABILITY

      BREACH OF CONTRACT - NEGLIGENCE - FRAUD

      AGENTS AS SPECIALISTS OR EXPERTS

      RESPONSIBILITY DETERMINED BY ACTIVITY, NOT BY TECHNICAL DESIGNATION

      STANDARDS MUST NOT BE COMPROMISED

      THE EVOLUTION OF AGENT LIABILITY

      CHAPTER FOUR: CONSUMER PROTECTION

      INTRODUCTION

      CONSUMER LAW

      THE NEEDS OF INSURANCE CONSUMERS - ENFORCEMENT OF CONSUMER LAW

      DECEPTIVE TRADE PRACTICES

      MISREPRESENTATIONS AND FALSE ADVERTISING OF INSURANCE POLICIES - FALSE INFORMATION AND ADVERTISING GENERALLY - DEFAMATION - BOYCOTT, COERCION, OR INTIMIDATION - FALSE STATEMENTS AND ENTRIES - STOCK OPERATIONS AND ADVISORY BOARD CONTRACTS - UNFAIR DISCRIMINATION - UNLAWFUL REBATES

      UNFAIR CLAIMS SETTLEMENT PRACTICES

      UNFAIR CLAIMS SETTLEMENT PRACTICES PROHIBITED - UNFAIR CLAIMS PRACTICES DEFINED - MISREPRESENTATION OF POLICY PROVISIONS - FAILURE TO ACKNOWLEDGE PERTINENT COMMUNICATIONS - STANDARDS FOR PROMPT INVESTIGATION OF CLAIMS - STANDARDS FOR PROMPT, FAIR AND EQUITABLE SETTLEMENTS APPLICABLE TO ALL INSURERS

      CHAPTER QUIZZES

      CHAPTER ONE – ETHICS FOR THE INSURANCE INDUSTRY

      CHAPTER TWO – THE LAW OF AGENCY

      CHAPTER THREE – AGENT AND BROKER LIABILITY

      CHAPTER FOUR – CONSUMER PROTECTION

      CHAPTER ONE: ETHICS FOR THE INSURANCE INDUSTRY

      WHAT IS ETHICS?

      For each of us the word ethics probably holds a different meaning. For those engaged in business enterprises of whatever nature, in its deepest, broadest, and most idealistic sense, ethics should hopefully refer to the Golden Rule, or the ethic of reciprocity. This is an ethical principle stating that a person has the right to just treatment and the responsibility to ensure justice for others. This is the ethical basis for virtually all moral systems in the world. If only we would all heed this simple lesson. By exercising the Golden Rule standard in business relationships, individuals then would not need to impose their own sometimes faulty personal values or preferences on others.

      There is wide public interest in how insurance practitioners conduct their businesses. If the individual ethical performances of agents and brokers become deficient, more government regulations are likely. Such additional government regulation need not materialize if each industry professional makes proper ethical decisions for his or her own business enterprise, recognizing that the best interests of the citizens in the community should be served before his or her own.

      Ethics is a system of moral principles, rules, and standards of conduct which define the duties owed by a member of a profession to the public, clients, and other members of his profession. Professional codes of ethics, as a means of establishing ethical standards, maintain a standard of behavior for members of a particular profession and provide an assurance to the public that such professionals possess the qualities of integrity and fairness essential to honest business dealings. The underlying purpose of codes of ethics, whether professional or personal, is to avoid unethical conduct which occurs when one takes advantage of a position of trust solely for his or her own gain and to the detriment of another person.

      Insurance professionals should always strive to act in an ethical manner. The public deserves it. In the scope of daily business dealings, however, certain situations may present themselves which encourage unethical behavior, or at least which require carefully examining choices of action. It is critical that producers recognize actions that are considered unethical, and these must be avoided.

      Choosing the right insurance professional may be one of the most important financial decisions a person makes. A professional with high standards of ethical fitness can focus on specific concerns, can provide guidance over a lifetime, and will play a significant role

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