Chapter 10: Ethics, Education and Excellence C16

1)      What principles does the Caux Round Table espouse?

• Senior business leaders of the free enterprise system from around the world have spawned an organization known as the Caux Round Table (CRT).
• They believe that the world business community should play an important role in improving economical and social conditions and have begun the process of identifying shared values, reconciling values that are different and developing a shared perspective on business behaviour that is acceptable and honoured by all.
• Members of the organization hold to the concepts of living and working together for the common good, and of enabling cooperation and mutual prosperity to coexist with healthy and fair competition.
• The CRT emphasizes first putting one’s own house in order before casting judgement and stands by the principle of seeking to establish what is right rather than who is right.
• They subscribe to the philosophy that all people should be treated with dignity.
• The CRT’s perspective is a tempting illustration of what a fair and just society should be.

2)      What is ethics?

• The systematic critical study of the basic underlying principles and concepts that we use to think about and to evaluate our human needs.
• The standards of conduct that businesses may define for themselves provide the means by which employees decide on the “right” course of action.

3)      What is a code of conduct?

• A code of conduct is a formally adopted statement of applied ethics, or a statement of what is expected in practice from the members of a company/organization/association that has formally declared its operating values and principles.
• Most codes of duct begin with a description of the principles and values to which the organization aspires.
• The code may also prohibit specific behaviours or actions by those it covers.

4)      What are the benefits of ethics training?

• Using training, role models, and recognition of exemplary service that rewards and highlights good conduct are all ways to implement codes of conduct.
• Training strengthens a member’s capacity to assess ethical issues and to meaningfully participate in the creation and reformulation of ethical standards.
• Ethic training also:

a)      Formalizes a framework to generate, nurture, and sustain transparent conduct, processes, and procedures;

b)      Encourages open and critical discussion of the insurance industry, including its ethical rules and obligations;

c)      Must be substantive, engaging, and continual; investing resources toward ethics training demonstrates an overall commitment to good governance.

5)      How do we treat others when we act with dignity?

• Actions speak much louder than words.
• When we act with dignity we treat others with courtesy, fairness and objectivity.
• Challenging ourselves and others to think about common situations where ethics questions arise can be a very useful exercise.

6)      How are values taught in the work environment?

• In reality, values are taught in the work environment.
• Corporations are constantly sending messages about the importance of such values.
• In most cases, the tone set by leadership of an organization is pivotal in creating an ethical working environment in business.

7)      Summarize the general areas of business conduct that are of particular importance to build character.

• Character education teaches right from wrong.
• Features related to one’s good character in business are discipline, integrity, and responsibility.
• Attention to clients’ interests, integrity, quality of service, confidentiality, honourable conducts towards others, and knowledge is some particularly important characteristics members of the insurance industry must demonstrate.

1)      Attention to clients’ interests

2)      Integrity

3)      Awareness of ethical dilemmas

4)      Quality of service

5)      Confidentiality

6)      Proper conduct towards others

7)      Competency

8)      What notion enables societies to function economically?

• The notion and operation of trust enables societies to function economically.
• When this trust breaks down, governments impose regulations to ensure that consumers are protected.

9)      What adds to the complexity of ethics education for insurance professionals?

• Competency in ethics can only be developed by preparing for those critical moments when our ethics will be challenged.
• This many varied roles held by people in the industry creates tremendous diversity; this adds complexity to the types of questions that might be asked which stir ethical awareness.

10)  What is utmost good faith?

• The principle of utmost good faith refers to a superior standard of conduct required of insurance employee’s participants to insurance contractual obligations. 
• It extracts a high level of honesty and disclosure relating to the risks of insurance.

11)  Why is a code of ethics useful?

• The Code of ethics reiterates the notion that professionals should always put the interests of the public/client/employer ahead of their own.
• They must respect laws and regulations and respond to duties and obligations that have to do with risk management and insurance.
• They must withdraw services that are related to unlawful acts.
• Graduates that follow the Code of Ethics must perform diligently using their full knowledge and ability and conduct themselves with dignity to the credit of the industry.

12)  What is altruism?

• Altruism is the act of an individual placing the needs of others before their own, and helping others before themselves.

13)  Summarize the eight elements of the Institute’s Code of Ethics.

1)      Subordinate personal interests

2)      No violation of law

3)      Not misrepresent material facts

4)      No false reports

5)      Confidential information

6)      Due diligence for client needs

7)      To use full knowledge

8)      Act with dignity

14)  What might happen if an individual concentrates on the technicalities within a code of ethics rather than its spirit?

• When relying wholly on a strictly legalistic system one can forget what truly ethical conduct rather than focus on the spirit of the code.
• If we dwell on technicalities, it might obstruct us from doing the right thing.
• An ethics code cannot anticipate every quandary and so more attention must be focused on educating ourselves to develop the character traits that will help us deal with business transactions ethically.

15)  Explain how trust plays an important role for insurance professionals.

• Trust is a fundamental principle of insurance; each participant in an insurance transaction is required to trust the other.
• Without trust, insurance cannot perform its proper function as a risk management device for companies and individuals. 
• Trust must be earned.

16)  What is reputation risk?

• Unethical behaviour can be widely and rapidly exposed and broadcast thanks to e-mail and the Internet.
• This creates a substantial exposure to reputation risk.
• Regulators have become very concerned about Web and email related exposures in recent years because of the devastating effect a loss of reputation could have on a company’s solvency.

17)  What performance is expected from brokers?

• Brokers should be aware of their responsibilities to know the product that they market.
• To advise members of the insuring public as to their best interests.
• To disclose to insurers all material information within their knowledge.
• To regularly review the position of each insured client.
• Brokers are also required to be helpful and cooperative when losses occur.
• To render an accounting of premiums collected within the time stipulated.
• To perform all services incidental to the broking business in a businesslike manner.

18)  What performance is expected from adjusters?

• They must be honest, impartial, and continue to improve their knowledge.
• The insuring public at a time of loss and distress needs the expert knowledge of an adjuster to understand and interpret insuring contracts.
• The loss adjuster is the arbiter of an insurance policy, upholding the law with respect to its interpretation.
• Adjusters must be aware of current investigative methods and procedures.
• Adjusters are expected to ascertain the true facts and actual values of a loss.

19)  What performance is expected from insurers?

• Insurers must behave ethically to market their products and to deliver on claims.
• Insurers must accept the responsibilities they have to select and train their staff and to install in those employees that they have dual responsibilities: to their employer and to their needs, claims, demands, and interests of the insuring public, claims, and insured’s.

20)  What is the mandate of the CIP society?

• The CIP society creates a venue for all CIP graduates to meet and become involved in the industry.
• The associate has a mandate to foster and promote professionalism and leadership for all insurance people through education and networking.

The main objects of the CIP society are to:

1)      Provide advanced-level, ongoing professional development opportunities and life-long learning for graduates;

2)      Act as an information resource, providing current insurance industry information;

3)      Promote the designations it awards within the insurance industry and to the general public