Section 5: Ethical Responsibility

Question 1

What are the foundations of ethical behavior?

Answer 1

Honesty
Integrity
Trustworthiness
Loyalty
Fairness
Concern for Others
Respect for Others
Law Abiding
Commitment to excellence
Leadership
Reputation and Morale
Accountability

Question 2

What are the steps to ethical decision making?

Answer 2

Stop and Think
Clarify Goals
Determine facts
Develop options
Consider Consequences
Choose
Monitor and Modify

Question 3

What are the legal and ethical duties that fall on an insurance agent?

Answer 3

Procure insurance asked for by a client using reasonable diligence
Notify a client of policy expiration what information is given to the agent
Renew a policy or notify a client of a non-renewal
Investigate the solvency of an insurance company

Question 4

What are the four types of agency authority?

Answer 4

1. Actual / express authority - authority given to an agent via written contract or agreement
2. Implied authority - not in writing, but authority to perform usual and necessary tasks to sell and service a policy
3. Apparent authority - Authority to protect the consumer, if they can reasonably believe the agent has authority then it is binding
4. Non-existent authority - an agent has no authority to work with clients seeking insurance

Question 5

What are the four steps that an agency can take to protect itself from E&O claims?

Answer 5

1. Education
2. Consistent Procedures
3. Documentation
4. Assessment