Why did you enter the insurance industry? For some insurance agents, the potential to make money was a factor. For others, the opportunity to help people protect themselves and their families from financial loss motivated them to get their insurance license. For others, a combination of these and other factors inspired them to become insurance professionals.
No matter what led you to pursue a career in the insurance industry, you’re bound to follow the law, industry regulations, and your personal ethics in every single one of your business transactions. If you run an insurance agency or you aspire to do so in the future, you should know that a lack of evidence indicating you or your agents are misbehaving isn’t enough to protect you from regulatory action. An agency must have an effective system and controls in place to actively discourage and prevent dishonest activities to avoid legal, and potentially costly, retribution. With this in mind, agents must adhere to their agency’s rules as well.
The Law vs. Ethics
Regardless of their chosen profession, most people follow the law every day. In the insurance industry, it’s easy to adhere to the law as well as industry and agency regulations because they’re normally very specific about what is and isn’t permissible behavior. You can’t sell a life insurance policy to someone if the person is unaware of the policy and doesn’t give their consent, for instance. If you sell a cash value life insurance policy to a client, you can’t change the person’s investment mix without their express permission, either. You also can’t legally use advertisements that are deliberately misleading or sell products to clients if the products aren’t suitable for them.
While the law is cut and dry, meaning you’re either in compliance with it or you’re not, it’s different when it comes to acting in concert with your personal ethics. Ethics are personal standards, which means they typically vary from one person to the next.
While the law is usually static and applies to everyone equally, your ethics may change over time, and you may feel more strongly about certain principles in some instances than you do in others. You might think it’s wrong to steal, for example, but you may be more understanding if an abandoned child steals a loaf of bread because he hasn’t eaten for three days.
Your ethics are influenced by many things, including your:
- Views
- Philosophical and Spiritual Beliefs
- Work Environment
- Friends, Family, and Associates
- Background and Experiences
When Ethics Conflict With the Law
Because the law applies to everyone and your ethics belong to just you, there will probably be instances in which your ethics conflict with the law. Insurance laws are often crafted to provide the highest level of protection for consumers. While that’s the case, the law also supports insurance agents’ duty to sell the appropriate insurance products so consumers can guard against preventable financial loss.
Even though insurance laws are in place for the benefit of consumers and agents, your ethics may clash with the law on occasion. In such instances, your ethics will provide several courses of action you can take. To determine which course is appropriate, you should test each one against the law and take the path that adheres to the prevailing law the closest.
Although your ethics may conflict with the law at some point in your career, it doesn’t give you the right to break or circumvent the law in any way. Instead, the law must be incorporated into your ethics by challenging them.
Setting and meeting a high ethical standard in your work can provide many benefits over the course of your career. Sticking to your ethical beliefs and acting within the confines of the law can provide a high level of satisfaction, prevent frustration, establish a sound reputation, and help you avoid legal action from being taken against you.
To learn more about why ethics are much, much more than a mere suggestion for insurance agents, enroll in StateCE’s Ethics course today.