Ethics for the Insurance Practitioner examines the nature and scope of ethics, as the foundation of integrity and honesty, and its relationship to compliance in the insurance practice. It considers the tools and practices used in the sale of insurance, and it applies the principles of ethics and compliance to them. The nature and consequences of misleading sales practices are discussed.

The common law concept of agency is examined, and its application to compliance is considered. In addition, the legal concepts of “course of conduct and custom,” waiver, estoppel and election are examined and their effect on both agent and insurer liability is addressed.

Compliance and ethical guidelines are applied to the reviewing of sales tools, including the agent’s:

• Stationery and business cards
• Advertising and direct mail
• Personal brochures
• Articles written for publication

In addition to the agent’s sales tools, the sales process itself is examined with the intent of ensuring its compliance with legal and ethical standards. The areas in which ethical or compliances lapses may occur are detailed in each of the steps of the sales process.

Common ethical and compliance problems are examined, including churning, twisting, abuse of the “free look” privilege, rebating and misrepresentation. Particular consideration is given to the ethical and compliance requirements present in replacement cases, including the need for a complete comparison and a full and fair disclosure.