This is the presentation that Ted Pappas used when he was chosen to speak at the NAMIC National Asso

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• This is the presentation that Ted Pappas used
  when he was chosen to speak at the NAMIC
  (National Association of Mutual Insurance
  Companies) Commercial Lines Seminar on February
  28th, 2008 in Chicago.

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Ethics In The Insurance Industry

• Theodore M. Pappas,
• CLU, CIC, CWCA

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Ethics Awareness Month for the Insurance
Industry
MARCH
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What We Sell
NOTHING
But A Promise
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OUR PROMISE
To pay a claim in the event of an unknown
contingency
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To Sell An Intangible
All you have is your credibility and
perceived honesty
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What Do We Know About Our Industry?
Eventually you will be between a rock and
a hard place
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Perhaps THIS Will Refresh Your Memory
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We have a fear that there are a finite number of
customers
Entrepreneurs have this horrifying sense of
scarcity, that the customers they have, are the
only ones in the world

• G. Richard Shell
• Prof. Of Legal Studies Management
• Wharton School,
• University of Pennsylvania

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Defending an EO claim is
A Liars Contest
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Your Reputation, Past ethical behavior,
will be the key issue
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If you have a history of
Misrepresenting a risk, being creative in
rating a risk or simply ignoring the rules
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That will be used to discredit you
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REMEMBER
A jury of your peers has absolutely no
idea how or what you do for a living
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If the opposition can demonstrate you are
less than ethical
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Touche!
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ETHICSA system of moral standards or
values
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ETHICSRules or standards governing the
conduct of a person or members of a profession
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Easy To Define?

• Different people and different organizations have
  different standards and values

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An action considered ethical by one may not
be considered ethical by another
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Early on we learned it is wrong to kill
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In time of war?
Capital Punishment?
To steal to feed your children?
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If its difficult to answer these questions
covered by rules or laws, its more difficult to
answer business ethical questions
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Business Choices
Not between Right and Wrong
but between 2 RIGHT answers
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LAWMinimum Standard
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Ethical BehaviorAbides by the spirit of
the law
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Qualities Society Views as Ethical
Honesty
Integrity
Responsibility
Respect
Courage
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Ethical Decision
Make best choice in compliance with duty
Rather than the best choice for him or her
personally
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Primary Cause of Unethical Behavior
Conflict of Interest
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Conflicts of Interest
Do not equate to unethical behavior
Think of them as temptations to resist
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Conflicts of Interest
Arise from unique circumstances
Relationships
Business Arrangements
Not known to the other party
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TRANSPARENCY-Eliot Spitzer
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Impossible to eliminate all conflicts of
interest
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Acting Ethically
Doing The Right Thing
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What are my legal duties and contractual
obligations?
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What benefits, what costs or harms each
course of action produce? Which alternative
leads to best overall results?
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Does one course of action best respect the
moral rights of all?
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Is one course of action fairer to all the
parties than are the others?
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Examples of Ethical Behavior
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Only making promises you can keep
Fulfilling all promises you make, or explaining
why they cant be fulfilled
Honesty in all communications
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Stay within your area of expertise
Never oversell your knowledge or abilities
Disclose bad news timely
Disclose unavoidable conflicts of interest
Work through proper channels
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Maintain confidences
Quickly admit and rectify mistakes
Associate with others known for their ethics and
integrity
Join organizations that support ethics and
integrity
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People who display these characteristics are
perceived as dependable and trustworthy
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Add to this
In-depth and up-to-date knowledge on the
technical side of the business
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You are an Insurance Professional
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Insurance Generates Conflicts of Interest
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Ethics Comes Down To The Golden Rule
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Golden RuleChristianity Do unto others
as you would have them do unto youJudaism Thou
shalt regard thy neighbor as thyself
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Golden Rule
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CASE STUDIES
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It is easy to find successful businessmen,
but not so easy to find men who put character
above business- Orison Swett Marden 1908
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Never try to fool the men you represent. Tell
them what is possible and what is impossible to
do. And look upon a single contract as something
sacred - - a pact to be observed an agreement
which is your bond of good faith
- Philip Murray
Even if you are on the right track, youll get
run over if you just sit there -
Will Rogers
Your word is who you are. Good
enough seldom is - Admiral James
Greer - Debbie Fields
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TEST
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Questions???
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Special Thanks to.D.C. Department of
InsurancePaul J. Winn, CLU ChFCWebCE LP, LLLP
IRMINational Alliance
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Competition is an Economic Fact of Life
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