A Video Explaining Ethics and The Insurance Product


The Products Sold by Insurers are Promises

See the full video at https://youtu.be/wx-BtQMCWZk

The basic insurance product is a promise that the insurer may never be called upon to fulfill. The value of the promise is based on the trust of the policyholder in the insurer being able and willing to fulfill the promises made by the insurance policy.

Gallup polls since 1977 have consistently ranked insurance sales persons among the lowest in terms of perceived honesty and ethical standards. In the November 1999 poll, insurance sales persons ranked third from last, just above telemarketers and car salesmen.

Depending on circumstances faced by an insurance agent, insurance broker, insurance claims handler or other insurance professionals find that they look to different resources for guidance when faced with an ethical decision. Dealing with mistakes in an honest manner appears to be more related to personal values, which could be assessed by insurers during the selection and hiring process.

The results of various surveys do not support the effectiveness of a number of common prescriptive actions to improve ethical behavior in the insurance industry.

One of the most common prescriptions is ethics training. The results indicate that logically, far fewer hours are spent in ethics training than in sales training.

In addition, there was no significant relationship between ethical intent/behavior and having received training or the number of hours spent in training. In addition, it is important to note that larger doses of ineffective training cannot be expected to improve ethical conduct.

Training in a formal setting, although useful, will not accomplish anything if the person being trained does not already have a well-defined ethical compass that has been applied to all interpersonal and business interactions throughout his or her adult life. State mandated ethical training will not change an unethical person into a paragon of ethics. The most ethics training can hope to accomplish is to reinforce the ethics of those students who are already ethical and will have little or no effect on those who are not.

Ethics training is essential for an insurer’s ability to successfully communicate and carry out its main goal of dealing with all insured’s and claimants fairly and in good faith. Effective ethics training for employees ensures that the insurer is situated for success and that individuals within the company will stay committed to their tasks at hand fairly, ethically and in good faith.

Prompt and efficient customer service to policyholders and other stakeholders is essential to the ethical insurance professional. Insurance is a service business. Good service must be offered at all times for the business to succeed. Insurance professionals dealing with the public are on the front line of providing good service. They are directly accountable to policyholders for this aspect of the policyholder’s relationship with the insurer. The need for rapid and efficient servicing is most apparent when a legitimate claim is received. Only in genuine cases of fraud, deception or negligence on the part of the policyholder should this requirement go unfulfilled.

© 2020 – Barry Zalma

Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant  specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as a

n insurance coverage and claims handling lawyer and more than 52 years in the insurance business. He is available at http://www.zalma.com and zalma@zalma.com.

Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE Legend Award.

Over the last 52 years Barry Zalma has dedicated his life to insurance, insurance claims and the need to defeat insurance fraud. He has created the following library of books and other materials to make it possible for insurers and their claims staff to become insurance claims professionals.

Read posts from Barry Zalma at https://parler.com/profile/Zalma/posts

Go to Zalma on Insurance on YouTube- https://www.youtube.com/channel/UCFg7qxC0tVgKcMUqoUfnwPw

Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/

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Read last two issues of ZIFL here. https://zalma.com/zalmas-insurance-fraud-letter-2/

Go to the Barry Zalma, Inc. web site here https://www.zalma.com/

Listen to my podcast, Zalma on Insurance, at:

https://podcasts.google.com/?q=zalma%20on%20insuranceZalma on Insurance – 

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