Insurance Ethics—From the Inside Looking Out

Abstract

An attempt to appraise the ethical posture of the insurance industry is complicated by the fact that it is an in separable mixture of business and professional relations, while business ethics and professional ethics are by no means the same. No code of ethics applying to the industry as a whole has been composed, although some groups of insurance prac titioners have made brief formal declarations of ethical intent. There is evidence of dissatisfaction with the ethics of certain segments of the industry, expressed by regulatory authorities, agents and brokers, and others. Insurance is likened to a pro fession because most of those who buy it are unequipped to ap praise accurately the quality of the service they have bought. Caveat emptor has no place in such a relationship, and the pro fessional ethic is essential to proper service. No recent im provement in the ethics of the industry is noted, and possibly some deterioration, but the level compares not unfavorably to that in other industries. However, there is ample room for improvement, particularly in the realm of pricing, advertising, and fair treatment of claimants. Improvement would result if more insurance statesmanship were exhibited by all segments of the industry, but insurance ethics are so closely related to the ethics of the whole business community that any notable improvement must await the rise of the general level.