Exam (elaborations)
Ethics 311: Ethical Decision Making in Risk and Insurance
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Ethics 311: Ethical Decision Making in Risk and Insurance
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EETHICS 311: ETHICAL DECISIONMAKING IN RISK AND INSURANCE
QUESTIONS/ANSWERS WITH VERIFIED
SOLUTION
Morals - Making distinction between right and wrong
Laws - Legal tenants
Ethics - Knowing what to do when a situation presents more than one "right" answer
Supporting Professionalism - 1. High Ethical Standards
2. Professional Competence
3. Sense of Altruism
4. Commitment to Continuing Education
5. Participation in an Association or a Society
6. Ability to Think and Act Independently
7. Public recognition as a Professional
High Ethical Standards - Standard of "utmost good faith" to ensure ethical nature of relationship
between insureds and insurers
Professional Competence - Ability to apply knowledge to risk and insurance circumstances is acquired
through professional training and job experience
Altriusm - Unselfish concern for the welfare of others
, Maintaining High Ethical Standards - 1. Regulatory Requirements
2. Social Responsibility
3. Economic Outcomes
Regulatory Requirements - Fiduciary Duty = Enhanced level of trust, arising from statutory rules and
regulations or be impacted by rulings and interpretations of the courts
Social Responsibility - Expectations that compel organizations to focus on goals and objectives on long
term survival and sustained growth
Economic Outcomes - Better reputations - better recruiting and skilled employees
Ethical Responsibility to Groups - 1. Insurers
2. Policyholders
3. The Public
Insurers - Provide customers with protection from financial loss by managing risk exposures
2 ways insurers have direct contact with public - 1. Purchase of insurance coverage initiates responsibility
to the policyholders
2. Policy language creates contractual obligations that are fulfilled when a loss event occurs and results
in a claim
Policyholders - -Parties to the insurance contract, giving them specific rights and duties
-Consumers of the insurance product, paying premiums when acquiring coverage
-Beneficiaries when payments are made to them under the first party coverage of the insurance contract
-Protected through liability insurance contracts when they become legally liable for a 3rd party claimant
The Public - Indemnification = Process of restoring an individual/organization to a pre-loss financial
condition
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