Ethical behaviour
1. Overview
Of late, serious concerns are voiced about the proprieties in business, because increasingly there are reports of improper behaviour. Some of the world’s biggest companies have been found to have cheated through false accounts and dishonest audit certification. The funds of banks have been misused by their managements to bolster the greed of some friends. Officials have used their authority to promote personal benefits. Increasingly, people who are trusted by the community to perform their tasks are seen to have betrayed the trust. Personal aggrandisement and greed prevails.
Consequently, there is increasing discussion about accountability and corporate governance, all of which together can be called “Ethics” in business. Acts like the ‘Right to Information Act’ and developments like ‘Public Interest Litigation’ have assumed considerable importance as instruments to achieve better accountability and governance.
Ethical behaviour automatically leads to good governance. When one does her duty conscientiously and sincerely, there is good governance. Unethical behaviour shows little concern for others and high concern for self. When one tries to serve self-interest through one’s official position, there is unethical behaviour. It is not wrong to look after one’s interests. But it is wrong to do so at the cost of the interests of others.
Insurance is a business of trust. Issues of propriety and ethics are extremely important in this business of insurance. Breach of trust amounts to cheating and is wrong. Things go wrong when wrong information is given to the prospects tempting them to buy insurance or the plan of insurance suggested does not cater to all the needs of the prospect.
Unethical behaviour happens when the benefits of self are considered more important than of the other. The code of ethics spelt out by the IRDA in the various regulations is directed towards ethical behaviour.
While it is important to know every clause in the code of conduct to ensure that there is no violation of the code, compliance would be automatic if the insurer and its representatives always kept the interests of the prospect in mind. Things go wrong when the officers of insurers become concerned with the targets of business, rather than the benefits to the prospect.
2. Characteristics
Some characteristics of ethical behaviour are:
a) Placing best interests of the client above one’s own direct or indirect benefits
b) Holding in strictest confidence and considering as privileged, all business and personal information pertaining to client’s affairs
c) Making full and adequate disclosure of all facts to enable clients make informed decisions
There could be a likelihood of ethics being compromised in the following situations:
a) Having to choose between two plans, one giving much less premium or commission than the other
b) Temptation to recommend discontinuance of an existing policy and taking out a new one
c) Becoming aware of circumstances that, if known to the insurer, could adversely affect the interests of the client or the beneficiaries of the claim
1. Overview
Of late, serious concerns are voiced about the proprieties in business, because increasingly there are reports of improper behaviour. Some of the world’s biggest companies have been found to have cheated through false accounts and dishonest audit certification. The funds of banks have been misused by their managements to bolster the greed of some friends. Officials have used their authority to promote personal benefits. Increasingly, people who are trusted by the community to perform their tasks are seen to have betrayed the trust. Personal aggrandisement and greed prevails.
Consequently, there is increasing discussion about accountability and corporate governance, all of which together can be called “Ethics” in business. Acts like the ‘Right to Information Act’ and developments like ‘Public Interest Litigation’ have assumed considerable importance as instruments to achieve better accountability and governance.
Ethical behaviour automatically leads to good governance. When one does her duty conscientiously and sincerely, there is good governance. Unethical behaviour shows little concern for others and high concern for self. When one tries to serve self-interest through one’s official position, there is unethical behaviour. It is not wrong to look after one’s interests. But it is wrong to do so at the cost of the interests of others.
Insurance is a business of trust. Issues of propriety and ethics are extremely important in this business of insurance. Breach of trust amounts to cheating and is wrong. Things go wrong when wrong information is given to the prospects tempting them to buy insurance or the plan of insurance suggested does not cater to all the needs of the prospect.
Unethical behaviour happens when the benefits of self are considered more important than of the other. The code of ethics spelt out by the IRDA in the various regulations is directed towards ethical behaviour.
While it is important to know every clause in the code of conduct to ensure that there is no violation of the code, compliance would be automatic if the insurer and its representatives always kept the interests of the prospect in mind. Things go wrong when the officers of insurers become concerned with the targets of business, rather than the benefits to the prospect.
2. Characteristics
Some characteristics of ethical behaviour are:
a) Placing best interests of the client above one’s own direct or indirect benefits
b) Holding in strictest confidence and considering as privileged, all business and personal information pertaining to client’s affairs
c) Making full and adequate disclosure of all facts to enable clients make informed decisions
There could be a likelihood of ethics being compromised in the following situations:
a) Having to choose between two plans, one giving much less premium or commission than the other
b) Temptation to recommend discontinuance of an existing policy and taking out a new one
c) Becoming aware of circumstances that, if known to the insurer, could adversely affect the interests of the client or the beneficiaries of the claim
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