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Over the past few years, the insurance industry has been forced to confront numerous charges and concerns related to ethical standards and practices within its ranks. Few would argue that some consumers do not view the insurance industry in a positive light. Certainly one reason for this is that the average consumer does not fully understand or appreciate insurance products, but recognizes they are something that's needed. Consequently, these consumers rely on the insurance industry and its many and varied representatives to provide them with appropriate information, advice, products and service. In the majority of cases, this reliance has served the insurance buyer well. Unfortunately, when the confluence of events is such that the information or the service or the product later fails to live up to the consumer's expectation, charges of malfeasance or neglect arise - sometimes valid, sometimes not. When enough of these charges are heard, the regulators step in with new or revised requirements that are intended to reinforce ethical business practices.
Unfortunately, it's possible that the ever-expanding focus on the issue of ethics may, in the long run, serve to undermine the very essence of this important issue. As more and more requirements in the form of mandated insurer practices, producer education requirements and consumer information and disclosure guidelines become attached to the issue of ethics; they may unintentionally and unwittingly undermine the force of ethical standards.
How can this be? Aren't rules and requirements that support ethics a good thing? Don't they encourage better business practices? Don't they protect the position and rights of the consumer? The answer is yes - and no. When the pursuit of ethics is translated into and defined as a body of regulated practice requirements, it becomes "compliance." Depending or relying solely on compliance requirements in order to conform to ethical standards will surely fall short of the mark because there is a big difference between compliance and ethics.
Being "in compliance" with the law means adhering to a minimum set of required standards. Compliance requirements simply cannot embrace the whole of ethics or its spirit; statements of policy, laws and regulations cannot cover every issue or question or situation that may arise. Ethics goes beyond compliance; it appeals to a higher standard, a moral code. Ethics is a form of self-regulation, based on principles. Conforming to mandated compliance standards is what one must do; conforming to ethical standards is what one should do. Rarely do the two conflict; the difference is the scope of thought, words and conduct each entails. Compliance rules and requirements are associated with statutes and regulations and they find strength in the threat and reality of legal liability and recourse. In contrast, ethics - though grounded in the law - is associated with social responsibility and public welfare. An activity - or lack thereof - may be legal; it does not necessarily follow that it is also ethica[entry truncated]
Being "in compliance" with the law means adhering to a minimum set of required standards. Compliance requirements simply cannot embrace the whole of ethics or its spirit; statements of policy, laws and regulations cannot cover every issue or question or situation that may arise. Ethics goes beyond compliance; it appeals to a higher standard, a moral code. Ethics is a form of self-regulation, based on principles. Conforming to mandated compliance standards is what one must do; conforming to ethical standards is what one should do. Rarely do the two conflict; the difference is the scope of thought, words and conduct each entails. Compliance rules and requirements are associated with statutes and regulations and they find strength in the threat and reality of legal liability and recourse. In contrast, ethics - though grounded in the law - is associated with social responsibility and public welfare. An activity - or lack thereof - may be legal; it does not necessarily follow that it is also ethica[entry truncated]
