Insurance is necessary for the survival and growth of any free market economy. Because of this necessity, insurance practitioners are expected to practice applying a high ethical standard; they are expected to know their profession. Education is one part of that higher standard.
But, how is ongoing, continual education viewed within the insurance industry? Does the insurance industry view ongoing education and training as a “nice-to-have” or a “must-have?” More importantly, how does a true insurance professional view insurance training and education? (How do you view education?)
Formalized ongoing career training within and outside the insurance industry is generally undertaken for one of five reasons:
- To satisfy an employer requirement (to “check the box”);
- As a way to obtain a better performance rating on the annual employee evaluation (stay out of trouble);
- Solely to move up the corporate ladder (a selfish motive);
- Simply to meet statutory requirements (many in the insurance industry fall into this category); or
- As a way to improve and increase career-related knowledge to become proficient (and professional) in the chosen career.
Key Assertion: True insurance professionals actively seek relevant and continual education, training and improvement to become more and more proficient. These professionals have and apply high ethical standards when making decisions regarding education.
Can this assertion be supported? Yes, provided there is an understanding of what “ethics” are and how a truly ethical professional prepares to help his fellow man (including clients / customers).
In the following paragraphs ethics are defined, societal standards are presented and specific questions are posed to help you define your personal standards regarding education.
Defining Ethics
Ethics derives from the Greek word, “ethos.” An ethos of a people is the group customs or character. Webster’s defines “ethics” as: “The discipline of dealing with right and wrong, or with moral duty and obligation.”
Ethics allows man (in the broad sense) to understand human behavior by creating expectations of another person’s behavior. Ethics create the boundaries or rules of “acceptable” behavior, allowing a society to “judge” whether a particular person’s behavior is right or wrong.
Note, that ethics are a group decision, a group opinion of what is right or wrong. Because of this fact, ethics can vary from group to group, country to country or even industry to industry (meaning the insurance industry has its own ethic).
“Types” of Ethics
Ethics can be discussed and debated or actually practiced – thus there are two types of ethics:
- Theoretical / philosophical ethics; and
- Practical / applied ethics.
Theoretical or philosophical ethics are those about which we debate, discuss and pontificate. These delineate the “ideal” – in a given situation, “THIS” is how a man should act or respond. Theoretical ethics are the basis for the case-study answers the class gives in every ethics class. But are the answers given in class and theoretical ethics the reality?
Practical or applied ethics are what we actually do, what we allow from our fellow man and what we accept from a particular industry. Applied ethics are a bit less stringent and far less consistent than theoretical ethics. One example of this type of “ethic” is the “little white lie” fallacy – “It is OK to lie if no one gets hurt or someone’s feelings are spared.”
In our daily lives, is lying right or wrong? Apply theoretical/philosophical ethics and the answer is always “no.” But if my wife asks me, “Do you like my hair;” or one of my kids ask, “Do you like the drawing I made for you,” and my applied or practical ethic regarding lying might be different.
Which type of ethic should be applied at work? Which type is actually practiced? Think hard before giving an answer. Consider recent dealings with the boss, an underwriter, the agent, the client or a regulator. Are there any “little white lies” or “relative truths” (not really a lie, but not totally the truth) in any of these interactions?
Behavioral Standards and Ethics
Picture behavioral standards like a pyramid – a bottom-up construction with the lowest level being the easiest to accomplish and successive levels more challenging to reach. This pyramid has four levels:
- Legal standards;
- Governmental standards;
- Business and professional standards; and
- Moral standards.
Legal Standards: Legal standards are the lowest standard and hopefully the easiest to reach – just don’t break the law. But there is a paradox in play in how legal standards relate to ethics (right and wrong): Being legal doesn’t make the action “right,” it just makes it allowable. But sometimes, all that is expected of the person (the “right” thing to do) is that he meets the legal standard because no higher standard is expected.
Governmental Standards: These standards are just a little higher than the “legal standard.” Governmental or regulatory standards are necessary when the industry being regulated is necessary for the optimal operation of a free market society. Legal standards don’t go far enough to protect the public, thus regulators make industry-specific rules. Insurance is an integral part of and necessary for our free market society, thus regulators have developed laws that apply specifically to the insurance industry (i.e. laws related to rebating, twisting, claims settlement, etc.).The same paradox applies governmental standards that applies to legal standards – sometimes this is the only standard expected.
Business and Professional Standards: This is the highest level of group opinion. Business and professional standards are set by the industry to represent and enumerate the ideal actions of a person within that industry. But as the legal and governmental paradox states, sometimes to meet business and professional standards, one must only meet legal and governmental standards. The best attribute of business and professional standards is that compliance with them is largely voluntary. Individuals and entities voluntarily agree to abide by the standards of a group. Once the decision is made to act in accordance with these higher standards, performing at less than those standards is unethical behavior (this includes education).
Business and professional standards are created by one of three types of organizations:
- Trade Associations (i.e. IIABA, NAPIA, NAMIC, etc.);
- Professional Societies (CPCU Society); or
- Service Organizations (Rotary, Kiwanis, etc.).
Moral Standards: Unlike ethics, morals are the standards of the individual rather than the group. Thus, “moral” and “ethical” are not necessarily synonymous. There can actually be a gap between the individual’s morals and the group’s ethics. In fact, the gap between a person’s morals and the group’s ethics can widen over time as the group opinion of right and wrong changes.
The actions of a moral person are ALWAYS greater than and sometimes equal to the expectation of the group. Why? If a person’s “moral standard” (their individual standard) falls below society’s ethical standard (society’s expectations), he is considered unethical.
Ethics and the Four Behavioral Standards: Ethics and “ethical behavior” actually fall outside the standards pyramid, encompassing every level in the pyramid. Remember, to be ethical requires the person to act in a manner that is acceptable to the group. A person’s actions may be considered ethical if all she meets are the legal or governmental standards. Conversely, some interactions require a person to act in accordance with the standards of the trade association (or professional society, or service organization) to which he belongs for the actions to be considered ethical.
A Fifth “Standard”: There is fifth standard that does not fit within the standards pyramid – the corporate standard. The corporate standard is a “non-person” standard – the standards of the company for which the person works. This is better known as the “corporate culture.” This “standard” has a direct impact upon the individual and her adherence to the various standards.
Some corporations seek to do only what is required – meeting the legal and regulatory standards. Some pay lip service to high ethical standards, but in daily activities do little more than is required. But some corporate entities actually do more than is required for their customers and employees.
Education and Your “Standards”
True insurance professionals understand the necessity of ongoing, career-focused training and education. Insurance professionals apply high business and professional standards when deciding among various training and education options. Conversely, non-professionals seek the lowest level of the ethical pyramid when making education choices.
What is your goal and motivation when seeking and undertaking training? What guides you in your decision to take (or not take) a particular class or course of training? True insurance professionals and those who just “work” in insurance answer these questions very differently.
Do you take a specific class simply to garner the necessary continuing education hours to avoid losing your license? If so, you are satisfied with meeting the lowest behavioral standard. This attitude and action falls below business and professional standards.
Likewise, will you NOT undertake useful training simply because CE is not given? “I would love to take that webinar, but there is no CE provided.” If your sole reason for not undertaking particular training is the lack of CE that indicates a low personal standard.
True insurance professionals view the availability of CE as a bonus, not the sole or main reason for taking a specific class. Check your reason for taking or not taking class.
Are you motivated to learn? Do you read the newspaper or something else during class just to pass the time? If learning is not a key motivation, this, too, is a symptom of your acceptance of a less-than-professional standard.
Regardless of your reason or motivation, there are times when you don’t have a choice, the “corporate standard” insists itself upon your standard. “I would like to take that class, but my employer won’t let me (or won’t pay) because there is no CE.” Short of paying for the class/training yourself, you are a victim of the corporation’s lower standards. Shame on the culture for not approving relevant and useful insurance education and training.
Insurance professionals seek to apply the highest standards regarding education and training. Content is king. Every effort is made by the professional to obtain highly useful training and education rather than simply staying compliant with the law.
“Ethical” Conclusion (or Dilemma)
Given the importance of insurance to a free market economy, being a well trained professional is absolutely necessary. Because on-going, career-related education is necessary, there is an “education ethic” for those calling themselves insurance professionals. Failing to meet this standard is a matter of individual morals and personal standards.
What is YOUR education standard – your “education ethic?”
Topics Market Training Development
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