Many insurance agents are so caught up in the day-to-day activities of their jobs, they do not realize that they are being presented with ethical concerns. They may be acting unethically without even realizing it.
Even if an agent does recognize that they are being asked to do something “murky,” they might not have the time to fully reason their stance out – they are forced to make a snap decision in that moment, which may not be the best solution. They may cave-in to pressure from policyholders, agency owners, or their own personal gain, and in doing so, act unethically or even illegally.
Yet, ethical breaches are extremely significant and can destroy any agency. At the very least, they can cause significant, expensive errors and omissions (E&O) claims that could have been avoided. Understanding ethical concerns and making the best choice in common situations is vital.
This column offers an opportunity to pause and truly consider the best choice when it comes to numerous ethical issues that insurance agents face on a daily basis.
A policyholder calls, saying that they are absolutely ready to move forward and get the policy you quoted in place. The only problem is, they are traveling in another state, and they do not have access to a computer. Since they really need the policy in place now, and they are giving you their express permission, could you sign the documents for them in their name?
You know that the insurance carrier would not like it if you forge a client’s signature. However, you want to represent the interest of the policyholder as well, and they have given you their express permission to sign. Plus, you have seen other agents in your office do it, although it is not really discussed or documented in the files. When there is a time pressure, you are inclined to just sign it, but you cannot help feeling slightly unsettled.
First of all, it is important to realize that time pressure frequently causes agents to make poor decisions. Many people get stressed out and pick a random choice due to a perceived need to make a decision immediately. Instead, remove yourself from the situation for a minute and pause to consider your next move.
As with any moral dilemma, you first need to ask yourself what your values say. If you value honesty, trustworthiness, and integrity, then you may want to decline signing on behalf of another person. However, those values might clash with other values you hold, like compassion, usefulness, and generating money and prestige for the agency. When this happens, you need to carefully consider the duty that you owe others.
As an insurance agent, you owe a duty of care to the insurance carrier, and you already know that they do not approve of forgery. They rely upon you to be trustworthy, and they want you to faithfully follow the contract between your agency and themselves. In the end, you receive a salary because of them, and you can only write insurance with their company due to a sustained relationship, so you need to make sure that you represent their interests.
In addition, you also owe a duty of care to your own agency. An E&O claim or even legal action against your agency is possible based upon your actions. What if, in the future, the policyholder has an issue with their insurance carrier and claims that they never signed the documents to begin with? What if you were personally investigated for forgery?
You might think that these are small possibilities, but a low chance of getting caught does not make something ethical.
Finally, you owe a duty of care to society. You need to help uphold the integrity of the insurance system as a whole – make sure that it truly serves the community in which you operate. That includes remaining ethical even when personal gain or money are on the line.
(There is a way for an insurance agent to sign application documents on behalf of another party legally, called procuration. However, many insurance carriers will not accept documents signed in this manner, and you should always ask for the advice of your legal team before attempting it.)
This is a common ethical dilemma that many insurance agents may be guilty of falling prey to. However, you should never sign documents on behalf of another person or business. Any time you have a nagging feeling in the back of your head, listen to it.
We all hate to say “no” to other people, but your own job, license, and reputation are hanging in the balance. Forging documents for a client may seem harmless, but it opens up your agency and the insurance carrier to E&O claims and legal actions.
Do not crumble to policyholder demands so easily. Explain why it is impossible for you to sign for them, and many clients understand.
Why bend over backwards to accommodate people, risking so much, when they can usually find a solution themselves?
Even if you lose the business if you refuse to sign, you are doing the right thing in the long run.
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