Ethics in the Age of Spitzer

By | March 7, 2005

You’ve read the papers and articles about the Attorney General Spitzer investigation. How do you feel about the specific allegations and facts that have been revealed? If you’ve read them carefully, you probably feel sick about them. This is not our finest hour.

We can fight back, citing all the good our industry does for society. We can get in the press and make the case that all of the things alleged were perpetrated by a few ill-advised individuals. We can call Attorney General Spitzer a headline grabber with political aspirations. And, we would be wasting our time.

The fact is, the investigations have brought to life some practices that are, or appear to be, illegal. Not just wrong–illegal. These investigators have also called into question some practices that need to be improved for the benefit of the customer. As much as we hate the bad publicity generated by these investigations, we need to carefully review the findings and make the changes necessary to improve our industry.

As the national president of the Chartered Property and Casualty Underwriters Society, I am often asked to speak to various insurance groups. Lately, I am asked to speak directly to the topic of ethics in our industry. Long a cornerstone of becoming and being a CPCU, the topic of ethics has heretofore been seen as important, but boring. The boring days are now over. Ethics is sexy. OK, I may have overstated it. At the very least, ethics has become a top-of-mind issue.

As much as we hate the bad publicity generated by these investigations, we need to carefully review the findings and make the changes necessary to improve our industry.

Personal obligation
The Attorney General, regulators, courts, industry groups and insurance companies and brokers will work out the details on what was wrong, what was right, what needs to be changed, what restitutions will be made and who must shoulder personal responsibility. All of this will play out before our horrified eyes and a changed industry will eventually emerge. I believe that the changes made will strengthen our industry and, eventually, increase the public faith in the way we do business.

So where does that leave you, personally? It leaves you with a specific obligation to understand the ethics of our business. Not just the emerging refinements, but the core ethical considerations of the insurance industry.

I strongly suggest that every single person in our industry revisit the very basics of these ethical requirements. Not just the rookies amongs us, but all of us.

Yes, I am aware that crooked people intent on operating in a crooked manner in any business will not be deterred by anyone’s code of ethics. Every industry in the world suffers from that fact. However, if the rest of us are clear on what is right and what is wrong, we will all be able to effectively monitor and police the conduct that occurs around us.

Where will we find the basics rules of ethical conduct for our industry? Well, most insurance companies, brokers and agencies have a code of conduct or something similar that contains the basic framework of required ethical behavior. It’s time to reread those codes, and it’s time to ask questions about issues that seem gray. There are no dumb questions when it comes to ethics.

It is also time for each company, broker or related entity in our business to republish and re-publicize these codes. They may wish to conduct an Ethics Awareness Month, like we have done in the CPCU Society for years. In fact, March is the month the Society designates as “Ethics Awareness Month.” We use the month to create the kind of dialogue about ethics that deepens our understanding of these issues.

Code of conduct
If you cannot find a code of conduct, I invite you to view the American Institute for CPCU’s Code of Ethics at You can also link to it through the CPCU Society’s Web site at Under “About the CPCU Society,” click on “Ethics Policy,” which will take you to the Code of Ethics for both organizations. These will serve insurance professionals well, whether you are a CPCU or not.

We have our work cut out for us. Let’s listen and learn from the various investigations. Let’s make the changes that are necessary to restore the public’s trust in our business. And let’s get back to the basics–making sure that we understand and live the ethical requirements of our industry.

I am proud to work in the insurance industry. I know the good work that we do. I have had an opportunity to be on the ground the day after a natural disaster and see a cat team at work. I’ve watched our people help bring order out of chaos and put people on a path toward restoring their lives. I am proud that our industry is as diverse as the rest of America and that the industry creates economic opportunity for well more than a million people.

We sell a promise in our business and consumers deserve to have that promise kept by people that they trust and respect. We must now rededicate ourselves to restoring that level of faith. In doing so, we can turn this difficult moment in our careers into something valuable to the customers we seek to insure.

Hurzeler, CPCU, CLU, is the 2004-2005 national president of the CPCU Society. He is president of the Zurich Foundation and senior vice president for sales/distribution for Zurich’s Commercial Business Group in Schaumburg, Ill.

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