Ethical Practices in Health Insurance Presented by GCAHU Programs Committee
Agenda • What is Ethics? • Why Study Ethics? • Target Ethics • Philosophy of Ethics • The Golden and Platinum Rules • Your Role as an Agent • Agent Duties • Professional and Personal Ethics • The Ethics of Replacement • Responsibilities • Code of Ethics
Why Important? • Before it is possible to say who needs ethics in their lives, we must first define what ethics are. • Defining ethics PRECISELY would depend upon many variables, although some elements are universal.
Why Important? • Cultural ethics depend upon: • The society one lives in • Religious beliefs • Personal long-range goals • Ethics are a form of excellence. • Many people do not realize that when they see excellence, they are seeing a form of ethics.
Why Important? • An athlete who wins an Olympic gold medal is recognized for their performance. • Recognizable excellence is not only seen in athletes, but also in the business world.
Why Important? • The individual is dedicated, structured and far-sighted. • Excellence does not happen miraculously. • Come from pace setting levels of personal effectiveness and effort. Can not be judged against a rigid set of criteria.
WHAT ARE ETHICS?
What is Ethics? A branch of study that includes the values of human life, duty, and morality, or rules of conduct. In short, ethics is the study of moral principles which govern our behavior. A behavior that is conscious, although it can be developed to the point where it becomes habitual.
What is Ethics? An ethical decision is based on “doing the right thing.”
What is Ethics? • It is wrong to lie. • Good universal principle. • Particular situations, we may cheat a bit on our own principles.
What is Ethics? • Why bother to study ethics? • Who cares what our professional organizations say about ethics?
Why Study Ethics? The answer is surprising: We study ethics to increase, not decrease, our personal freedom.
Why Study Ethics? An automatic, unthinking approach to ethics has caused some grief in the insurance profession
Why Study Ethics? Other reasons to study ethics: • An ethical insurance professional will keep long-term clients. • Get more referrals. • Stay out of trouble with the law. • When you act with integrity, the word gets around.
Albert Einstein To make a goal of comfort or happiness has never appealed to me; a system of ethics built on this basis would be sufficient only for a herd of cattle
Why Study Ethics? Acting ethically involves more than making a list of what is “right and wrong.”
Target Ethics • Ethical behavior must include legal standards for the insurance profession. • Some books on ethics begin and end with legal obligations. • Familiarity with legislation is a logical beginning point.
OH DOI Mission Statement The Ohio Department of Insurance's mission is to provide consumer protection through education and fair but vigilant regulation while promoting a stable and competitive environment for insurers. To accomplish that goal, it is important that we consistentlyregulate Ohio's insurance laws.
OH DOI Bulletins • 2010-01Temporary Extension of State Continuation Coverage To Take Advantage of Federal Premium Subsidy2/26/2010 • 2009-14 Guidance Regarding Use of the NAIC/NIPR Attachments Warehouse for the Electronic Filing of Insurance Producer Licensing Documents10/07/2009 • 2009-13 Guidance Governing the Giving of Promotional or Advertising Items10/01/2009 • 2009-12Loss of Control of Policyholder Information11/02/2009 • 2009-11Mandatory Use of SERFF for Product Filing Submissions12/31/2009 • 2009-10Workers' Compensation Other-States' Coverage 05/27/2009 • 2009-09The Ohio Annuity Disclosure Pilot Program for Fixed and Indexed Annuities 04/01/2009 • 2009-08Certificates of Insurance 03/12/2009 • 2009-07Revision of Bulletin 97-1: Basic Health Services and Infertility Services 02/10/2009 • 2009-06Revision of Bulletin 94-8: Disclosure and Use of Provider Discounts 02/10/2009 • 2009-04Calculation of the Amount of Deferred Income Tax Admitted in the Preparation of Statutory Financial Statements 02/03/2009 • 2009-03Calculation of the Reserves for Variable Annuities that provide Guaranteed Living Benefits (VAGLBs) in the Preparation of Statutory Financial Statements 02/03/2009 • 2009-02Interpretation of the Calculation of the Segment Length with respect to the Life Insurance Model Regulation and use of the 2001 CSO Preferred Class Structure Table to Determine Basic and Minimum Reserve Liabilities 02/03/2009 • 2009-01Reporting of Changes in Health Plan Provider Networks 01/20/2009
Philosophy of Ethics • The study of ethics is practical, not abstract, because we must make value judgments each day. • By studying ethics, we become aware of the reasons behind our judgments.
Philosophy of Ethics The word ethicscomes from two Greek words which mean “moral” and “character”.
Philosophy of Ethics Ethics as a branch of study that includes the values of: • Human Life • Duty • Morality • Rules of Conduct
Philosophy of Ethics • Many focused their intellect on ethical questions – the same ones which form the background of our own study.
Philosophy of Ethics • Ethical behavior is something that is conscious. • It can be developed to the point where it becomes habitual. • Must understand the underlying principles upon which they are based.
Golden and Platinum Rules Max Weber was an early writer from the Capitalist system and he saw ethics from a slightly different perspective. He thought that ethics was something that was necessary for society in order to hold the capitalist system together. If there isn’t a set of ethics that people adhere to, anarchy would ensue and the whole system would fall apart. So, from a societal point of view, he felt that ethics was critical.
The Golden Rule The Golden Rule: “Act toward others as you would like them to act toward you.”
The Platinum Rule The Platinum Rule: “Do unto others as they would have you do unto them.”
The Golden & Platinum Rules Ward and June, husband & wife, want different things when they are sick. Ward wants to be left alone. June enjoys attention and nurturing, which she believes helps her heal more quickly.
The Gold & Platinum Rules If Ward follows the Golden Rule when his wife is sick, he will leave her alone because that’s what he would prefer. Act toward others as you would like them to act toward you.
The Golden & Platinum Rules In this case, the Platinum Rule is better. Do unto others as they would have you do unto them. June wants something different than Ward. She wants attention!
The Golden & Platinum Rules • The Golden and Platinum Rules invite us to use our imaginations: • How it feels to be on the receiving end of our actions. • We trigger our own moral sense or intuition.
The Golden & Platinum Rules • Personal experience of imagining the consequences of our actions is one of the most powerful tools: • Acknowledging • Developing • Adhere To our own ethical codes.
The Golden & Platinum Rules • In insurance, we follow the Platinum Rule. • We listen to the needs of clients. • Help meet those needs.
Agent Role According to law, your role as an insurance agent makes you a fiduciary.
Agent Role • Fiduciary • Someone who holds a thing in trust for others.
Agent Role • Fiduciary: • Valuable because of the confidence which is bestowed by others.
Agent Role “Stands in the shoes of” the insurer. • Power to describe coverages • Solicit applications • Collect premiums • Provide service for the insurer
Agent Role • Agent not only acts with integrity because: “it’s the right thing to do.” • Accordance with the law. • Avoid E & O claim.
Agent Role Fiduciary Responsibilities • Three kinds of authority • Held in trust by agents
Agent Role • Express Authority • Granted by an insurer in writing. • No confusion about this kind of authority • Life and health agents have express authority to solicit applications. • Express authority is granted through the appointment with that carrier.
Agent Role • Implied Authority • Next logical level of an agent’s power. • Agents have the implied authority to explain policy provisions and coverages.
Agent Role • Apparent Authority • Gets agents into trouble • Agent represents the insurer • Statements not authorized by the company, carry the apparent authority in the eyes of the client. • Carrier • Not bound by every statement made by an agent. • Generally must stand behind credible statements.
Agent Role Full Disclosure