Chapter 6
Other Ethical Issues

The important points addressed in this lesson are:

Agents owe a fiduciary duty to the insurers they represent.
Agents have a duty to act with reasonable care in the performance of his or her duties, including the duty to solicit profitable business for the insurers they represent.
Agents must fully disclose all pertinent information when placing a policy with an insurer.
A customer's reasonable expectations of agent's acts can affect the agent's liability.
Certain terms, because of their propensity to mislead, cannot ethically be used
Certain acts -- rebating and replacement -- while legal, are prone to ethical abuses and should be approached carefully by an agent

The ethical and legal issues that have been examined to this point have focused on the agent's interaction with prospects and clients.  However, as we noted earlier in our discussion of the law of agency, there is another important relationship that may give rise to ethical and compliance issues -- the agent's relationship with represented companies.  Furthermore, as courts have shifted their legal reasoning from caveat emptor to caveat vendor,  sellers in the marketplace are under increasing scrutiny.  Agents, as salespersons, should be aware of this increased scrutiny of their actions and deal with both client and insurers in an ethical manner. .  

Fiduciary Responsibility
Replacement, Twisting and Churning
Rebating & Gifts
Client Expectations
Misleading Terms
Chapter 6 Review Questions