Classically, there were only three professions: ministry, medicine, and law.  What sets these occupations apart is a specialized knowledge, a "service before income" outlook, and a code of ethics. All three of these professions holds to a specific code of ethics, and members are almost universally required to swear some form of oath to uphold those ethics, thereby "professing" to a higher standard of accountability. Each of these professions also provides and requires extensive training in the meaning, value, and importance of its particular oath in the practice of that profession.  Today, the term professional has expanded outside its classical boundaries to encompass accounting, education, architecture, military, nursing, engineering and financial services.


Every profession is composed of three components: a body of specialized knowledge, a "service before income" outlook and a code of ethics.  This ethical code is what governs the professional’s actions and against which they are measured. This code of ethics imposes a price on the professional.  The consequence of being considered a professional — as opposed to simply a seller of insurance policies — is the greater potential liability imposed by the courts.  If we recognize that achieving the status of professional results in our greater liability, we need to ask whether it is worth the greater liability.  Not only is the label of professional worth being held to a higher ethical standard, it is essential to the financial well-being of the agent.


There is no question but that competition is an economic fact of life.  If you are able to make and sell something cheaper than your competition, you may have an ever-increasing share of the market.  Although we often hear about the increased competition for the insurance dollar from banks, brokerage companies and other financial institutions, we hear much less about the competition from a source that is far more difficult to deal with -- the alternative distribution systems that insurers are experimenting with.


Insurers have determined that the agency system is an expensive way to sell insurance, regardless of whether it is life insurance, health insurance or property & casualty insurance.  However, the agency system continues to exist because it is also the most effective system.  What happens, however, when the public no longer feels the need for an insurance agent?  


The answer should be obvious; insurers will move quickly to those less expensive alternative distribution systems. Unless agents and other financial services agents become more professional and the public perceives a greater benefit from the agent's participation in the sale, the agency system may die.  Even if there were no other reason for agents to be in the forefront insisting on an ethics-driven profession this would be enough.


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