Insurance Continuing Education Guide

Morality has often been described as a “social system of rules created to allow people to adjudicate disputes rationally without resorting to physical force so that the relationship is affected by the dispute can endure and, perhaps, even flourish. Because most disputes are generated over the question of who is entitled to certain goods, the pursuit of goods and the question of who is entitled to certain goods, the pursuit of goods and the avoidance of harm are at the core of any moral system. Hence, we can claim that the creation of some benefit or the avoidance of harm is the goal of any activity.” (McGill’s Life Insurance, Chapter 18)

Ethicists have taken a variety of ways to arrive at ethical approaches for a multitude of problems, but basically ethics primarily relates to enhancing the qualify of life on one hand, and at the same time, maintaining the issues of fairness and justice. The principal message here is for one to pursue his interests fairly and unselfishly, with particular attention to treating every person the same. Logically, this would mean that differences in treatment can be justified if, and only if, there are relevant differences. Selfish behavior, on the other hand, is where one pursues self interest without regard to the interests of, or at the expense of, others.

It can be difficult at time to treat two (or more) situations/persons/objects exactly the same. If a married couple has twin boys, what one is entitled to, so should the other be entitled to the same. Children recognize this early in their life, as something that a sibling receives, if different from what they receive, is “not fair”-whether it is a bigger piece of cake, staying up later, etc. Therefore, as soon as children began to notice differences and to use reason, they are aware of the basis of fairness, that “the same should be treated the same.” Therefore, if we truly believe that most people are alike in most morally relevant respects, then they should be treated the same in most respects. This can be hard to understand at time, particularly when terrorists blow up helpless people and commit atrocities (as Paul Harvey, radio commentator, often says, “It really isn’t one world…”)

Still, most of us have been installed with respect for the Golden Rule: “Do unto others as you would have others do unto you.” This principle reinforces the notion that others are the same as you in most relevant respects and is repeated in this text.

Some may see “selfishness” as unethical when related to the principle of fairness, but by “selfishness,” that does not mean only the pursuit of self-interest, which is natural and acceptable. The pursuit of self-interest is a perfectly natural and acceptable activity. Selfishness, on the other hand, is when a person pursues self-interest at the expense of another-when the person is not entitled to the good or material pursued-in effect putting their own interest ahead of the interest of another when doing so will hurt the other party. As an example, taking so much food at a party that there is not enough left for all of the others. If other people need or want the same thing but only one person can have it, who (and how) decides who gets it? Since situations like this occur often, society has created rule of fair distributions-and such are the ethical rules of society.

Ethical rules emerge as societies grow as justice and the betterment of the quality of life must have some sort of ethical rules for appropriate behavior governing the society. They usually start through the process of trial and error plus the assignment of responsibilities which not only perpetuates society, but allows it to grow. In the western world, those societies in the Greco-Roman-Judeo-Christian tradition developed these general principles into more specific rules based upon the Ten Commandments, which include prohibitions against murder, stealing, lying, adultery, etc., as a template for judging proper behavior. It should be obvious that these Commandments reinforce the general prohibitions against selfishness and unfairness.

Back as far as recorded history, there has been distribution of goods that have allowed civilization to advance. Those who derived food from the land would trade with the hunters, thereby creating the first acknowledgements of civility. If, for instance, a grower of food was not able to obtain what would be considered “equal” compensation in barter for meat from the hunters, either some sort of agreed-upon arrangement was made or war could result. The free exchange of goods in a market requires the informed consent of both parties, but neither party would consent if they would not benefit on an equal basis.

Applying this to insurance with the sale as a market transaction, it is easy to see that misrepresenting the product or withholding significant information would not allow informed consent-therefore that constitutes misappropriation of the buyer’s goods. Any way one looks at that, this type of sale would involve an unfair and unjust transaction, and basically is a form of stealing.

The necessity to be fair and just requires procedures to be set forth for the distribution of benefits and other obligations, such as the entitlement to benefits which are rights. What is a right due to one party is usually determined by the relationship to the person with the obligation. As an example, if I have a right to an education, then there are those who have an obligation to provide such educations. If you become a parent, your obligation is meet certain obligations to care for and educate your child. (No, there is no obligation to provide the child with his own car on his 16th birthday…) Then there are relationships that exist because of a commitment to them. Societies establish divisions of labor-set up jobs for persons-and there are those who accept the responsibilities of one or more of these jobs. A commitment to jobs and relationships automatically carries responsibilities.

Under the assumption that the majority of the social rules or jobs that we assume, are legal, necessary and beneficial to society, then we must take a look at the various relationships as a result of the division of labor. Looking at the relationships helps to determine what our responsibilities are in respect to applying ethics of relationships to the insurance industry and thereby determining the rights and responsibilities of those in the industry. In this text, particular practices that are ethically suspect are discussed for the purpose of showing why they are inappropriate or appropriate as the case may be. If the practice is problematic, then reasons both for and against them will be discussed.