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What is Ethics?
Ethics involves learning what is right or wrong, and then doing the right thing -- but "the right thing" is not nearly as straightforward as conveyed in a great deal of business ethics literature. Many ethicists assert there's always a right thing to do based on moral principle, and others believe the right thing to do depend on the situation -ultimately it's up to the individual. Many philosophers consider ethics to be the "science of conduct." Seniors explain that ethics includes the fundamental ground rules by which we live our lives. Philosophers have been discussing ethics for at least 2500 years. Many ethicists consider emerging ethical beliefs to be "state of the art" legal matters, i.e., what becomes an ethical guideline today is often translated to a law, regulation or rule tomorrow. Values which guide how we ought to behave are considered moral values, e.g., values such as respect, honesty, fairness, responsibility, etc. Discussions around how these values are applied are sometimes called moral or ethical principles.
Business Ethics is now a Management Discipline:
Business ethics has come to be considered a management discipline, especially since the birth of the social responsibility movement in the 1960s. In that decade, social awareness movements raised expectations of businesses to use their massive financial and social influence to address social problems such as poverty, crime, environmental protection, equal rights, public health and improving education. An increasing number of people asserted that because businesses were making a profit from
suppliers and the wider community. Organizations realized they needed to better manage their human resources and so the recent discipline of human resources was born. procedures to resolve ethical dilemmas. organizations realized they needed more guidance to ensure their dealings supported the common good and did not harm others -. roles of ethicists and ethics committees. etc. As commerce became more complicated and dynamic.using our country's resources. organizations realized that they needed to manage a more positive image to the public and so the recent discipline of public relations was born. business schools and managers have recognized this broader constituency. The emergence of business ethics is similar to other management disciplines. For example. and in their planning and operations have replaced the word "stockholder" with "stakeholder. customers. Many researchers. policies and procedures. ethics in the workplace can be managed through use of codes of ethics. . Note that 90% of business schools now provide some form of training in business ethics." meaning to include employees. codes of conduct. ethics training.and so business ethics was born. Today. these businesses owed it to our country to work to improve society.
The IRDA has been empowered to carry out several functions. and regulate. and the manner in which funds are invested * Laying down prudential norms for investment for both life and general insurance companies .The indication of reforms IRDA . promote & ensure orderly growth of the insurance industry.is an autonomous.INSURANCE . regulatory authority endeavoring to protect the interests of policy holders. including: * Promoting and regulating professional organizations connected with insurance & reinsurance * Improving the efficiency while conducting the insurance business * Establishing a code of conduct for players in insurance * Determining the specification of accounts.central to the insurance reform process .
♦ Gathering client data. The advisor should also disclose any restrictions on his ability to give unbiased advice and disclose any conflicts of interests. if relevant. understand the time frame for results and discuss. ♦ Establishing and defining the client – planner relationship: The Financial advisor should clearly explain or document the services to be provided and define the responsibilities. how one feel’s about risk. The Financial Planner should gather all the necessary documents before giving the advice. ♦ Analyzing and evaluating the financial status: The Financial advisor should analyze the information to assess the current situation and determine what one must do to meet the goals. including goals: The Financial advisor should ask for information about the financial situation.THE SIX STEP INSURANCE PLANNING PROCESS Insurance Planning is the process of providing advice and assistance to clients to determine whether and how clients can meet their financial needs and life’s goal through proper management of financial resources. The advisor should agree on how long the professional Relationship should last and how decisions will be made. The advisor should explain fully how he will be paid and by whom. The planner should mutually define the personal and financial goals. depending on what .
The planner should also listen to the client’s concerns and revise the recommendations as appropriate. ♦ Implementing the Financial Planning recommendations: The planner and the client should agree on how the recommendations will be carried out. ♦ Developing and presenting Financial Planning recommendations and/or alternatives: The Financial Planner should offer Financial Planning recommendations that address the goals.services have been asked. current insurance coverage. The planner should go over the recommendations with the client to help and understand them so that one makes informed decisions. If the planner is in charge of the process. The planner may carry out the recommendations or serve as your ‘coach’. coordinating the whole process along with professionals such as solicitors or stockbrokers. he/she should report personally to review the situation and adjust the recommendations. . liabilities and cash flow. For this one could include analyzing the assets. based on the information provided. ♦ Monitoring the Financial Planning recommendations: The planner should agree on who will monitor the progress towards the client’s goals. investments or tax strategies. if needed.
There should not be any room for unprofessional and unethical practices in the dispensation. Insurance operators need to devote more of their energies and resources to ensuring the emergence of a new order in terms of players' attitude to the issue of ethics. Insurance. Operators are usually expected to display more commitment to ethical standards in all the operations. the fear of losing business.Ethics in insurance today (present scenario): According to insurance stakeholders. being a business that is based on trust. Generally. loss adjusters. the issue of compliance with ethics and best practices should govern market strategies and operations. rate cutting and offer of illegal inducements has compromised insurance operators' compliance to the industry's ethics. Stakeholders have warned that the sector's efforts at achieving a more robust financial capacity would be rubbished if steps are not taken to address unethical practices and the prevalence of fake institutions in the industry. One would agree that the level of capital companies have had to raise within the last few years is quite challenging. could only win the admiration and patronage of the buying public when there is a widely acknowledged effort by operators to operate by the rules laid down by trade bodies and the regulatory authorities. . and agents to ensure that the additional funds injected into the sector are safeguarded and used optimally through strict adherence to ethics of the profession. That is why there must be a collective resolve by underwriters. brokers.
should be the key attributes of the sector. .Industry watchers say experience of non compliance with ethics in the insurance industry is a reflection of the situation in the larger society. adding that professionalism. service and social responsibility. honour.
Because they do not control the world.Insurance and Ethics Insurance. and this small claim isn’t covered” or “Because I forgot two payments. people are often disappointed. over the years. For example. the insurance industry has often nurtured this paternalistic and incorrect notion. In this business managers frequently hear statements like. angry or disillusioned to find that the insurance they have been paying for does not cover a particular situation. Many people look to insurance to provide them with a complete sense of security and assurance. Many ethical concerns with insurance exist because of this gap between consumer expectations and genuine insurable risk.” Not meeting a customer’s expectations can feel frustrating and dissatisfying to them. “I’ve paid thousands of rupees of premiums. now I don’t have to worry. at best. Insurance does not provide the kind of universal coverage and assurance that many people look for. I thought everything was covered. Insurance might be viewed as man’s attempt to control and influence an environment that we all know is in God’s hands. limited. Man’s attempt to insure anything is. Insurance is nothing more than a pooling of money to provide limited reassurance for a limited set of assets or circumstances. or “I didn’t understand what I bought. my coverage was cancelled. insurance is only a partial or stopgap measure to deal with the uncertainties that the world presents. Because of this difference . “Oh. everything will be taken care of. by definition raises ethical questions. Now my claim won’t be paid after paying premiums for many years”. This can leave consumers feeling that insurance is a poor economic value or a “rip-off”.” Unfortunately. When they buy insurance some people think.
It is a formalized way for people to come together and help each other. from the same pool. Commercial insurance for industries and professions has underwriting standards that require certain practices. Insurance is required in most industries and professions. Insurance. Insurance allows us to take risks and therefore fully live our lives. is a pooling of community risks. his family benefits because a payment can be made from this pool of premiums and the investment income that arises from it. those remaining help the family. When someone else dies. In some cases. at its core. in more informal ways.between what people expect and what insurance provides. not just to help ourselves but to help other families. insurance is one of the most highly regulated industries in our country. insurance is a wonderful and much needed product. Is insurance a good business after all? Does it raise so many ethical questions that we should just avoid or eliminate it? Once looked at carefully. This gives us some assurance of the quality of goods and services that we use. there are times when the industry has not been a good corporate citizen. Although it is national in scope. Unfortunately. When we die. safeguards. insurance has played an important role in the development of world economies. it is one of the few industries of its kind that is primarily regulated at the state level with 50 different sets of laws and regulations governing insurance. People. licensing. When someone dies. This may appear very basic. For example. usurious prices. and so on. In this way. have done this for centuries. Historically. when we pay life insurance premiums. our claim is paid to our family. we are putting our money together. and dishonest business practices. the insurance industry has a history of discrimination. but insurance is much more powerful than just survivor benefits. insurance provides a form of .
if there was no insurance in place. A few of the questions insurance corporatists confront daily are: 1. Insurance. in many ways. ethical considerations arise. It is a channel that can be used in very good and helpful ways. as little as we can. more than the customer has bargained for. without insurance we would not enter into these businesses.safety net for consumers both in terms of the product or service delivered and remuneration if there is malfeasance. Even more compelling. What is the proper level of customer service? Just enough to get by. or both? . What is a fair price to charge? Should we charge as much as we can. and drive cars. In fact. the spirit of the law. they just begin. get on an elevator. the ethical concerns do not end. Every day in running an insurance business. but also frees us to conduct business. Once we accept the proposition that insurance actually is a good business. just like money. or something in-between? 3. eat in a Restaurant. Very few of us would have surgery. in many cases. Without insurance one mistake could bankrupt the business and shatter customer confidence. or something in-between? 2. is not an evil unto itself. ride in an airplane. What kinds of policies and procedures should govern the running of the company? Should we follow the letter of the law. Insurance not only provides protection to the consumer.
every day depending upon the individualistic views and ethical followings. What should be done when someone is not doing the job? Should we help them. It is possible to face the changing questions. give as much as possible. Based upon the situation. God’s laws. . or both? When can and should we make exceptions to our policies and procedures? 5. How should we contract with other companies? Should we get as much as possible. Which laws are we talking about. any of the answers may be right. get rid of them. man’s laws. as much as possible. or something in-between? 6. or Something in-between? 7. What should our benefits and compensation be for the people working within the company? Should we pay them as little as possible. and the changing answers. or keep them no matter what? How can we best address these ethical dilemmas? There are no hard and fast answers to any of these questions.4.
The leadership shown by the institute will create ever-growing awareness of ethical issues among insurance and financial services professionals. Vision of the Future The Institute for Insurance Ethics will be a highly visible advocate for ethics and ethical behavior in the life insurance and financial services industry. Through that training and awareness. consumers will continue to gain trust and confidence in insurance professionals and in the insurance industry. and the application of high ethical standards. insurance is based on mutual trust between insurance producers and insurance clients. is based on the highest ethical standards. Through its growing leadership and influence. A primary purpose of the Institute will be to consider the role of ethics as an alternative to additional regulation of the insurance and financial services industry.Institute for Insurance Ethics Mission and Purpose The mission of the Institute for Insurance Ethics is to develop programs that will educate members of the insurance and financial services industry. as well as the consuming public about the nature of ethics. Unlike many other businesses. It will be a strong. in turn. Trust. clear voice for ethical conduct and social responsibility within the insurance industry. social responsibility. . insurance professionals will gain more and more formal training in ethics and in dealing with ethical situations that they confront.
5. 9. 3. 11. 2. marketing staff 1. To use appropriate methods in convincing clients to protect their insurable interest. To set a plan and work accordingly. So. the marketing staff needs to observe a set of norms in his / her professional conduct. To give utmost priority to the client's interest. To strictly follow the concerned laws and regulations. The Code of Ethics for the life insurance. To make truthful and accurate presentations. 8. To ensure prompt and sincere service to the client and his or her family. Not to disclose client's confidential and personal information 4.CODE OF ETHICS Selling Life Insurance is like selling intangible product. moral and financial standard defined by the Company. 7. 12. To be loyal to the Organization. . which make him / her worthy of trust and faith. To obtain proposals only on the lives of persons who fits in the physical. 10. To maintain fair relations with colleagues. To improve his / her knowledge of life insurance through constant study. 6. To perform his / her duties in high esteem.
The IRDA has formulated a Code of Conduct for the marketing staff which comprises two broad group heads viz. 4. 8. Identification of marketing staff and the insurance agency . They are listed herewith: Do's 1.certificate of License to be shown to the prospect on demand. Disclose to the insurer all relevant information. Assist the policy holder in matters of: • Claim settlement. Bring to the notice of his / her client the implication of various questions in the proposal form and other documents and advise the client to disclose all the material information. 7. • Revival. Match the needs of his / her client with various products available with his insurer. Obtain all documents from the prospect for the completion of the case. Work out the premium to be charged so that his / her prospect is able to weigh the economic or financial implication of the proposal on his / her resources. 2. 6. . 3. 5. • Effecting nomination/assignment. • Exercise of various options. change of address. "Do's" and "Don'ts". Inform the prospect about acceptance or rejection of the proposal by the insurer.
Receive a share of the policy proceeds from the beneficiary. Apply for fresh license to act as an insurance marketer if his / her earlier license / authorization have been terminated with in five years from the date of termination. 8. Part with or share his incentive with Prospect or with any other person.Don'ts . 5. 10.No Marketer shall 1. Offer different terms and conditions other than offered by the insurer. Solicit or procure insurance business without holding a proper authorization 2. Compel any person to terminate an insurance contract with any insurer in order to effect a new proposal within three years from date of such termination. Induce the prospect to submit wrong information in the proposal form or in the documents submitted to the insurer for acceptance of the proposal 4. 9. Induce the prospect to omit to disclose the material information in the proposal form 3. Remain or become a director of any insurer carrying on insurance business in India. Interfere with any proposal introduced by any other insurance marketers. . 6. 11. 7. Behave in discourteous manner.
Ethics in insurance: Building relationships through trust The momentum of the private insurance sector leaves no doubt in one’s mind that it is amongst the foremost growth sectors of our country. being open to suggestions and insights that might enhance his / her comfort levels. The greater the trust. It entails having great reverence for the customer's needs. not just to the company and to its customers. By giving customers the option to track investments online and by publishing the performance of the funds against benchmark indices. Ethics is an attitude that needs to touch every aspect of the customer relationship. the more the sales. and the free look period they offer have served to win their customers' trust.18 per cent in five years is testimony to this. the most fundamental being the way the product is designed. providing assistance and clarity in documentation and upgrades. they prove that they are an open and reliable organization. the inclusion of the policy proposal form. But even while one braces himself to avail of the numbers within his/her sight. For eg: At Birla Sun Life. where the customer entrusts the company with his / her financial savings. they need to realize that the "long-term" will belong to that company which rigidly benchmarks ethics for itself and for the industry. building in riders and flexibility options that address these needs. In a business. specifically prepared for Birla Sun Life by CRISIL. There are many ways to build trust through ethics. The . A market share of 26. It should offer complete clarity and transparency and the literature supporting the product should not overpromise the benefits or understate the risks. Ethics means being fully accountable. and settling claims on time. but to the industry they serve. ethics has a direct relation to sales. the use of the sales illustration.
inspiration for ethics thus comes from the highest source — from a need to impact the industry. On the flip side. a reduction in ratings. and the light by which they shall be remembered. the strength by which they progress. Ethics is that discipline. business losses.”. . the mandate for good ethics always stems from the top. they have introduced a system of checks and balances that guards against concealment and why they follow norms of compliance and adhere to IRDA regulations so scrupulously that their books and processes are open to audit at all times. and increased scrutiny are not half as damaging as the loss to image and reputation. As Albert Einstein said. Litigation and costs of settlement. It's a fact that good ethics makes good business sense. It is the way ahead . Which explains. Of course. its implementation depends on the individual. why at Birla Sun Life. that momentum that challenges a company to rise above themselves and raise the bar each time they interact. It is the means by which they measure themselves. While top management can lay down a code of ethics and request adherence. "Ethics is an exclusive human concern without any superhuman authority to back it. a lack of ethics can have serious consequences.for each individual and for his industry.
. He shares his personal experience with us. 12-11-05: Accident took place. The following is a timeline as to what happened and continues to happen. I am currently going through what can only be termed as the blatant cheating of a customer from one of India’s largest Companies – ICICI. Insurance company was notified and claim number received. Police report was made.CASE STUDY: CODE OF ETHICS AND PROFESSIONAL CONDUCT ICICI LOMBARD-CHEATS Rahul Saxena is a policy holder who is an unsatisfied consumer of ICICI LOMBARD. Member's Rating of this Product: Member's Recommendation of Product: Customer Service: Claims Settlement: Rates/Premium: Range of Plans: Staff Attitude: Pros: None Cons:Business ethics this No The Cheating by ICICI Now if things could not get any worse.
19-12-05: At 7:30pm. Suresh Shetty. was because ICICI told me they had a cashless facility for that garage. Mr. even after knowing the ridiculous prices they have. I also spoke to my long time insurance agent from New India Assurance who confirmed that there is no such requirement and that ICICI is known to harass its customers on large claims. Abhay stating that ICICI cannot process my cashless claim as a third party has been injured and a case has been filed. However he rudely told me that he does not know and even though he was sitting in the office. I get a call from Mr. I towed the car to the workshop.16-11-05: After checking the list of cashless garages on their company website. who stated. Kapil Madgar who stated that he was the Regional Manager. He instructed me that if I want my car I could pick it up after paying the full amount. The only reason I picked an authorized Skoda garage. I was put on the line with Mr. Till date. and verifying the same with your customer service representatives as well as the garage of choice – Autograph Skoda. I asked him to provide me with the clause as mentioned above. Shetty were well mannered and helpful to the extent they could be. he did not take the bother to atleast try and assist me. Official Skoda dealers. All papers as desired by ICICI were handed over to the garage to produce to the Insurance agent at the time of the survey. Kapil leaves a lot to be desired! As it was . “the ICICI legal department had advised them not to pay the claim”. Abhay and Mr. but I must say that the manner of speaking of Mr. I asked for a written copy of the clause in the policy where it is stated that the claim for vehicle repairs cannot be paid unless the case is solved in court. I then spoke to Mr.
and there is no-one you can speak to who will give you a straight answer. all their written correspondence is unsigned. I receive the biggest shock of my life. I get an unsigned fax from ICICI stating that they will NOT HONOUR my insurance at all stating the limitation in the policy of “PACEMAKING”. Nothing came. All further attempts to get a proper reply from ICICI has fallen on deaf years. Sandeep Bakshi has not been replied too till date. On 20/12/2005. and a fax sent on the 20th to their MD – Mr. and my agent at New India told me that this is a motor sport activity and does not apply to my case at all. This battle will now move to the Insurance Regulatory Board. I am in very good standing legally and I should win my case plus penalties and other expenses paid to me. From there I can move the Consumer Court if I am not happy with the verdict. There is no-one at ICICI who is willing to take responsibility. I have asked for a written statement by fax from the company showing me where this clause is mentioned. However this will now take time and I have no choice but to fund the entire repair costs myself. But. . from all the legal opinions I have taken. I was assured that it would be with me by 10am the next day. No explanation was given as to what they mean by pace making. This from a company who’s slogan is “Haam hai na!” I should take them to court for false advertising alone! I have now approached the WIAA who are supporting me completely.obvious that I was not going to get an accurate answer on the phone.
they are the WORST I have ever had the displeasure of dealing with. which they are rightfully entitled to pay. insurance or loans. And hopefully it will serve as a lesson to ICICI and other insurance companies that the Customer is no longer just going to lie down and take the CRAP that is meshed out to them. This tactic is probably their company policy.I am putting this topic up here now to WARN all other members (and the thousands of non-members who view this thread everyday) that ICICI are COMPLETE CHEATS AND DO NOT GIVE A DAMN ABOUT THEIR CUSTOMERS. Well. whether it’s their banking. hoping that finally the customer will give up and forget about it. Conclusion: . but when it comes to actual customer service. this is not happening here with me and rest assured this case will be followed till its rightful conclusion. They will try anything in their power to wriggle out of paying a large claim. They will gladly take your money with a smile. My Final notes – DO NOT DEAL WITH ICICI.
The ethical and spiritual path in insurance. What is good. and in life. Above all. right and true usually stands the test of time and may not always be immediately apparent. The ethical path may not be popular but it does stand the test of time. Ethics is not a hard and fast set of rules but is based upon guiding principles. yet they are deeply personal. ethics and the spiritual compass that underlies our individual ethical code. At times. it is not even a journey. it is the journey. it can feel like a solitary path. is an individual one. Ethics should guide our communities. The ethical “stake in the ground” will always be scrutinized and criticized by someone. is not a destination. Ethics is not reached by consensus but by conviction. .
Presented by: Faiza Ishaq – 12 Divya Kamath – 23 Nahid Potrick – 37 Manish Punjwani .38 .
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