Other Ethical Issues
The ethical and legal issues examined to this point have focused on the agent’s interaction with prospects and clients. However, 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 and deal with both clients and insurers in an ethical manner.
Key Points in This Chapter
- Agents owe a fiduciary duty to the insurers they represent
- Agents have a duty to act with reasonable care in the performance of their 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 an 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
Chapter 6 Topics
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