corporate ethics

Every day there are articles in our industry publications detailing the latest legal proceedings against insurance executives. In many cases the circumstances that have lead to these trials were "business as usual" practices in the insurance industry. So how is it that our industry, which is founded on the premise of utmost good faith, strayed so far from center? My personal opinion, as a claims person, is that the industry has forgotten its original purpose - to indemnify the policyholder for covered losses. Instead, the focus has been on ROI for investors. I agree that every insurer should be profitable but the ethical dilemma comes from how the profitability is created. Obviously, an underwriting profit is desirable. Yet many insurers threw out the underwriting guidelines and severely under priced risks in order to show a short term profit. Claims departments should watch their loss adjustment expenses. But overloading an adjuster with files, rather than hiring staff, is not the appropriate way to do it. I believe that there is a corporate responsibility to the policyholders, the employees and the stockholders. So is it ethical to overload an adjuster or assign an adjuster to a claim that he or she does not have the expertise to handle? Is it ethical to ask an adjuster to handle a claim in a location when they are not licensed to do so? Is it ethical to insist on regulatory compliance and turn a blind eye to the quality of the adjustment? Is it ethical to put employees in a position that they are so concerned for the security of their job that they are forced to engage in unethical practices instead of standing up for what they believe to be the ethical position?