Let's Walk and Talk Ethics

Roughly twenty years ago, I had the privilege of being a co-worker of Dr. Peter R. Kensicki at the American Institute for CPCU and Insurance Institute of America.

On pleasant summer days, Pete and I often took lunchtime walks on the quiet roads that wind through the scenic “horse country” around the Institutes in southeastern Pennsylvania. On these walks, our talk often turned to politics, which in turn often got around to ethics. In particular, I remember our discussions about the Senate’s Supreme Court Justice confirmation hearings for Robert Bork. Now that was an event full of ethical considerations!

Within a year or so after I joined the Institutes, Pete left to become a professor of insurance at Eastern Kentucky University, where he still teaches. In addition to his professorial duties, Pete writes the “Question of Ethics”column that appears in the National Underwriter (P&C edition).

I always look forward to Pete’s column because it never fails to provoke thought. And, I’m sorry to say, it’s maybe as close as I can now get to the live, and always lively, talks we had on our lunchtime walks twenty years ago.

Pete’s column in the January 7, 2008, edition of NU (P&C) examines the ethical implications of the anti-concurrent causation (ACC) language that has been included in property insurance policies since the 1980s.

A major part of the ACC language is contained in the wording that precedes several policy exclusions, such as those eliminating coverage for flood and earthquake. The wording says, in part, “Such loss is excluded regardless of any other cause or event contributing concurrently or in any sequence to the loss.”

The ACC language has been at the heart of numerous coverage disputes about losses caused by Hurricane Katrina in 2005. In these disputes, the insurer has cited the ACC language in denying coverage for some or all of the property loss suffered by a policyholder, on the basis that flooding was an excluded cause that contributed “concurrently or in any sequence to the loss,” even though hurricane (windstorm) is a covered cause of loss.

Pete’s exploration of the ethical implications of this issue, with input from several insurance professionals reflecting a wide range of opinions, is must reading for anyone concerned about the fairness of the ACC language.

Actually, if ethics matter, the column should be required reading for everyone in the insurance industry who’s involved in any way with policies containing the ACC language.

Pete’s column may not change everyone’s stance on the ACC issue, but it will certainly expose anyone who reads it to the basic ethical issues involved. That encourages each of us to question our existing ethical views on an important insurance issue.

What could be more appropriate than that during Ethics Awareness Month?

If, after reading Pete’s column or reflecting on this issue, you would like to post comments here, about either the ACC language or other policy provisions with ethical dimensions, I encourage you to do so.

Pete, thank you for your column, and keep up the fine work. The next time you’re near Philly, let’s get together and take a walk.

Pete’s next Question of Ethics column—on the subject of underinsurance—will run in the April 21 edition of NU. I’ll be looking for it.