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MA-Life-Insurance-Producer-Exam : General-Provisions : 5 : : Ethical Principles in Insurance

Foundational ethical principles for insurance producers

Ethical Principles in Insurance

Ethics in insurance means acting with integrity, honesty, and in the client's best interest. Ethical conduct builds trust, protects consumers, and maintains the profession's reputation.

Act in client's best interest:
- Place client welfare above personal gain
- Loyalty to client
- Avoid conflicts of interest
- Disclose material information
- Maintain confidentiality
- Provide competent advice

Not just legal compliance: Ethics go beyond minimum legal requirements

Honesty

  • Truthful representations
  • No misrepresentations
  • Accurate information
  • Admit mistakes

Integrity

  • Moral soundness
  • Doing what's right
  • Consistent principles
  • Trustworthy

Fair Dealing

  • Equitable treatment
  • No unfair advantage
  • Reasonable terms
  • Good faith

Competence

  • Adequate knowledge
  • Continuing education
  • Know products sold
  • Within scope of expertise

Confidentiality

  • Protect client information
  • Privacy maintained
  • No unauthorized disclosure
  • Secure records

Professionalism

  • High standards
  • Respectful conduct
  • Industry reputation
  • Serve public interest

Must disclose and manage:

Common conflicts:
- Higher commission products
- Company production bonuses
- Proprietary products
- Dual roles
- Family relationships

Management:
- Full disclosure
- Client consent
- Document decisions
- Prioritize client interest

Recommend appropriate products:
- Match client needs
- Suitable for situation
- Affordable
- Understandable
- Documented basis

  • Fiduciary duty: Act in client's best interest
  • Core principles: Honesty, integrity, fair dealing, competence
  • Conflicts of interest: Must disclose and manage
  • Suitability: Recommend appropriate products
  • Confidentiality: Protect client information
  • Professionalism: High standards of conduct

Foundational ethical principles for insurance producers

Ethical Principles in Insurance

Ethics in insurance means acting with integrity, honesty, and in the client's best interest. Ethical conduct builds trust, protects consumers, and maintains the profession's reputation.

Act in client's best interest:
- Place client welfare above personal gain
- Loyalty to client
- Avoid conflicts of interest
- Disclose material information
- Maintain confidentiality
- Provide competent advice

Not just legal compliance: Ethics go beyond minimum legal requirements

Honesty

  • Truthful representations
  • No misrepresentations
  • Accurate information
  • Admit mistakes

Integrity

  • Moral soundness
  • Doing what's right
  • Consistent principles
  • Trustworthy

Fair Dealing

  • Equitable treatment
  • No unfair advantage
  • Reasonable terms
  • Good faith

Competence

  • Adequate knowledge
  • Continuing education
  • Know products sold
  • Within scope of expertise

Confidentiality

  • Protect client information
  • Privacy maintained
  • No unauthorized disclosure
  • Secure records

Professionalism

  • High standards
  • Respectful conduct
  • Industry reputation
  • Serve public interest

Must disclose and manage:

Common conflicts:
- Higher commission products
- Company production bonuses
- Proprietary products
- Dual roles
- Family relationships

Management:
- Full disclosure
- Client consent
- Document decisions
- Prioritize client interest

Recommend appropriate products:
- Match client needs
- Suitable for situation
- Affordable
- Understandable
- Documented basis

  • Fiduciary duty: Act in client's best interest
  • Core principles: Honesty, integrity, fair dealing, competence
  • Conflicts of interest: Must disclose and manage
  • Suitability: Recommend appropriate products
  • Confidentiality: Protect client information
  • Professionalism: High standards of conduct
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