ETHICS 311 CORRECT FINALS ANSWERS AND
QUESTIONS SET A+
Which one of the following could create an ethical issue? - ✔✔Placing insurance with
the insurer paying the highest commission
✔✔Unselfish concern for the welfare of others is referred to as: - ✔✔Altruism.
✔✔Penny is in the marketing department at Insurance Company. Which one of the
following is an important truth for her to know? - ✔✔Organizations that focus on short-
term profits and fail to adhere to high ethical standards often do so at the expense of
their long-term success.
✔✔Oliver is a reinsurance intermediary placing reinsurance for a variety of insurers with
a variety of reinsurers. He has no contact with the public or policyholders of the insurers
for which he places reinsurance. In this position, Oliver's duties are best characterized
by which one of the following? - ✔✔Oliver still has significant duties to the public and
primary insurer policyholders.
✔✔Elmer is a commercial underwriter at ABC Insurance Company. Elmer and one of
his co-workers, Jeff, play golf together regularly at the local public course. One
weekend, Jeff suggests that instead they play at an expensive private club. He explains
to Elmer that the owner of a new commercial account Jeff recently wrote gave Jeff a
membership to the club. The situation makes Elmer uncomfortable because he knows
that ABC has a strict policy about not accepting gifts from policyholders. Elmer has an
ethical dilemma and is torn about whether to inform his employer about the gift or not.
Which one of the following types of ethical conflicts does this situation most clearly
represent? - ✔✔Truth versus loyalty.
✔✔Burt's young son belongs to a scouting organization. A father of a fellow scout has
volunteered to be the group's treasurer. Burt, as a bond underwriter, knows from an
application he had rejected that the other father had been in trouble for embezzlement,
but Burt's employer has a policy against disclosing publicly that which is learned in the
course of underwriting. Burt is contemplating whether he should reveal to the scouts
, that which he knows. His dilemma could probably be resolved by: - ✔✔Analyzing
whether any laws, regulations, or standards apply to the situation.
✔✔Ariel is facing an ethical dilemma at work and is using a checklist for ethical decision
making to help resolve it. At the end of his experience, he should: - ✔✔Internalize
everything learned.
✔✔An important decision on how to defend a bad-faith claim regarding a liability file
needs to be made at Insurance Company. The original underlying claim goes back
many years, to a time when only a paper file existed. Those assigned to the bad-faith
claim do not have access to the original paper file because it has been lost, yet its
contents are important to understanding the claims handling at issue. Such a restraint or
restriction to access is an example of which one of the following types of barriers to
ethical decision making? - ✔✔A physical barrier.
✔✔Don has acquired a significant body of knowledge relating to coverage for additional
insureds. This knowledge, and his skill in applying it, has resulted in significant new
business for him and his firm. To best comply with the ethical canon titled Maintaining
and Raising Professional Standards, Don should: - ✔✔Share his knowledge with other
appropriate insurance professionals.
✔✔An underwriter has realized that most of the potential insureds in the poor section of
town will not qualify for homeowners insurance because of below-standards roofing.
This disturbs her and she is using an ethical dilemma decision making flow chart to
decide whether there is an ethical obligation to underwrite their properties anyway. If
she is concerned with the perspective of the potential insureds, then she is at which one
of the following steps of the flow chart? - ✔✔Reviewing the dilemma from the three
decision (rules-, situation-, and people-based) perspectives.
✔✔The ability to apply knowledge to risk and insurance circumstances is acquired
through: - ✔✔Professional training and job experience.
✔✔An insurance professional is responsible for his or her thoughts, decisions, and
actions. Knowledge, skill, and expertise guide decisions and ensure that the insurance
professional uses his or her: - ✔✔Professional Judgement.
✔✔Ethical behavior is based on moral conduct, which implies: - ✔✔One knows what is
right and what is wrong.
✔✔(T/F) As a broker, Josh has a responsibility only to his clients, the policyholders. -
✔✔False.
QUESTIONS SET A+
Which one of the following could create an ethical issue? - ✔✔Placing insurance with
the insurer paying the highest commission
✔✔Unselfish concern for the welfare of others is referred to as: - ✔✔Altruism.
✔✔Penny is in the marketing department at Insurance Company. Which one of the
following is an important truth for her to know? - ✔✔Organizations that focus on short-
term profits and fail to adhere to high ethical standards often do so at the expense of
their long-term success.
✔✔Oliver is a reinsurance intermediary placing reinsurance for a variety of insurers with
a variety of reinsurers. He has no contact with the public or policyholders of the insurers
for which he places reinsurance. In this position, Oliver's duties are best characterized
by which one of the following? - ✔✔Oliver still has significant duties to the public and
primary insurer policyholders.
✔✔Elmer is a commercial underwriter at ABC Insurance Company. Elmer and one of
his co-workers, Jeff, play golf together regularly at the local public course. One
weekend, Jeff suggests that instead they play at an expensive private club. He explains
to Elmer that the owner of a new commercial account Jeff recently wrote gave Jeff a
membership to the club. The situation makes Elmer uncomfortable because he knows
that ABC has a strict policy about not accepting gifts from policyholders. Elmer has an
ethical dilemma and is torn about whether to inform his employer about the gift or not.
Which one of the following types of ethical conflicts does this situation most clearly
represent? - ✔✔Truth versus loyalty.
✔✔Burt's young son belongs to a scouting organization. A father of a fellow scout has
volunteered to be the group's treasurer. Burt, as a bond underwriter, knows from an
application he had rejected that the other father had been in trouble for embezzlement,
but Burt's employer has a policy against disclosing publicly that which is learned in the
course of underwriting. Burt is contemplating whether he should reveal to the scouts
, that which he knows. His dilemma could probably be resolved by: - ✔✔Analyzing
whether any laws, regulations, or standards apply to the situation.
✔✔Ariel is facing an ethical dilemma at work and is using a checklist for ethical decision
making to help resolve it. At the end of his experience, he should: - ✔✔Internalize
everything learned.
✔✔An important decision on how to defend a bad-faith claim regarding a liability file
needs to be made at Insurance Company. The original underlying claim goes back
many years, to a time when only a paper file existed. Those assigned to the bad-faith
claim do not have access to the original paper file because it has been lost, yet its
contents are important to understanding the claims handling at issue. Such a restraint or
restriction to access is an example of which one of the following types of barriers to
ethical decision making? - ✔✔A physical barrier.
✔✔Don has acquired a significant body of knowledge relating to coverage for additional
insureds. This knowledge, and his skill in applying it, has resulted in significant new
business for him and his firm. To best comply with the ethical canon titled Maintaining
and Raising Professional Standards, Don should: - ✔✔Share his knowledge with other
appropriate insurance professionals.
✔✔An underwriter has realized that most of the potential insureds in the poor section of
town will not qualify for homeowners insurance because of below-standards roofing.
This disturbs her and she is using an ethical dilemma decision making flow chart to
decide whether there is an ethical obligation to underwrite their properties anyway. If
she is concerned with the perspective of the potential insureds, then she is at which one
of the following steps of the flow chart? - ✔✔Reviewing the dilemma from the three
decision (rules-, situation-, and people-based) perspectives.
✔✔The ability to apply knowledge to risk and insurance circumstances is acquired
through: - ✔✔Professional training and job experience.
✔✔An insurance professional is responsible for his or her thoughts, decisions, and
actions. Knowledge, skill, and expertise guide decisions and ensure that the insurance
professional uses his or her: - ✔✔Professional Judgement.
✔✔Ethical behavior is based on moral conduct, which implies: - ✔✔One knows what is
right and what is wrong.
✔✔(T/F) As a broker, Josh has a responsibility only to his clients, the policyholders. -
✔✔False.
