ETHICS 311 ACTUAL SCRIPT ANSWERS AND
QUESTIONS SET A+
✔✔(T/F) Insurance rating systems discourage social responsibility. - ✔✔False.
✔✔From an economic standpoint, the net result of maintaining high ethical standards is:
- ✔✔A reduction in operating expenses as well as costs related to fines or legal
defense. And when high ethical standards improve customer satisfaction, revenue
increases through customer retention and referrals.
✔✔(T/F) In general, organizations and individuals who demonstrate high ethical values
are more successful over the long term. - ✔✔True.
✔✔Risk and insurance professionals can develop a systematic approach to resolving
ethical dilemmas by taking three steps: - ✔✔Identifying the stakeholders, determining
the motivation for the actions taken, and analyzing the relevant ethical issues.
✔✔The first step in resolving an ethical dilemma involves gathering information, starting
with: - ✔✔Identifying the Stakeholders.
✔✔Truth versus loyalty: - ✔✔An ethical dilemma arises between truth and loyalty when
the facts may be harmful to someone or something in which a person has placed faith
and fidelity.
✔✔Long-term versus short-term dilemmas: - ✔✔Tend to be based on personal conflicts
but can be much broader than personal concerns. Even apparently simple decisions
can have far-reaching consequences when the dilemma is fully examined and the effect
of the decision is evaluated.
✔✔Justice versus mercy dilemmas: - ✔✔May have to choose between established rule
of law and compassion. Insurance involves legal concepts and issues. The insurance
contract itself is a legal document with a specific body of law (contract law) dictating
interpretation and performance issues.
, ✔✔Identification of the relevant ethical issues in play: - ✔✔requires a professional to
objectively analyze the facts surrounding the dilemma. After gathering the facts, risk or
insurance professionals should consider any subjective issues involving feelings and
impressions. Questions to consider may include these:
-What feelings does the situation cause?
-How are the stakeholders likely to respond?
-What are the decision maker's feelings?
-How will outsiders (those who are not stakeholders to the decision) view the issues?
✔✔Decision-making theories guide the decision process from these three perspectives:
- ✔✔-Rules-based
-Situation-based
-People-based
✔✔Situation-based decision making, which is also known as ends-based decision
making: - ✔✔Analyzes the potential outcomes of possible decisions given the
circumstances. It considers who will benefit from a decision, who will be damaged or
hurt by it, and the extent of the ramifications of potential outcomes. It requires an
assessment of a decision's consequences.
✔✔A rules-based approach to ethical decision making takes into account: - ✔✔Whether
any established rules or laws govern an action or a decision. The first thing to
remember is that for an insurance transaction to be ethical, it must meet legal
requirements.
✔✔People-based decision making: - ✔✔Is founded on the principles of philosophical
and religious schools of thought and rules for living. This approach requires the decision
maker to consider the personal circumstances involved in any decision and calls for a
degree of empathy, including the ability to consider a decision and its outcome from
someone else's perspective.
✔✔Contract Law - ✔✔The branch of civil law that deals with contracts and settles
contract disputes.
✔✔Tort Law - ✔✔The branch of civil law that deals with civil wrongs other than
breaches of contract.
✔✔(T/F) While valuable, an organization's code of ethics cannot protect it against a
lawsuit. - ✔✔False.
✔✔Physical barriers to ethical decision making: - ✔✔Prevent a professional from
developing factual information about the ethical dilemma through restraints, restrictions
to access, or stumbling blocks to uncovering the truth about the situation or the people
associated with the dilemma.
QUESTIONS SET A+
✔✔(T/F) Insurance rating systems discourage social responsibility. - ✔✔False.
✔✔From an economic standpoint, the net result of maintaining high ethical standards is:
- ✔✔A reduction in operating expenses as well as costs related to fines or legal
defense. And when high ethical standards improve customer satisfaction, revenue
increases through customer retention and referrals.
✔✔(T/F) In general, organizations and individuals who demonstrate high ethical values
are more successful over the long term. - ✔✔True.
✔✔Risk and insurance professionals can develop a systematic approach to resolving
ethical dilemmas by taking three steps: - ✔✔Identifying the stakeholders, determining
the motivation for the actions taken, and analyzing the relevant ethical issues.
✔✔The first step in resolving an ethical dilemma involves gathering information, starting
with: - ✔✔Identifying the Stakeholders.
✔✔Truth versus loyalty: - ✔✔An ethical dilemma arises between truth and loyalty when
the facts may be harmful to someone or something in which a person has placed faith
and fidelity.
✔✔Long-term versus short-term dilemmas: - ✔✔Tend to be based on personal conflicts
but can be much broader than personal concerns. Even apparently simple decisions
can have far-reaching consequences when the dilemma is fully examined and the effect
of the decision is evaluated.
✔✔Justice versus mercy dilemmas: - ✔✔May have to choose between established rule
of law and compassion. Insurance involves legal concepts and issues. The insurance
contract itself is a legal document with a specific body of law (contract law) dictating
interpretation and performance issues.
, ✔✔Identification of the relevant ethical issues in play: - ✔✔requires a professional to
objectively analyze the facts surrounding the dilemma. After gathering the facts, risk or
insurance professionals should consider any subjective issues involving feelings and
impressions. Questions to consider may include these:
-What feelings does the situation cause?
-How are the stakeholders likely to respond?
-What are the decision maker's feelings?
-How will outsiders (those who are not stakeholders to the decision) view the issues?
✔✔Decision-making theories guide the decision process from these three perspectives:
- ✔✔-Rules-based
-Situation-based
-People-based
✔✔Situation-based decision making, which is also known as ends-based decision
making: - ✔✔Analyzes the potential outcomes of possible decisions given the
circumstances. It considers who will benefit from a decision, who will be damaged or
hurt by it, and the extent of the ramifications of potential outcomes. It requires an
assessment of a decision's consequences.
✔✔A rules-based approach to ethical decision making takes into account: - ✔✔Whether
any established rules or laws govern an action or a decision. The first thing to
remember is that for an insurance transaction to be ethical, it must meet legal
requirements.
✔✔People-based decision making: - ✔✔Is founded on the principles of philosophical
and religious schools of thought and rules for living. This approach requires the decision
maker to consider the personal circumstances involved in any decision and calls for a
degree of empathy, including the ability to consider a decision and its outcome from
someone else's perspective.
✔✔Contract Law - ✔✔The branch of civil law that deals with contracts and settles
contract disputes.
✔✔Tort Law - ✔✔The branch of civil law that deals with civil wrongs other than
breaches of contract.
✔✔(T/F) While valuable, an organization's code of ethics cannot protect it against a
lawsuit. - ✔✔False.
✔✔Physical barriers to ethical decision making: - ✔✔Prevent a professional from
developing factual information about the ethical dilemma through restraints, restrictions
to access, or stumbling blocks to uncovering the truth about the situation or the people
associated with the dilemma.
