220 - FLORIDA STATUTES AND RULES,
UNAUTHORIZED ENTITIES AND
ETHICS UNIT 17 Q&A
What are the three exceptions to the MEWA definition? - ANSWER-1. Union Plans
2. Association Plans
3. Professional Employer Organization (PEO)
Association Plans - ANSWER-Association Plans are not exempt from state
regulations for two reasons:
1. There is no employer-employee relationship
2. They must be fully insured
Professional Employer Organization (PEO) - ANSWER-are not exempt from state
regulations because there is not an employer/employee relationship and the original
employer controls the common law incidents of employment, such as:
- hiring and firing
- employee performance evaluations
- employee discipline
- compensation
- hours, location, nature and method of the work performed
Possible Consequences for Aiding and Abetting an Unauthorized Insurer and for
Acting as an Insurer without Proper License - ANSWER-- Conviction of a 3rd degree
felony
- Liability for all unpaid claims
- Suspension or revocation of all insurance licenses
Name one consequence for aiding and abetting an unauthorized insurer -
ANSWER-- Conviction of a 3rd degree felony
- Liability for all unpaid claims
- Suspension or revocation of all insurance license
Ethical behavior is more than trying not to do wrong. It is determining to do
r_______. - ANSWER-right
Ethics - What is it? - ANSWER-The word "ethics" comes from the Greek word
"ethos" which means "custom". When used in Greek society, it generally referred to
"proper modes of conduct". Ethical behavior is more than just not breaking the law. It
is the product of ingrained attitudes, personal respect, and ideals of service to others
in an unselfish manner. Altruism is a term that is closely related to agent ethics.
Altruism is defined as "consciously seeking and serving the welfare of others". The
opposite of Altruistic would be "selfish" or putting your own interests above the
interests of others.
,Which term is closely related to agent ethics? - ANSWER-altruism
Personal Ethics - ANSWER-Where do we get our values?
- Parents
-Friends
-Religion
-Community
-School
-Media
-Other role models
Examples of the values you received from these sources may include the Golden
Rule, truthfulness, respect, treating people with dignity, etc.
Ethics is more than "not breaking the law." It refers to the _________ mode of
conduct. - ANSWER-proper
Unethical practices do not affect just one or two people. Unethical behavior affects
the entire __________. - ANSWER-company
Errors and Omission Claims - ANSWER-Errors and Omissions Claims occur when
an insured sues the insurance company because of either inaccurate information (an
error) of lack of information (an omission) from an agent, service representative or
claims adjuster. Error and Omission claims are sometimes a symptom of unethical
behavior and sometimes the result of just being human and making mistakes. The
best defense against errors and omissions claims is knowledge. Know and
understand the information you need to counsel the customer correctly, take the time
to advise customers accurately and document well.
Error and Omission claims are a result of two things. Those can be: u_________
b___________ and h______ e______. - ANSWER-unethical behavior and human
error.
Building Sound Ethics - ANSWER-Although it seems that ethical issues are not
always clear-cut, they are often not us unclear as we might think. The Florida
General Lines Study Manual gives the following example:
Florida Statute 626. 730 Purpose of License -
The purpose of a license issued under this code to a general lines agent, personal
lines agent, or customer service representative is to authorize and enable the
licensee actively and in good faith to engage in the insurance business as an agent
or customer representative with respect to the public and to facilitate the public
supervision of such activities in the public interest, and not for the purpose of
enabling the licensee to receive a rebate of premium in the form of commission or
other compensation as an agent or customer representative or enabling the licensee
to receive commissions or other compensation based upon insurance solicited or
procured by or through him or her upon his or her own interests or those of other
, persons with whom he or she is closely associated in capacities other than that of
insurance agent or customer representative.
This statute states that the main objective of an agent is always the public interest.
Although the statue does not give a specific definition of ethical behavior, it does give
clear direction for the insurance agent. The agent should act in the best interest of
the public and not in the interest of commission or compensation.
The agent must act in the best interest of the p______ and not in the interest of their
c_____________. - ANSWER-public, comission
The next step to building sound ethics is understanding the difference between
morals and ethics.
Morality is defined as obedience to something that is enforceable - right or wrong?
Determining what is moral is based on:
- Legality - is it violation of the law
- Truth - what is not true is typically wrong and therefore immoral
- Moral standards - what is accepted by society as morally right
Ethics is obedience to something that is u_______________. - ANSWER-
unenforceable.
Codes of Ethics
Codes of ethics are designed to help individuals reach a higher level of
responsibility. They provide a standard or measurement for applying values to the
workplace. Some examples of core values include:
1. Honesty and truth
2. Responsibility and accountability
3. Respect and tolerance
4. Fairness and justice
5. Compassion and caring - ANSWER-
What types of employers use ERISA? - ANSWER-1. Large companies with sufficient
assets to handle the costs if contributions to the plan are insufficient to cover
expenses of the plan
2. Corporations with many employees among which to spread the risk
3. Companies with the financial expertise to handle the risk planning ERISA Pre-
emption and State Regulation
What limits the scope ERISA Section 514(a)? - ANSWER-The Savings Clause -
Congress never intended that ERISA would relieve any person from any law of any
state that regulates insurance. This is stated within the ERISA law. This paragraph is
referred to the "savings clause".
UNAUTHORIZED ENTITIES AND
ETHICS UNIT 17 Q&A
What are the three exceptions to the MEWA definition? - ANSWER-1. Union Plans
2. Association Plans
3. Professional Employer Organization (PEO)
Association Plans - ANSWER-Association Plans are not exempt from state
regulations for two reasons:
1. There is no employer-employee relationship
2. They must be fully insured
Professional Employer Organization (PEO) - ANSWER-are not exempt from state
regulations because there is not an employer/employee relationship and the original
employer controls the common law incidents of employment, such as:
- hiring and firing
- employee performance evaluations
- employee discipline
- compensation
- hours, location, nature and method of the work performed
Possible Consequences for Aiding and Abetting an Unauthorized Insurer and for
Acting as an Insurer without Proper License - ANSWER-- Conviction of a 3rd degree
felony
- Liability for all unpaid claims
- Suspension or revocation of all insurance licenses
Name one consequence for aiding and abetting an unauthorized insurer -
ANSWER-- Conviction of a 3rd degree felony
- Liability for all unpaid claims
- Suspension or revocation of all insurance license
Ethical behavior is more than trying not to do wrong. It is determining to do
r_______. - ANSWER-right
Ethics - What is it? - ANSWER-The word "ethics" comes from the Greek word
"ethos" which means "custom". When used in Greek society, it generally referred to
"proper modes of conduct". Ethical behavior is more than just not breaking the law. It
is the product of ingrained attitudes, personal respect, and ideals of service to others
in an unselfish manner. Altruism is a term that is closely related to agent ethics.
Altruism is defined as "consciously seeking and serving the welfare of others". The
opposite of Altruistic would be "selfish" or putting your own interests above the
interests of others.
,Which term is closely related to agent ethics? - ANSWER-altruism
Personal Ethics - ANSWER-Where do we get our values?
- Parents
-Friends
-Religion
-Community
-School
-Media
-Other role models
Examples of the values you received from these sources may include the Golden
Rule, truthfulness, respect, treating people with dignity, etc.
Ethics is more than "not breaking the law." It refers to the _________ mode of
conduct. - ANSWER-proper
Unethical practices do not affect just one or two people. Unethical behavior affects
the entire __________. - ANSWER-company
Errors and Omission Claims - ANSWER-Errors and Omissions Claims occur when
an insured sues the insurance company because of either inaccurate information (an
error) of lack of information (an omission) from an agent, service representative or
claims adjuster. Error and Omission claims are sometimes a symptom of unethical
behavior and sometimes the result of just being human and making mistakes. The
best defense against errors and omissions claims is knowledge. Know and
understand the information you need to counsel the customer correctly, take the time
to advise customers accurately and document well.
Error and Omission claims are a result of two things. Those can be: u_________
b___________ and h______ e______. - ANSWER-unethical behavior and human
error.
Building Sound Ethics - ANSWER-Although it seems that ethical issues are not
always clear-cut, they are often not us unclear as we might think. The Florida
General Lines Study Manual gives the following example:
Florida Statute 626. 730 Purpose of License -
The purpose of a license issued under this code to a general lines agent, personal
lines agent, or customer service representative is to authorize and enable the
licensee actively and in good faith to engage in the insurance business as an agent
or customer representative with respect to the public and to facilitate the public
supervision of such activities in the public interest, and not for the purpose of
enabling the licensee to receive a rebate of premium in the form of commission or
other compensation as an agent or customer representative or enabling the licensee
to receive commissions or other compensation based upon insurance solicited or
procured by or through him or her upon his or her own interests or those of other
, persons with whom he or she is closely associated in capacities other than that of
insurance agent or customer representative.
This statute states that the main objective of an agent is always the public interest.
Although the statue does not give a specific definition of ethical behavior, it does give
clear direction for the insurance agent. The agent should act in the best interest of
the public and not in the interest of commission or compensation.
The agent must act in the best interest of the p______ and not in the interest of their
c_____________. - ANSWER-public, comission
The next step to building sound ethics is understanding the difference between
morals and ethics.
Morality is defined as obedience to something that is enforceable - right or wrong?
Determining what is moral is based on:
- Legality - is it violation of the law
- Truth - what is not true is typically wrong and therefore immoral
- Moral standards - what is accepted by society as morally right
Ethics is obedience to something that is u_______________. - ANSWER-
unenforceable.
Codes of Ethics
Codes of ethics are designed to help individuals reach a higher level of
responsibility. They provide a standard or measurement for applying values to the
workplace. Some examples of core values include:
1. Honesty and truth
2. Responsibility and accountability
3. Respect and tolerance
4. Fairness and justice
5. Compassion and caring - ANSWER-
What types of employers use ERISA? - ANSWER-1. Large companies with sufficient
assets to handle the costs if contributions to the plan are insufficient to cover
expenses of the plan
2. Corporations with many employees among which to spread the risk
3. Companies with the financial expertise to handle the risk planning ERISA Pre-
emption and State Regulation
What limits the scope ERISA Section 514(a)? - ANSWER-The Savings Clause -
Congress never intended that ERISA would relieve any person from any law of any
state that regulates insurance. This is stated within the ERISA law. This paragraph is
referred to the "savings clause".
