ETHICS 311 QUESTIONS WITH VERIFIED ANSWERS
Which one of the following could create an ethical issue? - Answers - Placing insurance
with the insurer paying the highest commission
Unselfish concern for the welfare of others is referred to as: - Answers - Altruism.
Penny is in the marketing department at Insurance Company. Which one of the
following is an important truth for her to know? - Answers - 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? - Answers - 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? - Answers
- 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: - Answers - 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: - Answers -
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? - Answers - 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: - Answers - 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? - Answers - 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:
- Answers - 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: - Answers - Professional Judgement.
Ethical behavior is based on moral conduct, which implies: - Answers - One knows what
is right and what is wrong.
(T/F) As a broker, Josh has a responsibility only to his clients, the policyholders. -
Answers - False.
An insurance professional has ethical responsibilities to insurers, policyholders, and: -
Answers - The public. To meet the responsibilities owed to each group, the insurance
professional must consider each group's perspective and interests.
Moral Hazard: - Answers - A condition that increases the likelihood that a person will
intentionally cause or exaggerate a loss.
Morale Hazard: - Answers - A condition of carelessness or indifference that increases
the frequency or severity of loss.
The ethical standards that risk and insurance professionals must adhere to are rooted in
three general areas: - Answers - -Regulatory Requirements.
-Social Responsibility.
-Economic Outcomes.
Which one of the following could create an ethical issue? - Answers - Placing insurance
with the insurer paying the highest commission
Unselfish concern for the welfare of others is referred to as: - Answers - Altruism.
Penny is in the marketing department at Insurance Company. Which one of the
following is an important truth for her to know? - Answers - 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? - Answers - 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? - Answers
- 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: - Answers - 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: - Answers -
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? - Answers - 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: - Answers - 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? - Answers - 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:
- Answers - 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: - Answers - Professional Judgement.
Ethical behavior is based on moral conduct, which implies: - Answers - One knows what
is right and what is wrong.
(T/F) As a broker, Josh has a responsibility only to his clients, the policyholders. -
Answers - False.
An insurance professional has ethical responsibilities to insurers, policyholders, and: -
Answers - The public. To meet the responsibilities owed to each group, the insurance
professional must consider each group's perspective and interests.
Moral Hazard: - Answers - A condition that increases the likelihood that a person will
intentionally cause or exaggerate a loss.
Morale Hazard: - Answers - A condition of carelessness or indifference that increases
the frequency or severity of loss.
The ethical standards that risk and insurance professionals must adhere to are rooted in
three general areas: - Answers - -Regulatory Requirements.
-Social Responsibility.
-Economic Outcomes.
