WebCe – Ethics Questions with correct Answers

You have been invited to your niece's wedding reception, and the invitation requests an RSVP. You really don't want to go, and you could simply decline the invitation. But you respond that you will be in attendance, and you check her bridal registry to select an appropriate gift to bring. Your decision is based on - Answer- an area of manners; it would have been impolite to decline. Stefan's friends would agree that he has many vices. In describing Stefan's character, they would probably use a term like - Answer- unfaithful According to John Fletcher Moulton, the opposite of positive law is - Answer- free choice Your character is made up of both - Answer- virtues and vices Mohammed made a $13 purchase and paid for it with a $20 bill. The cashier handed him a $5 bill and three $1 bills as change. This cashier was somewhat slow, and there was a long line of people behind Mohammed waiting to check out. What is the most likely reason why Mohammed told the cashier she gave him too much change? - Answer- it was the right thing to do In Lake Wobegon, it is reported that all the children are above average. When it comes to moral virtues, what's wrong with being average? - Answer- Nothing; it avoids extremes Six months ago, Alexandria, the insurance agency manager, told Walker, "I'm putting you in charge of the Middleton account." Alexandria just discovered that Middleton's policies have expired and Walker has done nothing about the renewal. This example illustrates the point that - Answer- responsibility has to be taken An ethical person has many positive traits. Which of the following traits does not necessarily suggest that a person is ethical? - Answer- Consistency In an attempt to increase agency volume, employees of the Owen Insurance Agency are choosing sides in the debate over the best advertising campaign. One faction suggests low-key ads that focus on the agency's humble beginnings. Another faction suggests the agency "blow its horn" and brag about its capabilities and everything it has done within the community. Which of the following statements does not accurately characterize this situation? - Answer- A middle-ground approach that shows a proper level of pride but avoids bragging is probably most desirable A hotel bellboy walked into a supposedly vacant hotel room and encountered an elderly man who had just gotten out of the shower. The surprised bellboy said, "Oh, excuse me, sir," and slowly backed out of the room. Which of the bellboy's actions was an example of courtesy? - Answer- Saying "excuse me" Ronny had a lot of pain and suffering as a result of an accident. Comparable injury claims are typically settled for around $200,000, but Aileen, the adjuster assigned to the case, settled Ronny's claim for $250,000 after Ronny hired a well-known plaintiff's attorney and threatened to sue the insurer. In making the $250,000 settlement, Aileen presumably decided to do what was most - Answer- practical Jeannie tells Manuel, who is adjusting her claim, that she will take him out on a date, "show him a good time," and buy him breakfast if he overlooks an obscure but applicable exclusion in her policy and pays her claim. Manuel finds Jeannie attractive. What type of dilemma does Manuel face? - Answer- Moral Donnie has accepted an attractive job offer in another state, and he will begin work there in 3 months. Donnie shares this information with Vivian, his department head, and asks her to keep it strictly confidential, which she promises to do. Two weeks later, Vivian is asked to approve a promotion for Donnie. What type of dilemma does Vivian face? - Answer- Truth versus loyalty The Baldwin Agency needs a new up-to-date computer system. However, a new computer system would be so expensive that the agency would be unable to pay employee bonuses for the next 2 or 3 years. Which of the following statements is most likely incorrect? - Answer- This is a truth versus loyalty dilemma It wasn't cheap, but Herminia finally managed to convince the elderly owner of a small lakefront home to sell it to her. Herminia plans to tear down the home and erect a three-story luxury residence for herself that would comply with current building codes. However, she is getting a lot of flak from residents of the nursing home across the street who would no longer be able to enjoy a lake view from their balconies. What type of dilemma does Herminia face? - Answer- Individual versus community The gate attendant at a major airport thought she detected alcohol on the breath of the pilot who was boarding a passenger plane. It might have been the pilot's aftershave or cologne. It was not the attendant's job to screen the crew, and she could get into trouble by delaying a flight. But she notified authorities, and the pilot was taken off the flight. The story made the TV news. Why do you think the gate attendant risked her job in taking this action? - Answer- As a professional, she was committed to doing the right thing. A woman who has moral confidence - Answer- knows what her values are and is willing to stand for those values. During the Vietnam War, several people became either famous or infamous as the result of an incident known as the My Lai Massacre. Who was Lieutenant William L. Calley? - Answer- The leader of the platoon conducting the massacre What is the relationship between self-respect and ethical behavior? - Answer- Having respect for oneself and for others allows one to do the right thing. The My Lai Massacre is an example of an incident in which a group of ethical individuals aboard a helicopter - Answer- just stepped in and did the right thing Like many other people, Dirk Rhodes, who owns the insurance agency, has a number of quirks. Which of them is least likely to be considered a trivial preference? - Answer- Dirk insists that manuals and reference materials be updated immediately whenever changes come in Nobody reads privacy notices, but Alfred has been instructed to include them with certain mailings he handles. This frustrates Alfred because it adds an additional step to the mailing process, and the added weight of the privacy document often increases the postage. What should Alfred do? - Answer- Stop worrying about things that cannot be changed Ebony is an insurance agent who likes to read for an hour before going to bed at night. What type of reading material will best help Ebony meet the needs and challenges of her profession? - Answer- Insurance textbooks and continuing education courses Everett and Hans currently share the same administrative assistant, Lorna. They are also competing with each other to see who gets promoted to a higher position that will soon become available. Which of the strategies he is considering might Hans find most effective? - Answer- Encourage Everett to succeed and try to keep up with him. When entering an important policy change into the computer, Carolyn receives an error message: "The change cannot be made at this time because a system upgrade is in progress." Which of the following actions she considers would be a mistake? - Answer- Report to the client that it is not possible to make the change What is the first step in dealing with an ethical conflict? - Answer- Recognize that an ethical conflict exists Rosanna calls and asks whether the quote on her renewal premium is available yet. You know the quote has come in, and it is much higher than either you or Rosanna expected. However, to keep Rosanna from shopping, your boss says you should tell her that you're still waiting for the quote and then sit on it until just before the renewal date. What core ethical principle might affect your decision? - Answer- Truthfulness It's Friday afternoon, the start of a 3-day holiday weekend. There is one more claim you ought to handle today, but you decide to postpone the claim until Tuesday. The claimant will have to wait. Your decision appears to be based, at least in part, on - Answer- an opportunity for personal gain Your independent agency has received auto claims from both Jim and Beverly, both clients of your agency. Jim and Beverly, who are insured by two different companies you represent, were both involved in the same accident. Jim's claim report indicates that the accident was Beverly's fault, and Beverly's claim indicates that it was Jim's fault. Beverly is a nun, and Jim is a bartender. What seems to be the best way to handle this claim? - Answer- Transmit both accident reports to their respective insurers and let the insurers decide how to handle the claims After meeting the customer who just walked into the agency, Earl Byrd thought to himself, "It might not be such a good idea to sell insurance to a guy applying for auto insurance who smells like a distillery." Earl himself does not drink alcohol because it is against his religion, but he has friends who do. After completing the application, Earl could bind coverage, but he tells the customer he will have to get a copy of the applicant's motor vehicle record before he will issue a policy. Earl is thinking he wants to be sure there are no driving while intoxicated charges on the record. The most important thing in this scenario is - Answer- what Earl did Which of the following is not a good example of a conflict between the goals of an insurer and the goals of its customers? - Answer- Privacy laws keep insurers from sharing personal information about their customers Colossal Casualty's claims vice president, who operates with a limited expense budget, can either hire additional staff or update the computer system. Both measures would improve customer service, but there is not enough money in the budget to do both. This is an example of what ethical issue? - Answer- Allocation of scarce resources Brown Insurance Company's current property policies pay to replace the property with components of like kind and quality. Brown Insurance Company is debating whether to modify its policies to cover the added cost of replacing dated building components that have been damaged by a covered peril with more expensive components that are kinder to the environment. Some company officials oppose the idea of improving policyholders' property at the expense of their insurer and predict that fraud and inflated claims will result. This is an example of what ethical issue insurers often face? - Answer- Use of costly resources After 9 months as a claims adjuster, Shannon is depressed. She tries very hard to be fair, but it seems she can't do anything right. Half the time, the claimant is dissatisfied with her settlement, and the rest of the time, she faces criticism from her supervisor. Unless other factors are at work, this information seems to indicate that - Answer- Shannon is doing a good job. Superhero Builders has purchased all the homes on Lois Lane in a depressed area of Metropolis and plans to tear them down and replace them with new, modern townhouses that will attract a more affluent group of residents. You are told not to insure Superhero's project because it is located in a "bad area" of Metropolis. This is an example of - Answer- redlining, which is illegal According to Black's Law Dictionary, good faith encompasses all the following attributes EXCEPT: - Answer- freedom of religion After closing the file, Rhea discovered that she had made a mistake and paid a claim that should not have been covered. What would you advise her to do? - Answer- Tell her supervisor and ask for help Suppose you are a premium auditor who finds a classification error in a policy previously handled by Clint, another premium auditor. Clint is your mentor. He trained you and helped you succeed. Clint's error caused the insured to pay a much higher premium than he would have paid if the exposure had properly been classified. What is the best thing to do first in addressing this error? - Answer- Talk to Clint and find out how he decided on the current classification Richard Eyre, an English theater director, made a profound statement that is particularly relevant to insurance professionals when he identified a principle that is "at the heart of all decent work." Eyre was, of course, referring to the concept of - Answer- acting in good faith An insurance underwriter should be able to trust that the insured will do all the following EXCEPT: - Answer- withhold unfavorable information As a CPCU, Luella is serious about her pledge to understand the interests of others and even place them above her own. As an insurance professional, she should frequently be asking herself all the following questions EXCEPT: - Answer- How much time can I afford to give this client? The concepts of good faith and fair dealing arise from contract law, but they are especially important with insurance because it is "a forward promise." Why is it said that insurance is a forward promise? - Answer- People pay a premium today and expect coverage tomorrow With regard to insurance transactions, failure to comply with the duty of good faith and fair dealing does not result in costs that are - Answer- imaginary. What state standards, based on the National Association of Insurance Commissioners (NAIC) model acts, specify minimum guidelines that insurance claims adjusters are required to follow in fulfilling their duties? - Answer- Unfair claims settlement practices acts Raphael Company bought workers compensation and general liability insurance from Colossal Casualty Insurance Company. Colossal Casualty can rightfully expect Raphael to perform all the following duties EXCEPT: - Answer- create the policy language that reflects Raphael's coverage needs Which one of the following words is not a synonym for "fair" that one might find in a thesaurus? - Answer- Foul A witness who described an auto accident had no connection or relationship to either driver; she just happened to be there when the accident occurred. A jury will probably believe this witness will present a fair account of what happened because the witness is - Answer- detached. Before going to work for the insurance agency where Phil works, Olivia was a real estate agent. After overhearing some of Olivia's conversations on her office phone, Phil suspects Olivia is still selling real estate on the side. This might mean any of the following EXCEPT: - Answer- Phil should keep his observations to himself Why is it difficult for a claims adjuster to be completely objective when determining the cause of a loss? - Answer- The adjuster's past experience with similar claims might lead him or her to jump to conclusions without conducting a thorough investigation If Elaine Benes wanted to describe a person with a strong sense of equity and integrity, she would be most likely to us the term - Answer- fair Which one of the following individuals is acting with altruism rather than egoism? - Answer- Briana tells a client that one of Briana's competitors offers a policy that will better meet her specific needs. Some people say Moses is greedy. Because he has a little more seniority than his coworkers, Moses made sure he got the office with the best view, the desk with the most drawers, and the computer with the biggest monitor. Anything but the best is treated like a personal failure. Moses is not very popular with his coworkers because his greed makes him overlook the concept of - Answer- fair dealing After thoroughly examining the risk and reviewing the account's past losses, Eddy calculated a proposed premium of $450,000. Lakisha, Eddy's supervisor, tells him to get it down to $300,000, as there is competition for the account and this sale will enable the office to meet its premium goals for the quarter. The account has had $1.5 million in losses over the last 4 years. As an ethical insurance professional, which one of the following is not among the options Eddy should take in dealing with this situation? - Answer- Cover his tail with notes in the file that disparage Lakisha's recommendation. Short-term thinking - Answer- leads to long-term success. Which one of the following involves a situation in which the individual who did something unfair or harmful was acting out of desperation? - Answer- Evan's bookie was threatening him, so he submitted a fraudulent claim and used the proceeds to pay off his gambling debt Zachary cannot find his expensive camera, so he submits a theft claim. Before agreeing to pay his claim, Morgan, the homeowners adjuster, reviews his policy to determine whether the policy was in force at the time of the loss and whether any exclusions apply. Morgan should also consider all the following EXCEPT: - Answer- what outcome Zachary expects Which of the following is an example of normalized deviancy? - Answer- Little work is accomplished most Friday afternoons after the staff's traditional weekly three-martini lunch When Alyce left the Bowers Agency and joined the Cameron Agency, she brought with her a complete list of Bowers clients and their x-dates. The Cameron Agency calls a staff meeting to decide how best to use Alyce's list as a prospecting tool. Everybody else seems enthusiastic about the opportunities, but Warren has ethical concerns. However, he has a lot less seniority than most other employees and is not in a management position. What should Warren do? - Answer- Express his ethical concerns; they just might change the direction of the discussion. When faced with an ethical dilemma, you might make the wrong decision and take the wrong action if you do any of the following EXCEPT: - Answer- Consider the interests of others When you run across an ethical conflict, you should not be asking yourself: - Answer- Why is this happening to me?