CPCU ETHICS UPDATED 2026 EXAM SCRIPT QUESTIONS
AND ANSWERS RATED A+
✔✔Canon 7 - ✔✔Insurance professionals should assist in improving the public
understanding of insurance & risk management.
✔✔Canon 8 - ✔✔CPCUs should honor the integrity of the CPCU designation & respect
the limitations placed on its use.
✔✔Canon 9 - ✔✔CPCUs should assist in maintaining the integrity of the CPCU Code of
Professional Conduct.
✔✔Moral hazard - ✔✔a condition that increases the likelihood that a person will
intentionally cause or exaggerate a loss
✔✔Morale hazard - ✔✔a condition of carelessness or indifference that increases the
frequency or severity of loss
✔✔Truth - ✔✔an objective concept involving what actually exists or is known. It is a
universal basis of morality.
✔✔Loyalty - ✔✔is subjective. It is fidelity to a person, thing, or concept and exists
independently of concerns related to morali
✔✔Rules-based decision making - ✔✔based on perceived duty owed, on what should
be done & does not consider who will be helped or who will be hurt
✔✔Situation-based decision making - ✔✔(ends-based) analyzes potential outcomes of
possible decisions given circumstances. who'll benefit, be damaged or hurt by a
decision & extent of ramifications of potential outcomes.
✔✔People-based decision making - ✔✔"Do unto others as you would have them do
unto you."
✔✔Physical barrier to decision making - ✔✔prevents insurance professional from
developing factual info about ethical dilemma through restraints, restrictions to access
or stumbling blocks to uncovering truth about situation or people associated w/dilemma.
✔✔Procedural barrier to decision making - ✔✔arises when processes for resolving
conflicts hinder identification, careful consideration or resolution of ethical dilemmas or
when no systematic approaches apply to resolving these dilemmas.
, ✔✔Administrative barrier to decision making - ✔✔creates hurdles when individuals are
unable or unwilling to follow good decision-making processes; perceived lack of
authority or fear of repercussions
✔✔Components of the Code - ✔✔Canons & Rules
✔✔Canon 3 - Rule 3.1 - ✔✔A CPCU shall exercise utmost good faith in conduct of
business or professional activities.
✔✔Canon 3 - Rule 3.2 - ✔✔A CPCU shall not allow pursuit of financial gain or other
personal benefit to interfere w/the exercise of sound professional judgment and skills.
✔✔Canon 3 - Rule 3.3 - ✔✔A CPCU shall remain informed of, uphold & not violate any
policy, rule, law or regulation relating to professional activities w/in the country in which
business is being conducted, nor commit any felony, as defined by the country in which
committed.
✔✔3 areas of misconduct that C3 & its rules apply - ✔✔Misrepresentation/Concealment
of material facts
Unreasonable/inappropriate financial gain
Violation of any laws/regulations
✔✔Canon 4 - Rule 4.1 - ✔✔A CPCU shall competently and consistently discharge his
or her occupational duties.
✔✔Canon 4 - Rule 4.2 - ✔✔A CPCU shall support efforts to effect improvements in all
aspects of insurance operations that will both benefit the public & improve the overall
efficiency w/which the insurance mechanism functions.
✔✔Canon 5 - Rule 5.1 - ✔✔A CPCU shall encourage and assist others to enhance their
professional competence.
✔✔Canon 5 - Rule 5.2 - ✔✔A CPCU shall support the development, improvement &
enforcement of laws, regulations & codes that will foster competence & ethical conduct
on the part of all insurance practitioners and benefit the public.
✔✔Canon 5 - Rule 5.3 - ✔✔A CPCU shall not withhold information or assistance
officially requested by appropriate regulatory authorities who are investigating or
prosecuting any alleged violation of laws or regulations.
✔✔Canon 6 - Rule 6.1 - ✔✔CPCUs must treat as confidential all information obtained
by or entrusted to them in the course of their professional duties, unless otherwise
required by law or as necessary to complete their professional work.
AND ANSWERS RATED A+
✔✔Canon 7 - ✔✔Insurance professionals should assist in improving the public
understanding of insurance & risk management.
✔✔Canon 8 - ✔✔CPCUs should honor the integrity of the CPCU designation & respect
the limitations placed on its use.
✔✔Canon 9 - ✔✔CPCUs should assist in maintaining the integrity of the CPCU Code of
Professional Conduct.
✔✔Moral hazard - ✔✔a condition that increases the likelihood that a person will
intentionally cause or exaggerate a loss
✔✔Morale hazard - ✔✔a condition of carelessness or indifference that increases the
frequency or severity of loss
✔✔Truth - ✔✔an objective concept involving what actually exists or is known. It is a
universal basis of morality.
✔✔Loyalty - ✔✔is subjective. It is fidelity to a person, thing, or concept and exists
independently of concerns related to morali
✔✔Rules-based decision making - ✔✔based on perceived duty owed, on what should
be done & does not consider who will be helped or who will be hurt
✔✔Situation-based decision making - ✔✔(ends-based) analyzes potential outcomes of
possible decisions given circumstances. who'll benefit, be damaged or hurt by a
decision & extent of ramifications of potential outcomes.
✔✔People-based decision making - ✔✔"Do unto others as you would have them do
unto you."
✔✔Physical barrier to decision making - ✔✔prevents insurance professional from
developing factual info about ethical dilemma through restraints, restrictions to access
or stumbling blocks to uncovering truth about situation or people associated w/dilemma.
✔✔Procedural barrier to decision making - ✔✔arises when processes for resolving
conflicts hinder identification, careful consideration or resolution of ethical dilemmas or
when no systematic approaches apply to resolving these dilemmas.
, ✔✔Administrative barrier to decision making - ✔✔creates hurdles when individuals are
unable or unwilling to follow good decision-making processes; perceived lack of
authority or fear of repercussions
✔✔Components of the Code - ✔✔Canons & Rules
✔✔Canon 3 - Rule 3.1 - ✔✔A CPCU shall exercise utmost good faith in conduct of
business or professional activities.
✔✔Canon 3 - Rule 3.2 - ✔✔A CPCU shall not allow pursuit of financial gain or other
personal benefit to interfere w/the exercise of sound professional judgment and skills.
✔✔Canon 3 - Rule 3.3 - ✔✔A CPCU shall remain informed of, uphold & not violate any
policy, rule, law or regulation relating to professional activities w/in the country in which
business is being conducted, nor commit any felony, as defined by the country in which
committed.
✔✔3 areas of misconduct that C3 & its rules apply - ✔✔Misrepresentation/Concealment
of material facts
Unreasonable/inappropriate financial gain
Violation of any laws/regulations
✔✔Canon 4 - Rule 4.1 - ✔✔A CPCU shall competently and consistently discharge his
or her occupational duties.
✔✔Canon 4 - Rule 4.2 - ✔✔A CPCU shall support efforts to effect improvements in all
aspects of insurance operations that will both benefit the public & improve the overall
efficiency w/which the insurance mechanism functions.
✔✔Canon 5 - Rule 5.1 - ✔✔A CPCU shall encourage and assist others to enhance their
professional competence.
✔✔Canon 5 - Rule 5.2 - ✔✔A CPCU shall support the development, improvement &
enforcement of laws, regulations & codes that will foster competence & ethical conduct
on the part of all insurance practitioners and benefit the public.
✔✔Canon 5 - Rule 5.3 - ✔✔A CPCU shall not withhold information or assistance
officially requested by appropriate regulatory authorities who are investigating or
prosecuting any alleged violation of laws or regulations.
✔✔Canon 6 - Rule 6.1 - ✔✔CPCUs must treat as confidential all information obtained
by or entrusted to them in the course of their professional duties, unless otherwise
required by law or as necessary to complete their professional work.
