Ethics

Ethics

In today’s world we all appreciate that we are all exposed to how we treat each other. We come to expect a higher ethical stand from those in power and commercial businesses, especially those in industries where founded on trust.

Ethics in society

Ethics means the science of morals or rules of conduct.   For society to live together in harmony there needs to be some rules. Rules tend to come from standards of common conduct that are acceptable to the majority.

Laws tend to be precise, the written down do’s and don’ts.   Laws however tend to be the rules a society wants to enforce and is willing to enforce.   There is little point in having laws that are not enforced.

Some ethics will be spelt out in laws but many ethics will be standards of behaviour that are higher than the law. What is or is not ethical may well be a matter for individual opinion.

For example most people will agree that it is wrong to steal from an individual, yet many do not feel the same about the Inland Revenue or over inflating insurance claims.  

In several reported instances the doors to armoured car vans have fallen open and money dropped out during a transit. The money bags have broken and passers by have collected the money for their own keeping.

There is a different level of ethics between one person and another.

Ethics in business

Businesses are made up of individuals and in the work of business there are differing levels of ethical behaviour.   All businesses have to comply with the laws, and some do not always do this. However there are levels of behaviours which are not governed by the laws and these are controlled by the ethical principals of the firm.

In some cases, being within the law is not enough and customers expect a higher ethical standard also to be practiced.

Ethics in insurance

Those businesses in the insurance industry need to make a profit be professional, business like and competitive.   These are not unreasonable aims. Failure in these areas could place the business at risk and those that are dependent on the business.

There is nothing unethical about sticking to the terms of an insurance contract, so long as both parties where aware of the terms when the contract was entered into.   This can produce conflicts where a claim should be correctly denied but to do so would bring hardship on the beneficiaries under the policy.

Directors of companies also have to think about the shareholders who employ them to run the business. This can produce conflicts with employees where the company needs to make redundancies in order to remain competitive.

There have however been instances in the insurance market where ethical standards have come into question.  

There have been questions raised in the past that some high commission levels may have lead to overselling and churning.

There have been various reports about pension mis-selling.

There was an instance where a life office had to balance promises to older policy holders against the protection of all policyholders.

The FSMA 2000 embraces the idea that the spirit of the rules is important as well as the actual rule detail.