Avoiding ethics violations from unlikely sources

“Just mark it up, scribble something,” he purportedly said. Knowing he was the agent’s friend for 30 years and not wishing to inconvenience him, she did just that. The ethical and legal violations should be overwhelmingly obvious, but if no one knows, what’s the big deal?

Right? Not so fast.

The friend paid one month’s premium to insure the coverage and policy process was complete and then bypassed the agent and sent a letter directly to the carrier in order to file his claim. The carrier naturally kicked the letter back to the agent with some obvious and rather large questions. The agent was understandably upset, but understood any misrepresentation on the application would cause the coverage to be nullified—that is until the “friend” informed him that 1) it wasn’t his signature and 2) he never received a phone call to inform him of the oversight. It didn’t matter anyway, the “friend” taunted, the coverage was issued and premium was paid.

The agent now faces the dissolution of a 25 years relationship with the carrier at best, legal sanction and the loss of his business at worst. There’s an awful lot of he said/she said and the outcome is far from certain, but it all stemmed from a three minute phone call and a naïve willingness to help. It’s why specific, detailed, written procedures are so important, especially in today’s compliance-centric, E&O free-for-all legal environment. Horror stories like this must also be shared with staff to illustrate why a particular policy is in place. Understanding the motives behind it go a long way in ensuring all are on board. It will nip any potential ethical violations that stem from (sadly) a desire to help.