The Insurance Industry and Business Ethics
Erik Cohen
Business Ethics
26 September 2011
The Insurance Industry and Business Ethics The Insurance industry is a perfect example of the use of “grey areas” in the culture of business ethics in the United States. Within my research and years of experience in the field of insurance the use of business ethics couldn’t be of greater importance then the companies that provide the actual policies themselves. Even with all of the regulations the Insurance Department puts on the insurance companies, agents, brokers, and adjusters there are still areas where discrepancies in the code of business practices exist. I will explain some of the insurance company’s ways of motivation, monetary compensation, underwriting rules, business strategies, and the “grey areas” or lack of business ethics of the professional agents and brokers who sell their products. The birth of Insurance in the United States was in 1732 in one of the American colonies at Charleston SC and then New York City in 1787 (Encyclopedia). "Insurance developed rapidly with the growth of British commerce in the 17th and 18th cent. Prior to the formation of corporations devoted solely to the business of writing insurance, policies were signed by a number of individuals, each of whom wrote his name and the amount of risk he was assuming underneath the insurance proposal, hence the term underwriter." (Press) According to the Columbia Electronic Encyclopedia, since the late 19th century there has been a growing tendency for the United States to increase their interest in insurance, especially with protecting workers against sickness and disability, either temporary or permanent, destitute old age, and unemployment. The U.S. government has also experimented with various types of crop insurance which began the Federal Crop Insurance Act of 1938. In World War II the government provided life insurance for members of the armed forces; since then it has provided other forms of insurance
Business Ethics
26 September 2011
The Insurance Industry and Business Ethics The Insurance industry is a perfect example of the use of “grey areas” in the culture of business ethics in the United States. Within my research and years of experience in the field of insurance the use of business ethics couldn’t be of greater importance then the companies that provide the actual policies themselves. Even with all of the regulations the Insurance Department puts on the insurance companies, agents, brokers, and adjusters there are still areas where discrepancies in the code of business practices exist. I will explain some of the insurance company’s ways of motivation, monetary compensation, underwriting rules, business strategies, and the “grey areas” or lack of business ethics of the professional agents and brokers who sell their products. The birth of Insurance in the United States was in 1732 in one of the American colonies at Charleston SC and then New York City in 1787 (Encyclopedia). "Insurance developed rapidly with the growth of British commerce in the 17th and 18th cent. Prior to the formation of corporations devoted solely to the business of writing insurance, policies were signed by a number of individuals, each of whom wrote his name and the amount of risk he was assuming underneath the insurance proposal, hence the term underwriter." (Press) According to the Columbia Electronic Encyclopedia, since the late 19th century there has been a growing tendency for the United States to increase their interest in insurance, especially with protecting workers against sickness and disability, either temporary or permanent, destitute old age, and unemployment. The U.S. government has also experimented with various types of crop insurance which began the Federal Crop Insurance Act of 1938. In World War II the government provided life insurance for members of the armed forces; since then it has provided other forms of insurance
Cited: Boop, Gregory. www.about.com. 2011. 21 September 2011 . Department, New York State Insurance. New York State Insurance Department. 2011. 21 September 2011 . Press, Columbia University. www.infoplease.com. 2007. 12 September 2011 . Rubin, Harvey. Dictionary of Insurance Terms. 4th Ed. Baron 's Educational Series, 2000. Stalson, J. Owen. Marketing Life Insurance: Its History in America . Harvard U.P., 1942.